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THE  INHERITANCE  TAX  LAW 


CONTAINING 


ALL  AMERICAN  DECISIONS  AND 
EXISTING  STATUTES 


BY 

ARTHUR  W.  BLAKEMORE 

OF    THE    BOSTON    BAR 

Author    of    "Massachusetts    Court    Rules   Annotated;"   of    "Wills"    in    the 
Cyclopaedia  of  Law  and  Procedure,  etc.,  etc. 

AND 

HUGH   BANCROFT 

Formerly    District    Attorney,    Northern     District    of     Massachusetts,    author 
of   "Inheritance   Taxes   for   Investors" 


BOSTON 

THE  BOSTON  BOOK  COMPANY 

1912 


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Copyright,  1912 
By  the   boston  BOOK  COMPANY 


The  Riverdale  Press,  Brooktine,  Mass.,  U.S.A. 


PREFACE, 


The  subject  of  inheritance  taxes  is  a  branch  of  the  law 
which  is  daily  growing  in  importance,  and  it  is  so  woven 
into  the  texture  of  our  taxing  systems  that  the  principles 
now  in  force  bid  fair  to  be  permanent.  The  legislation 
of  1911,  with  a  few  notable  exceptions,  was  productive 
of  no  great  changes,  and  we  believe  that  the  statutes  and 
decisions  in  most  of  the  states  have  so  crystallized  the 
law  that  an  authoritative  statement  at  this  time  is  not 
out  of  place.  The  lapse  of  over  fifteen  years  since  the 
publication  of  the  last  general  work  on  Inheritance  Taxes 
seems  to  furnish  ample  reason  for  a  new  book  at  the  pres- 
ent time,  as  during  that  period  the  statutes  in  all  the  states 
have  substantially  changed  and  most  of  them  have  been 
in  force  long  enough  to  receive  final  construction  by  the 
courts. 

It  has  been  the  authors'  aim  to  make  this  book  of  prac- 
tical importance  to  the  banker  and  investor  as  well  as  to 
the  lawyer,  and  with  this  in  mind  we  have  printed  in  the 
second  part  of  this  book  all  existing  statutes,  collated 
with  judicial  interpretation  of  those  statutes. 

To  make  clear  the  application  of  the  early  -decisions 
without  extended  research,  we  have  also  printed  all  the 
earlier  statutes  referred  to  in  reported  cases.  We  have 
also  prepared  tables  for  ready  use  by  investors,  showing 
the  law  in  each  state  at  a  glance  and  containing  a  list  of 
the  corporations  whose  stocks  are  listed  on  the  stock 
exchanges,  with  the  place  of  incorporation  of  each,  which 
we  believe  should  prove  of  incalculable  value  to  the  in- 
vestor who  desires  so  to  place  his  funds  as  to  insure  his 
family  against  exorbitant  or  double  taxation. 


IV  PREFACE. 

We  have  analyzed  with  great  care  all  reported  opinions 
and  have  quoted  at  length  in  the  second  part  of  the  volume 
instructive  discussions  on  disputed  points  by  our  leading 
courts.  In  short,  we  hope  and  believe  that  the  investor 
and  lawyer  will  find  everything  in  this  work  which  he 
may  care  to  know  about  inheritance  taxes  in  any  State. 
.  The  inheritance  tax  of  reasonable  provisions  has  so 
many  features  to  commend  it  that  we  believe  it  will  prove 
a  permanent  feature  of  our  tax  systems,  although  we 
appreciate  it  is  regarded  by  many  as  only  fittingly  de- 
scribed in  the  words  of  Macbeth :  — 

"The  time  has  been 

That,  when  the  brains  were  out,  the  man  would  die, 
And  there  an  end;  but  now  they  rise  again, 
With  twenty  mortal  murders  on  their  crowns, 
And  push  us  from  our  stools." 


Arthur  W.  Blakemore. 
Hugh  Bancroft. 

Jan.  1,  1912. 


TABLE  OF  CONTENTS. 


Chapter.  Page, 

I.  Definitions 1 

II.  Nature  of  Tax 4 

III.  The  Inheritance  Tax  in  Political  Economy 9 

IV.  History 13 

V.  What  Law  Governs  —  Place   17 

VI.  What  Law  Governs  —  Time    20 

VII.  Power  to  Impose    22 

VIII.  Construction  of  Statutes 32 

IX.  Validity  in  General    34 

X.  Various  Constitutional  Limitations 40 

XI.  Uniformity  and  Equality    45 

XII.  Classification  by  Residence    49 

XIII.  Classification  by  Relationship 53 

XIV.  Classification  by  Amount  —  Progressive  Rates 57 

XV.  Notice    66 

XVI.  Retroactive  Legislation 69 

XVII.  Repeal  or  Amendment    79 

XVIII.  Transfers  Other  than  by  Will 85 

XIX.  Transfers  in  Contemplation  of  Death 99 

XX.  Consideration    110 

XXI.  Powers    116 

XXII.  Methods  of  Avoiding  Tax 123 

XXIII.  Title  of  Decedent  130 

XXIV.  Real  Estate 132 

XXV.  Personal  Property    135 

XXVI.  Pledge  or  Collateral   143 

XXVII.  Double  Taxation    146 

XXVIII.  Estates  of  Non-resident  Decedents 151 

XXIX.  Property  beyond  the  Jurisdiction 167 

XXX.  Situs  of  Choses  in  Action 172 

XXXI.  Beneficial  Interests  Taxed 183 

XXXII.  Exemptions  in  General . 193 

XXXIII.  Exemptions  for  Governmental  Purposes    211 

XXXIV.  Exemptions  for  Religious  or  Charitable  Purposes    216 

XXXV.  Rates    224 

XXXVI.  Interest  and  Penalties   227 

XXXVII.  When  Tax  Accrues 231 

XXXVIII.  Persons  Liable    235 

XXXIX.  Inventory    247 

XL.  Appraisal 248 


vi 


TABLE  OF  CONTENTS. 


Chapter. 

XLI. 

XLII. 

XLIII. 

XLIV. 

XLV. 

XLVI. 


Page. 


Debts  and  Expenses    265 

Assessment  of  Tax 279 

Collection  of  Tax  289 

Lien   294 

Payment   297 

Refunding  to  Taxpayer 298 

STATUTES  ANNOTATED 303 

TABLES 1281 


THE  INHERITANCE  TAX  LAW. 


CHAPTER  I. 


DEFINITIONS. 

§  1.  Death  Duty. 

§  2.  Inheritance  Tax. 

§  3.  Legacy  Tax. 

§  4.  Succession  Tax. 

§  5.  Legacy  and  Succession  Tax  Distinguished. 

§  6.  Residence,  Domicile,  etc. 

Sec.  1.    Death  Duty. 

A  death  duty^  is  an  exaction  by  the  state  to  be  collected  from 
the  property  left  by  a  deceased  person  while  in  its  custody,  pre- 
scribed upon  the  occasion  of  his  death,  and  the  consequent  devo- 
lution of  his  property  by  force  of  its  laws.^ 

^  Death  Duties.  The  comprehensive  English  term  for  a  variety  of  specific 
duties  levied  under  acts  of  Parliament  on  the  estates  of  deceased  persons.  In- 
cluded under  the  term  are  (1)  probate  duties,  (2)  account  duties,  (3)  legacy 
duties,  (4)  succession  duties,  and  (5)  estate  duties.  —  International  Encyclopedia. 

^Appeal  oj  Hopkins,  77  Conn.  644,  649,  60  A.  657. 

Sec.  2.    Inheritance  Tax. 

The  fact  that  a  statute  is  called  an  inheritance  tax  is  of  much 
significance.  No  term  sufficiently  comprehensive  could  be  more 
aptly  employed  to  embrace  a  tax  upon  the  right  to  acquire  interests 
in  both  real  and  personal  property  passing  by  will  or  by  inheritance, 
whether  lineal  or  collateral,  than  the  term  "inheritance  tax."  By 
this  term  the  legislature  intended  to  express  the  specific  nature 
of  the  tax  and  that  it  should  operate  upon  interests  to  which  a 
person  succeeded  upon  death. ^ 

The  word  "inheritance"  is  no  doubt  properly  confined  to  property 
passing  by  descent  or  by  operation  of  law.  But  by  popular  use 
this  word  has  become  applicable  to  cases  of  testacy  and  is  broad 


»    e    ci  •    "••   • 


;  ^1  s";:.""'/!: :    :  :\  *  Inheritance  tax  law.  I§§  3-5. 

enough  to  sustain  a  provision  imposing  a  tax  on  the  right  of  suc- 
session  by  will.^ 

i/n  re  Macky,  45  Colo.  316,  102  P.  1075.  See  In  re  Morris,  138  N.  C.  259, 
50  S.  E.  682. 

Un  re  White,  42  Wash.  360,  84  P.  831. 

Under  the  Tennessee  Statute  of  1909,  c.  479,  sec.  20,  providing  for  the  taxa- 
tion of  "inheritances,"  it  was  claimed  that  the  word  "inheritances"  is  to  be 
limited  to  cases  of  intestacy.  The  court  observes  that  if  this  was  so  the  statute 
might  be  void,  as  class  legislation;  and  that  the  revenue  statutes  should  receive 
a  "fair  construction  to  effect  the  end  for  which  they  were  intended."  The 
court  notes  that  the  civil  law  definition  of  the  word  "inheritances"  is  "the 
succession  to  all  rights  of  the  deceased";  and  is  of  two  kinds,  by  will  and  by  the 
operation  of  law.  The  court  concludes  that  it  is  inconceivable  that  the  legis- 
lature intended  by  the  term  inheritance  to  confine  this  tax  to  those  taking  as 
heirs  or  next  of  kin.     Knox  v.  Emerson^  123  Tenn.  409,  131  S.  W.  972. 

See  "Smith's  Wealth  of  Nations,"  Book  5,  c.  2. 


Sec.  3.    Legacy  Tax. 

A  tax  upon  an  interest  in  personal  property  on  the  death  of 
another  is  a  legacy  tax. 

In  re  Macky,  45  Colo.  316,  102  P.  1075. 

Sec.  4.    Succession  Tax. 

The  term  "succession  tax"  is  of  the  broadest  significance.  A 
tax  upon  an  interest  in  real  estate  could  be  aptly  termed  a  succession 
tax. 

In  re  Macky,  45  Colo.  316,  102  P.  1075. 

Sec.  5.    Legacy  and  Succession  Tax  Distinguished. 

A  legacy  duty  should  be  distinguished  from  a  succession  tax, 
as  the  former  taxes  a  specific  inheritance  or  bequest,  while  the 
latter  taxes  a  transfer  of  property  in  general. 

The  New  Jersey  statute  of  1894  differs  from  the  New  York  act  of  1892,  which 
assumes  to  tax  the  transfer  of  property  within  the  jurisdiction,  and  the  New 
Jersey  statute  of  1894  does  not  undertake  to  tax  all  transfers  of  property  within 
the  jurisdiction,  but  only  taxes  an  inheritance,  distribution,  bequest,  or  devise. 
In  this  respect  the  New  Jersey  statute  differs  also  from  the  Maryland  statute 
construed  in  State  v.  Dalrymple,  70  Md.  594,  17  A.  82,  3  L.  R.  A.  372.  For  the 
same  reason  the  question  is  different  from  what  it  is  in  Massachusetts,  as  in 
Greves  v.  Shaw,  173  Mass.  205,  53  N.  E.  372.  In  short,  the  New  Jersey  statute 
imposes  a  legacy  duty  and  not  a  transfer  or  succession  tax,  as  was  decided  in 
reference  to  the  English  statute  in  Thompson  v.  Advocate  General,  12  CI.  &  F.  1. 
Neilson  v.  Russell,  76  N.  J.  L.  655,  71  A.  286,  reversing  76  N.  J.  L.  27,  69  A.  476. 


§6.]  DEFINITIONS.  3 

Sec.  6.    Residence,  Domicile,  etc. 

The  terms  residence,  abode,  domicile,  and  kindred  terms  differ 
somewhat  in  meaning,  but  when  used  in  statutes  similar  to  the 
Illinois  inheritance  statute  have  frequently  been  held  to  be 
synonymous. 

In  re  Moir,  207  111.  180,  69  N.  E.  905,  99  Am.  St.  Rep.  205. 


CHAPTER  II. 


NATURE  OF  TAX. 

§    7.  An  Excise  Tax. 

§    8.  A  Revenue  Act. 

§   9.  Not  a  Property  Tax. 

§  10.  Right  to  Receive  Rather  than  Right  to  Transmit  is  Taxed. 

§  11.  Not  a  Penalty  or  Forfeiture. 

§  12.  Privilege  Taxed  as  a  Commodity. 

Sec.  7.    An  Excise  Tax. 

Inheritance  taxes  are  commonly  and  properly  called  excise 
taxes. 

Booth  V.  Commonwealth,  130  Ky.  88,  113  S.  W.  61,  citing  State  v.  Switzler,  143 
Mo.  287,  45  S.  W.  245.  Minot  v.  Winthrop,  162  Mass.  113,  122,  26  L.  R.  A.  259, 
Kingsbury  v.  Chapin,  196  Mass.  533,  537,  82  N.  E.  700.  In  re  Touhy,  35 
Mont.  431,  90  P.  170,  172.  Scholey  v.  Rew,  90  U.  S.  (23  Wall.)  331.  KnowUon 
V.  Moore,  178  U.  S.  41,  81,  20  S.  Ct.  747,  44  L.  Ed.  969. 

The  tax  laid  by  the  United  States  statute  of  1864  is  not  a  direct  tax  but  instead 
of  that  is  plainly  an  excise  tax  authorized  by  the  United  States  Constitution,  sec.  8, 
art.  1.  The  succession  or  devolution  of  real  estate  is  the  subject-matter  of  the  tax 
or  duty.  "Successor  is  employed  in  the  act  as  the  correlative  to  predecessor,  and 
the  succession  or  devolution  of  the  real  estate  is  the  subject-matter  of  the  tax  or 
duty,  or,  in  other  words,  it  is  the  right  to  become  the  successor  of  real  estate  upon 
the  death  of  the  predecessor,  whether  the  devolution  or  disposition  of  the  same 
is  eflfected  by  will,  deed,  or  laws  of  descent,  from  a  grantor,  testator,  ancestor,  or 
other  person  from  whom  the  interest  of  the  successor  has  been  or  shall  be  derived; 
nor  is  the  question  affected  in  the  least  by  the  fact  that  the  tax  or  duty  is  made  a 
lien  upon  the  land,  as  the  lien  is  merely  an  appropriate  regulation  to  secure  the 
collection  of  the  exaction."  Per  Clifford,  J.,  in  Scholey  v.  Rew,  90  U.  S.  (23  Wall.) 
331,  347. 

See  further,  post,  s.  28,  as  to  derivation  of  power  to  lay  tax. 

Sec.  8.     A  Revenue  Act. 

Inheritance    taxes    have    been    properly  denominated  revenue 
taxation. 
Succession  of  Givanovich,  50  La.  Ann.  625. 

Sec.  9.    Not  a  Property  Tax. 

The  courts  have  held,  with  few  exceptions,^  that  an  inheritance  tax 
is  a  legacy  duty,*  or  a  tax  on  the  succession,  and  is  not  a  tax  on  the 


§  9.]  NATURE  OF  TAX.  5 

property  itself,^  even  in  those  states  which  hold  the  right  to 
inherit  to  be  a  natural  property  right.'*  This  result  is  reached, 
although  the  amount  of  the  tax  may  be  measured  by  the  value  of 
the  property,^  although  it  is  made  a  lien  on  property,®  or  although 
the  statute  on  its  face  levies  a  tax  on  property.^ 

^State  V.  Switzler,  143  Mo.  287,  330,  45  S.  W.  245,  40  L.  R.  A.  280,  65  Am.  St. 
Rep.  653.  In  re  Cope,  191  Pa.  St.  1,  20,  43  A.  79,  29  Pittsb.  Leg.  J.  N.  S.  379, 
45  L.  R.  A.  316,  71  Am.  St.  Rep.  749,  44  Wkly.  Notes  Cas.  89.  (The  direct  inherit- 
ance act  of  1897.) 

Wis.  St.  1889,  c.  176,  is  not  a  tax  upon  a  succession  but  upon  the  whole  estate 
at  its  appraised  valuation  regardless  of  whether  it  is  solvent  or  insolvent.  In  the 
case  of  an  insolvent  estate  nothing  would  be  left  after  the  payment  of  debts  for 
transmission,  and  in  most  estates  there  are  likely  to  be  sufficient  debts  to  reduce 
the  amount  of  such  transmission  far  below  the  amount  of  such  valuation.  Besides, 
the  amount  of  such  tax  is  graduated  by  the  amount  of  such  appraisal  and  is  to  be 
paid  by  the  executors  at  the  time  of  filing  the  appraisal,  notwithstanding  they 
may  only  be  interested  as  such  officials  and  never  succeed  to  any  of  such  estate. 
Manifestly  the  burden  imposed  is  not  a  succession  tax  but  a  tax  upon  the  whole 
estate  regardless  of  whether  it  is  solvent  or  insolvent.  State  v.  Mann,  76  Wis.  469, 
478,  45  N.  W.  526,  46  N.  W.  51. 

^Neilson  v.  Russell,  76  N.  J.  L.  655,  71  A.  286,  reversing  76  N.  J.  L.  27,  69 
A.  476. 

^ State  V.  Handlin  (Ark.  1911),  139  S.  W.  1112.  In  re  Magnes,  32  Colo.  527, 
77  P.  853.  In  re  Macky ,  45  Colo.  316, 102  P.  1075.  National  Safe  Dep.  Co.  v.  Sneed, 
250  111.  584, 95  N.  E.  973.  McGhee  v.  State,  105  Iowa  9,  74  N.  W.  695.  Wieting  v. 
Morrow  (Iowa,  1911),  132  N.  W.  193.  Booth  v.  Comm,  130  Ky.  88,  113  S.  W.  61. 
Leavell  v.  Arnold,  131  Ky.  426,  115  S.  W.  232.  Union  Trust  Co.  v.  Durfee,  125 
Mich.  487,  84  N.  W.  1101,  7  Detroit  Leg.  N.  597.  State  v.  Bazille,  97  Minn.  11, 
106  N.  W.  93,  6  L.  R.  A.  N.  S.  732.  State  v.  Henderson,  160  Mo.  190,  217, 
60  S.  W.  1093.  Gelsthorpe  v.  Furnell,  20  Mont.  299,  51  P.  267,  39  L.  R.  A.  170. 
Eastwood  V.  Russell  (N.  J.  1911),  81  A.  108.  In  re  Swift,  137  N.  Y.  77,  88,  32 
N.  E.  1096, 18  L.  R.  A.  709,  64  Hun  639, 16  N.  Y.  Suppl.  193, 19  N.  Y.  Suppl.  292. 
In  re  Davis,  149  N.  Y.  539,  547,  44  N.  E.  185,  affirming  91  Hun  53.  In 
re  Pell,  171  N.  Y.  48,  56,  63  N.  E.  789,  57  L.  R.  A.  540,  89  Am,  St.  Rep.  791, 
reversing  60  N.  Y.  App.  Div.  286,  70  N.  Y.  Suppl.  196.  In  re  Vanderbilt, 
172  N.  Y.  69,  73,  64  N.  E.  782,  modifying  68  N.  Y.  App.  Div.  27,  74  N.  Y.  Suppl. 
450.  See  In  re  McPherson,  104  N.  Y.  306,  317,  10  N.  E.  685,  58  Am.  Rep.  502, 
where  the  court  refuses  to  decide  the  question.  In  re  Morris,  138  N.  C.  259,  50 
S.  E.  682.  State  v.  Ferris,  53  Ohio  St.  314,  326,  41  N.  E.  579,  30  L.  R.  A.  218. 
In  re  McKennan,  25  S.  D.  369,  126  N.  W.  611,  130  N.  W.  33.  Eyre  v.  Jacob,  14 
Gratt.  (Va.)  422, 430,  73  Am.  Dec.  367.  Schoolfield  v.  Lynchburg,  78  Va.  366,  372. 
In  re  Howard,  80  Vt.  489,  495,  68  A.  513.  Black  v.  State,  113  Wis.  205,  217,  89  N. 
W.  522,  90  Am.  St.  Rep.  853.  State  v.  Bullen,  143  Wis.  512, 518, 128  N.  W.  109. 
Scholey  v.  Rew,  90  U.  S.  (23  Wall.)  331,349.  See  Stellwayen  v.  Durfee,  130  Mich. 
166,  173,  89  N.  W.  728. 

It  is  not  a  tax  upon  the  property  or  money  bequeathed,  but  a  diminution  of  the 
amount  that  otherwise  would  pass  under  the  will,  and  hence  what  the  legatee 
really  receives  is  not  taxed  at  all.    It  is  that  which  is  left  after  the  tax  has  been 


6  INHERITANCE  TAX  LAW.  [§9. 

taken  off.  It  is  only  imposed  once  and  that  is  before  the  legacy  has  reached  the 
legatee,  and  before  it  has  become  his  property.  In  re  Finnen,  193  Pa.  St.  72,  46 
A.  269  (the  collateral  inheritance  tax  of  1887).  "It  is  a  reduction  by  the  state 
of  a  part  of  a  deceased  person's  property  which  the  state  may  take  to  meet  its 
necessities  and  which,  in  certain  cases,  it  may  take  in  toto,  as  in  the  cases  of  es- 
cheated property."  Per  Wilkes,  J.,  in  State  v.  Alston,  94  Tenn.  674,  30  S.  W.  750, 
28  L.  R.  A.  178. 

The  exemption  in  La.  Const.  1898  from  the  operation  of  the  inheritance  tax 
of  property  which  had  borne  its  just  share  of  taxation  arose  from  a  misapprehen- 
sion of  the  inheritance  tax,  which  is  not  a  tax  proper,  but  a  bonus  or  premium 
exacted  by  the  sovereign  on  the  transmission  of  an  estate,  the  amount  being  meas- 
ured by  the  value  of  the  property.  In  its  very  nature  it  is  a  privilege  or  fran- 
chise tax  and  is  not  affected  by  the  nature  and  character  of  the  property 
transmitted.     Succession  of  Kohn,  115  La.  Ann.  71,  38  S.  898. 

That  the  right  to  acquh*e  property  inter  vivos  is  a  natural  right  and  the  tax 
on  it  is  a  tax  on  property  was  suggested  and  not  considered  as  the  case  pending 
was  one  of  intestacy  in  Eastwood  v.  Russell  (N.  J.  1911),  81  A.  108. 

*  It  was  claimed  that  because  the  court  held  in  the  Nunnemacher  case,  129  Wis. 
190,  108  N.  W.  627,  9  L.  R.  A.  N.  S.  121,  that  the  right  to  inherit  a  devised  prop- 
erty was  a  natural  right,  therefore  it  was  a  property  right;  and  hence  an  inherit- 
ance tax  must  logically  be  held  to  be  a  tax  upon  a  property  right  and  subject  to 
the  provision  that  it  must  be  absolutely  uniform.  The  court  says  that  the  con- 
clusion does  not  follow;  that  taxes  frequently  are  levied  upon  transactions  or 
occupations  which  are  matters  of  natural  right;  and  that  these  matters  are  mere 
privilege  taxes.    Beats  v.  State,  139  Wis.  544,  556,  121  N.  W.  347. 

^Succession  of  Kohn,  115  La.  Ann.  71,  38  S.  898.  Kingsbury  v.  Chapin,  196 
Mass.  533,  537,  82  N.  E,  700.  State  Street  Trust  Co.  v.  Stevens,  209  Mass.  373, 
95  N.  E.  851.     Pullen  v.  Commissioners,  66  N.  C.  361. 

"In  nearly  all  inheritance  tax  laws  the  statutes  provide  for  the  appraising  of 
property  to  be  inherited,  but  the  object  of  such  valuation  is  not  to  tax  the  prop- 
erty itself,  it  is  to  arrive  at  a  measure  of  price  by  which  the  privilege  of  inheriting 
can  be  valued."  Per  Hunt,  J.,  in  Gelsthorpe  v.  Furnell,  20  Mont.  299,  51  P.  267,  39 
L.  R.  A.  170. 

While  referring  to  the  property  devised  or  inherited  it  does  so  only  to  secure 
uniformity  among  the  beneficiaries  receiving  the  property,  the  object  being  to 
tax  each  in  proportion  to  his  or  her  interest  received  and  for  that  privilege.  State 
V.  Henderson,  160  Mo.  190,  215,  60  S.  W.  1093. 

It  is  insisted  that  as  the  tax  is  a  certain  per  cent  of  the  value  of  the  estate  and 
the  property  pays  it,  it  is  therefore  a  tax  on  the  property  itself.  But  the  court 
relying  on  Eyre  v.  Jacobs,  14  Gratt.  422,  remarks  that  this  is  by  no  means  a  neces- 
sary logical  conclusion,  that  "the  intention  of  the  legislature  was  plainly  to  tax 
the  transmission  of  property  by  devise  or  descent  to  collateral  kindred  and  to 
require  that  a  party  then  taking  the  benefit  of  a  civil  right  accrued  to  him  under  the 
law  should  pay  a  certain  premium  for  its  enjoyment;  and  as  it  was  thought  just  and 
reasonable  that  the  amount  of  the  premium  should  bearacertain  proportion  to  the 
value  of  the  subject  enjoyed  it  is  fixed  at  a  certain  per  centum  upon  the  value  of 
the  whole  estate  transmitted."    Booth  v.  Commonwealth,  130  Ky.  88,  113S.  W.61. 

''State  V.  Ferris,  53  Ohio  St.  314,  326,  41  N.  E.  579,  30  L.  R.  A.  218,  distinguish- 
ing E^tote  ofBittinger,  129  Pa.  St.  344.     As  to  lien,  see  post,  s.  406  et  seq. 


§  10.]  NATURE  OF  TAX.  7 

"The  lien  is  merely  an  appropriate  regulation  to  secure  the  collection  of  the 
exaction."  Per  Clifford,  J.,  in  Scholey  v.  Rew,  90  U.  S.  (23  Wall.)  331,  347,  23 
L.  R.  A.  99.     Contra,  In  re  Bittinger,  129  Pa.  St.  338. 

■'Gelsthorpe  v.Furnell,  20  Mont.  299,  51  P.  267,  269,  39  L.  R.  A.  170.  The  court 
relies  upon  State  v.  Hamlin,  86  Me.  495,  30  A.  76,  41  Am.  St.  Rep.  569,  25  L.  R.  A. 
632,  and  on  State  v.  Ferris,  53  Ohio  St.  314,  41  N.  E.  579,  where  the  statutes  also 
on  their  face  were  upon  the  "property,"  and  although  it  provides  that  administra- 
tors, executors  and  trustees  shall  be  liable  for  all  such  taxes.  Humphreys  v.  State, 
70  Ohio  St.  67,  84,  101  Am.  St.  888,  70  N.  E.  957,  65  L.  R.  A.  776,  affirming  13 
Low.  D.  168,  1  C.  C.  N.  S.  1,  14  Cur.  D.  238. 

Sec.  10.     Right  to  Receive  rather  than  Right  to  Transmit 
is  Taxed. 

It  is  the  better  view  that  the  inheritance  tax  is  laid  on  the  right 
or  privilege  of  receiving  property  rather  than  on  that  of  trans- 
mitting,^  although  it  has  been  held  also  a  tax  on  the  right  of  trans- 
mission,^  or  on  the  transmission  itself,^  and  the  question  will 
depend  on  the  language  of  the  particular  statute."* 

1  In  re  Kennedy,  157  Cal.  517,  108  P.  280.  In  re  Macky,  45  Colo.  316,  102 
P.  1075.  In  re  Speed,  216  111.  23,  27,  74  N.  E.  809, 108  Am.  St.  Rep.  189;  affirmed 
203  U.  S.  553,  State  v.  Vinsonhaler,  74  Neb.  675,  105  N.  W.  472.  Pullen  v. 
Commissioners,  66  N.  C.  361.  State  v.  Ferris,  53  Ohio  St.  314,  325,  41  N.  E. 
579,  30  L.  R.  A.  218.  Humphreys  v.  State,  70  Ohio  St.  67,  84,  101  Am.  St. 
888,  70  N.  E.  957,  65  L.  R.  A.  776,  affirming  13  Low.  D.  168,  C.  C.  N.  S.  1;  14 
Cir.  D.  238.  Eury  v.  State,  72  Ohio  St.  448,  74  N.  E.  650.  State  v.  Alston, 
94  Tenn.  674,  30  S.  W.  750,  28  L.  R.  A.  178.  Knox  v.  Emerson,  123  Tenn.  409, 
131  S.  W.  972.  In  re  Joyslin,  76  Vt.  88,  56  A.  281.  Black  v.  State,  113  Wis. 
205,  217,  89  N.  W.  522,  90  Am.  St.  Rep.  853.  State  v.  Bullen,  143  Wis.  512,  518, 
128  N.  W.  109. 

The  most  exact  rule  is  that  which  regards  the  inheritance  tax  as  upon  the  right 
to  receive  property  rather  than  the  right  to  dispose  of  it.  "Properly  under- 
stood, it  is  not  the  right  to  transmit,  but  the  right  and  privilege  to  receive,  that 
is  taxed.  The  right  to  dispose  of  property  during  the  lifetime  of  the  owner 
cannot  be  separated  from  the  property  itself,  and  therefore  to  tax  the  right  of 
disposal  by  contract  in  the  lifetime  of  the  owner,  even  though  it  take  effect  at 
his  death,  is  to  tax  the  property  itself.  But  the  right  to  dispose  of  the  property 
by  will  or  descent,  taking  effect  after  the  death  of  the  owner,  is  not  so  closely 
connected  with  the  right  of  property,  and  it  is  not  clear  that  such  right  may  not 
be  taxed.  But,  when  the  right  to  receive  the  property  is  considered,  it  is  clear 
that  the  right  is  distinct  and  separate  from  the  propeity  itself,  and  the  state 
may  tax  this  right  to  receive  property;  and  this  is  so  whether  the  property  is 
disposed  of  by  the  owner  during  his  lifetime,  or  at  his  death.  This  right  to 
receive  property  is  under  the  control  of  the  legislature,  and  it  has  the  power 
to  regulate  and  lay  such  burdens  thereon  as  it  may  see  fit,  within  the  provisions 
of  the  constitution.  To  regulate  by  taxation  or  otherwise  the  privilege  or  right 
to  receive  property  is  not  in  conflict  with  the  first  section  of  the  bill  of  rights, 
which  recognizes  the  inalienable  right  of  acquiring,  possessing,  and  protecting 


8  INHERITANCE  TAX  LAW.  [§§11-12. 

property.  Were  it  otherwise,  all  our  laws  as  to  wills,  descent,  distribution,  and 
conveyances  would  be  unconstitutional,"  Per  Burkett,  J.,  in  State  v.  Ferris, 
53  Ohio  St.  314,  41  N.  E.  579,  approved  in  Gelsthorpe  v.  Furnell,  20  Mont.  299, 
51  P.  267,  39  L.  R.  A.  170. 

^State  Street  Trust  Co.  v.  Stevens,  209  Mass.  373,  95  N.  E.  851.  "This  is  an 
excise  tax,  imposed,  not  only  upon  the  right  of  the  owner  of  property  to  transmit 
it  after  his  deach,  but  also  upon  the  privilege  of  his  beneficiaries  to  succeed  to  the 
property  thus  dealt  with,"  Att.  Gen.  v.  Stone,  209  Mass.  186,  95  N.  E.  395. 

3/w  re  McKennan,  25  S.  Dak.  369,  126  N.  W.  611,  614,  reversed  on  rehearing, 
130  N.  W.  33. 

The  court  after  considering  ancient  and  modern  death  duties  concludes  as 
follows:  "Although  different  modes  of  assessing  such  duties  prevail,  and  although 
they  have  different  accidental  names,  such  as  probate  duties,  stamp  duties, 
taxes  on  the  transaction,  or  the  act  of  passing  of  an  estate  or  a  succession,  legacy 
taxes,  estate  taxes  or  privilege  taxes,  nevertheless  tax  laws  of  this  nature  in  all 
countries  rest  in  their  essence  upon  the  principle  that  death  is  the  generating 
source  from  which  the  particular  taxing  power  takes  its  being  and  that  it  is  the 
power  to  transmit,  or  the  transmission  from  the  dead  to  the  living,  on  which 
such  taxes  are  more  immediately  rested."  Knowlton  v.  Moore,  178  U.  S.  41, 
56,  20  S.  Ct.  747,  44  L.  Ed.  969. 

*  Minot  V.  Winthrop,  162  Mass.  113. 

Sec.  11.    Not  a  Penalty  or  Forfeiture. 

The  tax  is  in  the  nature  of  an  assessment  and  is  not  a  penalty,* 
or  a  forfeiture. 2 

^Strode  v.  Conn.,  52  Pa.  St.  181. 

^Arnaud  v.  Arnaud,  3  La.  Ann.  337.  Carpenter  v.  Pennsylvania,  17  How.  (U.  S.) 
456,  462. 

Sec.  12.    Privilege  Taxed  as  a  "Commodity.'' 

The  privilege  of  transmitting  or  receiving  by  will  or  descent 
property  on  the  death  of  the  owner  is  a  "commodity"  within  the 
meaning  of  this  word  in  the  Massachusetts  constitution,  and  an 
excise  may  be  laid  upon  it. 

Minot  V.  Winthrop,  162  Mass.  113,  122  (Lathrop,  J.,  dissenting),  26  L.  R.  A. 
259. 


CHAPTER  III, 


THE  INHERITANCE  TAX  IN  POLITICAL 
ECONOMY. 

§  13.     Economically  Sound. 

§  14.    Arguments  in  Favor  of  and  Against  Tax. 

Sec.  13.    Economically  Sound. 

Firmly  entrenched  in  a  long  and  honorable  history,  with  the 
endorsement  of  the  leading  economists  of  ancient  and  modern  times, 
and  approved  by  the  present  practice  of  most  civilized  govern- 
ments, he  would  be  indeed  brave  who  should  attempt  to  attack 
the  theory  or  validity  of  any  sane  inheritance  tax  from  an  economic 
standpoint. 

See  In  re  Morris,  138  N.  C.  259,  50  S.  E.  682. 

A  very  learned  discussion  of  the  economic  theory  of  the  inheritance  taxes 
may  be  found  in  the  monograph  on  the  inheritance  tax  by  Max  West,  pubUshed 
in  1908,  on  pages  189,  et  seq.  Mr.  West  notes  that  the  inheritance  tax  has 
received  the  approbation  of  political  economists  from  a  very  early  day  down 
to  recent  times.  It  was  advocated  by  Pliny  the  younger,  and  by  Adam  Smith 
(Wealth  of  Nations,  bk,  V,  chap.  II,  pt.  II),  although  Smith  pointed  out  the 
inequality  of  the  taxes  caused  by  the  fact  that  the  frequency  of  transference  was 
not  always  equal  in  property  of  equal  value.  Mr.  West  notes  the  objection  of 
Ricardo  (Principles  of  Political  Economy  and  Taxation,  chap.  VIII),  whose  views 
were  criticised  by  McCulloch.  Jeremy  Bentham  was  a  stror^g  advocate  of  the 
inheritance  tax.  John  Stuart  Mill  (Principles  of  Political  Economy,  bk.  V, 
chap.  XI,  s.  3),  advocated  not  only  progressive  inheritance  taxes  but  the 
abolition  of  collateral  inheritance  and  a  limitation  of  the  amount  which  any  one 
should  be  allowed  to  take  either  by  inheritance  or  bequest.  Mr.  West,  on 
pages  195  and  196,  cites  many  political  writers  on  inheritance  taxes. 

From  an  economic  standpoint  no  tax  has  more  to  commend  it  and  none 
is  easier  to  defend  As  has  been  well  said:  "This  method  of  increasing  the 
public  revenue  is  wise,  simple,  and  effective  —  wise  because  it  does  not  touch 
private  property  during  the  life  of  the  owner  and  thus  places  no  burden  upon 
business  activity;  simple  because  the  tax  is  easily  ascertained  and  collected 
while  estates  are  being  administered  in  the  probate  court;  effective  because 
by  the  application  of  progressive  rates,  it  adds  no  burden  to  the  poor,  but  permits 
those  who  have  much  to  contribute  to  the  government  somewhat  in  proportion 
to  their  ability  to  pay.  It  invades  no  natural  rights.  It  violates  no  maxim  of 
the  law.  It  overleaps  no  constitutional  barriers.  It  is  neither  revolutionary 
nor  socialistic,  but  is,  on  the  contrary,  a  measure  of  practical  wisdom  and  social 


10  INHERITANCE  TAX  LAW.  [§  14. 

justice,  and  has  been  truly  styled  an  'institution  of  democracy.'  "  Another 
desirable  feature  of  the  inheritance  tax  is  the  fact  that  it  cannot  be  shifted. 
(Report  of  Minnesota  Tax  Commission,  1910.) 

How  often  Property  becomes  Subject  to  Tax.  In  the  learned  treatise 
on  the  inheritance  tax  by  Max  West,  pages  228,  et  seq.,  he  points  out  that  the 
length  of  a  generation  is  from  thirty-three  to  thirty-six  years  and  that  one  thirty- 
third  to  one  thirty-sixth  of  the  private  wealth  of  a  country  will  change  hands 
annually  by  inheritance,  bequest,  or  gifts  causa  mortis,  aside  from  the  exemptions. 
It  has  been  calculated  that  in  Massachusetts  one-ninth  of  the  tax  will  be  elimi- 
nated by  an  exemption  of  five  thousand  dollars  or  one-fifth  by  an  exemption 
of  ten  thousand  dollars,  and  that  at  least  one-fiftieth  of  the  private  wealth  of  a 
state  should  annually  become  subject  to  inheritance  taxes,  even  if  the  ten  thou- 
sand dollar  exemption  applied  to  all  estate  in  New  York  and  Massachusetts. 

Sec.  14.    Arguments  in  Favor  of  and  Against  the  Tax. 

The  most  common  arguments  against  the  tax  are  that  it  bears 
on  those  least  able  to  afford  it,  and  that  it  is  harsh  and  unequal 
in  one  form  or  another.^ 

No  defense  can  well  be  made  of  confiscation,  as  practiced  in 
Oklahoma  and  in  the  New  York  act  of  1910,  or  of  the  double 
taxation  which  most  of  our  statutes  impose  on  non-residents,  but 
to  a  fair,  reasonable  law  with  liberal  exemptions  there  can  be  no 
objection. 

There  is  much  to  be  said  in  favor  of  the  tax.  It  is  certain  and 
economical  in  collection,  it  bears  usually  on  the  wealthy,  who  are 
best  able  to  pay  it,  and  as  it  never  takes  what  the  taxpayer  has, 
but  only  what  he  is  to  get,  it  is  ideal  from  the  standpoint  of  the 
French  tax  commissioner  who  remarked,  "The  science  of  taxation 
consists  in  plucking  the  most  feathers  with  the  least  squawking.  "^ 

1  Mr.  West,  on  pages  209  et  seq.,  considers  the  objections  to  the  inheritance 
tax  as  follows:  — 

First.   That  it  is  a  tax  on  capital  and  hence  tends  to  diminish  the  national  wealth. 

Second.  Its  inequality  on  account  of  a  varying  frequency  of  transfers  result- 
ing from  death. 

Third.  That  to  levy  a  property  tax  and  inheritance  tax  on  the  same  property 
in  the  same  year  constitutes  double  taxation. 

Fourth.    That  the  tax  is  a  tax  upon  widows  and  orphans. 

Fifth.     That  the  tax  will  discourage  industry  and  thrift  and  drive  away  capital. 

Sixth.     That  the  tax  will  be  evaded  by  gifts  inter  vivos. 

Seventh.  That  the  tax  is  confiscation,  extortion,  and  a  dangerous  step  towards 
communism. 

2 Advantages.  On  pages  213  et  seq.,  Mr.  West  considers  the  practical  advan- 
tages of  the  inheritance  tax  as  follows:  — 

It  is  certain,  the  cost  of  collection  is  not  high,  and  as  to  the  time  of  payment, 
it  is  the  most  convenient  of  all  direct  taxes.     It  leaves  little  opportunity  for 


§  14.]  IN  POLITICAL  ECONOMY.  11 

fraud.  The  receipts  do  not  come  in  all  at  the  same  time,  but  are  distributed 
through  the  entire  year.  The  returns  are  remarkably  constant  from  year  to 
year.  It  is  elastic,  as  an  increase  in  the  rate  of  tax  cannot  diminish  the  death 
rate  and  the  tax  itself  cannot  be  shifted. 

"Ability  or  faculty  to  pay  has  come  to  be  the  test  in  determining  the  just- 
ness of  taxation."  State  v.  Baaille,  97  Minn.  11,  16,  106  N.  W.  93,  6  L.  R.  A. 
(N.  S.)  732. 

The  arguments  that  the  recipient  of  the  larger  amount  is  able  to  pay  a 
larger  rate  of  tax  and  that  it  is  against  public  policy  to  allow  large  estates  to 
be  held  together  after  the  death  of  the  owners,  are  discussed  in  In  re  McKennan, 
25  S.  D.  369,  126  N.  W.  611,  618  (reversed  on  rehearing),  130  N.  W.  33. 

Arguments  Classified.  Mr.  West  classifies  the  arguments  in  favor  of  the 
inheritance  tax,  on  pages  199    /  seq.,  as  follows:  — 

1.  The  Extension-of-Escheat  Argument  —  that  no  good  reason  exists  for 
intestate  inheritance  between  distant  relatives. 

2.  The  Diffusion-of- Wealth  Argument  —  that  large  estates  should  not  be 
allowed  to  remain  in  one  family. 

3.  The  Partnership  Argument  —  that  the  state  is  a  silent  partner  in  the 
business  of  each  citizen  and  when  the  partnership  is  dissolved  by  death  the 
silent  partner  is  entitled  to  a  share  of  the  capital. 

4.  The  Value-of -Service  Argument  —  that  the  inheritance  tax  is  a  payment 
for  the  particular  services  connected  with  the  institutions  of  inheritance  and 
bequest  and  that  these  are  not  natural  rights,  but  privileges  conferred  by  positive 
law. 

6.  The  Cost-of-Service  Argument  considers  the  expense  of  governmental 
action  rather  than  its  value  to  the  heir  and  would  make  the  tax  defray  the 
expense  of  the  probate  courts,  and  other  expenses  connected  with  the  inheritance. 

6.  The  Back-Taxes  Argument,  to  the  effect  that  inheritance  taxes  are  in 
place  of  taxes  which  have  been  evaded  by  property  owners  during  their  lives. 

7.  The  Lump-Sum  Argument  considers  the  tax  as  a  property  tax  or  a  capital- 
ized income  tax  and  paid  once  in  a  generation  instead  of  once  a  year. 

8.  The  Accidental-Income  Argument  —  that  inheritance  is  a  sudden  acquisi- 
tion of  property  without  effort  on  the  part  of  the  heir,  an  accretion  of  wealth, 
which  manifestly  increases  his  ability  to  pay  taxes. 

9.  The  Co-heirship  of  the  State  in  which  the  state  and  the  local  political 
units  are  regarded  as  co-heirs  with  individuals. 

The  tax  is  regarded  in  number  1  and  2  as  a  limitation  of  inheritance 
in  numbers  3,  4  and  5  as  a  fee;  and  in  numbers  6,  7  and  8  as  a  tax. 

Strongest  Argument  for  the  Tax.  "One  of  the  strongest  arguments  in  favor 
of  the  inheritance  tax  arises  from  the  recognized  right  and  duty  of  the  state 
to  regulate  inheritance  to  such  an  extent  as  the  public  welfare  may  require. 
The  right  of  bequest  and  inheritance  is  a  natural  right  only  to  the  extent  that 
it  is  socially  useful;  that  it  furnishes  an  incentive  to  the  creation  of  wealth  or 
furthers  its  preservation  and  judicious  management.  Although  we  uphold 
devise  and  descent  as  the  best  known  method  of  securing  this  end,  yet  we  must 
admit  that  it  is  open  to  very  serious  objection  and  very  often  fails  completely. 
While  the  man  who  acquires  wealth  by  that  act  gives  evidence  of  his  ability 
to  manage  it  properly,  it  is  by  no  means  so  certain  that  his  heirs  will  possess 
that  qualification.     It  is  most  fitting,  therefore,  that  the  state  in  apportioning 


12  INHERITANCE  TAX  LAW.  [§14. 

the  burden  of  taxation  should  take  cognizance  of  this  condition  and  obtain  a 
portion  of  its  revenue  from  estates  at  the  time  of  their  transfer  to  hands  that 
have  given  no  evidence  of  ability  to  manage  them  economically.  Such  a  tax, 
if  the  rate  be  moderate,  can  only  further  the  true  social  function  of  devise  and 
descent,  i.e.,  the  furtherance  of  the  creation  and  the  judicious  management  of 
wealth.  The  tax  is  an  incentive  rather  than  a  hindrance  to  the  creation  of  wealth 
and  insures  that  after  its  transfer  at  death  a  certain  portion  at  least  will  serve 
a  socially  useful  purpose." 

(Address  by  Dr.  Robert  H .  Whitten,  in  1901 ,  before  the  National  Tax  Conference.) 


CHAPTER  IV. 


HISTORY. 

§  15.  Early  History. 

1 16.  State  Statutes  Copied  from  other  States. 

§  17.  The  Present  Situation. 

§  18.  History  of  Federal  Legislation. 

Sec.  15.    Early  History. 

Inheritance  taxes  have  been  imposed  since  very  early  times,* 
the  earhest  mention  of  them  being  in  Egypt.^  The  tax  is  no  new 
invention  of  the  legislative  power  for  the  purpose  of  putting 
money  in  the  public  coffers.  Gibbon,  the  historian,  traces  its 
origin  to  the  Emperor  Augustus,  and  says  it  was  suggested  by  him 
to  the  senate  as  a  means  of  supporting  the  Roman  army;  that  it 
was  imposed  at  the  rate  of  five  per  cent,  upon  all  legacies  or  inherit- 
ances above  a  certain  value,  but  that  it  was  not  collected  from  the 
nearest  relatives  upon  the  father's  side;  and  that  the  tax  was 
most  fruitful  as  well  as  most  comprehensive.^  It  was  called 
''vicessima  hereditatum  et  legatorum.'*  This  method  of  taxation 
has  been  long  resorted  to  in  European  countries,  and  was 
introduced  into  Great  Britain  by  Lord  North  and  adopted  in 
1780.  Of  the  states  of  the  American  Union,  Pennsylvania  was 
the  first  to  adopt  it,  in  1826,  since  which  date  it  has  been  adopted 
as  a  means  of  governmental  support  by  a  great  many  other  states."* 
Such  taxes  were  recognized  by  the  Roman  law.^  They  were 
adopted  in  England  in  1780,  and  have  been  much  extended  since 
that  date.^  Such  taxes  are  now  in  force  generally  in  the  countries 
of  Europe.^  In  the  United  States  they  were  enacted  in  Pennsyl- 
vania in  1826;  Maryland,  1844;  Delaware,  1869;  West  Virginia, 
1887,  and  still  more  recently  in  Connecticut,  New  Jersey,  Ohio, 
Maine,  Massachusetts,  1891;  Tennessee  in  1891,  chapter  25,  now 
repealed  by  chapter  174,  acts  1893.  They  were  adopted  in  North 
Carolina  in  1846,  but  repealed  in  1883,  were  enacted  in  Virginia 
in  1884,  repealed  in  1885,  re-enacted  in  1863,  and  repealed  in 
1884.8 

The  practice  has  long  been  resorted  to  in  European  countries 
and  was  introduced  in  England  in  the  last  century,  and  was  en- 


14  INHERITANCE  TAX  LAW.  [§  16. 

larged  from  time  to  time  till  1853,  when  it  was  extended  to  all 
successions  to  real  property,  chattels  real,  and  a  vast  variety  of 
personal  property  and  rights.^ 

^Appeal  of  Nettleton,  76  Conn.  235,  241,  56  A.  565.  State  v.  Bazille,  97  Minn. 
11,  16,  106  N.  W.  93,  6  L.  R.  A.  (N.  S.)  732.  Knowlton  v.  Moore,  178  U.  S. 
41,  48,  49,  20  S.  Ct.  747,  44  L.  Ed.  969. 

2  The  early  history  of  the  inheritance  tax  is  traced  by  Max  West  in  his 
learned  monograph  on  the  inheritance  tax,  pages  11  e^  seq.  Mr.  West  states  that 
the  earliest  known  inheritance  tax  was  imposed  in  Egypt  in  the  seventh  century 
before  Christ;  that  the  Romans  copied  the  idea  from  the  Egyptians;  that  it 
was  imposed  in  Rome  by  the  Emperor  Augustus  in  the  year  6  A.D.,  and  pre- 
vailed for  about  two  hundred  and  fifty  years.  Under  the  feudal  system  the 
inheritance  tax,  as  Mr.  West  observes,  was  represented  by  the  relief  and  heriot. 
Mr.  West  suggests  that  the  relief  and  heriot  are  probably  feudal  in  their  origin 
and  are  not  copied  from  the  Roman  tax. 

Inheritance  taxes  during  the  seventh  century  were  imposed  in  Germany  and 
the  Netherlands  and  in  Italy  before  the  close  of  the  fourteenth  century  and 
at  various  times  since. 

n  Gibbon's  Rome,  133;   Encyc.  Brit.  (8th  Am.  Ed.)  65,  tit.  "Taxation." 

4  In  re  Morris,  138  N.  C.  259,  50  S.  E.  682. 

^  Gibbon's  Decline  and  Fall  of  the  Roman  Empire,  vol.  1,  pp.  163-4. 

«Doweirs  History  of  Taxation  in  England,  148;  Acts  20  George  III,  c.  28; 
45  George  III,  c.  28;  16  and  17  Vict.,  c.  51;  Green  v.  Croft,  2  H.  Bl.  30;  Hill 
V.  Atkinson,  2  Merivale  45. 

'  "Review  of  Reviews,"  February,  1893. 

8  Per  Wilkes,  J.,  in  State v,  Alston,  94  Tenn.  674,  30,  S.  W.  750,  751,  28  L.  R.  A. 
178,  quoted  with  approval  in  Magoun  v.  Illinois  Trust  &  Savings  Bank,  170  U.  S. 
283,  287,  18  Sup.  Ct.  594,  42  L.  Ed.  1037. 

^  State  V.  Hamlin,  86  Me.  495,  498,  30  A.  76,  41  A.  St.  Rep.  569,  25  L.  R.  A. 
632. 

Sec.  16.    State  Statutes  Copied  from  Other  States. 

The  early  New  York  act  has  been  followed  very  closely  in 
Illinois,^  Maine,2  Michigan,^  and  Wisconsin,*  and  with  some  changes 
in  New  Jersey.^ 

The  Maine  statute  has  been  the  model  for  legislation  in  Ken- 
tucky^ and  Ohio,  which  also  follows  the  Virginia  act.^  The  Ten- 
nessee statute  is  copied  after  Pennsylvania,^  and  the  New  Hampshire 
act  after  Massachusetts,^  and  the  Utah  act  after  lowa.^^ 

1  People  V.  Griffith,  245  111.  532,  92  N.  E.  313.  See  statement  in  In  re  Inherit- 
ance Tax,  23  Colo.  492,  493,  48  P.  535. 

^State  V.  Hamlin,  86  Me.  495,  500,  30  A.  76,  41  Am.  St.  Rep.  569,  25  L.  R.  A. 
632. 

^Stellwagen  v.  Durfee,  130  Mich.  166,  89  N.  W.  728,  8  Detroit  Leg.  N.  1204. 
Miller  v.  McLaughlin,  141  Mich.  425,  104  N.  W.  777,  12  Detroit  Leg.  N.  501. 
In  re  Stanton,  142  Mich.  491,  105  N.  W.  1122,  12  Detroit  Leg.  N.  829. 


§§17-18.]  HISTORY.  15 

*  Wis.  St.  899,  c.  355,  is  in  all  essential  respects  a  literal  copy  of  the  New  York 
law,  N.  Y.  St.  1892,  c.  399,  with  the  important  exceptions  that  in  the  New  York 
law  all  transfers  to  collateral  kindred  and  strangers  of  the  value  of  five  hundred 
dollars  or  over  are  taxed,  while  in  the  Wisconsin  law  such  transfers  are  not 
taxed  unless  they  equal  or  exceed  ten  thousand  dollars;  and  in  New  York  the 
tax  is  imposed  upon  transfers  of  both  real  and  personal  property,  while  in  Wis- 
consin it  is  confined  to  personal  property  alone.  Black  v.  State,  113  Wis.  205, 
211,  89  N.  W.  522,  90  Am.  St.  Rep.  853. 

6  Neilson  v.  Russell,  76  N.  J.  L.  655,  71  A.  286,  287,  reversing  76  N.  J.  L.  27, 
69  A.  476. 

^Booth  v.  Commonwealth,  130  Ky.  88,  113  S.  W.  61. 

''Dyer  v.  Hagerty,  5  Ohio  Cir.  Dec.  701,  12  Ohio  Cir.  Ct.  606. 

*Tenn,  St.  1893,  c.  174,  is  almost  identical  in  terms  with  the  Pennsylvania 
statute.    English  v.  Crenshaw,  120  Tenn.  531,  110  S.  W.  210. 

^Mann  v.  Carter,  74  N.  H.  345,  347. 

^'>  Dixon  v.  Rickets,  26  U.  215,  72  P.  47. 

Sec.  17.    The  Present  Situation. 

Most  civilized  countries  are  today  employing  the  inheritance 
tax  as  a  source  of  revenue,^  and  it  is  in  force  in  the  United  States 
in  all  but  a  few  states.^ 

*Now  Employed  in  Nearly  All  Enlightened  Countries.  Under  different 
names  the  tax  is  now  employed  in  nearly  every  civilized  country,  and  is  most 
highly  developed  in  the  Australasian  states,  where  democratic  ideas  have  taken 
the  deepest  root.  It  exists  in  Great  Britain,  France,  Germany,  Switzerland,  the 
Netherlands,  Belgium,  Sweden,  Norway,  Denmark,  Austria-Hungary,  Italy, 
and  nearly  all  of  the  other  European  countries.  It  is  part  of  the  revenue  system 
of  every  state  in  the  union  except  Alabama,  Florida,  Georgia,  Indiana,  Kansas, 
Mississippi,  Nevada,  Rhode  Island,  and  South  Carolina.  In  the  Australasian 
colonies  succession  duties  are  among  the  chief  source  of  revenue;  and  in  some 
cases  heavy  progressive  taxes  have  been  imposed,  not  from  fiscal  considerations 
alone,  but  also  for  the  purpose  of  breaking  up  large  estates.  The  rates  are 
progressive  in  all  of  the  colonies,  rising  to  ten  per  cent  in  Victoria,  New  South 
Wales,  South  Australia,  and  Western  Australia,  to  thirteen  per  cent  in  New 
Zealand,  and  to  twenty  per  cent  in  Queensland.  It  is  stated  upon  the  best 
authority  that  the  institution  of  private  property  has  not  weakened,  nor  capital 
driven  from  the  colonies,  by  these  progressive  taxes.  They  have  given  very 
general  satisfaction  and  in  almost  every  instance  the  rates  have  been  increased 
after  the  tax  has  been  in  operation  for  a  time.  The  graduation  according  to 
relationship  is  much  less  elaborate  than  in  European  countries;  usually  not 
more  than  two  or  three  classes  of  relatives  are  distinguished.  Report  of  Minne- 
sota Tax  Commission,  1910. 

2  See  tables,  post,  p.  1285. 

Sec.  18.    History  of  Federal  Legislation. 

Congress  imposed  a  legacy  tax  in  1797  by  the  act  of  July  6, 
1797,  c.  11,  1  Stat.  527,  which  act  was  repealed  June  30,  1802, 


16  INHERITANCE  TAX  LAW.  [§  18. 

2  Stat.  148,  c.  17.  In  this  statute,  as  in  the  English  legacy  duty 
statute  of  1780,  the  mode  of  collection  provided  was  by  stamp 
duties  laid  on  the  receipts  evidencing  the  payment  of  the  legacies 
or  distributive  shares  in  personal  property,  and  the  amount  was, 
like  the  English  legacy  tax,  charged  upon  the  legacies  and  not  upon 
the  residue  of  the  personal  estate. 

A  legacy  tax  was  again  enacted  by  the  statute  of  1862,  12  Stat. 
433,  485,  sections  111  and  112  of  chapter  119,  and  repealed  in  1870. 
This  statute,  like  the  act  of  1797,  was  a  tax  imposed  on  legacies 
or  distributive  shares  of  personal  property,  but  contained  a  new 
form  of  death  duty.  By  section  194  a  probate  duty,  proportioned 
to  the  amount  of  the  estate  and  to  be  paid  by  way  of  stamps,  was 
levied,  and  repealed  in  1872.  The  result  of  the  act  of  1862  was  to 
cause  the  death  duties  imposed  by  congress  to  greatly  resemble 
those  then  existing  in  England;  that  is,  first,  a  legacy  tax,  charge- 
able against  each  legacy  or  distributive  share,  and  a  probate  duty 
chargeable  against  the  mass  of  the  estate.  Thus  it  came  to  pass 
that  the  system  of  death  duties  prevailing  in  England  and  that 
adopted  by  congress  were  substantially  identical,  and  of  a  three- 
fold nature,  that  is,  a  probate  duty  charged  upon  the  whole  estate, 
a  legacy  duty  charged  upon  each  legacy  or  distributive  share  of 
personalty,  and  a  succession  duty  charged  against  each  interest  in 
real  property.  The  fact  that  the  framers  had  in  mind  the  English 
law  was  conclusively  demonstrated  by  section  127,  wherein  the 
succession  or  real  estate  inheritance  tax  was  defined  in  substantially 
similar  terms  to  that  contained  in  the  English  succession  duty 
act.  The  parallel  was  observed  by  the  court  in  Sholey  v.  Rew, 
23  Wall.  331,  349.^ 

The  tax  was  again  enacted  as  a  war  measure  in  1898  and  repealed 
in  1902.2 

^Knowlton  v.  Moore,  178  U.  S.  41,  50,  20  S.  Ct.  747,  44  L.  Ed.  969. 
2  See  post,  p.  1264  et  seq. 


CHAPTER  V. 


WHAT  LAW  GOVERNS.  — PLACE. 

§  19.     Law  of  Domicile  of  Decedent.  —  Change  of  Domicile. 

§  20.     Power  of  Appointment. 

i  21.     Extraterritorial  Effect  of  Judgment  as  to  Domicile. 

Sec.  19.        Law  of   Domicile    of    Decedent.  —  Change  of 
Domicile. 

Inheritance  taxes  may  not  apply  to  the  estates  of  non-residents,^ 
unless  such  estate^  are  specifically  included. ^  The  law  of  the 
domicile  of  the  decedent  governs  the  rate  of  tax  and  the  persons 
liable.^ 

Where  the  grantor,  after  making  a  deed  in  trust  to  assign  the 
property  in  accordance  with  her  will,  moved  from  Pennsylvania, 
where  the  trustee  resided,  to  New  York,  where  she  died,  the  court 
holds  that  the  change  in  the  domicile  of  the  grantor  did  not  affect 
the  right  of  the  state  to  collect  the  tax,  that  the  statute  grasped 
the  estate  when  one  citizen  created  the  trust  with  the  features 
described  and  made  this  the  domicile  or  situs  of  the  estate.  As 
the  grantor  could  not  take  the  property  out  of  its  jurisdiction  by 
any  act  of  hers,  so  she  could  not  make  it  follow  her  or  affect  it 
with  any  incidents  of  the  new  domicile  when  she  removed."* 

1  United  States  v.  Morris,  27  Fed.  341.  United  States  v.  Hunnewell,  13  Fed.  617» 
aliens. 

The  question  whether  the  statute  of  1898,  section  29,  imposes  a  legacy  tax 
upon  the  estates  of  persons  who  are  not  domiciled  in  the  United  States  at  the 
time  of  death,  is  not  free  from  doubt,  and  the  attorney  general  declines  to  give 
any  opinion  upon  it.  23  Opinions  of  the  Attorney  General,  221  (September  7, 
1900). 

"In  England  the  question  of  probate  duty  depends  upon  the  situs  of  the  property 
and  not  the  domicile  of  the  owner.  Attorney  General  v.  Hope,  1  Cromp.,  Mes. 
&  Ros.,  530.  It  was  for  some  time  held  that  the  legacy  duty  imposed  by  36 
Geo.  Ill,  ch.  52,  and  48  Geo.  Ill,  ch.  149,  depended  upon  the  same  consideration. 
Attorney  General  v.  Cockerell,  1  Price,  560.  But  these  cases  were  overruled  in 
Thompson  v.  Advocate  General,  12  Clark  &  Fin.  1;  and  the  principle  was  settled 
that  the  law  of  the  domicile  of  the  owner  of  personal  property  determines  its 
liability  to  legacy  duty.  The  same  rule  was  adopted  in  respect  to  the  succession 
duty  under  16  and  17  Vic,  ch.  51.  Wallace  v.  Attorney  General,  L.  R.  1  Ch. 
App.    c.    1.     In  the  case  last  referred  to,   Lord  Chancellor  Cranworth    said, 


18  INHERITANCE  TAX  LAW.  [§19. 

'Parliament  has,  no  doubt,  the  power  of  taxing  the  succession  of  foreigners  to 
their  personal  property  in  this  country;  but  I  can  hardly  think  we  ought  to 
presume  such  an  intention  unless  it  is  clearly  stated.'  Thus  whilst  the  power 
of  Parliament  to  impose  the  tax  without  reference  at  all  to  the  subject  of  domicile 
is  distinctly  recognized,  it  was  held  that  the  language  of  the  acts  did  not  furnish 
any  indication  of  an  intention  to  exercise  that  power,  and  that,  therefore,  the 
law  of  the  domicile  of  the  owner  fixed  the  liability  of  his  property  to  pay  these 
taxes.  In  our  opinion,  for  the  reasons  we  have  given,  the  Maryland  statute 
cannot  be  so  construed."  Per  McSherry,  J.,  in  State  v.  Dalrymple,  70  Md.  294, 
304,  17  A.  82,  3  L.  R.  A.  372.     See  further,  post,  Chapter  XXVIII. 

'^Most  states  now  tax  the  property  in  the  state  of  non-residents.  See  tables, 
post,  p.  1285. 

'  The  testator  while  a  citizen  of  France  married,  and  under  French  law  his 
wife  was  entitled  to  one-half  of  his  property  on  his  death;  but  the  court  holds 
that  where  he  afterwards  becomes  a  citizen  of  New  York  and  owns  property 
there  one-half  his  property  is  not  exempt  from  taxation  on  the  ground  that  it 
belongs  to  his  wife.  In  re  Majot,  135  N,  Y.  App.  Div.  409,  119  N.  Y.  Suppl. 
888.     See  post,  s.  288. 

The  intestate  died  a  citizen  of  Kentucky  having  personal  property  in  Ten- 
nessee. Under  the  laws  of  Kentucky  his  mother  was  the  sole  distributee,  while 
under  the  laws  of  Tennessee  his  brother  would  take  one-half  of  the  estate.  Under 
Tenn.  St.  1893,  c.  174,  s.  1,  this  property  is  not  subject  to  tax,  as  it  is  settled 
that  if  one  dies  domiciled  in  a  foreign  state  leaving  personal  property  in  this 
state  the  laws  of  the  domicile  of  the  deceased  will  determine  who  are  entitled  to 
the  surplus  after  the  payment  of  debts.  Fidelity  &  Deposit  Co.  v.  Crenshaw, 
120  Tenn.  531,  110  S.  W.  1017. 

Conversion.  A  note  in  19  Harvard  Law  Review,  pp.  20i,  202,  discusses 
conversion  and  suggests  that  the  question  as  to  whether  a  conversion  has  taken 
place  must  be  determined  by  the  law  of  the  state  where  the  land  is  situate,  since 
that  state  alone  has  dominion  over  the  property.  But  if  it  is  determined  that 
there  is  a  conversion  succession  will  occur  by  the  law  of  the  decedent's  domicile 
as  in  the  case  of  other  personalty. 

Findings  as  to  Domicile.  The  court  upholds  a  finding  as  to  domicile  in 
Pittsfield,  where  it  appears  that  it  was  the  only  place  where  the  testator  ever 
voted  or  paid  a  personal  tax,  and  that  he  continued  to  return  there  to  his  home 
with  a  friend  to  the  very  time  of  his  death,  and  died  there,  that  he  declared 
that  to  be  his  home,  and  made  it  a  point  to  return  there  and  vote  at  the  presi- 
dential elections  when  his  business  interests  would  permit.  In  re  Dalrymple, 
215  Pa.  St.  367,  371,  64  A.  554. 

Under  the  Illinois  inheritance  tax  a  man  is  a  resident  of  Illinois  who  has  lived 
in  Illinois  for  some  years  and  who  has  declared  his  intention  of  moving  out  of 
the  state  as  soon  as  his  business  is  settled.  He  was  taken  ill  and  went  to  the 
house  of  a  daughter  in  another  state,  where  he  died.  The  facts  show  that  he 
went  to  his  daughter's  house  for  a  temporary  purpose  only.  In  re  Moir,  207 
111.  180,  69  N.  E.  905,  99  Am.  St.  Rep.  205.  As  to  disputed  domicile  see  further, 
post,  s.  192. 

<  Commonwealth  v.  Kuhn,  2  Pa.  Co.  Ct.  248. 


§§  20-21.1        WHAT  LAW  GOVERNS.  —  PLACE.  19 

Sec.  20.    Power  of  Appointment. 

Where  a  testator  died  in  1870  a  resident  of  New  York,  leaving  a 
will  under  which  he  gave  his  daughter  a  life  estate  with  a  power 
of  appointment,  and  the  daughter  died  in  1908,  being  a  resident 
of  the  state  of  Rhode  Island,  leaving  a  will  by  which  she  exercised 
the  power,  no  tax  can  be  imposed  under  New  York  law,  as  the  life 
tenant  in  making  her  will  exercised  a  privilege  granted  by  the  laws 
of  her  own  state,  and  not  by  those  of  the  state  of  New  York. 

In  re  Fearing,  200  N.  Y.  340,  93  N.  E.  956,  affirming  123  N.  Y.  Suppl.  396. 
As  to  powers,  see  further,  post,  s.  139  et  seq. 

Sec.  21.    Extraterritorial  Effect  of  Judgment  as  to  Domicile. 

The  decision  of  one  state  as  to  domicile  is  binding  on  courts  in 
other  states. 

Where  a  will  was  probated  by  the  probate  court  of  New  Jersey  which  found 
that  the  deceased  was  a  resident  of  New  Jersey,  this  decree  is  entitled  to  full 
faith  and  credit  under  the  federal  constitution  in  another  state  and  is  a  bar 
in  the  courts  of  another  state  against  an  attempt  in  the  latter  state  to  enforce 
a  claim  for  the  inheritance  tax  on  the  ground  that  the  testator  was  domiciled 
there  at  the  time  of  his  death.  Tili  v.  Kelsey,  207  U.  S.  43,  52  L.  Ed.  95,  revers- 
ing 182  N.  Y.  557.  See,  however.  In  re  Hartman,  70  N.  J.  Eq.  664,  62  A.  560; 
In  re  Cummings,  142  N.  Y.  App.  Div.  377,  127  N.  Y.  Suppl.  109,  reversing  63 
Misc.  621,  118  N.  Y.  Suppl.  684.     See  also,  post,  s.  192. 

The  action  of  the  court  of  the  domicile  as  to  distribution  of  asseto  may  be 
binding  on  the  court  of  the  jurisdiction  where  the  assets  are,  on  the  question  of 
marshaling  assets.     In  re  Clark,  37  Wash.  671,  80  P.  267. 


CHAPTER  VI. 


WHAT  LAW  GOVERNS.  — TIME. 

§  22.  Law  at  Death  of  Decedent. 

§  23.  Effect  of  Unconstitutional  Statute. 

§  24.  Property  in  Hands  of  Trustee. 

§  25.  Gifts  Causa  Mortis. 

§  26.  Deed  Inter  Vivos. 

Sec.  22.    Law  at  Death  of  Decedent. 

The  substantive  rights  of  the  state  and  the  taxpayer  in  an 
inheritance  tax  depend  on  the  law  in  force  at  the  death  of  the 
decedent,^  even  under  a  will  executed  before  the  passage  of  the 
statute  in  force  at  his  death, ^  and  not  on  the  time  the  remainder 
falls  in,^  but  the  procedure  governing  its  collection  will  depend  on 
the  law  in  force  at  the  date  when  the  proceedings  began .^ 

^In  re  Stanford's  Estate,  126  Cal.  112,  58  P.  462,  45  L.  R.  A.  788.  Trippet  v- 
State,  149  Cal.  521,  86  P.  1084,  8  L.  R.  A.  (N.  S.)  1210.  In  re  Woodard's  Estate, 
153  Cal.  39,  94  P.  242.  Crocker  v.  Shaw,  174  Mass.  266,  54  N.  E.  549.  State 
V.  Switzler,  143  Mo.  287,  330,  45  S.  W.  245,  40  L.  R.  A.  280,  65  Am.  St.  Rep. 
653.  In  re  Fayerweather,  143  N.  Y.  114,  38  N.  E.  278,  right  to  interest.  In  re 
Davis,  149  N.  Y.  539,  545,  44  N.  E.  185,  affirming  91  Hun  53.  In  re  Sloane,  154 
N.  Y.  109,  47  N.  E.  978,  19  N.  Y.  App.  Div.  411,  46  N.  Y.  Suppl.  264.  In  re 
Milne,  76  Hun  328,  27  N.  Y.  Suppl.  727,  penalties  and  interest.  In  re  Sterling, 
9  Misc.  Rep.  224,  30  N.  Y.  Suppl.  385. 

N.  Y.  St.  1885,  c.  483,  which  was  approved  June  10,  1885,  did  not  take  effect 
until  twenty  days  after  its  passage,  and  therefore  no  tax  could  be  levied  on  the 
estate  of  a  testatrix  who  died  June  16,  1885.  In  re  Howe,  112  N.  Y.  100,  19 
N.  E.  513,  2  L.  R.  A.  825,  affirming  48  Hun  235.  (Law  governing  action  for 
refunding,  post,  s.  414). 

2/»  re  Seaman,  147  N.  Y.  69,  77,  41  N.  E.  401,  reversing  87  Hun  619. 

3  Where  the  testator  died  in  1828,  leaving  a  life  tenant  who  died  in  1864,  the 
whole  estate  passed  in  1828,  and  the  tax  on  the  remainder  interest  is  payable 
at  the  rate  under  the  statute  in  force  in  1828  of  two  and  one-half  per  cent  and 
not  under  the  higher  rate  in  force  on  the  death  of  the  life  tenant.  Common- 
wealth V.  Eckhert,  53  Pa.  St.  (3  P.  F.  Smith)  102. 

*/«  re  Sloane,  154  N.  Y.  109,47  N.  E.  978,  19  N.  Y.  App.  Div.  411,  46  N.  Y. 
Suppl.  2«4.  In  re  Davis,  149  N.  Y.  539,  545,  44  N.  E.  185,  affirming  91  Hun  53. 
See  further,  Proceedings  for  collection,  post,  s.  395  et  seq. 


§§  23-26.1  WHAT  LAW  GOVERNS.  —  TIME.  21 

Sec.  23.    Effect  of  Unconstitutional  Statute. 

Where  an  unconstitutional  statute  was  nominally  in  force  at 
the  date  of  a  certain  transfer,  and  after  the  transfer  was  made  a 
valid  law  was  passed,  the  transfer  is  subject  to  no  tax  whatever. 
The  act  was  void  from  the  beginning  and  its  nominal  existence 
in  no  way  affected  the  validity  of  the  transactions.^  So  an  un- 
constitutional amendment  has  no  effect  on  the  original  act.^ 

^State  V.  Probate  Court,  Washington  County,  102  Minn.  268,  285,  113  N.  W.  888. 
^Eastwood  V.  Russell  (N.  J   1911),  81  A.  108. 

Sec.  24.    Property  in  Hands  of  Trustee. 

A  trustee  who  at  the  time  of  the  passage  of  the  inheritance  tax 
act  held  personal  property  upon  a  trust  under  a  will  to  be  distrib- 
uted on  a  future  date  is  not  "a  person  possessed"  of  such  property. 
Personal  estate  passing  under  the  intestate  laws  passes  from  the 
intestate  himself  and  never  from  the  administrator. 

McClain  v.  Pennsylvania  Co.  for  Insurance  and  Annuities,  108  Fed.  618,  47  C. 
C.  A.  529. 

Trustee's  Commissions.  Where  the  testator  died  March  27,  1845,  the  court 
holds  that  the  commissions  of  the  trustees  were  subject  to  a  tax  of  ten  per  cent 
in  favor  of  the  state  imposed  by  the  act  of  \844,  c.  187,  which  went  into  effect 
June  2,  1845.     Williams  v.  Mosher,  6  Gill  (Md.)  339. 

Sec.  25.    Gifts  Causa  Mortis. 

Gifts  causa  mortis  are  governed  by  the  law  in  effect  at  the  death 
of  the  donor. 

In  re  Seaman,  147  N.  Y.  69,  77,  41  N.  E.  401,  reversing  87  Hun  619  (under 
N.  Y.  St.  1892,  providing  for  the  imposition  of  a  tax  when  any  person  becomes 
beneficially  entitled  by  any  such  transfer  "whether  made  before  or  after  the 
passage  of  this  act").     See  also,  post,  s.  99. 

Sec.  26.    Deed  Inter  Vivos. 

A  deed  inter  vivos  is  governed  by  the  law  of  the  date  of  the 
transfer. 

Minn.  St.  1905,  c.  288,  has  no  application  to  property  which  was  actually 
sold  and  disposed  of  before  the  date  of  its  enactment.  State  v.  Probate  Court, 
Washington  County,  102  Minn.  268,  285,  113  N.  W.  888.  But  see  also  Crocker  v. 
Shaw,  174  Mass.  266,  54  N.  E.  549,  reported  fully  under  post,  s.  141,  n.  3.  See 
further,  post,  s.  99. 


CHAPTER  VII. 


POWER  TO  IMPOSE. 

§  27.  State  Legislatures. 

§  28.  Derived  from  Taxing  Power  or  from  Power  to  Regulate  Descent. 

§  29.  Power  of  State  to  Regulate  or  Prohibit  Devolution  on  Death. 

§  30.  Power  of  Congress. 

§  31.  Power  of  Municipalities. 

Sec.  27.    State  Legislatures. 

The  legislature  has  implied  inherent  power  to  levy  an  inheritance 
tax  although  no  such  power  is  expressly  granted  by  the  constitution. 

Booth  V.  Commonwealth,  130  Ky.  88,  113  S.  W.  61.  State  v.  Dalrymple,  70  Md- 
294,  17  A.  82,  3  L.  R.  A.  372.  State  v.  Switzler,  143  Mo.  287,  316,  45  S.  W.  245. 
40  L.  R.  A.  280,  65  Am.  St.  Rep.  653.  Matter  of  McPherson,  104  N.  Y.  306. 
Pullen  V.  Commissioners  (1872),  66  N.  C.  361.  In  re  Morris,  138  N.  C.  259, 
50  S.  E.  682.  State  v.  Ferris,  53  Ohio  St.  314,  41  N.  E.  579,  30  L.  R.  A.  218. 
Eury  V.  State,  72  Ohio  St.  448,  74  N.  E.  650.  Schoolfield  v.  Lynchburg,  78  Va. 
366,  372.  Magoun  v.  Illinois  Trust  &  Savings  Bank,  170  U.  S.  283,  287.  Snyder 
V.  Bettman,  190  U.  S.  249,  252. 

The  inheritance  tax  is  in  effect  an  assertion  of  sovereignty  in  the  estate  of 
deceased  persons.  Kochersperger  v.  Drake,  167  111.  122,  47  N.  E.  321,  41  L.  R.  A. 
446,  affirmed  in  Magoun  v.  Illinois  Trust,  etc.,  170  U.  S.  283,  18  Sup.  Ct.  594. 

"It  is  not  to  be  questioned  that  the  power  to  tax  is  vested  in  the  legislature; 
that  it  is  unrestricted,  except  when  it  is  opposed  to  some  provision  of  the  federal 
or  state  constitution;  and  that  it  extends  'to  every  trade  or  occupation,  to 
every  object  of  industry,  use  or  enjoyment,  and  to  every  species  of  possession.' 
Nor  is  it  to  be  questioned  that  the  subject  of  taxation  in  the  present  case  is  one 
within  legislative  control,  because  inheritances,  distributive  shares,  and  legacies 
are  but  creatures  of  the  law."  Per  Blodgett,  J.,  in  Curry  v,  Spencer,  61  N.  H. 
624,  630,  60  Am.  St.  Rep.  337. 

It  was  urged  that  the  state  constitution  grants  to  the  legislature  special  and 
delegated  powers,  and  legislative  enactments  to  be  valid  must  come  within 
such  grant  of  powers.  But  the  court  finds  that  the  legislature  in  the  absence 
of  constitutional  prohibition  has  the  power  to  impose  conditions  by  way  of  a 
tax  upon  legacies  and  successions.     State  v.  Clark,  30  Wash.  439,  71  P.  20. 

It  is  claimed  that  as  the  constitution  did  not  expressly  give  a  right  to  levy 
an  inheritance  tax  the  legislature  had  not  that  authority.  But  the  court  relies 
on  Nebraska  decisions  to  the  effect  that  the  constitution  was  not  a  grant  but  a 
restriction  on  legislative  power  and  that  the  legislature  may  legislate  upon  any 
subject  not  prohibited  by  the  constitution.  The  court  concludes,  following 
State  V.  Lancaster,  4  Neb.  537,  that  the  enumeration  in  the  constitution  of  certain 


§28.1  POWER  TO  IMPOSE.  23 

subjects  for  taxation  did  not  preclude  the  legislature  from  imposing  other  taxes 
where  there  was  no  prohibition.  State  v.  Vinsonhaler,  74  Neb.  675,  105  N.  W. 
472,  474. 

"Some  form  of  death  duty  has  been  used  as  a  mode  of  taxation  from  ancient 
times.  When  the  constitution  of  the  United  States  was  adopted,  death  duties 
had  been  in  use  in  England,  as  well  as  elsewhere,  and  were  an  established  mode 
of  taxation  known  to  the  people,  who,  in  the  exercise  of  the  sovereignty  vested 
in  them,  enacted  that  fundamental  law.  The  imposition  of  death  duties  must 
therefore  have  been  included  in  the  broad  power  of  taxation  granted  to  the 
legislature  by  the  constitution.  This  is  true  of  the  constitution  of  our  state." 
Appeal  of  Nettleton,  76  Conn.  235,  241,  56  A.  565. 

The  only  case  which  questions  the  correctness  of  the  doctrine  that  the 
imposition  of  an  inheritance  tax  is  authorized  under  our  governmental  system 
when  not  expressly  forbidden  by  the  state  constitution  is  Nunnemacher  v.  State. 
There  the  court  sustains  the  theory  of  an  inheritance  tax  not  on  the  power  to 
prohibit  succession  but  upon  the  power  to  reasonably  regulate  by  tax.  The  court 
finds  that  the  state  constitution  expressly  recognizes  the  fact  that  the  state  may 
have  other  sources  of  income  aside  from  the  direct  tax  upon  property  and  that  the 
section  as  to  taxation  is  simply  intended  as  a  regulation  covering  the  levying  of 
a  direct  tax  upon  property  if  such  a  tax  be  necessary.  Nunnemacher  v.  State, 
129  Wis.  190,  223,  108  N.  W.  627,  9  L.  R.  A.  N.  S.  121. 

Sec.   28.    Derived  from  Taxing  Power  or  from  Power  to 
Regulate  Descent. 

Inheritance  taxes  may  be  based  on  the  power  to  regulate  de- 
scent,^ or  on  the  power  to  tax.^  The  imposition  of  a  succession 
tax  does  not  change  the  law  of  descent,  but  the  laying  of  the  tax 
merely  casts  upon  the  devolution  of  property  a  burden  that  was 
not  borne  before.^ 

»  People  V.  Griffith,  245  111.  532,  92  N.  E.  313.  "The  right  to  impose  such  in- 
heritance tax  is  based  upon  the  power  of  the  state  in  its  sovereign  capacity  to 
regulate  and  control  the  transmission  of  property  by  inheritance.  Although 
designated  as  a  tax,  it  is  not  such  a  tax  upon  property  as  is  contemplated  by  the 
state  constitution.  It  is  rather  a  contribution  which  the  state  levies  for  itself 
as  a  condition  upon  which  the  title  to  property  shall  pass  upon  the  death  of  its 
owner."     In  re  Inheritance  Tax,  23  Colo.  492,  493,  48  P.  535. 

An  inheritance  tax  law  "is  nothing  more  than  an  exercise  of  the  power  which 
every  state  and  sovereignty  possesses,  of  regulating  the  manner  and  term  upon 
which  property  real  or  personal  within  its  dominion  may  be  transmitted  by  last 
will  and  testament  or  by  inheritance."  Per  Torrey,  C.  J.,  in  Mager  v.  Grima, 
8  How.  492,  493. 

"The  power  to  tax  inheritances  does  not  arise  solely  from  the  power  to  regulate 
the  descent  of  property,  but  from  the  general  authority  to  impose  taxes  upon  all 
property  within  the  jurisdiction  of  the  taxing  power.  It  has  usually  happened 
that  the  power  has  been  exercised  by  the  same  government  which  regulates  the 
succession  to  the  property  taxed;  but  '■his  power  is  not  destroyed  by  the  dual 
character  of  our  government,  or  by  the  fact  that  under  our  constitution  the 


24  INHERITANCE  TAX  LAW.  l§29. 

devolution  of  property  is  determined  by  the  laws  of  the  several  states."  It  was 
claimed  that  the  authority  to  lay  a  succession  tax  arose  solely  from  the  power 
to  regulate  the  descent  of  property.  But  the  court  replies  that  this  proposition 
proves  too  much,  that  a  denial  of  the  right  to  regulate  succession  goes  to  the 
whole  power  of  the  government  to  impose  a  succession  tax.  Snyder  v.  Bettman, 
190  U.  S.  249,  252. 

^ State  V.  Switzler,  143  Mo.  287,  315,  45  S.  W.  245,  40  L.  R.  A.  280,  65  Am. 
St.  Rep.  653.  In  re  McKennan,  25  S.  D.  369,  126  N.  W.  611,  614,  citing  Knowl- 
ton  V.  Moore,  178  U.  S.  41,  20  S.  Ct.  747  (reversed  130  N.  W.  33).  Mager  v.Grima, 
9  How.  490. 

The  court  suggests  that  Knowlton  v.  Moore,  178  U.  S.  41,  20  S.  Ct.  747,  virtu- 
ally overruled  the  Magoun  case,  170  U.  S.  283,  18  S.  Ct.  594,  and  laid  down 
the  rule  that  the  fact  that  the  state  has  a  right  to  control  the  transmission  of 
property  by  devise  or  succession  has  nothing  whatever  to  do  with  the  power  of 
the  state  to  tax  transmission  of  property.  In  re  McKennan,  25  S.  D.  369,  126 
N.  W.  611,  619  (reversed  130  N.  W.  33).  As  to  the  nature  of  the  tax  see  further, 
ante,  s.  7  et  seq. 

3  In  re  Magnes,  32  Colo.  527,  77  P.  853. 

Sec.  29.    Power  of  State  to  Regulate  or  Prohibit  Devolution 
on  Death. 

The  state  is  commonly  held  to  have  plenary  power  to  regulate 
descent,  to  tax  it,  or  even  to  prohibit  it  altogether,^  as  the  right 
of  succession  on  death  is  the  creature  of  law  and  not  a  natural 
right.^  This  doctrine  has  the  best  historical  foundation  and  has 
been  ably  set  forth  in  the  following  language,  which  has  been 
repeatedly  quoted  with  approval : — 

"The  right  to  take  property  by  devise  or  descent  is  the  creature 
of  the  law  and  secured  and  protected  by  its  authority.  The  legis- 
lature might,  if  it  saw  proper,  restrict  the  succession  to  a  decedent's 
estate,  either  by  devise  or  descent  to  a  particular  class  of  his  kin- 
dred, say  to  his  lineal  descendants  and  ascendants;  it  might  impose 
terms  and  conditions  upon  which  collateral  relations  may  be  per- 
mitted to  take  it;  or  it  may  tomorrow,  if  it  pleases,  absolutely  repeal 
the  statute  of  wills  and  that  of  descents  and  distributions  and  de- 
clare that,  upon  the  death  of  a  party,  his  property  shall  be  applied 
to  the  payment  of  his  debts,  and  the  residue  appropriated  to  public 
uses.  Possessing  this  sweeping  power  over  the  whole  subject,  it 
is  difficult  to  see  upon  what  ground  its  right  to  appropriate  a 
modicum  of  the  estate,  call  it  a  tax  or  what  you  will,  as  the  condition 
upon  which  those  who  take  the  estate  shall  be  permitted  to  enjoy 
it,  can  be  successfully  questioned."* 

A  more  recent  statement  of  this  doctrine  by  our  highest  tribunal 
is  as  follows:     "While  the  laws  of  all  civilized  states  recognize  in 


§  29.]  POWER  TO  IMPOSE.  25 

every  citizen  the  absolute  right  to  his  own  earnings,  and  to  the 
enjoyment  of  his  own  property,  and  the  increase  thereof,  during 
his  life,  except  so  far  as  the  state  may  require  him  to  contribute 
his  share  for  public  expenses,  the  right  to  dispose  of  his  property 
by  will  has  always  been  considered  purely  a  creature  of  statute 
and  within  legislative  control.  'By  the  common  law,  as  it  stood 
in  the  reign  of  Henry  II,  a  man's  goods  were  to  be  divided  into  three 
equal  parts,  of  which  one  went  to  his  heirs  or  lineal  descendants, 
another  to  his  wife,  and  a  third  was  at  his  own  disposal;  or  if  he 
died  without  a  wife,  he  might  then  dispose  of  one  moiety,  and  the 
other  went  to  his  children;  and  so,  e  converso,  if  he  had  no  children, 
the  wife  was  entitled  to  one  moiety,  and  he  might  bequeath  the  other, 
but  if  he  died  without  either  wife  or  issue,  the  whole  was  at  his  own 
disposal.*  2  Bl.  Com.  492.  Prior  to  the  statute  of  wills,  enacted 
in  the  reign  of  Henry  VIII,  the  right  to  a  testamentary  disposition 
of  the  property  did  not  extend  to  real  estate  at  all,  and  as  to  personal 
estate,  was  limited  as  above  stated.  Although  these  restrictions 
have  long  since  been  abolished  in  England,  and  never  existed  in  this 
country,  except  in  Louisiana,  the  right  of  a  widow  to  her  dower  and  to 
a  share  in  the  personal  estate  is  ordinarily  secured  to  her  by  statute. 

"By  the  Code  Napoleon,  gifts  of  property,  whether  by  acts  inter 
vivos  or  by  will,  must  not  exceed  one-half  the  estate  if  the  testator 
leave  but  one  child ;  one-third  if  he  leaves  to  children ;  one-fourth 
if  he  leaves  three  or  more.  If  he  have  no  children,  but  leaves 
ancestors,  both  in  the  paternal  and  maternal  line,  he  may  give  away 
but  one-half  of  his  property,  and  but  three-fourths  if  he  have  an- 
cestors in  but  one  line.  By  the  law  of  Italy,  one-half  a  testator's 
property  must  be  distributed  equally  among  all  his  children;  the 
other  half  he  may  leave  to  his  eldest  son  or  to  whomsoever  he 
pleases.  Similar  restrictions  upon  the  power  of  disposition  by  will 
are  found  in  the  codes  of  other  continental  countries,  as  well  as  in 
the  state  of  Louisiana.  Though  the  general  consent  of  the  most 
enlightened  nations,:  has,  from  the  earliest  historical  period,  recog- 
nized a  natural  right  in  children  to  inherit  the  property  of  their 
parents,  we  know  of  no  legal  principle  to  prevent  the  legislature 
from  taking  away  or  limiting  the  right  of  testamentary  disposition 
or  imposing  such  conditions  upon  its  exercise  as  it  may  deem 
conducive  to  public  good."* 

The  following  language  is  also  enlightening :  — 

"The  right  of  inheritance  including  the  designation  of  heirs  and 
the  proportions  which  the  several  heirs  shall  receive,  as  well  as  the 


26  INHERITANCE  TAX  LAW.  [§29. 

right  of  testamentary  disposition,  are  entirely  matters  of  statu- 
tory enactment,  and  within  the  control  of  the  legislature.  As 
it  is  only  by  virtue  of  the  statute  that  the  heir  is  entitled  to  receive 
any  of  his  ancestor's  estate,  or  that  the  ancestor  can  divert  his 
estate  from  the  heir,  the  same  authority  which  confers  this 
privilege  may  attach  to  it  the  condition  that  a  portion  of  the 
estate  so  received  shall  be  contributed  to  the  state,  and  the  portion 
thus  to  be  contributed  is  peculiarly  within  the  legislative  dis- 
cretion."^ 

On  the  other  hand  a  few  courts  have  laid  down  the  proposition 
that  while  a  state  may  regulate  or  alter  laws  of  succession  on 
death,  it  cannot  entirely  abolish  the  right  of  succession  by  inheri- 
tance or  bequest.^ 

The  Massachusetts  court  has  said :  — 

"The  descent  or  devolution  of  property  on  the  death  of  the  owner 
in  England  and  in  this  country  has  always  been  regulated  by  law." 

"The  legislature  cannot  so  far  restrict  the  right  to  transmit 
property  by  will  or  by  descent  as  to  amount  to  an  appropriation 
of  property  generally,  ...  it  cannot  impose  a  tax  which  shall 
be  equivalent,  or  almost  equivalent,  to  the  value  of  the  property, 
and  cannot  so  limit  the  persons  who  can  take  as  heirs,  devisees, 
distributees  or  legatees  that  the  great  mass  of  all  the  property  of 
the  inhabitants  must  become  vested  in  the  commonwealth  by 
escheat.  The  state  can  take  property  by  taxation  only  for  the 
public  service,  and  we  assume  that  its  right  to  take  property,  if 
any  exists,  by  regulating  the  distribution  of  it  on  the  death  of  the 
owner,  is  limited  in  the  same  manner,  and  that  this  right  must 
be  exercised  in  a  reasonable  way."^ 

The  last  word  on  the  subject  has  been  uttered  by  the  supreme 
court  of  Wisconsin  which,  speaking  of  the  prevailing  doctrine, 
remarks  that  the  unanimity  with  which  the  proposition  is  stated 
is  only  equaled  by  the  paucity  of  reasoning  by  which  it  is  supported, 
and  says  that  the  declaration  of  the  court  of  North  Carolina  seems 
to  have  reached  the  logical  goal  toward  which  the  other  cases  only 
tend,  namely,  the  denial  of  all  natural  rights  of  property.  It 
comes  perilously  near  the  doctrine  that  might  makes  right. 

The  court  quotes  from  Mr.  Justice  Brown,  United  States  v.  Per- 
kins, 163  U.  S.  625,  16  Sup.  Ct.  1073,  where  he  says:  — 

"The  general  consent  of  the  most  enlightened  nations  has  from 
the  earliest  historical  period  recognized  a  natural  right  in  children 
to  inherit  the  property  of  their  parents." 


§29.]  POWER  TO  IMPOSE.  27 

The  court  notices  the  difference  between  our  theory  of  govern- 
ment that  political  rights  flow  from  the  people  and  the  medieval 
theory  that  political  rights  flow  from  the  crown,  and  remarks  that 
this  difference  makes  the  European  cases  of  no  value  in  this  country. 
The  court  remarks  after  discussion: — 

"So  clear  does  it  seem  to  us  from  the  historical  point  of  view 
that  the  right  to  take  property  by  inheritance  or  will  has  existed 
in  some  form  among  civilized  nations  from  the  time  when  the  memory 
of  man  runneth  not  to  the  contrary,  and  so  conclusive  seems  the 
argument  that  these  rights  are  a  part  of  the  inherent  rights  which 
governments,  under  our  conception,  are  established  to  conserve, 
that  we  feel  entirely  justified  in  rejecting  the  dictum  so  frequently 
asserted  by  such  a  vast  array  of  courts  that  these  rights  are  purely 
statutory  and  may  be  wholly  taken  away  by  the  legislature. 

"It  is  true  that  these  rights  are  subject  to  reasonable  regulation 
by  the  legislature;  lines  of  descent  may  be  prescribed,  the  persons 
who  can  take  as  heirs  or  devisees  may  be  limited,  collateral  rela- 
tives may  doubtless  be  included  or  cut  off,  the  manner  of  the 
execution  of  wills  may  be  prescribed,  and  there  may  be  much  room 
for  legislative  action  in  determining  how  much  property  shall  be 
exempted  entirely  from  the  power  to  will  so  that  dependents  may 
not  be  entirely  cut  off.  These  are  all  matters  within  the  field  of 
regulation.  The  fact  that  these  powers  exist  and  have  been  uni- 
versally exercised  affords  no  ground  for  claiming  that  the  legis- 
lature may  abolish  both  inheritances  and  wills,  turn  every 
fee-simple  title  into  a  mere  estate  for  life,  and  thus  in  effect 
confiscate  the  property  of  the  people  once  every  generation."^ 

We  venture  to  suggest  that  the  attitude  of  the  majority  of  our 
courts  is  more  historical  than  sensible,  that  no  court  in  this  country 
has  ever  actually  upheld  the  state  in  appropriating  all  the  property 
of  a  decedent  for  taxation,  and  we  doubt  if  any  court  ever  will 
approve  of  such  an  outrage  in  time  of  peace. 

Such  proceedings  may  have  historical  sanction,  but  are  utterly 
out  of  tone  with  the  modern  theory  of  the  sanctity  of  private 
property. 

We  are  of  opinion  that  when,  for  example,  the  confiscatory 
law  of  Oklahoma  is  tested  in  a  flagrant  case,  no  line  of  dicta,  however 
respectable,  will  prevent  our  courts  from  doing  justice  as  between 
the  state  and  its  citizens.  Our  supreme  court  has  intimated  the 
possibility  of  such  an  attitude.® 

*  In  re  Inheritance  Tax,  23  Colo.  492,  48  P.  535. 


28  INHERITANCE  TAX  LAW.  [§29. 

« In  re  Magnes,  32  Colo.  527,  77  P.  853.  Kochersperger  v.  Drake,  167  111.  122, 
47  N.  E.  321,  41  L.  R.  A.  446.  In  re  Speed,  216  111.  23,  27,  74  N.  E.  809,  108 
Am.  St.  Rep.  189,  affirmed  203  U.  S.  553,  27  S.  Ct.  171,  51  L.  Ed.  314.  Booth 
V.  Commonwealth,  130  Ky.  88,  113  S.  W.  61.  Curry  v.  Spencer,  61  N.  H.  624, 
60  Am.  St.  Rep.  337.  In  re  Howard,  5  Dem.  Surr.  (N.  Y.)  483.  Pullen  v. 
Commissioners,  66  N.  C.  361.  In  re  Morris,  138  N.  C.  259,  50  S.  E.  682.  State 
V.  Allston,  94  Tenn.  674,  30  S.  W.  750,  28  L.  R.  A.  178.  In  re  Joyslin,  76  Vt. 
88,  564,  281.     State  v.  Clark,  30  Wash.  439,  71  P.  20. 

The  rule  stated.  "The  constitution  guarantees  to  the  citizen  the  right  of 
acquiring,  possessing  and  protecting  property,  Article  1,  section  1,  which  in- 
cludes also  the  right  of  disposal.  But  the  guaranty  ceases  to  operate  at  the 
death  of  the  possessor.  There  is  no  provision  of  our  constitution,  or  that  of 
the  United  States,  which  secures  the  right  to  any  one  to  control  or  dispose  of 
his  property  after  his  death,  nor  the  right  to  any  one,  whether  kindred  or  not, 
to  take  it  by  inheritance.  Descent  is  a  creature  of  statute,  and  not  a  natural 
right.  2  Blackstone's  Com.,  pp.  10,  11,  12,  13;  Strode  v.  Com.,  supra.  At 
common  law,  prior  to  the  statute  of  distribution  in  England,  22  and  23  Car.  11, 
descent  of  personal  property  could  hardly  be  recognized,  and  even  after  the 
statute  requiring  administration  to  be  granted,  the  administrator,  after  the 
payment  of  the  debts  and  funeral  expenses  of  the  deceased,  was  entitled  to 
retain  to  himself  the  residue  of  his  effects,  the  court  holding  that  there  was 
no  power  to  compel  a  distribution.  2  Bl.  Com.  515;  Edwards  v.  Freeman,  2  P.  Wms. 
442.    Per  Strout,  J.,  inState  v.  Hamlin,  86  Me.  495, 504,  30  A.  76,  25 L.  R.  A.  632. 

Blackstone.  "The  most  universal  and  effectual  way  of  abandoning  property, 
is  by  the  death  of  the  occupant;  when,  both  the  actual  possession  and  intention 
of  keeping  possession  ceasing,  the  property  which  is  founded  upon  such  possession 
and  intention  ought  also  to  cease  of  course.  For,  naturally  speaking,  the  instant 
a  man  ceases  to  be,  he  ceases  to  have  any  dominion;  else,  if  he  had  a  right  to 
dispose  of  his  acquisitions  one  moment  beyond  his  life,  he  would  also  have  a 
right  to  direct  their  disposal  for  a  million  of  ages  after  him;  which  would  be 
highly  absurd  and  inconvenient.  All  property  must  therefore  cease  upon 
death,  considering  men  as  absolute  individuals,  and  unconnected  with  civil 
society:  for,  then,  by  the  principles  before  established,  the  next  immediate 
occupant  would  acquire  a  right  in  all  that  the  deceased  possessed.  But  as, 
under  civilized  governments,  which  are  calculated  for  the  peace  of  mankind, 
such  a  constitution  would  be  productive  of  endless  disturbances,  the  universal 
law  of  almost  every  nation  (which  is  a  kind  of  secondary  law  of  nature)  has 
either  given  the  dying  person  a  power  of  continuing  his  property,  by  disposing 
of  his  possessions  by  will;  or,  in  case  he  neglects  to  dispose  of  it,  or  is  not  per- 
mitted to  make  any  disposition  at  all,  the  municipal  law  of  the  country  then 
steps  in,  and  declares  who  shall  be  the  successor,  representative,  or  heir  of  the 
deceased ;  that  is,  who  alone  shall  have  a  right  to  enter  upon  this  vacant  posses- 
sion, in  order  to  avoid  that  confusion  which  its  becoming  again  common  would 
occasion.  And  further,  in  case  no  testament  be  permitted  by  the  law,  or  none 
be  made,  and  no  heir  can  be  found  so  qualified  as  the  law  requires,  still,  to  pre- 
vent the  robust  title  of  occupancy  from  again  taking  place,  the  doctrine  of 
escheats  is  adopted  in  almost  every  country;  whereby  the  sovereign,  of  the 
state,  and  those  who  claim  under  his  authority,  are  the  ultimate  heirs,  and 
succeed  to  those  inheritances  to  which  no  other  title  can  be  formed. 


§30.]  POWER  TO  IMPOSE.  29 

"The  right  of  inheritance,  or  descent  to  the  children  and  relations  of  the  de- 
ceased, seems  to  have  been  allowed  much  earlier  than  the  right  of  devising  by 
testament.  We  are  apt  to  conceive  at  first  view  that  it  has  nature  on  its  side; 
yet  we  often  mistake  for  nature  what  we  find  established  by  long  and  inveterate 
custom.  It  is  certainly  a  wise  and  effectual,  but  clearly  a  political,  establish- 
ment; since  the  permanent  right  of  property,  vested  in  the  ancestor  himself, 
was  no  natural,  but  merely  a  civil,  right. 

"With  us  in  England,  till  modern  times,  a  man  could  only  dispose  of  one-third 
of  his  movables  from  his  wife  and  children;  and,  in  general,  no  will  was  per- 
mitted of  lands  till  the  reign  of  Henry  the  Eighth;  and  then  only  of  a  certain 
portion :  for  it  was  not  till  after  the  restoration  that  the  power  of  devising  real 
property  became  so  universal  as  at  present. 

"Wills,  therefore,  and  testaments,  rights  of  inheritance  and  successions,  are  all 
of  them  creatures  of  the  civil  or  municipal  laws,  and  accordingly  are  in  all  respects 
regulated  by  them;  every  distinct  country  having  different  ceremonies  and 
requisites  to  make  a  testament  completely  valid:  neither  does  anything  vary 
more  than  the  right  of  inheritance  under  different  national  establishments." 
Vol.  2,  Blackstone's  Commentaries  10. 

3  Per  Lee,  J.,  in  Eyre  v.  Jacob.  14  Gratt.  (Va.)  422,  430,  73  Am.  Dec.  367. 

*  P^r  Brown,  J.,  in  United  States  v.  Perkins,  163  U.  S.  625, 627,  quoted  with  ap- 
proval in  Magoun  v.  Illinois  Trust  &  Savings  Bank,  170  U.  S.  283,  290. 

^Per  Harrison,  J.,  in  In  re  Wilmerding's  Estate,  117  Cal.  281,  284,  49  P.  181. 

6  Nunnemacher  v.  State,  129  Wis.  190,  108  N.  W.  627. 

The  court  intimates  no  favorable  opinion  upon  the  proposition  laid  down  by 
the  Virginia  court  in  Eyre  v.  Jacob,  14  Gratt.  430.  Black  v.  State,  113  Wis.  205 
216.  89  N.  W.  522,  90  Am.  St.  Rep.  853. 

'  Per  Field  C.  J.,  in  Minot  v.  Winthrop,  162  Mass.  113,  117,  26  L.  R.  A.  259. 

The  same  court  had  earlier  said:  "The  power  to  dispose  of  property  by  will  is 
neither  a  natural  nor  a  constitutional  right,  but  depends  wholly  upon  statute, 
and  may  be  conferred  taken  away  or  limited  and  regulated  in  whole  or  in  part, 
by  the  legislature."  Bretton  v.  Fox,  100  Mass.  234  (applied  to  widow's  share  in 
her  husband's  estate). 

A  note  in  8  Harvard  Law  Review,  p.  226,  criticises  adversely  the  attitude  of 
the  court  in  Minot  v.  Winthrop,  162  Mass.  113,  38  N.  E.  512,  26  L.  R.  A.  259, 
to  the  effect  that  the  state  has  no  authority  to  take  away  altogether  the  in- 
heritable quality  of  property.  The  editor  suggests  that  this  statement  is  a 
dictum  and  that  the  only  necessary  incident  of  private  property  is  that  there  be 
a  succession  of  some  kind  on  the  death  of  the  owner.  Who  shall  succeed  is 
quite  a  different  question.  It  has  been  answered  differently  at  different  times 
and  places. 

8  Nunnemacher  v.  State,  129  Wis.  190,  202,  108  N.  W.  627,  9  L.  R.  A.  N.  S.  121. 

9  Knowlton  v.  Moore,  178  U.  S.  41,  109,  20  S.  Ct.  747,  44  L.  Ed.  969. 


Sec.  30.    Power  of  Congress. 

The  federal  congress  has  power  to  lay  an  inheritance  tax  notwith- 
standing the  devolution  of  property  is  solely  in  the  jurisdiction  of 
the  state.* 


30  INHERITANCE  TAX  LAW.  [§31. 

When  this  question  finally  came  squarely  before  the  supreme 
court,  it  was  claimed  that  as  the  transmission  of  property  by  death 
is  exclusively  subject  to  the  regulating  authority  of  the  several  states, 
therefore  the  levy  by  congress  of  a  tax  on  inheritances  of  any 
kind  is  beyond  the  power  of  congress  and  is  interference  by  the 
national  government  with  a  matter  which  falls  alone  within  the 
reach  of  state  legislation.  The  court  states,  however,  that  trans- 
mission of  property  is  a  usual  subject  of  taxation  and  that  the 
taxing  power  of  congress  extends  to  all  usual  objects  of  taxation 
subject  to  the  limitations  in  the  constitution. 

The  court  points  out  that  it  is  a  fallacy  to  assume  that  the  tax  on 
the  transmission  or  receipt  of  property  occasioned  by  death  is 
imposed  on  the  exclusive  power  of  the  state  to  regulate  the  devo- 
lution of  property  upon  death.  The  subject  of  taxation  is  the 
transmission  or  receipt,  not  the  right  existing  to  regulate. 

The  court  points  out  that  under  the  American  constitutional 
system  both  the  national  and  the  state  governments  moving  in 
their  respective  orbits  have  a  common  authority  to  tax  many  and 
diverse  objects,  but  this  does  not  cause  the  exercise  of  its  lawful 
attributes  by  one  to  be  a  curtailment  of  the  powers  of  government 
of  the  other  .2 

1  KnowUon  v.  Moore,  178  U.  S.  41,  59,  60,  20  S.  Ct.  747,  44  L.  Ed.  969. 

It  was  suggested  in  the  argument  of  Frederickson  v.  Louisiana  that  the  gov- 
ernment of  the  United  States  is  incompetent  to  regulate  testamentary  dispo- 
sitions or  laws  of  inheritance  of  foreigners  in  reference  to  property  within  the 
states.  The  court  observes  that  the  question  is  one  of  great  magnitude  and 
declines  to  consider  it  in  that  case.  Frederickson  v.  State,  23  How.  (U.  S.)  445. 
The  court  had  also  held  that  inheritance  taxes  are  not  direct  taxes,  but  excises 
or  duties,  and  as  such  within  the  authority  of  congress  to  lay  and  collect  without 
apportionment  among  the  states.     Scholey  v.  Rew,  23  Wall.  331. 

2  KnowUon  v.  Moore,  178  U.  S.  41,  60.  20  S.  Ct.  747,  44  L.  Ed.  969. 


Sec.  31.    Power  of  Municipalities. 

Municipalities  have  no  authority  to  levy  an  inheritance  tax 
unless  expressly  conferred. 

The  collateral  inheritance  tax  is  not  in  a  proper  legal  sense  a  tax  upon  property, 
but  is  a  premium  demanded  for  the  privilege  of  transmitting  an  estate  and  the 
imposition  of  such  a  tax  is  a  power  inherent  in  the  legislature  in  the  absence  of 
express  constitutional  prohibition.  The  legislature  has  the  power  to  confer  on 
municipal  corporations  the  right  to  levy  an  inheritance  tax,  but  such  power 
cannot  be  inferred  from  the  legislative  authority  unless  such  appears  to  be  the 
clear  legislative  intent.    Schoolfield  v.  Lynchburg,  78  Va.  366,  372. 


§31.]  POWER  TO   IMPOSE.  31 

The  authority  to  towns  under  the  Virginia  Code  of  1904,  section  1043,  to 
levy  taxes  allows  the  tax  to  be  levied  "upon  any  property  therein,  and  upon  such 
other  subject  as  may  at  that  time  be  assessed  with  state  taxes  against  persons 
residing  therein."  The  town  charter  provides  that  the  council  "may  raise 
taxes  annually  by  assessments  in  said  town  on  all  subjects  taxable  by  the  state." 

The  court  holds,  however,  that  the  section  of  the  code  and  the  town  charter 
apply  only  to  the  ordinary  annually  recurring  tax  on  property  and  other  subjects 
of  taxation,  and  not  to  sporadic  subjects  which,  though  connected  with  the 
transmission  and  enjoyment  of  property,  are  casual  in  their  nature  and  not 
recurrent.  The  court  notes  further  that  a  collateral  inheritance  tax  is  not  in 
any  proper  sense  a  tax  on  property.  Wytheville  v.  Johnson,  108  Va.  589,  62  S.  E. 
328,  18  L.  R.  A.  N.  S.  960. 


CHAPTER  VIII, 


CONSTRUCTION  OF  STATUTES. 

§  32.     Strict  Construction. — Executive  Practice. 

§  33.     Effect  of  Amendment. 

§  34.     Construction  of  Statute  Copied  from  Another  Jurisdiction. 

Sec.  32.    Strict  Construction. — Executive  Practice. 

The  inheritance  tax  is  to  be  strictly  construed  in  favor  of  the 
taxpayer,  who  has  a  right  to  claim  that  he  shall  be  clearly  brought 
within  its  terms  before  being  subjected  to  it,  as  it  is  a  special  burden 
or  tax.i  Even  words  of  exception  confining  the  operation  of  the 
tax  should  receive  a  liberal  construction ,2  while  any  particular  ex- 
emption from  it  should  be  construed  in  favor  of  the  state. ^ 

The  construction  adopted  by  executive  officers  in  administering 
an  inheritance  tax  is  immaterial  unless  the  true  construction  of 
the  law  is  doubtful.* 

i/«  re  Enston,  113  N.  Y.  174,  178,  21  N.  E.  87,  3  L.  R.  A.  464,  22  N.  Y.  St. 
569,  reversing  46  Hun  506,  19  Abb.  N.  Cas.  227,  10  N.  Y.  St.  380,  5  Dem.  Surr. 
93,  8  N.  Y.  St.  781.  In  re  Vassar,  127  N.  Y.  1,  12,  27  N.  E.  394,  reversing  58 
Hun  378,  12  N.  Y.  Suppl.  203.  In  re  Stewart,  131  N.  Y.  274,  282,  30  N.  E. 
184,  14  L.  R.  A.  836.  Eidman  v.  Martinez,  184  U.  S.  578,  583,  22  Sup.  Ct.  515, 
46  L.  Ed.  697. 

The  Rule  of  Reasonable  Construction.  The  rule  of  strict  construction 
ordinarily  applied  to  the  operation  and  effect  of  statutes  on  taxation  and  to  pro- 
ceedings thereunder  does  not  apply  to  inheritance  taxes.  The  statute  must  be 
given  a  fair  and  reasonable  construction.  State  v.  Bazille,  97  Minn.  11,  106 
N.  W.  93,  6  L.  R.  A.  N.  S.  732. 

2"It  is  an  old  and  familiar  rule  of  the  English  courts,  applicable  to  all  forms 
of  taxation,  and  particularly  special  taxes,  that  the  sovereign  is  bound  to  express 
its  intention  to  tax  in  clear  and  unambiguous  language,  and  that  a  liberal  con- 
struction be  given  to  words  of  exception  confining  the  operation  of  duty,  .  .  . 
though  the  rule  regarding  eocemptions  from  general  laws  imposing  taxes  may 
be  different."  Per  Brown,  J.,  xnEidman  v.  Martinez,  184  U.  S.  578,  583,  22  Sup. 
Ct.  515,  46  L.  Ed.  697,  where  the  court  quotes  as  sustaining  its  doctrine  In  re 
Howell's  Estate,  147  Pa.  St.  164,  23  A.  403,  In  re  Cager,  111  N.  Y.  343,  18  N.  E. 
866,  Knowlton  v.  Moore,  178  U.  S.  41,  20  Sup.  Ct.  747,  44  L.  Ed.  969. 

'in  re  Hickock,  78  Vt.  259,  62  A.  724.  Where  a  particular  subject  is  within 
the  scope  of  the  law  and  an  exemption  from  taxation  is  claimed  on  the  ground 
that  the  legislature  has  not  provided  proper  machinery  for  accomplishing  the 
legislative  purpose  in  a  particular  instance  a  liberal  rather  than  a  strict  construe- 


U  33-34.]  CONSTRUCTION  OF  STATUTES.  33 

tion  should  be  applied,  and  if  by  fair  and  reasonable  construction  of  its  provisions 
the  purpose  of  the  statute  can  be  carried  out,  that  interpretation  ought  to  be 
given  to  effectuate  the  legislative  intent.  In  re  Stewart,  131  N.  Y.  274,  282, 
30  N.  E.  184,  14  L.  R.  A.  836,  affirming. 

*  Attorney  Geneneral  v.  Barney,  211  Mass. — ,  95  N.  E.  750. 

See  further,  post,  s.  241,  as  to  construction  of  exemptions. 

Sec.  33.    Effect  of  Amendment. 

The  fact  that  a  statute  was  amended  by  extending  it  over  a 
certain  subject  or  situation  is  some  evidence  that  prior  thereto  it 
did  not  include  such  property. 

The  fact  that  the  New  York  statute  of  1887,  c.  713,  amended  the  New  York 
statute  of  1885,  c.  483,  s.  1,  so  as  to  subject  to  its  operation  the  property  within 
the  state  of  a  non-resident  decedent,  furnishes  some  evidence  that  prior  thereto 
the  proper  construction  of  the  section  did  not  include  such  property  within  its 
operation.  In  re  Enston,  113  N.  Y.  174,  183,  21  N.  E.  87,  3  L.  R.  A.  464,  22 
N.  Y.  St.  569,  reversing  46  Hun  506,  19  Abb.  N.  Cas.  227,  10  N.  Y.  St.  380, 
5  Dem.  Surr.  93,  8  N.  Y.  St.  781. 

Sec.  34.     Construction    of    Statute    Copied    from    another 
Jurisdiction. 

The  general  rule  applies  to  inheritance  laws  that  where  a  statute 
is  adopted  from  another  state  it  will  be  presumed  that  the  legis- 
lature intended  it  to  receive  the  construction  given  by  the  courts 
of  that  state  if  it  had  been  previously  construed,  unless  in  conflict 
with  the  spirit  and  policy  of  the  laws  of  the  second  state. 

People  v.  Griffith,  245  111.  532,  92  N.  E.  313.  Black  v.  State,  113  Wis.  205, 
211,  89  N.  W.  522,  90  Am.  St.  Rep.  853.  State  v.  Bullen,  143  Wis.  512,  520, 
128  N.  W.  109.     Statutes  copied  from  another  jurisdiction,  see  ante,  s.  16. 


CHAPTER  IX. 


VALIDITY  IN  GENERAL. 

§  35.  Certainty. 

§  36.  Laws  Upheld  and  Avoided. 

§  37.  Statutes  Void  in  Part  Only. 

§  38.  Confiscatory  Legislation. 

§39.  Public  Purpose. 

§  40.  Validity  of  Appropriation  to  Special  Fund. 

§  41.  Assigning  to  Probate  Courts  the  Duty  of  Collection. 

§  42.  Omission  of  Provisions  for  Collection. 

§  43.  Proceedings  to  Test  Validity. 

§  44.  Who  may  Attack  Validity. 

Sec.  35.    Certainty. 

The  inheritance  tax  acts  may  be  void  for  uncertainty. 

State  V.  Vinsonhaler,  74  Neb.  675,  105  N.  W.  472,  semhle. 

It  was  pointed  out  that  N.  Y.  St.  1885,  c.  483,  contains  many  imperfections  and 
that  there  would  be  great  embarrassment  and  difficulty  in  executing  the  act 
in  the  cases  of  contingent  remainders  and  expectant  estates.  But  the  court 
holds  that  this  is  no  reason  for  condemning  the  entire  act.  In  re  McPherson, 
104  N.  Y.  306,  324,  10  N.  E.  685,  58  Am.  Rep.  502. 

Sec.  36.    Laws  Upheld  and  Avoided. 

The  inheritance  taxes  in  this  country  have  usually  been  upheld,^ 
but  have  been  held  unconstitutional  under  state  constitutions  in 
the  cases  cited.^ 

*See,  for  example,  Appeal  of  Hopkins,  77  Conn.  644,  60  A.  657.  Minot  v.  Win- 
throp,  162  Mass.  113,  115,  25  L.  R.  A.  259.  Crocker  v.  Shaw,  174  Mass.  266. 
State  V.  Probate  Court,  112  Minn.  279,  128  N.  W.  18,  19.  In  re  Kimberly,  27 
N.  Y.  App.  Div.  470,  50  N.  Y.  Suppl.  586. 

-Chambe  v.  Judge,  100  Mich.  112.  State  v.  Gorman,  40  Minn.  232.  Drew  v. 
Tifft,  79  Minn.  175.  State  v.Bazille,  87  Minn.  500.  State  v.  Harvey,  90  Minn.  180. 
State  V.  Switzler,  143  Mo.  316.  Curry  v.  Spencer,  61  N.  H.  624,  60  Am.  St.  Rep. 
337.  State  v.  Ferris,  53  Ohio  St.  314.  In  re  Cope,  191  Pa.  St.  1,  70  Am.  St. 
Rep.  749,  45  L.  R.  A.  316.  State  v.  Mann,  76  Wis.  469.  Black  v.  State,  113  Wis. 
205. 

The  supreme  court  remarks  that  Curry  v.  Spencer  is  an  extreme  decision  put 
on  the  basis  of  the  rigid  uniformity  of  the  constitution  of  the  state.  In  State  v. 
Mann  and  State  v.  Gorman,  the  distinction  between  a  tax  on  successions  and 
one  on  property  was  not  necessary  to  be  observed.     State  v.  Gorman,  however, 


§37.]  VALIDITY  IN  GENERAL.  35 

may  be  claimed  as  deciding  that  a  tax  based  on  the  value  of  the  estates  is  con- 
trary to  the  rule  of  equality;  also  that  exemptions  are.  State  v.  Ferris  and 
State  V.  Switzler  do  not  oppose  the  principles  upon  which  inheritance  taxes  are 
sustained,  but  only  decide  that  the  statutes  passed  on  were  repugnant  to  equality 
and  uniformity  of  taxation  as  prescribed  by  the  state  constitutions.  They  are 
authority  against  the  Illinois  statute.  Magoun  v.  Illinois  Trust  &•  Savings  Bank, 
170  U.  S.  283,  291,  18  Sup.  Ct.  594,  42  L.  Ed.  1037. 

Sec.  37.    Statutes  Void  in  Part  Only. 

The  unconstitutional  portion  of  an  inheritance  statute  may 
well  be  so  separated  from  the  balance  that  the  act  may  be  void 
only  in  part,^  but  one  rate  of  taxation  cannot  be  valid  so  far  as 
allowed  by  law  and  void  as  to  the  excess.^ 

1  Union  Trust  Co.  v.  Durfee,  125  Mich.  487,  84  N.  W.  1101,  7  Detroit  Leg.  N. 
597,  purpose  void. 

The  suggestion  that  the  New  York  statute  is  unconstitutional  as  providing  a 
different  rate  of  taxation  for  different  classes  of  relatives  even  if  tenable  could 
not  render  the  statute  void  in  entirety.  In  re  Keeney,  194  N.  Y.  281,  286,  87 
N.  E.  428,  affirming  128  N.  Y.  App.  Div.  893. 

Void  in  Part.  Where  the  Ohio  statute  of  1906  provided  for  the  repeal  of  the 
Ohio  inheritance  law  "except  as  to  estates  in  which  the  inventory  has  already 
been  filed  at  the  date  of  the  passage  of  this  act,"  and  where  this  exception  was 
void,  the  court  holds  that  the  whole  act  need  not  be  declared  unconstitutional 
as  the  title  of  the  act  does  not  leave  room  for  even  suspicion  that  the  exception 
was  an  inducement  to  the  repeal;  and  the  two  objects  of  the  act  may  well  be 
taken  separately.     Friend  v.  Levy,  76  Ohio  St.  26,  50,  80  N.  E.  1036. 

The  unconstitutionality  of  the  clause  in  the  Cal.  St.  1897,  c.  83,  exempting 
certain  resident  relatives  from  tax,  does  not  render  the  entire  provision  for  exemp- 
tion void.  It  is  evident  that  the  legislature  intended  the  exemption  to  apply 
to  resident  relatives  and  the  intention  of  the  legislature  not  to  exempt  non- 
residents of  the  same  degree  of  relationship  fails  and  therefore  residents  and 
non-residents  are  both  exempted  as  provided  by  the  original  intention.  In  re 
Stanford's  Estate,  54  P.  259,  reversed  on  another  point  in  126  Cal.  112,  58  P. 
462,  45  L.  R.  A.  788. 

2  Where  the  Minnesota  act  of  1902  provided  for  a  tax  of  ten  per  cent,  while 
the  constitution  only  allowed  five  per  cent  to  be  levied,  the  claim  was  made  that 
the  greater  includes  the  less  and  that  a  ten  per  cent  tax  included  a  five  per  cent 
tax  and  that  therefore  the  statute  might  be  upheld  as  imposing  a  tax  valid 
to  the  extent  of  five  per  cent.  The  court,  however,  finds  that  the  rate  of  taxa- 
tion and  the  whole  thereof  ordained  by  the  legislature  is  absolutely  void  and 
the  statute  is  in  legal  effect  one  in  which  the  rate  of  taxation  as  to  collateral 
heirs  and  other  parties  is  left  blank.  Such  being  the  case  the  court  has  no  more 
power  to  fill  by  construction  the  blank  in  he  statute  by  reading  into  it  a  rate 
of  taxation  which  will  be  within  the  limitation  of  the  constitution  than  it  has 
to  decree  an  inheritance  tax  in  advance  of  any  legislation  on  the  subject.  It 
was  urged  that  the  tax  as  to  lineal  heirs  is  within  the  constitutional  limitation 
and  is  separate  and  distinct  from  the  tax  as  to  the  collateral  heirs  and  that  there- 


36  INHERITANCE  TAX  LAW.  l§§3&-39. 

fore  the  statute  might  be  sustained  as  to  lineals.  The  court  replies  to  this  claim 
that  any  such  statute  would  be  unconstitutional,  as  all  must  be  taxed  or  none, 
quoting  Drew  v.  Tifft,  79  Minn.  175,  81  N.  W.  839,  47  L.  R.  A.  525,  79  Am.  St. 
Rep.  446.     State  v.  Harvey,  90  Minn.  180,  95  N.  W.  764. 


Sec.  38.    Confiscatory  Legislation. 

The  supreme  court  has  suggested  the  possibility  of  avoiding  a 
confiscatory  tax  on  broad  grounds,  but  no  statute  has  yet  been 
held  void  merely  for  that  reason. 

Knowlton  v.  Moore,  178  U.  S.  41,  109,  20  S.  Ct.  747,  44  L.  Ed.  969. 

Cf.  State  V.  Mann,  76  Wis.  469,  474,  45  N.  W.  526,  46  N.  W.  51,  where  the 
court  remarks  that  the  tax  if  regarded  as  a  probate  fee  may  be  so  large  as  to 
shock  the  good  sense  of  everybody. 

As  to  confiscatory  rates  see  further,  post,  s.  70. 

Sec.  39.    Public  Purpose. 

An  inheritance  tax  may  be  void  as  not  for  a  public  purpose. 
The  Missouri  statute  of  1895,  for  example,  levied  an  inheritance 
tax  for  the  purpose  of  an  endowment  for  the  state  university  and 
further  to  be  paid  to  students  "while  attending  the  university  for 
defraying  the  expenses  of  such  attendance"  in  what  was  known 
as  the  state  university  scholarship  fund.  It  was  argued  that 
this  was  no  different  from  providing  free  tuition  at  the  state 
imiversity.  But  the  court  says  that  it  is  one  thing  to  provide  for 
the  establishment  and  maintenance  of  a  system  of  public  educa- 
tion and  a  wholly  different  thing  to  support  private  individuals 
who  attend  a  university  and  public  schools  by  public  taxation; 
and  the  court  concludes  that  the  tax  is  levied  for  a  purely  private 
purpose  and  for  that  reason  is  in  contravention  of  the  constitution 
of  Missouri.^ 

The  Wisconsin  constitution  provides  that  "the  legislature  shall 
impose  a  tax  on  all  civil  suits  commenced  or  prosecuted  in  the 
municipal  inferior  or  circuit  courts,  which  shall  constitute  a  fund 
to  be  applied  toward  the  payment  of  the  salary  of  the  judges." 
Wis.  St.  1889,  c.  176,  cannot  be  sustained  under  this  section,  as 
the  fund  thereby  raised  is  not  restricted  to  the  payment  of  the 
salary  of  judges.^ 

The  Michigan  statute  of  1893  was  held  totally  void  on  account 
of  its  failure  to  follow  the  constitutional  requirement  that  all 
specific  state  taxes  shall  be  applied  in  paying  certain  debts,* 
while  the  act  of  1899  was  only  void  in  so  far  as  it  directed  the  appli- 


§40.]  VALIDITY  IN  GENERAL.  37 

cation  of  the  proceeds.*     The  fact  that  the  object  is  a  public  purpose 
will  not  aid  an  unconstitutional  statute.^ 

^State  V.  Switzler,  143  Mo.  287,  326,  45  S.  W.  245,  40  L.  R.  A.  280,  65  Am.  St. 
Rep.  653;  followed  in  Simmons  Medicine  Co.  v.  Ziegenhein,  145  Mo.  368,  47  S.  W. 
10. 

^State  V.  Mann,  76  Wis.  469,  477,  45  N.  W.  526,  46  N.  W.  51. 

^Chambe  v.  Durfee,  100  Mich.  112,  58  N.  W.  661. 

*  Union  Trust  Co.  v.  Durfee,  125  Mich.  487,  84  N.  W.  1101,  7  Detroit  Leg. 
N.  597. 

^As  the  New  Hampshire  act  of  1878  is  unconstitutional,  the  fact  that  its  object 
was  "to  defray  the  cost  of  probate  courts"  is  not  entitled  to  any  weight  because 
the  constitutional  rule  of  equality  cannot  be  limited  or  qualified  by  any  con- 
sideration of  expediency  or  convenience.  The  purpose  of  the  act  cannot  change 
its  character  in  this  respect.  Curry  v.  Spencer,  61  N.  H.  624,  631,  60  Am.  St. 
Rep.  337. 

Sec.  40.    Validity  of  Appropriation  to  Special  Fund. 

The  Missouri  constitution  provides  that  all  revenue  in  money 
received  by  the  state  shall  go  into  the  treasury  and  that  all  appro- 
priations shall  be  made  in  the  order  set  forth  in  the  section.  It 
was  argued  that  this  means  that  all  revenue  shall  go  into  one 
common  general  fund  unfettered  and  unpledged  and  that  these 
words  prohibit  the  creation  of  any  special  fund  in  the  treasury 
to  be  supplied  out  of  revenue  provided  by  the  general  assembly; 
and  that  therefore  the  Missouri  act  of  1899,  which  provided  that 
the  receipts  from  the  inheritance  tax  should  be  accredited  to  the 
"State  Seminary  moneys,"  was  rendered  void.  The  court  replies 
that  the  constitution  itself  provides  elsewhere  for  special  funds 
and  holds  that  the  constitution  simply  requires  the  general 
assembly  to  proceed  in  the  order  designated  in  passing  its  appro- 
priation bills.  In  prescribing  the  order  for  the  passage  of  the 
appropriation  bill  there  was  no  intention  to  create  special  liens 
upon  the  money  in  the  treasury  or  give  any  priority  of  payment 
to  one  appropriation  over  another. 

It  was  contended  that  the  act  of  1899,  which  provides  that 
the  receipts  from  the  inheritance  tax  law  shall  be  appropriated  to 
the  state  university,  is  itself  an  appropriation  of  the  money,  as 
every  dollar  raised  thereby  is  instantly  and  perpetually  appropri- 
ated to  the  maintenance  of  the  university.  The  court  replies 
that  the  statute  itself  forbids  expenditure  save  in  pursuance  of 
regular  appropriat  ons  of  the  general  assembly. 

State  V.    Henderson,  160  Mo.  190,  211,  213,  60  S.  W.  1093. 


38  INHERITANCE  TAX  LAW.  [§§41-43. 

Sec.  41.    Assigning  to  Probate  Courts  the  Duty  of  Appraisal 
and  Collection. 

It  is  proper  to  assign  to  the  probate  courts  the  duty  of  collect- 
ing the  tax.  Such  duties  are  necessarily  incident  to  the  settle- 
ment of  the  estates  and  may  be  properly  performed  by  the  judge 
of  probate.^ 

It  was  claimed  that  Wisconsin  statute  of  1903,  c.  44,  is  uncon- 
stitutional because  it  commits  the  appraisal  of  property  and  the 
fixing  of  the  amount  of  the  tax  to  the  county  court,  and  these  are 
claimed  to  be  administrative  and  not  judicial  duties.  The  court 
replies  that  this  is  not  so,  that  the  court  simply  determines  in 
a  judicial  way  certain  facts  necessary  to  be  ascertained  to  deter- 
mine how  much  the  tax  fixed  by  the  law  amounts  to  in  a  given 
case.  These  duties  are  judicial  in  their  character  and  very  properly 
entrusted  to  the  county  court  in  which  the  estate  is  being 
administered. 2 

1  Union  Trust  Co.  v.  Durfee,  125  Mich.  487,  84  N.  W.  1101,  7  Detroit  Leg. 
N.  597,  quoting  State  v.  Gloucester  Circuit  Judge,  50  N.  J.  L.  585,  611,  15  A.  272, 
1  L.  R.  A.  86.     See  further,  post,  s.  325,  377. 

2  Nunnemacher  v.  State,  129  Wis.  190,  223,  108  N.  W.  627,  9  L.  R.  A.  N.  S.  121. 

Sec.  42.    Omission  of  Provisions  for  Collection. 

An  omission  from  the  act  of  any  machinery  to  collect  the  taxes 
due  under  it  does  not  render  it  invalid.^  Where  the  act  clearly 
creates  a  liability  on  the  part  of  recipients  of  inherited  estates  to 
pay  the  amount  of  any  tax  to  the  county  treasurer  for  the  use  of 
the  state,  there  is  no  reason  why  the  county  treasurer  might  not 
maintain  an  ordinary  action  based  upon  the  liability  that  thus  is 
created  to  pay,  against  the  beneficiaries  to  recover  the  tax  for  the 
use  of  the  state.^ 

1  Neilson  v.  Russell  (N.  J.  1908)  76  N.  J.  L.  27,  42,  69  A.  476,  482,  reversed  on 
another  ground  in  76  N.  J.  L.  655,  71  A.  286.     See  further,  post,  s.  396. 

^  In  re  McKennan,  (S.  D.,)  130  N.  W.  33,  reversing  judgment  on  rehearing  in 
25  S.  D.  369,  126  N.  W.  611. 

Sec.  43.    Proceedings  to  Test  Validity. 

Proceedings  to  test  the  validity  of  inheritance  tax  statutes 
depend  on  local  practice,  and  are  commonly  brought  up  by  pro- 
hibition^  or  by  certiorari, ^  or  quo  warranto^  or  possibly  by  injunction,* 
or  mandamus  may  be  brought  against  the  court  to  compel  it  to 
assess  the  tax.^ 


§44.1  VALIDITY  IN  GENERAL.  39 

^Chamhe  v.  Durfee,  100  Mich.  112,  58  N.  W.  661.  Union  Trust  Co.  v.  Durfee, 
125  Mich.  487,  84  N.  W.  1101,  7  Detroit  Leg.  N.  597. 

"^State  V.  Henderson,  160  Mo.  190,  60  S.  W.  1093.  State  v.  District  Court,  41 
Mont.  357,  109  P.  438. 

^State  V.  Guilbert,  70  Ohio  St.  229,  225,  71  N.  E.  636. 

*Eyre  v.  Jacob,  14  Gratt.  (Va.)  422,  73  Am.  Dec.  367,  where  the  propriety  of 
injunction  was  not  questioned. 

^State  V.  Bazille,  97   Minn.  11,  106  H.  W.  93,  6  L.  R.  A.  N.  S.  732. 

Sec.  44.     Who  May  Attack  Validity. 

Only  those  can  attack  the  validity  of  an  inheritance  tax  who 
would  be  benefited  by  its  invalidity.  So  grantees  in  a  deed  sub- 
ject to  the  lowest  rate  of  taxation  have  no  valid  cause  of  complaint 
as  to  the  constitutionality  of  the  transfer  tax  because  other  grantees 
are  subjected  to  a  higher  rate.  That  objection,  if  tenable,  could  be 
taken  only  by  the  grantees  taxed  at  the  higher  rate.^ 

The  contention  that  the  California  statute  of  1905,  c.  314,  is 
unconstitutional  as  discriminating  between  the  citizens  of  the 
state  and  those  of  other  states  will  not  be  considered  where  it 
does  not  appear  by  the  pleadings  to  which  class  the  appellant 
belongs.'* 

Where  the  devisee  of  real  estate  is  an  alien,  and  has  received  the 
value  of  the  real  estate  in  partition  proceedings,  he  is  estopped  to 
deny  liability  for  the  succession  tax  on  the  ground  that  the  devise 
to  him  as  an  alien  was  void.^ 

1  In  re  Keeney,  194  N.  Y.  281,  286,  87  N.  E.  428,  affirming  128  N.  Y.  App. 
Div.  893. 

2  In  re  Damon,  10  Cal.  App.  542,  102  P.  684. 
^Scholey  v.  Rew,  90  U.  S.  (23  Wall.)  331,  23  L.  R.  A.  99. 


CHAPTER  X. 


VARIOUS  CONSTITUTIONAL  LIMITATIONS. 

§  45.  The  State  Constitutions. 

§  45a.  Impairment  of  Contract. 

§  46.  Constitutional  Limitation  in  Rate. 

§47.  Justice  to  be  Free. 

§  48.  Poll  Tax  Prohibited. 

§  49.  Void  as  in  Addition  to  Annual  Property  Tax. 

§  50.  Must  Cover  both  Realty  and  Personalty. 

§  51.  Local  or  Special  Laws. 

§  52.  Title  to  be  Expressed. 

§  53.  Revenue  Legislation  to  Originate  in  House  of  Representatives. 

Sec.  45.    The  State  Constitutions. 

While  most  states  require  equality  and  uniformity  in  taxation/ 
inheritance  taxes  are  specifically  referred  to  in  only  five  states.^ 

^As  to  equality  and  uniformity,  see  Chapter  XL  For  the  clauses  in  the  state 
constitutions  bearing  on  inheritance  taxes,  see  the  second  part  of  this  book. 

2  Alabama,  Louisiana,  Minnesota,  New  Hampshire,  Oklahoma.  See  also  the 
proposed  constitutions  of  Arizona  and  Indiana.  See  In  re  Fox,  154  Mich.  5, 
117  N.  W.  558.  15  Detroit  Leg.  N.  674.  See  also  Drew  v.  Tifft,  79  Minn.  175, 
81  N.  W.  839,  47  L.  R.  A.  525,  79  Am.  St.  Rep.  446. 

Sec.  45a.    Impairment  of  Contract. 

.  No  collateral  inheritance  tax  has  yet  been  held  to  impair  any 
contract  right  under  any  circumstances.  The  subject  was  adverted 
to  in  the  supreme  court  in  a  decision  holding  that  where  the  law 
imposing  a  tax  on  deposits  was  in  force  before  the  deposit  was 
made  by  a  non-resident  in  the  state  of  New  York,  it  did  not  im- 
pair the  obligation  of  the  contract,  if  a  tax  otherwise  lawful  ever 
can  be  said  to  have  that  effect.^  The  New  York  statute  of  1885 
did  not  create  any  contract  right  that  a  person  dying  while  that 
statute  was  in  force  might  dispose  of  his  estate  without  any  further 
tax  except  as  then  in  existence.  Therefore  the  statute  of  1897 
could  tax  powers  of  appointment  which  were  not  taxable  under 
the  statute  of  1885.2 

In  an  Iowa  case  the  decedent  before  the  passage  of  any  inherit- 
ance law  entered  into  an  agreement  for  the  disposition  of  certain 


§§46-48.1  CONSTITUTIONAL  LIMITATIONS.  41 

property  on  his  death,  which  occurred  after  the  law  went  into 
effect.  The  court  considered  the  suggestion  that  as  the  contract 
was  made  before  the  passage  of  the  collateral  inheritance  law  this 
law  cannot  apply,  for  the  reason  that  it  impairs  the  obligations  of 
a  contract  and  deprives  the  collateral  heirs  of  their  property  with- 
out due  process  of  law.  The  court  answers  this  suggestion  show- 
ing that  until  the  death  of  the  devisee  it  was  entirely  unsettled 
as  to  who  would  get  the  property  at  the  time  of  his  death,  as  it 
depended  on  the  survival  of  the  collateral  heirs.  The  time  of 
possession  and  enjoyment  was  postponed  until  the  death  of  the 
devisee  and  the  estate  of  the  original  testator  was  still  undis- 
tributed. It  was  therefore  entirely  competent  for  the  legis- 
lature to  impose  a  tax  upon  the  right  to  receive  in  possession  and 
enjoyment  although  the  right  was  given  by  a  contract.^ 

^Blackstone  v.  Miller,  188  U.  S.  189,  23  S.  Ct.  277,  47  L.  Ed.  439,  affirming 
171  N.  Y.  682,  69  N.  Y.  App.  Div.  127,  quoting  Pinney  v.  Nelson,  183  U.  S 
144,  147. 

Un  re  Vanderbilt,  163  N.  Y.  597,  57  N.  E.  1127,  50  N.  Y.  App.  Div.  246 
63  N.  Y.  Suppl.  1079. 

^Lacy  V.  State  Treasurer,  (Iowa,  1909,)  121  N.  W.  179. 

Sec.  46.     Constitutional  Limitation  in  Rate. 

The  tax  may  be  void  as  at  a  rate  prohibited  by  the  constitution. 
State  V.  Harvey,  90  Minn.  180,  95  N.  W.  764. 

Sec.  47.    Justice  to  be  Free. 

Inheritance  taxes  in  the  form  of  heavy  probate  duties  have  been 
found  invalid  under  constitutional  provisions  that  justice  must 
be  obtained  freely  and  without  purchase. 

State  V.  Gorman,  40  Minn.  232,  41  N.  W.  948. 

The  Wisconsin  statute  of  1889,  c.  176,  purports  to  close  the  door  of  the  county 
court  against  administrators  and  the  estate  unless  they  first  advance  and  pay 
the  amount  exacted.  This  looks  very  much  like  purchasing  the  privilege  of  go- 
ing into  the  county  court  for  the  settlement  of  the  estate,  but  the  court  finds  it 
unnecessary  to  determine  that  question.  State  v.  Mann,  76  Wis.  469,  480,  45 
N.  W.  526,  46  N.  W.  51. 

Sec.  48.    Poll  Tax  Prohibited. 

An  inheritance  tax  is  not  void  under  a  constitution  providing 
that  "the  levying  of  taxes  by  poll  is  grievous  and  oppressive  and 
ought  to  be  prohibited." 

Tyson  v.  SUite,  28  Md.  577. 


42  INHERITANCE  TAX  LAW.  [§§49-52. 

Sec.  49,    Void  as  in  Addition  to  Annual  Property  Tax. 

In  two  states  succession  taxes  cannot  be  sustained  as  property 
taxes,  as  they  would  be  void  as  an  additional  tax  beside  the  regular 
annual  property  tax  and  as  such  prohibited  by  the  constitution.^ 
Louisiana  is  the  only  state  limiting  the  legislature  by  forbidding 
the  imposition  of  an  inheritance  tax  on  property  which  has  already 
borne  its  just  proportion  of  taxes.^ 

^ State  V.  Switder,  143  Mo.  287,  330,  45  S.  W.  245,  40  L.  R.  A.  280,  65  Am.  St. 
Rep.  653.     State  v.  Mann,  76  Wis.  469,  478,  45  N.  W.  526,  46  N.  W.  51. 

^Succession  of  Stauffer,  119  La.  Ann  66,  43  S.  928,  holding  that  this  provision 
does  not  apply  to  taxes  due  and  unpaid  before  the  enactment  of  the  constitution. 
To  the  same  effect  see  Succession  of  Westfeldt,  122  La.  Ann.  836,  48  S.  281.  Other 
cases  construing  this  clause  are  Succession  of  Pritchard,  118  La.  Ann.  883,  43  S. 
637;  Succession  of  Fell,  119  La.  Ann.  1037,  44  S.  879. 

Sec.  50.    Must  Cover  both  Realty  and  Personalty. 

Under  the  Minnesota  constitution  an  inheritance  tax  is  void 
unless  it  applies  to  real  as  well  as  personal  property,^  but  no  such 
limitation  is  imposed  by  the  federal  constitution.^ 

1  Drew  V.  Tifft,  79  Minn.  175,  81  N.  W.  839,  47  L.  R.  A.  525,  79  Am.  St.  Rep. 
446.    State  v.  Bazille,  87  Minn.  500,  92  N.  W.  415,  94  Am.  St.  Rep.  718. 
^Beers  v.  Glynn,  211  U.  S.  477,  483,  29  S.  Ct.  186,  53  L.  Ed.  290. 

Sec.  51.    Local  or  Special  Laws. 

Inheritance  taxes  are  subject  to  constitutional  restrictions  against 
local  or  special  laws. 

In  re  Stanford's  Estate,  126  Cal.  112,  58  P.  462,  45  L.  R.  A.  788.  In  re 
Magnes,  32  Colo.  527,  77  P.  853. 

Wis.  St.  1889,  c.  176,  is  unconstitutional,  as  it  provides  for  the  imposition  of 
a  tax  on  certain  estates  only  in  counties  having  more  than  a  certain  population 
and  the  tax  in  question  really  applies  only  to  one  county  and  is  further  limited 
to  a  certain  class  of  estates  in  that  county.  State  v.  Mann,  76  Wis.  469,  45  N. 
W.  526,  46  N.  W.  51. 

The  Maryland  statute  of  1880,  chapter  444,  was  not  void  on  the  ground  that 
it  was  a  release  of  taxes  and  that  the  constitution  provides  that  the  general 
assembly  shall  not  pass  any  local  or  special  laws  of  that  character,  as  the  release 
of  debts  or  obligations  to  the  state  is  a  public  general  law  not  forbidden  by  the 
constitution.     Montague  v.  State,  54  Md.  481. 

Sec.  52.    Title  to  be  Expressed. 

Inheritance  taxes  are  commonly  subject  to  constitutional  pro- 
visions requiring  the  title  to  express  the  subject  clearly,^  although 


§62.]  CONSTITUTIONAL  LIMITATIONS.  43 

the  rule  is  otherwise  in  New  York,^  These  clauses  in  constitu- 
tions require  the  title  to  cover  the  form  of  transfer,*  and  the 
property,*  and  the  persons  taxed ,^  and  to  point  out  new  provisions 
in  an  amending  act.®  A  requirement  that  the  title  shall  dis- 
tinctly state  the  object  of  the  tax  to  which  only  it  shall  be  applied 
has  been  held  to  clearly  refer  to  the  ordinary  property  tax  which, 
at  the  time  it  is  levied,  can  be  levied  with  knowledge  as  to  the 
probable  amount  of  revenue  that  will  be  derived  therefrom  and 
can  thus  be  well  rendered  to  meet  the  uses  to  which  the  same 
shall  be  applied  7 

^Colo.  St.  1902,  c.  3,  called  "an  act  in  relation  to  public  revenue,"  is  not  void 
as  being  too  general  in  title,  in  view  of  the  financial  history  of  the  state.  In  re 
Magnes,  32  Colo.  527,  77  P.  853. 

The  title  of  La.  St.  1904,  c.  45,  is  as  follows:  "To  carry  into  effect  articles 
235  and  236  of  the  constitution  of  1898  relative  to  inheritance  taxes."  The 
court  holds  that  the  title  sufficiently  suggests  the  object  of  the  act  and  is  there- 
fore not  void  under  La.  Const,  a.  31.  Succession  of  Levy,  115  La.  378,  39  S.  37, 
affirmed  in  Cahen  v.  Brewster,  203  U.  S.  552,  27  S.  Ct.  174. 

Objections  to  the  title  of  Mo.  St.  1895,  were  not  considered  by  the  court, 
which  found  the  act  void  on  other  grounds.  State  v.  SwUzler,  143  Mo.  287,  331, 
45  S.  W.  245,  40  L.  R.  A.  280,  65  Am.  St.  Rep.  653. 

2  The  provision  of  the  constitution  as  to  title  did  not  apply  to  the  inheritance 
tax,  as  it  has  no  reference  to  special  taxes  which  may  be  collected  in  a  variety  of 
ways  under  general  laws.  In  re  McPherson,  104  N.  Y.  306,  319,  10  N.  E.  685, 
58  Am.  Rep.  602. 

3 "Inheritances"  covers  succession  by  will.  In  re  White,  42  Wash.  360,  84 
P.  831. 

*The  New  Jersey  acts  of  1892  and  1893  are  void  as  to  realty,  as  the  title  does 
not  mention  real  estate,  which  defect  was  avoided  in  the  act  of  1894.  Grossman 
v.  Hancock,  58  N.  J.  L.  139,  32  AtL  689;  Von  Riper  v.  Heffenheimer,17N.].L.]. 
49;   In  re  Dobermiller,  17  N.  J.  L.  J.  378. 

^  Where  the  title  only  mentions  collateral  inheritances  the  act  is  void  so  far 
as  direct  inheritances  are  concerned.  Illegitimate  children  are  clearly  not 
collateral  heirs,  and  therefore  the  act  is  void  as  to  them.  Wirringer  v.  Morgan, 
12  Cal.  App.  26,  106  P.  425. 

Reference  to  other  Statutes  and  to  Mortality  Tables.  Mich.  Const,  a. 
14,  s.  14,  provides  that  every  tax  law  shall  distinctly  state  the  tax  and  the  object 
to  which  it  is  to  be  applied;  that  it  shall  not  be  sufficient  to  refer  to  any  other 
law  to  fix  such  a  tax  or  object.  Mich.  St.  1899,  c.  188,  provides  that  the  tax  shall 
be  imposed  upon  persons  or  corporations  not  exempt  by  law  and  the  court  holds 
that  this  is  not  in  violation  of  the  constitution.  The  court  says  that  the  tax  is 
clearly  defined  and  no  other  law  referred  to  either  to  fix  the  tax  or  its  object. 
It  is  imposed  upon  everybody  who  is  not  exempt.  So  the  reference  in  s.  11  to 
mortality  tables  to  ascertain  the  value  of  future  interests  does  not  change  the 
rule  of  taxation  or  modify  it,  but  only  prescribes  a  rule  of  estimating  the  values 
and  is  valid  within  the  constitution.  Union  Trust  Co.  v.  Durfee,  125  Mich.  487, 
84  N.  W.  1101,  7  Detroit  Leg.  N.  697. 


44  INHERITANCE  TAX  LAW.  [8  53. 

•N.  J.  St.  1906  is  entitled  "An  act  to  amend  an  act  entitled  'An  act  to  tax 
intestates  and  estates,  gifts,  legacies,  devises  and  collateral  inheritance  in  certain 
cases.'  "  The  act  of  1906  intended  to  substitute  a  tax  on  the  transfer  of 
property  which  is  the  subject  of  a  legacy  for  a  tax  on  the  legacy  itself.  This 
purpose  was  not  expressed  in  the  title  and  the  statute  is  therefore  void  as 
applied  to  New  Jersey  stocks  belonging  to  a  non-resident.  Dixon  v.  Russell^ 
79  N.  J.  L.  490,  76  A.  982,  reversing  78  N.  J.  L.  296,  73  A.  51. 

The  Pennsylvania  statute  of  1887,  P.  L.  79,  is  entitled  "An  act  to  provide  for 
the  better  collection  of  collateral  inheritance  taxes."  The  court  does  not  pass  on 
whether  this  is  a  suflficient  title  as  to  cover  new  taxes  imposed  by  the  statute, 
but  intimates  that  it  is  not.  In  re  Bittinger,  129  Pa.  St.  338,  18  A.  132.  See 
also  Appeal  of  Commonwealth,  127  Pa.  St.  435,  440,  17  A.  1004. 

Un  re  McKennan,  25  S.  D.  369,  126  N.  W.  611,  130  N.  W.  33,  citing  with 
approval  Matter  of  McPherson,  104  N.  Y.  315,  10  N.  E.  685. 

Sec.  53.    Revenue   Legislation    to    Originate    in    House   of 
Representatives. 

The  Louisiana  act  of  1894  was  attacked  as  being  in  conflict 
with  Art.  35  of  the  constitution,  which  requires  that  all  bills  for 
raising  a  revenue  and  appropriating  money  shall  originate  in  the 
house  of  representatives.  The  statute  did  originate  in  the 
senate  and  it  was  denied  that  the  act  was  one  raising  revenues  or 
appropriating  money.  It  was  claimed  that  the  statute  is  a  legal 
limitation  upon  the  right  of  inheritance;  that  it  simply  fixes  as 
a  necessary  condition  for  the  existence  of  a  capacity  to  receive  by 
succession  the  payment  of  a  certain  sum.  The  court  holds  that 
the  statute  does  not  make  the  payment  of  the  tax  a  condition  prece- 
dent to  a  right  of  inheritance,  but  that  the  law  permits  a  foreigner 
to  inherit  and,  having  so  inherited,  charges  him  with  the  payment  of 
the  tax,  and  that  as  such  the  legislation  is  revenue  legislation 
and  unconstitutional. 

Succession  of  Sala,  50  La.  Ann.  1009,  24  S.  674. 


CHAPTER  XI. 


UNIFORMITY  AND  EQUALITY. 

§  54.     Requirement    of    Uniformity    not    Applicable    to    Inheritance 

Taxes. 
§  55.     Meaning  of  "Equality"  Molded  to  New  Conditions. 
§  56.     Authority    to    Levy     Inheritance    Taxes     Makes     Uniformity 

Unnecessary. 
§  57.     Uniformity  within  Specified  Classes. 
§  58.     Proportional  Tax  Required. 
§59.     Geographical  Uniormity. 

Sec.  54.    Requirement    of    Uniformity    not    Applicable    to 
Inheritance  Taxes. 

It  is  often  said  that  constitutional  requirements  of  uniformity 
and  equality  apply  only  to  property  taxes  and  not  to  an  inheritance 
tax,^  and  do  not  prohibit  an  inheritance  tax  which  by  its  nature 
cannot  be  uniform  in  the  same  sense  as  a  property  tax,^  but  there 
is  some  authority  to  the  contrary  in  Minnesota.^ 

^ Booth  V.  Commonwealth,  130  Ky.  88,  113  S.  W.  61.  Tyson  v.  State,  1868,  28 
Md.  577.  Nunnemacher  v.  State,  129  Wis.  190,  204-220,  108  N.  W.  627,  9 
L.  R.  A.  N.  S.  121.    Beals  v.  State,  139  Wis.  544,  552,  121  N.  W.  347. 

In  an  earlier  decision  the  court  does  not  decide  whether  an  inheritance  tax  is 
subject  to  the  constitutional  provision  that  the  rule  of  taxation  shall  be  uniform. 
"Considering  the  clause  without  undue  refinement  of  reasoning,  it  is  difficult 
to  see  why  it  does  not  apply  to  an  inheritance  or  succession  tax.  It  is  true  such 
a  tax  is  called  an  excise  in  the  decisions.  An  excise  is  a  duty  levied  on  articles 
of  sale  or  manufacture,  upon  licenses  to  pursue  certain  trades  or  deal  in  certain 
commodities,  upon  official  privileges,  etc.  Cooley,  Taxation  (2d  ed.),  4.  But 
when  such  duty  is  levied  upon  a  trade,  occupation  or  privilege  as  a  means  of 
producing  revenue  alone,  and  not  in  exercise  of  the  police  power,  it  is,  to  all 
intents  and  purposes,  an  exercise  of  the  taxing  power,  and  no  good  reason  is  per- 
ceived why  such  taxation  is  not  included  within  the  taxation  referred  to  in  the 
constitution  in  the  clause  quoted.  The  argument  against  this  position  is  that 
the  words  immediately  following  this  clause,  namely,  'and  taxes  shall  be  levied 
upon  such  property  as  the  legislature  shall  prescribe,'  indicate  that  it  is  a  taxa- 
tion of  property  alone  which  the  section  covers,"  Per  Winslow,  J.,  in  Black  v. 
State,  113  Wis.  205,  218,  89  N.  W.  522,  90  Am.  St.  Rep.  853. 


46  INHERITANCE  TAX  LAW.  [§§  55-57. 

Inheritance  taxes  were  upheld  as  not  violating  the  requirement  of  uni- 
formity in  Dixon  v.  Ricketts,  26  Utah  215,  72  P.  947.  State  v.  Alston,  94  Tenn. 
674,  30  S.  W.  750. 

^Thompson  v.  Kidder,  74  N.  H.  89,  96,  65  A.  392. 

^ State  V.  Gorman,  40  Minn.  232,  41  N.  W.  948. 

The  amendment  of  1894  to  the  Minnesota  constitution,  a.  9,  s.  1,  was  in- 
corporated into  the  existing  constitution  and  the  section  in  question  must  be 
construed  precisely  as  if  the  proviso  had  been  a  part  of  the  original  section;  hence 
the  mandate  of  equality  qualifies  the  provisions  of  the  amendment  and  applies 
to  the  whole  section.  The  court  therefore  holds  that  the  requirements  of 
equality  in  taxation  applies  to  inheritance  taxes  exactly  as  it  does  to  taxes  on 
property  except  as  expressly  provided  in  the  last  clause  of  the  section.  Drew 
v.  Tifft,  79  Minn.  175,  81  N.  W.  839,  47  L.  R.  A.  625,  79  Am.  St.  Rep.  446. 

See,  however,  State  v.  Bazille,  97  Minn.  11,  106  N.  W.  93,  6  L.  R.  A.  (N.  S.) 
732. 

Sec.  55.     Meaning    of    "Equality"   Molded  to    New    Con- 
ditions. 

The  requirement  of  equality  has  been  molded  from  time  to 
time  in  view  of  the  prevalent  economic  theories  and  changing 
conditions  of  government. 

State  V.  Bazille,  97  Minn.  11,  16,  106  N.  W.  93,  6  L.  R.  A.  (N.  S.)  732. 

Sec.  56.    Authority  to  Levy  Inheritance  Tax  Makes  Uni- 
formity Unnecessary. 

Direct  constitutional  authority  to  levy  an  inheritance  tax  in- 
cludes authority  to  levy  one  which  is  not  uniform. 

The  intention  and  effect  of  the  amendment  of  1903  to  the  constitution  of  New 
Hampshire  was  to  provide  in  addition  to  taxation  as  theretofore  defined  a  different 
method  of  meeting  public  charges  by  an  inheritance  tax.  As  an  inheritance  tax 
is  necessarily  disproportional  and  is  unequal  in  its  lack  of  proportion,  and  it  is 
impossible  to  lay  a  proportional  tax  upon  property  upon  the  occasion  of  death, 
it  cannot  have  been  understood  that  such  impossibility  would  defeat  the  express 
power  to  lay  such  a  tax,  but  it  must  follow  that  the  express  authority  to  impose 
such  a  tax  is  an  authority  to  disregard  the  general  rule  of  proportion  so  far  as 
is  necessary  to  exercise  the  power.  For  instance,  poll  taxes  are  recognized 
by  the  constitution,  but  they  are  not  proportional,  they  are  constitutional  acts 
recognized  by  the  constitution  and  have  never  been  understood  to  have  been 
rendered  unconstitutional  by  lack  of  proportion  or  inability  to  pay.  Thompson 
V.  Kidder,  74  N.  H.  89,  96,  65  A.  392. 

Sec.  57.    Uniformity  within  Specified  Classes. 

Uniformity  means  only  uniformity  within  the  class  and  does 
not  prohibit  proper  classification  with  different  rates  for  each.^ 
"If  a  burden  in  the  nature  of  taxation  is  laid  upon  the  right  [of 
descent],  the  constitutional  principle  that  taxes  must  be  uniform 


§58.1  UNIFORMITY  AND  EQUALITY.  47 

as  to  the  classes  upon  which  they  operate  must  be  observed. 
Subject  to  this  restriction  the  legislature  may  lay  taxes  upon  the 
right  of  one  class  of  persons  and  corporations  to  succeed  to  prop- 
erty of  deceased  persons,  and  exempt  the  right  of  other  classes  of 
persons  or  corporations  from  such  taxation. "^ 

1  Nunnemacher  v.  State,  129  Wis.  190,  221,  108  N.  W.  627,  9  L.  R.  A.  N.  S.  121. 

The  constitutionality  of  inheritance  taxes  are  based  on  two  principles:  "1. 
An  inheritance  tax  is  not  one  on  property,  but  one  on  the  succession.  2.  The 
right  to  take  property  by  devise  or  descent  is  the  creature  of  the  law,  and  not  a 
natural  right — a  privilege,  and  therefore  the  authority  which  confers  it  may 
impose  conditions  upon  it.  From  these  principles  it  is  deduced  that  the  states 
may  tax  the  privilege,  discriminate  between  relatives,  and  between  these  and 
strangers,  and  grant  exemptions,  and  are  not  precluded  from  this  power  by  the 
provisions  of  the  respective  state  constitutions  requiring  uniformity  and  equality 
of  taxation."  Magoun  v.  Illinois  Trust  &  Savings  Bank,  170  U.  S.  283,  287, 
18  Sup.  Ct.  594,  42  L.  Ed.  1037.  "Equality"  as  applied  to  the  progressive  tax, 
see  post,  s.  64. 

2 Per  Boggs,  J.,  In  re  Speed,  216  111.  23,  27,  74  N.  E.  809,'  108  Am.  St.  Rep. 
189,  affirmed  203  U.  S.  553,  27  S.  Ct.  171,  51  L.  Ed.  314 

Sec.  58.    Proportional  Tax  Required. 

The  requirement  of  proportional  taxation  is  not  intended  to 
apply  to  inheritance  taxes. 

Tyson  v.  State,  28  Md.  577.  Eyre  v.  Jacob,  14  Gratt.  (Va.)  422,  433,  73  Am. 
Dec.  357. 

A  requirement  in  the  Maryland  constitution  that  every  person  shall  con- 
tribute proportionally  for  the  support  of  the  government  did  not  forbid  an 
inheritance  tax.  While  this  article  provided  for  a  uniform  mode  of  taxation 
on  property  it  was  not  the  purpose  of  the  friends  of  the  constitution  to  prohibit 
any  other  species  of  taxation  but  to  leave  the  legislature  power  to  impose  such 
other  taxes  as  the  necessities  of  the  government  might  require.  Tyson  v.  State, 
28  Md.  577. 

The  Vermont  constitution  provides  that  every  member  of  society  is  bound  to 
contribute  "his  proportion"  towards  the  expense  of  the  protection  which  the 
state  affords  him,  and  it  is  claimed  that  this  excludes  all  methods  of  taxation 
that  are  not  uniform,  equal  and  proportionate.  And  it  was  claimed  that  the 
collateral  inheritance  tax  lacked  uniformity.  The  court  holds,  however,  that 
the  question  is  what  constitutes  equality  of  apportionment  within  the  meaning 
of  this  provision,  and  in  doing  this  the  basis  of  the  act  in  question  must  be  con- 
sidered, that  the  statute  is  not  a  tax  upon  property  but  a  tax  upon  the  trans- 
mission of  property,  which  is  not  a  natural  right,  but  a  privilege  accorded 
by  the  state.  And  the  court  decides  that  the  constitutional  requirement  of  pro- 
portional contributions  was  not  intended  to  restrict  the  state  to  methods  of 
taxation  that  operate  equally  upon  all  its  inhabitants,  regardless  of  the  variety 
and  measure  of  the  advantages  derived  from  its  protection  and  regulation.  A 
member  of  the  body  politic  has  from  the  state  not  only  the  protection  of  his 
property,  but  the  privilege  of  taking  property  by  descent  and  by  will.     It  seems 


48  INHERITANCE  TAX  LAW.  [§59. 

clear  that  privileges  of  this  character  as  well  as  property  are  to  be  considered 
in  determining  the  just  proportion  of  the  individual.  In  re  Hickok,  78  Vt. 
259,  62  A.  724. 

The  opposite  view  was  expressed  in  a  discredited  New  Hampshire  case- 
"Immunity  from  disproportional  taxation  being  expressly  reserved  in  our  bill 
of  rights,  and  the  power  of  proportional  taxation  only  being  granted  the  legis- 
lature by  the  constitution,  we  are  unaware  of  any  ground  upon  which  the  statute 
under  consideration  [Gen.  Laws,  c.  64]  can  be  upheld;  for  if  it  is  to  be  regarded 
as  a  tax  on  property,  it  is  open  to  the  objection  of  unequal  and  double  taxation, 
and  if  it  is  to  be  regarded  as  a  tax  on  a  civil  right  or  privilege,  it  is  discriminat- 
ing and  disproportional.  See  State  v.  United  States  &  Can.  Express  Co.,  60  N.  H. 
219."  Per  Blodgett,  J.,  in  Curry  v.  Spencer,  61  N.  H.  624,  631,  60  Am.  St. 
Rep.  337.  Curry  v.  Spencer,  61  N.  H.  624,  is  explained  in  Minot  v.  Winthrop, 
162  Mass.  113,  118,  as  going  on  the  ground  that  the  tax  in  that  case  is  not  propor- 
tional and  so  cannot  be  supported  as  a  tax  on  property  under  the  constitution 
of  that  state  which  authorizes  only  taxes  and  assessments  on  polls  and  property." 

In  Missouri  the  act  of  1895  was  found  void  as  a  property  tax  not  levied  in  pro- 
portion to  the  value  of  the  property  as  the  constitution  required.  State  v, 
Switzler,  143  Mo.  287,  330,  45  S.  W.  245,  40  L.  R.  A.  280,  65  Am.  St.  Rep.  653. 

Sec.  59.    Geographical  Uniformity. 

Constitutional  requirements  of  uniformity  mean  merely  that 
general  tax  laws  shall  be  in  full  force  th  roughout  the  taxing  district. 

State  v.  Ferris,  53  Ohio  St.  314,  41  N.  E.  579,  30  L.  R.  A.  218.  Knowlton  v 
Moore,  178  U.  S.  41,  108,  20  S.  Ct.  747,  44  L.  Ed.  969.  (U.  S.  Const.,  art.  1, 
s.  8.) 

"An  excise  tax  which  operates  uniformly  throughout  the  state  and  bears  equally 
upon  all  persons  standing  in  the  same  category  does  not  deprive  any  of  equal 
protection  of  the  laws."  Per  Spear,  C.  J.,  in  State  v.  Guilbert,  70  Ohio  St.  229, 
255,  71  N.  E.  636. 

The  Wisconsin  tax  was  declared  unconstitutional  primarily  because  it  applied 
only  to  one  county,  in  State  v.  Mann,  76  Wis.  469,  45  N.  W.  526. 

"I  do  not  perceive  wherein  the  inequality  and  want  of  uniformity  complained 
of  can  be  said  to  consist.  ...  The  tax  is  equal  and  uniform  throughout  the 
state  as  far  as  it  is  susceptible  of  the  application  of  the  rule.  It  is  the  same 
everywhere  upon  the  succession  to  estates  of  equal  value  of  whatever  subjects 
they  may  consist."     Per  Lee,  J.,  in  Eyre  v.  Jacob,  1858,  14  Gratt.  422. 


CHAPTER  XII. 


CLASSIFICATION  BY  RESIDENCE. 

§  60.     Corporations. 

§61.     Individuals. —  Aliens. —  Effect  of  Treaties. 

Sec.  60.    Corporations. 

Exempting  domestic  and  not  foreign  corporations  from  tax  is 
a  valid  classification. 

An  exemption  of  foreign  charitable  corporations  is  not  obnoxious  to  the 
provisions  of  the  fourteenth  amendment  to  the  federal  constitution,  s.  1,  "that 
no  state  shall  deny  to  any  person  within  its  jurisdiction  the  equal  protection 
of  the  laws,"  as  it  is  settled  that  a  corporation  is  not  a  citizen  within  the  meaning 
of  this  clause  of  the  federal  constitution.  Furthermore,  the  legislature  has  the 
right  in  laying  taxes  to  classify  corporations  as  has  been  done  in  this  state  in 
recent  years,  and  can  classify  resident  corporations  in  one  class  and  foreign 
corporations  in  another.  Humphreys  v.  State,  70  Ohio  St.  67,  87,  101  Am.  St. 
888,  70  N.  E.  907,  65  L.  R.  A.  776,  affirming  13  Low.  D.  168,  1  C.  C.  N.  S.  1, 
14  Cir.  D.  238. 

The  Illinois  inheritance  statute  of  1895  as  amended  in  1901  exempted  from 
the  inheritance  tax  certain  charitable  corporations  organized  under  the  law  of 
Illinois  and  did  not  exempt  similar  corporations  organized  under  the  laws  of 
other  states.  The  court  holds  that  this  distinction  is  not  contrary  to  the  four- 
teenth amendment  to  the  federal  constitution;  that  if  a  state  exempt  property 
bequeathed  for  charitable  and  educational  purposes  from  taxation  it  is  not 
unreasonable  or  arbitrary  to  require  the  charity  to  be  exercised  or  education  to 
be  bestowed  within  her  borders  and  for  her  people  whether  exercised  through 
persons  or  corporations.  Board  of  Education  v.  Illinois,  203  U.  S.  553,  563,  27 
S.  Ct.  171,51L.  Ed.  314. 

To  the  effect  that  exemptions  apply  only  to  domestic  charitable  corporations, 
see  post,  s.  257. 

Sec.  61.     Individuals. —  Aliens.—  Effect  of  Treaties. 

State  statutes  discriminating  against  alien  beneficiaries  have 
been  often  held  void  as  in  conflict  with  particular  United  States 
treaties,^  and  they  are  also  ineffective  so  far  as  they  attempt  to 
extend  to  residents  of  the  state  privileges  not  accorded  to  residents 
of  other  states,^  but  otherwise  they  are  valid. ^  A  lucid  explanation 
of  the  doctrine  was  given  by  our  supreme  court  in  an  early  case 
upholding  the  validity  of  the  Louisiana  statute,  which  levied  a  tax 


50  INHERITANCE  TAX  LAW.  [§61 

on  legacies  when  the  legatee  was  neither  a  citizen  of  the  United 
States,  nor  domiciled  in  the  state,  the  court  saying :  — 

"Now  the  law  in  question  is  nothing  more  than  an  exercise  of 
the  power  which  every  state  and  sovereignty  possesses,  of  regulat- 
ing the  manner  and  term  upon  which  property  real  or  personal  within 
its  dominion  may  be  transmitted  by  last  will  and  testament,  or  by 
inheritance ;  and  of  prescribing  who  shall  and  who  shall  not  be  cap- 
able of  taking  it.  Every  state  or  nation  may  unquestionably  refuse 
to  allow  an  alien  to  take  either  real  or  personal  property,  situated 
within  its  limits,  either  as  heir  or  legatee,  and  may,  if  it  thinks 
proper,  direct  that  property  so  descending  or  bequeathed  shall 
belong  to  the  state.  In  many  of  the  states  of  this  union  at  this 
day,  real  property  devised  to  an  alien  is  liable  to  escheat.  And 
if  a  state  may  deny  the  privilege  altogether,  it  follows  that,  when 
it  grants  it,  it  may  annex  to  the  grant  any  conditions  which  it 
supposes  to  be  required  by  its  interests  or  policy.  This  has  been 
done  by  Louisiana.  The  right  to  take  is  given  to  the  alien,  subject 
to  a  deduction  of  ten  per  cent  for  the  use  of  the  state. 

*Tn  some  of  the  states  laws  have  been  passed  at  different  times 
imposing  a  tax,  similar  to  the  one  now  in  question,  upon  its  own 
citizens  as  well  as  foreigners;  and  the  constitutionality  of  these 
laws  has  never  been  questioned.  And  if  a  state  may  impose  it 
upon  its  own  citizens,  it  will  hardly  be  contended  that  aliens  are 
entitled  to  exemption ;  and  that  their  property  in  our  own  country 
is  not  liable  to  the  same  burdens  that  may  lawfully  be  imposed 
upon  that  of  our  own  citizens. 

"We  can  see  no  objection  to  such  a  tax,  whether  imposed  on 
citizens  and  aliens  alike,  or  upon  the  latter  exclusively.  It  cer- 
tainly has  no  concern  with  commerce,  or  with  imports  or  exports. 
It  has  been  suggested,  indeed,  in  the  argument,  that  as  the  legatee 
resided  abroad,  it  would  be  necessary  to  transmit  to  her  the  pro- 
ceeds of  the  portion  of  the  estate  to  which  she  was  entitled,  and 
that  the  law  was  therefore  a  tax  on  exports.  But  if  that  argument 
was  sound,  no  property  would  be  liable  to  be  taxed  in  a  state,  when 
the  owner  intended  to  convert  it  into  money  and  send  it  abroad."'* 

The  tax  on  an  estate  of  one  who  died  before  a  treaty  became 
effective  cannot  be  affected  by  it.^ 

^ Adams  v.  Akerlund,  168  111.  632,  48  N.  E.  454.  (Swedish  treaty  of  1783.) 
Succession  of  Dufour,  10  La.  Ann.  391.  (French  treaty  of  1853.)  Succession  of 
Crusius,  19  La.  Ann.  369.  (Bavarian  treaty  of  1845.)  Succession  of  Rixner, 
48  La.  Ann.  552.  19  S.  597,  32  L.  R.  A.  177.     (Italian  treaty  of  1871.)     Succes- 


§61.1  CLASSIFICATION  BY  RESIDENCE.  51 

sion  of  Rabasse,  49  La.  Ann.  1405,  22  So.  767,  772.  (French  treaty  of  1853.) 
State  V.  Circe,  Man.  Unreported  Cases  (La.)  412.  (French  treaty  of  1853.) 
In  re  Stixrud,  58  Wash.  339,  109  P.  343,  348.  (Treaty  of  1827  with  Norway  and 
Sweden.)     See  post,  s.  305. 

"Goods  and  effects"  include  real  estate.  The  treaty  between  Norway 
and  Sweden  and  the  United  States  of  1827,  uses  the  words  "goods  and  effects" 
to  designate  the  property  the  treaty  is  appHcable  to,  but  the  court  holds  that 
these  words  include  real  estate,  following  Adams  y.  Akerlund,  168  111.  632,  48 
N.  E.  454,  and  University  v.  Miller,  14  N.  C.  207.  In  re  Stixrud,  58  Wash. 
339,  109  P.  343,  349. 

Heirs.  The  treaty  of  1827,  between  the  United  States  and  Norway  and 
Sweden,  provided  for  the  succession  by  "heirs,"  and  the  court  notes  that  this 
word  has  a  technical  common  law  meaning  restricting  it  to  those  who  take  by 
inheritance  only;  while  by  the  civil  law  it  applies  to  all  persons  who  are  called 
to  the  succession  whether  by  act  of  the  party  or  by  operation  of  law.  As  the 
word  is  used  in  this  treaty  by  countries  in  one  of  which  the  common  law  pre- 
vails and  the  other  of  which  the  civil  law  prevails,  there  does  not  appear  to  be 
any  reason  for  here  attributing  to  it  the  technical  meaning  of  either  of  these 
systems  of  law  in  preference  to  the  other,  and  hence  the  word  "heirs"  includes 
those  who  receive  by  will  as  well  as  those  who  receive  by  operation  of  law.  In  re 
Stixrud,  58  Wash.  339,  109  P.  343,  349. 

The  New  York  statute  of  1887  is  not  a  "detraction  tax,"  but  a  succes- 
sion tax,  and  is  therefore  not  included  within  the  terms  of  the  treaty  of  1844 
between  the  Kingdom  of  Wurtemberg  and  the  United  States.  In  re  Stroebel, 
5  N.  Y.  App.  Div.  621,  39  N.  Y.  Suppl.  169. 

2  7w  re  Stanford's  Estate  (Cal.  1898),  54  Pac.  259,  reversed  on  another  point 
in  126  Cal.  112,  58  P.  462,  45  L.  R.  A.  788.  State  v.  Hamlin,  86  Me.  495,  507, 
30  A.  76,  41  Am.  St.  Rep.  569,  25  L.  R.  A.  632  semble. 

The  California  statute  as  amended  by  the  statute  of  1897  exempting  nephews 
and  nieces  when  resident  of  the  state  is  not  void  under  the  United  States  con" 
stitution.  On  the  contrary  the  effect  of  the  United  States  constitution,  section 
2,  article  4.  is  to  extend  the  exemption  there  given  to  citizens  of  other  states, 
as  the  effect  of  the  federal  constitution  is  to  measure  the  exemption  by  the 
exemption  given  to  citizens  of  California.  In  re  Johnson,  139  Cal.  532,  537. 
The  court  notes  the  case  of  In  re  Mahoney,  133  Cal.  180,  65  P.  389,  85  Am. 
St.  Rep.  155,  and  says  that  the  question  was  raised  there  by  aliens  and  that 
therefore  no  constitutional  question  was  involved  and  the  decision  in  the  Ma- 
honey case  was  a  dictum  which  the  court  refuses  to  follow. 

^State  v.  Poydras,  9  La.  Ann.  165,  167.  Succession  of  Schaffer,  13  La.  Ann. 
113.  State  v.  Martin,  2  La.  Ann.  667.  Succession  of  George,  4  La.  Ann.  223. 
Succession  of  Pehan,  5  La.  Ann.  304.  See  In  re  Strixrud,  58  Wash.  339,  109 
P.  343,  where  the  question  is  not  decided.     See  Iowa  St.  1911,  post,  p.  458  et  seq. 

The  Louisiana  statute  provided  that  every  person  not  domiciled  in  the 
state  and  not  being  a  citizen  of  the  United  States  shall  pay  an  inheritance  tax 
of  ten  per  cent.  A  treaty  between  the  United  States  and  the  King  of  Wurtem- 
berg, dated  April  10,  1844,  provided  that  citizens  of  each  country  should  have  a 
right  to  take  as  heirs,  paying  such  duties  only  as  the  inhabitants  of  the  countr\' 
where  the  property  lies.  The  court  holds  that  this  statute  does  not  make  any 
discrimination  between  citizens  of  the  state  and  aliens  in  the  same  circumstances 


52  INHERITANCE  TAX  LAW.  [§61. 

as  a  citizen  oi  Louisiana  domiciled  abroad  is  subject  to  the  tax.  Furthermore, 
the  case  oi  a  citizen  or  subject  of  the  respective  countries  residing  at  home  and 
disposing  of  property  there  in  favor  of  a  citizen  or  subject  of  the  other  was  not 
in  contemplation  of  the  treaty.  So  the  tax  should  be  collected  on  the  estate  of 
a  citizen  of  Louisiana  leaving  property  to  a  citizen  of  Wurtemberg.  Frederick- . 
son  V.  State,  23  How.  (U.  S.)  445. 

It  was  contended  that  the  act  of  1842  must  be  construed  according  to  its 
own  terms  and  that  the  discrepancy  between  its  language  excepting  those  who 
are  not  citizens  of  any  state  in  the  union  and  the  La.  St.  1850  which  excepts 
only  those  who  are  not  citizens  of  any  other  state  or  territory  means  that  heirs 
who  are  citizens  of  the  United  States  and  heirs  who  are  domiciled  in  Louisiana 
are  exempt  from  taxes.  The  court,  however,  by  reference  to  the  French  version 
of  the  statute  and  the  original  exemplification  finds  that  the  word  "other"  has 
been  inadvertently  omitted  in  the  English  text  and  from  this  view  of  the  statute 
the  court  concludes  that  the  tax  attaches  not  only  to  property  falling  to  alien 
heirs  who  are  non-residents,  but  al*o  to  property  falling  to  citizens  of  Louisiana 
residing  abroad.  The  only  exceptions  to  non-resident  heirs  are  citizens  of  any 
other  state  or  territory  of  the  United  States  than  the  state  of  Louisiana.  This 
exemption  was  probably  intended  to  satisfy  the  second  section  of  the  fourth 
article  of  the  constitution  of  the  United  States.  The  object  of  the  law  was  not 
only  to  increase  the  revenues  of  the  state,  but  to  discourage  absenteeism.  State 
V.  Poydras,  9  La.  Ann.  165. 

"Personal  Goods."  "Inhabitants."  The  treaty  of  1795  between  the 
United  States  and  Spain  provides  that  the  citizens  and  subjects  of  each  party 
shall  have  power  to  dispose  of  their  "personal  goods"  within  the  jurisdiction  of 
the  other,  and  their  representatives  being  subjects  of  the  other  party  shall  succeed 
to  their  said  personal  goods  and  dispose  of  the  same  at  their  will,  paying  such 
dues  only  as  the  inhabitants  of  the  country  wherein  the  goods  are  shall  be  subject 
to  pay  in  like  cases.  The  court  finds  that  the  words  "personal  goods"  include 
movable  property  only  and  not  real  estate  or  immovable  property.  The  word 
"inhabitants"  was  intended  to  have  as  broad  a  signification  as  would  be  needed 
to  insure  to  the  citizens  of  each  country  full  protection  which  it  was  intended  to 
secure.  The  general  assembly  did  not  have  in  view  the  imposition  of  a  succession 
tax  upon  the  citizens  of  Louisiana  living  away  from  the  state.  The  treaty  would 
have  no  effect  if  the  act  was  extended  to  Spanish  heirs  or  legatees  living  in  their 
own  country.  La.  St.  1894  was  not,  however,  aimed  at  any  portion  of  the  people 
of  Louisiana  and  therefore  Spanish  heirs  and  legatees  have  the  same  rights  that 
they  do  to  exemption.    Succession  of  Sala,  50  La.  Ann.  1009,  24  S.  674. 

*Per  Taney,  C.  J.,  in  Mager  v.  Grima,  8  How.  490.  To  the  same  effect  see 
Arnaud  v.  Arnatid,  3  La.  336. 

^Succession  of  Prevost,  12  La.  Ann.  577.  This  judgment  was  affirmed  in 
Prevost  v.  Greneaux,  19  How.  1. 


CHAPTER  XIII. 


CLASSIFICATION  BY  RELATIONSHIP. 

§  62.     In  General. 

§  63.    Transfers  where  Life  Estate  is  Reserved  to  Grantor. 

Sec.  62.    In  General. 

It  is  well  settled  that  classification  for  purposes  of  the  inheritance 
tax  by  degrees  of  relationship  to  the  testator  is  valid  and  does 
not  violate  constitutional  requirements  of  equality  or  uniformity.^ 
So  confining  the  tax  to  collaterals  and  strangers,^  discrimination 
among  collaterals,^  or  taxing  lineals  at  a  higher  rate  than  collaterals, 
in  generally  upheld.* 

The  classification  need  not  follow  the  lines  of  inheritance.  There 
is  no  necessary  connection  between  inheritance  and  taxation,  and 
in  making  laws  relating  to  these  two  subjects  the  legislature  is  not 
required  to  consider  them  together.  In  determining  the  mode 
in  which  the  estate  of  an  intestate  shall  be  distributed,  the  legis- 
lature did  not  in  any  respect  impair  its  right  to  distribute  the 
burden  of  taxation  or  to  determine  the  classes  by  which  that 
burden  shall  be  borne.^ 

Distinction  among  Life  Tenancies  based  on  Relationship  of  Re- 
maindermen. The  lUinois  statute  of  1895  provided  that  a  life  estate 
should  be  taxable  when  the  remainder  was  to  lineal  descendants  and 
not  taxable  where  the  remainder  was  to  collateral  descendants  or 
strangers.  It  was  claimed  that  this  was  void  as  unreasonable  classifi- 
cation; that  life  tenants  constitute  but  a  single  class,  as  the  incidents 
of  such  an  estate  are  the  same  irrespective  of  the  ultimate  vesting 
of  the  remainder.  The  court  holds,  however,  that  this  was  entirely 
within  the  discretion  of  the  state  legislature;  that  the  power  of 
the  state  to  impose  conditions  upon  the  transfer  or  devolution  of 
estates  is  complete  where  no  discrimination  is  exercised  in  the 
creation  of  a  class.  "Crossing  the  lines  of  the  classes  created  by 
the  statute  discriminations  may  be  exhibited,  but  within  the 
classes  there  is  equality."  This  is  not  an  arbitrary  or  warranted 
discrimination  between  life  tenants.  A  life  estate  with  the  fee 
descending  in  lineal  life  might  well  be  more  desirable  than  a  life 


54  INHERITANCE  TAX  LAW.  [§62. 

estate  with  remainder  to  collateral  heirs  or  strangers  to  the  blood. 
The  exemption  may  be  regarded  as  a  concession  to  beneficiaries 
of  the  first  class  while  the  last  of  their  line  to  hold  and  enjoy  the 
property.^ 

1  Kochersperger  v.  Drake,  167  111.  122,  47  N.  E.  321,  41  L.  R.  A.  446.  Booth 
V.  Commonwealth,  130  Ky.  88,  113  S.  W.  61.  In  re  Fox,  154  Mich.  5,  13.  State 
V.  Switzler,  143  Mo.  287,  333,  45  S.  W.  245,  40  L.  R.  A.  280,  65  Am.  St.  Rep. 
653.  In  re  Patterson,  130  N.  Y.  Suppl.  970,  127  N.  Y.  Suppl.  284.  In  re  Opinion 
of  Justices,  (N.  H.  1911),  79  A.  490.  Nunnemacher  v.  State,  129  Wis.  190,  221, 
108  N.  W.  627,  9  L.  R.A.  (N.  S.)  121.  State  v.  Clark,  30  Wash.  439,  71  P.  20; 
.  Magoun  v.  Illinois  Trust  &f  Savings  Bank,  170  U.  S.  283,  287,  42  L.  Ed.  1037, 
18  U.  S.  Sup.  Ct.  594. 

A  distinction  between  direct  descendants  and  collateral  kindred 
and  strangers  has  abundant  reason  upon  which  to  sustain  it,  for  the  moral 
claim  of  collaterals  and  strangers  is  less  than  of  kindred  in  direct  line  and  the 
privilege  is  therefore  greater.  Tenn.  St.  1893,  c.  89,  s.  7,  is  not  unconstitutional 
because  it  discriminates  between  direct  descendants  and  collateral  kindred  and 
strangers.  State  v.  Alston,  94  Tenn.  674,  30  S.  W.  750,  28  L.  R.  A.  178.  As 
to  persons  liable  to  tax  see  further,  post,  s.  303  et  seq. 

^State  V.  Hamlin,  86  Me.  495,  502,  30  A.  76,  41  Am.  St.  Rep.  569,  25  L.  R.  A. 
632.  Minot  v.  Winthrop,  162  Mass.  113,  123,  26  L.  R.  A.  259.  State  v.  Hender- 
son, 160  Mo.  190,  216,  60  S.  W.  1093.  Hagerty  v.  State,  55  Ohio  St.  613,  45  N.  E. 
1046,  affirming  5  Ohio  Cir.  Dec.  701,  12  Ohio  Cir.  Ct.  606,  relying  upon  State 
V.  Ferris,  53  Ohio  St.  314.  Eyre  v.  Jacob,  14  Gratt.  (Va.)  422,  431,  73  Am.  Dec. 
367. 

New  Hampshire.  The  New  Hampshire  constitution  requires  that  an 
inheritance  tax  must  be  proportional  and  constitute  only  the  just  share  of  those 
upon  whom  it  is  imposed.  It  cannot  lawfully  make  discriminations  and  cast  a 
burden  upon  one  class  of  beneficiaries  and  exempt  all  other  classes  from  its 
operation;  and  it  cannot,  therefore,  for  purposes  of  taxation,  exempt  legacies 
and  successions  to  lineal  descendants  and  include  only  those  to  collaterals  and 
others  than  those  specified.  "Such  a  tax  is  founded  upon  pure  inequality,  and 
is  simply  extortion  in  the  name  of  taxation;  and  it  can  therefore  never  be 
sustained  in  this  jurisdiction  so  long  as  equality  and  justice  continue  to  be  the 
basis  of  constitutional  taxation."  Per  Blodgett,  J.,  in  Curry  v.  Spencer,  61 
N.  H.  624,  632,  60  Am.  St.  Rep.  337. 

This  decision  is  now  generally  discredited  and  is  no  longer  law,  even  in  New 
Hampshire,  where  a  constitutional  amendment  subsequently  gave  the  legislature 
authority  to  levy  an  inheritance  tax.  Under  this  amendment  the  act  of  1905 
was  held  constitutional.  The  court  distinguishes  Curry  v.  Spencer,  61  N.  H. 
624,  as  the  right  then  in  question  was  the  right  to  the  privileges  of  the  probate 
court  for  the  purposes  of  administration;  and  if  one  estate  was  entitled  to  be 
there  settled  without  payment  of  fee,  all  were.  The  right  under  the  act  of  1905, 
however,  is  a  right  to  the  passing  of  property,  and  the  court  says  that  there 
are  good  reasons  why  the  passing  of  property  to  near  relatives  or  the  gift  of  it 
to  charitable  purposes  or  directly  to  the  public  should  not  be  subject  to  an 
exaction  by  the  state.  Reasonable  exemptions  of  property  have  not  been 
considered  to  effect  the  validity  of  the  tax  upon  other  property,  and  the  exemp- 


§63.]  CLASSIFICATION  BY  RELATIONSHIP.  55 

tions  in  this  statute  do  not  render  the  assessment  unreasonable.  Thompson  v 
Kidder,  74  N.  H.  89,  97,  65  A.  392. 

3/«  re  Wilmerding's  Estate,  117  Cal.  281,  49  P.  181.  (Upholding  distinction 
between  the  surviving  brothers  and  sisters  of  the  testator  and  the  children  of 
deceased  brothers  and  sisters.)  "The  discrimination  is  based  upon,  and  justi- 
fied by,  the  fact  that  there  are  degrees  in  collateral  kinship." 

Hagerty  v.  State,  55  Ohio  St.  613,  45  N.  E.  1046,  affirming  12  C.  C.  R.  606, 
5  Ohio  Cir.  Dec.  701. 

The  fourteenth  amendment  to  the  federal  constitution  does  not  render  invalid 
the  California  statute  of  1893  as  amended  in  1899,  because  it  subjected  to  an 
inheritance  tax  brothers  and  sisters  of  a  decedent  and  did  not  subject  to  such 
burden  such  strangers  to  the  blood  as  the  wife  or  widow  of  a  son  or  the  husband 
of  a  daughter.  The  court  says  that  the  discretion  of  the  state  in  this  matter 
can  only  be  affected  by  the  fourteenth  amendment  when  the  discretion  is  so  obviously 
arbitrary  and  unreasonable  as  to  be  beyond  the  pale  of  governmental  authority. 

The  court  holds  it  is  not  arbitrary  to  put  in  one  class  for  the  purpose  of  inherit- 
ance all  blood  relatives  to  a  designated  degree  except  brothers  and  sisters  and 
to  place  all  other  and  more  remote  relatives  including  brothers  and  sisters  in  a 
second  class  along  with  strangers  to  the  blood.  Campbell  v.  California,  200 
U.  S.  87,  95,  26  S.  Ct.  182,  50  L.  Ed.  382. 

Exempting  stepchildren  from  the  collateral  inheritance  tax  together  with 
other  lineal  descendants  is  not  void  as  improper  classification.  The  court  remarks 
that  it  has  nothing  to  do  with  the  wisdom  of  legislation.  Commonwealth  v. 
Randall,  225  Pa.  St.  197,  73  A.  1109. 

*  "There  is  a  natural  reason  for  taxing  the  privilege  of  the  latter  [collaterals] 
of  receiving  the  property  at  a  higher  rate  than  that  of  the  former  [lineals],  and 
the  amendment  of  1894  to  the  Minnesota  constitution  authorizes  such  gradua- 
tion of  the  tax.  Drew  v.  Tifft,  79  Minn.  175,  81  N.  W.  839,  47  L.  R.  A.  525, 
79  Am.  St.  Rep.  446. 

^In  re  Wilmerding's  Estate,  117  Cal.  281,  49  P.  181. 

^Billings  V.  People,  188  U.  S.  97,  104,  23  S.  Ct.  272,  47  L.  Ed.  400,  affirming 
189  111.  472,  482,  59  L.  R.  A.  807. 

A  tax  on  lineals  imposed  only  on  the  value  of  property  transferred  in  excess  of 
five  thousand  dollars  where  all  transfers  of  five  thousand  dollars  and  less  to 
lineals  are  exempt  from  the  act,  while  the  tax  on  collaterals  is  upon  the  entire 
transfer  of  property  if  its  value  exceeds  five  thousand  dollars,  is  a  clear  inequality 
and  discrimination  between  collateral  and  lineal  descendants  which  renders  the 
statute  unconstitutional.  State  v.  Bazille,  87  Minn.  500,  92  N.  W.  415,  94  Am. 
St.  Rep.  718. 

If  the  Michigan  act  is  a  property  tax  it  is  void  as  violating  the  provisions 
of  the  constitution  requiring  uniformity,  as  it  provides  for  a  different  rate  for 
direct  descendants  from  that  on  collaterals.  Chambe  v.  Durfee,  100  Mich.  112, 
58N.  W.661. 

Sec.  63.    Transfers  where  Life  Estate  is  Reserved  to  Grantor. 

It  is  a  good  classification  to  single  out  for  taxation  transfers 
where  the  life  estate  is  reserved  to  the  grantor,  leaving  all  other 
transfers  exempt. 


56  INHERITANCE  TAX  LAW.  [§63- 

"We  think  that  there  are  sufficient  reasons  to  support  the  classifi- 
cation made  by  the  statute;  at  least  that  the  classification  cannot 
be  said  to  be  devoid  of  reasonable  ground  on  which  to  rest.  In- 
heritance tax  laws  have  been  very  generally  adopted  throughout 
the  states  of  the  union.  A  substantial  part  of  the  revenue  neces- 
sary to  support  their  governments  is  now  derived  from  that  source. 
A  not  wholly  unnatural  desire  exists  among  owners  of  property 
to  avoid  the  imposition  of  inheritance  taxes  upon  the  estates  they 
may  leave,  so  that  such  estates  may  pass  to  the  objects  of  their 
bounty  unimpaired.  It  is  a  matter  of  common  knowledge  that 
for  this  purpose  trusts  or  other  conveyances  are  made  whereby 
the  grantor  reserves  to  himself  the  beneficial  enjoyment  of  his 
estate  during  life.  Were  it  not  for  the  provision  of  the  statute 
which  is  challenged,  it  is  clear  that  in  many  cases  the  estate  on  the 
death  of  the  grantor  would  pass  free  from  tax  to  the  same  persons 
who  would  take  it  had  the  grantor  made  a  will  or  died  intestate. 
It  is  true  that  an  ingenious  mind  may  devise  other  means  of  avoid- 
ing an  inheritance  tax —  but  the  one  commonly  used  is  a  transfer 
with  reservation  of  a  life  estate.  We  think  this  fact  justified 
the  legislature  in  singling  out  this  class  of  transfers  as  subject  to  a 
special  tax." 

Per  Cullen,  C.  J.,  in  In  re  Keeney,  194  N.  Y.  281,  286,  87  N.  E.  428,  affirm- 
ing 128  N.  Y.  App.  Div.  893.  Taxation  based  on  relationship  of  remaindermen, 
see  antet  s.  62. 


CHAPTER  XIV. 


CLASSIFICATION  BY  AMOUNT  — PROGRES- 
SIVE RATES. 

§  64.  Validity  in  General. 

§  65,  From  the  Aspect  of  Political  Economy. 

§  66.  Increased  Rate  Applied  to  Excess  Only. 

§  67.  Tax  Proportioned  to  Amount  Received. 

S  68.  Classification  by  Amount  of  Whole  Estate. 

§  69.  The  Pennsylvania  Doctrine. 

§  70.  Confiscatory  Rates. 

Sec.  64.    Validity  in  General. 

A  graduated  progressive  tax  is  valid, ^  and  constitutes  equal 
protection  of  the  laws,^  and  is  not  invalid  even  under  a  constitu- 
tion providing  that  taxes  shall  be  in  proportion  to  the  value  of  the 
property.^  Our  own  supreme  court  has  said  of  it:  "The  review 
which  we  have  made  exhibits  the  fact  that  taxes  imposed  with 
reference  to  the  ability  of  the  person  upon  whom  the  burden  is 
placed  to  bear  the  same  have  been  levied  from  the  foundation  of 
the  government.  So,  also,  some  authoritative  thinkers,  and  a 
number  of  economic  writers,  contend  that  a  progressive  tax  is 
more  just  and  equal  than  a  proportional  one.  In  the  absence  of 
constitutional  limitation,  the  question  whether  it  is  or  is  not  is 
legislative  and  not  judicial.  The  grave  consequences  which,  it  is 
asserted,  must  arise  in  the  future  if  the  right  to  levy  a  progressive 
tax  be  recognized,  involves  in  its  ultimate  aspect  the  mere  asser- 
tion that  free  and  representative  government  is  a  failure,  and  that 
the  grossest  abuses  of  power  are  foreshadowed  unless  the  courts 
usurp  a  purely  legislative  function."^ 

1  Union  Trust  Co.  v.  Durfee,  125  Mich.  487,  84  N.  W.  1101,  7  Detroit  Leg. 
N.  597,  following  with  some  reluctance  Magoun  v.  Savings  Bank,  170  U.  S.  301, 
18  Sup.  Ct.  601. 

In  re  McKennan,  (S.  D.  1911),  130  N.  W.  33,  reversing  judgment  on 
rehearing,  25  S.  D.  369, 126  N.  W.  611.  Nunnemacher  v.  State,  129  Wis.  190,  222, 
108  N.  W.  627,  9  L.  R.  A.  N.  S.  121.  Knowlton  v.  Moore,  178  U.  S.  41,  20  Sup. 
Ct.  747,  44  L.  Ed.  969. 

In  New  Hampshire.  On  the  question  whether  in  view  of  the  constitution 
as  it  was  construed  and  understood  prior  to  1903,  it  was  intended  by  the  amend- 


58  INHERITANCE  TAX  LAW.  [§64. 

ment  then  made  to  authorize  a  progressive  tax,  the  court  is  divided  in  opinion 
and  therefore  declines  to  express  any  opinion  whatever.  In  re  Opinion  of 
Justices  (N.  H.  1911),  79  A.  490. 

There  is  no  difference  in  principle  between  an  exemption  given  to 
direct  inheritances  and  a  progressive  tax.  The  same  inequality  exists  in 
the  one  case  as  in  the  other;  and  if  there  is  unjust  discrimination  in  the  one 
case  there  is  also  in  the  other.  The  diflFerence  is  one  of  degree  and  not  of  prin- 
ciple.    In  re  Fox,  154  Mich.  5,  11. 

Authority  to  classify  persons  and  property  for  the  purpose  of  taxation  is 
well  settled  and  graded  or  progressive  taxation  is  intimately  associated  with 
that  of  classification  and  perhaps  amounts  substantially  to  the  same  thing.  State 
v.  Bazille,  97  Minn.  11,  106  N.  W.  93,  6  L.  R.  A.  N.  S.  732.  State  v.  Vance, 
97  Minn.  532, 106  N.  W.  98. 

The  following  cases  have  been  cited  to  show  that  an  unequal  graduated 
rate  is  unconstitutional:  Black  v.  State,  113  Wis.  205;  State  v.  Ferris,  53  Ohio  St. 
314;  Drew  v.  Tifft,  79  Minn.  187;  State  v.  Bazille,  87  Minn.  503. 

In  a  recent  case,  State  v.  Bazille,  97  Minn.  11,  the  court  has  explained  and 
somewhat  modified  its  former  holdings.  The  same  may  be  said  of  the  Wis- 
consin and  Ohio  courts  in  their  recent  utterances.  Nunnemacher  v.  State,  129 
Wis.  190.    State  v.  Guilbert,  70  Ohio  St.  229.     See  In  re  Fox,  154  Mich.  5,  12. 

The  Mo.  St.  1895  is  void  as  contravening  Mo.  Const,  a.  10,  s.  3,  as  it  is 
not  "uniform  upon  the  same  class  of  subjects  within  the  territorial  limits  of 
the  authority  levying  the  tax"  within  the  Mo.  Const,  a.  10,  s.  3.  It  is  clear 
that  where  the  amount  of  property  received  is  made  the  basis  of  the  tax,  uni- 
formity is  only  attainable  by  levying  the  same  per  cent  upon  all  property  belong- 
ing to  persons  bearing  the  same  relation  to  the  decedent.  State  v.  Switzler,  143 
Mo.  287,  332,  45  S.  W.  245,  40  L.  R.  A.  280,  65  Am.  St.  Rep.  653,  relying  on  State 
V.  Ferris,  53  Ohio  St.  314,  30  L.  R.  A.  218. 

2  Nunnemacher  v.  State,  129  Wis.  190,  108  N.  W.  627,  9  L.  R.  A.  (N.  S.)  121. 
Magoun  v.  Illinois  Trust  &  Savings  Bank,  170  U.  S.  283,  18  Sup.  Ct.  594. 

History  and  Principles.  "It  is  insisted  that  the  proviso  authorizing  the 
inheritance  tax  must  be  construed  in  connection  with  the  equality  mandate, 
and  that,  properly  construed,  the  tax,  although  it  may  be  graded  or  progressive, 
must,  as  respects  graded  or  progressive  features,  be  made  as  nearly  equal  as 
may  be,  and  that  the  statute  does  not  conform  to  this  requirement.  Counsel 
contend  that  this  construction  is  sustained  by  the  Drew  case.  In  this  we  do 
not  concur. 

"The  history  of  taxation,  in  harmony  with  all  human  affairs,  is  one  of  evolu- 
tion. Its  progress  from  the  earliest  times  to  the  present  day  is  one  of  constant 
development,  in  keeping  with  the  advancing  intelligence  of  man,  unrolling  step 
by  step,  with  changing  economic  and  social  conditions,  tardily,  however,  new 
methods  and  means  of  subjecting  untaxed  property  to  the  tax  rolls.  Originally 
public  revenue  was  raised  by  voluntary  contributions  from  the  citizens;  later, 
in  response  to  appeals  and  solicitations  of  the  rulers;  and  finally,  when  volun- 
tary contributions  ceased,  as  at  the  present  day,  by  compulsory  assessments, 
enforced  by  the  operation  of  law.  With  this  latter  method  came  the  demand, 
born  of  injustice  and  oppression,  for  uniformity  and  equality,  and  provisions 
securing  it  have  long  been  a  part  of  the  fundamental  law  of  all  democratic  forms 
of  government.     Formerly  tangible  property  only  was  taxed.     Ability  or  faculty 


§  64.]  CLASSIFICATION  BY  AMOUNT.  59 

to  pay  has  come  to  be  the  test  in  determining  the  justness  of  taxation.  It  is 
'not  only  the  basis  of  taxation,  but  the  goal  toward  which  society  is  steadily  work- 
ing. It  lies  instinctively  and  unconsciously  at  the  bottom  of  all  of  our  en- 
deavors at  reform.'     [Seligman,  Tax.  72.] 

"The  equity  and  fairness  of  this  theory,  in  its  broadest  sense,  when  we  reflect 
upon  the  vast  fortunes  accumulated  as  the  result  of  especially  advantageous 
opportunities  and  facilities,  not  possessed  by  people  in  general,  is  apparent 
and  obvious.  It  works  no  injustice  or  harm  to  those  thus  fortunately  situated, 
does  not  injuriously  affect  productive  or  industrial  agencies,  and  relieves  in  a 
measure  those  with  lesser  opportunities,  and  those  to  whom  taxation  is  always 
an  extreme  burden.  This  theory  does  not,  however,  harmonize  well  with  a 
strict  application  of  the  fundamental  mandate  of  equality,  as  applied  more 
particularly  to  the  proportional  system  of  taxation  in  force  in  this  and  other 
states.  We  mean  by  'proportional  system'  a  tax  at  a  fixed  and  uniform  rate, 
in  proportion  to  the  amount  of  taxable  property,  based  upon  a  cash  valuation, 
and  legislatures  and  courts  have  been  not  a  little  embarrassed  in  attempts  to 
apply  it. 

"But  an  examination  of  the  books  discloses  that  the  equality  mandate  has 
been  expanded  and  made  to  yield,  from  time  to  time,  to  new  and  advancing 
social  and  economic  conditions.  The  general  principle  is  retained,  but  is  applied 
with  less  rigor  and  strictness.  In  our  own  state  it  has  been  enlarged,  extended, 
and  departed  from  by  the  people.  As  it  originally  stood,  our  constitution  in 
this  respect  prevented  the  assessment  of  property  for  local  improvements,  and 
it  was  amended  by  expressly  excepting  such  assessments  from  the  equality  rule. 
Bidwell  v.  Coleman,  11  Minn.  45  (78);  Sperry  v.  Flygare,  80  Minn.  325,  83  N.  W. 
177,  49  L.  R.  A.  757,  81  Am.  St.  Rep.  162.  The  equality  mandate  applies  as  a 
general  rule  to  taxes  upon  property  only,  and  is  generally  held  by  the  courts  of 
this  country  to  have  no  application  to  inheritance  taxation,  because  a  tax 
of  that  nature  is  not  one  upon  property  but  upon  the  right  of  succession  or 
inheritance  (27  Am.  &  Eng.  Enc.  (2d  Ed.)  338),  though  in  this  state  it  was 
held  to  apply  to  inheritance  taxes  in  Drew  v.  Tifft,  supra,  and  also  to  a  similar 
statute  in  State  v.  Gorman,  40  Minn.  232,  234,  41  N.  W.  948,  2  L.  R.  A.  701, 
precisely  as  in  other  taxation,  except  as  otherwise  provided  by  the  amendment 
under  consideration."  Per  Brown,  J.,  in  State  v.  Bazille,  97  Minn.  11,  16,  106 
N.  W.  93,  6  L.  R.  A.  N.  S.  732. 

The  Contrary  View.  While  the  legislature  might  perhaps  distribute  the 
collaterals  according  to  the  different  degrees  of  kinship  to  the  decedent,  and 
levy  a  different  rate  upon  the  different  degrees,  yet  when  it  ignores  all  such 
natural  classification  and  makes  the  amount  of  money  received  by  each  the 
test  of  classification,  it  runs  counter  to  another  principle  that  is  wellnigh  univer- 
sally accepted,  that  a  uniform  rate  of  taxation  secures  equality  of  burden.  To 
levy  a  different  rate  simply  because  the  amount  of  each  man's  holding  is  different 
would  produce  favoritism  and  destroy  that  principle  of  equality  before  the  law 
which  is  the  boast  of  free  government.  If  it  be  urged  that  the  one  receiving  the 
larger  bounty  enjoys  the  greater  privilege.stil!  the  principle  of  uniformity  answers 
that  the  value  of  his  right  to  receive  is  in  direct  proportion  to  the  value  of  the 
property  to  which  he  succeeds,  and  must,  if  taxation  is  to  be  uniform,  be  taxed 
in  that  proportion  or  according  to  one  uniform  rate.  State  v.  Switder,  143  Mo. 
287,  333,  45  S.  W.  245,  40  L.  R.  A.  280,  65  Am.  St.  Rep.  653. 


60  INHERITANCE  TAX  LAW.  [§§  60-66. 

'A  tax  which  affects  the  property  within  a  specific  class  is  uniform  as  to  that 
class  and  there  is  no  provision  of  the  constitution  which  precludes  a  tax  on  that 
particular  class.  No  want  of  uniformity  with  one  living  who  owns  property 
can  be  urged  as  a  reason  why  the  statute  makes  an  inconsistent  rule.  No  per- 
son inherits  or  can  take  by  devise  except  by  statute  and  the  state  having  power 
to  regulate  this  question  may  create  classes  and  provide  for  uniformity  with 
reference  to  classes  which  were  before  unknown.  Kochersperger  v.  Drake, 
167  111.  122,  47  N.  E.  321,  41  L.  R.  A.  446. 

*Per  White,  J.,  in  Knowlton  v.  Moore,  178  U.  S.  41,  109,  20  S.  Ct.  747,  44  L. 
Ed.  949. 

Sec.  65.    From  the  Aspect  of  Political  Economy. 

The  progressive  tax,  charging  a  higher  percentage  on  large  estates 
than  on  small  ones,  has  the  best  of  economic  endorsement. 

A  learned  discussion  of  progressive  rates  is  contained  in  the  monograph  by 
Max  West  on  the  Inheritance  Tax,  at  pages  221  et  seq.  Mr.  West  points  out 
that  the  progressive  tax  was  supported  by  John  Stuart  Mill.  He  remarks  on 
the  dangers  to  general  business  and  society  of  inexperienced  young  men  in- 
heriting their  fathers'  fortunes;  and  states  that  there  is  no  reason  why  the 
right  of  inheritance  should  be  unlimited;  that  a  progressive  tax  can  be  justified 
as  a  compensation  for  the  inequality  of  taxes  which  fall  more  heavily  on  the 
poor  than  on  the  rich;  that  if  the  inheritance  tax  be  regarded  as  a  payment 
of  back  taxes  the  justice  of  progression  is  especially  evident,  because  large 
fortunes  undoubtedly  escape  taxation  during  the  owner's  life  to  a  greater  extent 
than  small  ones.  Progressive  taxes  may  also  be  explained  on  the  simple  prin- 
ciple that  the  tax  paying  ability  increases  more  rapidly  than  wealth,  or  that 
the  sacrifice  involved  in  paying  a  proportional  tax  is  less  for  the  wealthy  than 
for  the  poor.  Mr.  West  points  out  that  the  most  effective  argument  against 
the  progressive  tax  is  the  political  argument  that  it  is  a  step  towards  socialism. 

Sec.  66.    Increased  Rate  Applied  to  Excess  Only. 

A  distinction  has  been  attempted  between  cases  where  the  in- 
creased rate  is  on  the  whole  legacy  and  where  it  is  applied  only 
to  the  excess  over  the  portion  taxed  at  the  primary  rate,^  but 
this  view  has  not  prevailed. ^ 

^ State  V.  Ferris,  53  O.  St.  314.     Cf.  s.  291. 

There  are  two  methods  of  progression  provided  for  in  the  statutes  of  the 
several  states:  one  found  in  South  Dakota  wherein  the  higher  rate  in  the  case 
of  transmission  of  a  greater  devise  or  bequest  is  levied  upon  the  whole  valae  of 
the  property  transmitted;  the  other,  like  that  found  in  the  Wisconsin  statute, 
where  the  increased  rate  applies  only  to  the  excess  in  value  of  property  trans- 
mitted over  the  amount  subject  to  the  next  lower  rate.  The  court  remarks 
that  if  any  difference  is  to  be  made  in  the  rate  of  taxation  between  a  large  legacy 
and  a  small  legacy  on  the  theory  that  the  increased  ability  to  pay  is  greater  in 
the  case  of  the  large  beneficiary  than  of  the  smaller,  that  it  cannot  be  said  that 
the  increased  ability  to  pay  of  a  devisee  receiving  $20,000  over  that  of  one 


§  67.]  CLASSIFICATION  BY  AMOUNT.  61 

receiving  $10,000  comes  from  the  receipt  of  his  first  $10,000.  The  increased 
ability  to  pay  does  come  solely  from  the  receipt  of  the  second  $10,000.  "It  is 
ridiculous  to  say  that  a  man  who  receives  a  devise  or  legacy  of  a  thousand  and 
one  dollars  is  as  well  able  to  pay  a  tax  of  $594.06  as  is  a  man  who  receives  ten 
thousand  dollars  to  pay  $396.  We  have  never  discovered  any  method  of  making 
one  dollar  pay  $198.06." 

If  the  progressive  tax  is  based  on  the  theory  that  it  is  against  public  policy 
to  allow  large  estates  to  be  held  together  by  transmission  after  the  death  of  the 
owners,  which  is  the  theory  that  seems  the  more  reasonable  to  the  court,  the 
court  replies  that  "if  one  person  receives  $20,000  and  another  $10,000  it  was 
no  greater  privilege  for  the  first  to  receive  his  first  $10,000  than  for  the  second. 
The  increased  privilege  is  all  found  in  receiving  of  the  extra  $10^000,  and  it  is 
the  exercise  of  this  extra  privilege,  the  transmission  of  the  extra  $10,000,  that 
should  receive  the  extra  burden  of  taxation."  In  re  McKennan,  25  S.  D.  369,  126 
N.  W.  611,  618,  reversed,  however,  on  rehearing,  130  N.  W.  33. 

2  Magoun  v.  Illinois  Trust  &  Savings  Bank,  170  U.  S.  283,  18  Sup.  Ct.  594,  42 
L.  Ed.  1037. 

The  progressive  tax  under  South  Dakota  statute  of  1905,  where  the  increased 
rate  applies  to  the  whole  legacy  in  a  large  estate,  is  valid.  The  court  holds  that 
this  is  logically,  legally  and  constitutionally  in  the  same  category  as  classification, 
based  on  the  net  increased  amount  of  a  higher,  over  a  lower,  class.  In  re  Mc- 
Kennan, (S.  D.  1911,)  130  N.  W.  33,  reversing  judgment  on  rehearing,  25  S. 
D.  369,  126  N.  W.  611. 

As  to  the  progressive  feature  of  the  act,  there  are  four  classes  created  and 
there  is  equality  between  the  members  of  each  class.  It  was  pointed  out  that 
the  tax  is  not  in  proportion  to  the  amount,  but  varies  with  the  amount  arbitrarily 
fixed,  and  hence  that  one  who  is  given  a  legacy  of  $10,001  by  the  deduction  of 
the  tax  receives  $99.04  less  than  one  who  is  given  a  legacy  of  $10,000.  But  the 
court  holds  that  this  is  not  contrary  to  the  rule  of  equality  of  the  fourteenth 
amendment  and  that  rule  does  not  require,  as  we  have  seen,  exact  equality  of 
taxation.  It  only  requires  that  the  law  imposing  it  shall  operate  on  all  alike 
under  the  same  circumstances.  The  tax  is  not  on  money;  it  is  on  the  right  to 
inherit,  and  hence  a  condition  of  inheritance;  and  it  may  be  graded  according 
to  the  value  of  that  inheritance.  The  condition  is  not  arbitrary  because  it  is 
determined  by  that  value;  it  is  not  unequal  in  operation  because  it  does  not 
levy  the  same  percentage  on  every  dollar;  does  not  fail  to  treat  all  "alike  under 
like  circumstances  and  conditions,  both  in  the  privilege  incurred  and  the  liabili- 
ties imposed."  Per  McKenna,  J.,  in  Magoun  v.  Illinois  Trust  &  Savings  Bank, 
170  U.  S.  283,  298,  300,  18  Sup.  Ct.  694,  42  L.  Ed.  1037. 

Sec.  67.    Tax  Proportioned  to  Amount  Received. 

The  fact  that  the  tax  is  fixed  at  a  certain  percentage  of  the 
property  passing  to  the  beneficiary  does  not  invalidate  it^  or 
deprive  it  of  the  requisites  of  equality  and  uniformity,^  as  the 
legislature  has  a  right  to  classify  the  privilege  taxed  according  to 
the  value  of  the  property  received.^ 

1  Union  Trust  Co,  v.  Dur^ee,  125  Mich.  487,  493,  84  N.  W.  1101,  7  Detroit 
Leg.  N.  597. 


62  INHERITANCE  TAX  LAW.  [§§68-69. 

^Booth  V.  Commonwealth,  130  Ky.  88,  113  S.  W.  61. 

"Such  right  is  derived  from  and  regulated  by  municipal  law;  it  arises  from  the 
relation  of  the  individual  to  the  state,  and  is  not  an  inherent  or  constitutional 
right.  It  follows  that  in  assessing  a  tax  upon  such  right  or  privilege,  the  state 
may  lawfully  measure  or  fix  the  ainount  of  the  tax  by  referring  to  the  value  of 
the  property  passing,  and  is  not  precluded  from  this  power  by  the  provision  of 
the  constitution  requiring  uniformity  and  equality  of  taxation."  State  v. 
Guilbert,  70  Ohio  St.  229,  255,  71  N.  E.  636. 

^State  V.  Vinsonhaler,  74  Neb.  675,  105  N.  W.  472,  474.  Eyre  v.  Jacob,  14 
Gratt.  (Va.)  422,  73  Am.  Dec.  367. 

Sec.  68.    Classification  by  Amount  of  Whole  Estate. 

Classification  by  the  amount  of  the  estate  of  the  decedent  is 
probably  valid,^  although  this  has  been  held,  with  some  reason, 
void  as  grossly  unequal.^ 

1  See  Minof  v.  Winthrop,  162  Mass.  113,  124,  38  N.  E.  512.  Cf.  also,  as  to 
exemptions,  s.  243;  rates,  s.  289. 

^  State  V.  Ferris,  53  Ohio  St.  314,  41  N.  E.  579,  30  L.  R.  A.  218. 

The  court  admits  the  validity  of  a  progressive  rate,  but  remarks  as 
follows:  "But  while  classification  is  proper,  there  must  always  be  uniformity 
within  the  class.  If  persons  under  the  same  circumstances  and  conditions  are 
treated  differently,  there  is  arbitrary  discrimination,  and  not  classification. 

"It  is  claimed  that  such  is  the  effect  of  the  present  law,  and  we  can  see  no 
escape  from  the  conclusion.  People  in  the  same  class  are  subject  to  different  rules, 
some  being  exempt  and  some  being  taxed.  This  results  from  the  peculiar  pro- 
visions of  sec.  19  of  the  law,  which  defines  'estate'  and  'proi>erty'  as  construed 
by  the  New  York  courts  before  we  borrowed  the  law.  As  already  pointed  out, 
under  this  provision  the  $10,000  limitation  or  exemption  is  based  on  the  size  of 
the  whole  property  devised  or  granted,  and  not  upon  the  amount  received  by  each 
individual  legatee  or  grantee.  Thus  it  results  that  one  collateral  relative,  receiv- 
ing a  legacy  of  $2,000  from  one  testator,  whose  estate  amounts  to  but  $9,500, 
pays  no  tax,  while  another  collateral  relative  in  the  same  degree,  receiving  a  legacy 
of  $2,000  from  another  testator  whose  estate  amounts  to  $10,500,  is  obliged  to 
pay  a  tax.  Here  is  unlawful  discrimination,  pure  and  simple.  No  rational  dis- 
tinction or  difference  can  be  dr<wn  between  the  two  legatees  simply  because  the 
estates  from  which  their  legacies  come  are  of  slightly  different  size.  They  are 
both  within  the  same  class,  surrounded  by  the  same  conditions,  and  receiving 
the  same  benefits.  One  pays  a  tax,  and  the  other  does  not.  This  is  not  the 
equal  protection  of  the  laws."  Per  Winslow,  J.,  in  Black  v.  State,  113  Wis.  205, 
218,  89  N.  W.  522,  90  Am.  St.  Rep.  853. 

Sec.  69.    The  Pennsylvania  Doctrine. 

Under  the  Pennsylvania  doctrine  that  the  inheritance  tax  is  a 
property  tax,  a  progressive  rate  is  void.  The  Pennsylvania  Con- 
stitution, article  9,  s.  1,  declares:  "All  taxes  shall  be  uniform  upon 
the  same  class  of  subjects  within  the  territorial  limits  of  theauthority 


§  70.]  CLASSIFICATION  BY  AMOUNT.  63 

levying  the  tax."  The  language  of  section  1,  as  to  what  the  rule 
of  uniformity  shall  embrace,  is  as  broad  and  comprehensive  as  it 
could  possible  have  been  made.  The  words  "all  taxes"  must 
necessarily  be  construed  to  include  property  tax,  inheritance  tax, 
succession  tax,  and  all  other  kinds  of  tax,  the  subjects  of  which 
are  susceptible  of  just  and  proper  classification.  By  necessary 
implication,  the  first  clause  of  that  section  recognizes  the  authority 
of  the  legislature  to  justly  and  fairly,  but  never  arbitrarily,  classify 
those  subjects  of  taxation  with  the  view  of  effecting  relative 
equality  of  burdens.  A  pretended  classification  that  is  based 
solely  on  a  difference  in  quantity  of  precisely  the  same  kind  of 
property  is  necessarily  unjust,  arbitrary  and  illegal.  For  example, 
a  division  of  personal  property  into  three  classes,  with  the  view  of 
imposing  a  different  tax  rate  on  each — class  1,  consisting  of  per- 
sonal property  exceeding  in  value  the  sum  of  one  hundred  thou- 
sand dollars,  class  2,  consisting  of  personal  property  exceeding 
in  value  twenty  thousand  dollars  and  not  exceeding  one  hundred 
thousand  dollars,  and  class  3,  consisting  of  personal  property  not 
exceeding  in  value  twenty  thousand  dollars  —  would  be  so  mani- 
festly arbitrary  and  illegal  that  no  one  would  attempt  to  justify  it. 

In  re  Cope,  191  Pa.  St.  1,  21,  43  A.  79,  45  L.  R.  A.  316,  71  Am.  St.  Rep. 
749. 

Sec.  70.    Confiscatory  Rates. 

We  conceive  that  a  progressive  tax  which  amounts  to  confisca- 
tion is  void  on  fundamental  principles,  and  that  the  Oklahoma 
statute,  as  applied  to  a  large  estate,  for  example,  would  receive 
scant  consideration  from  the  court.  The  possibility  of  such  a 
result  was  considered  by  our  supreme  court  in  the  following 
language:  "If  a  case  should  ever  arise  where  an  arbitrary  and 
confiscatory  exaction  is  imposed  bearing  the  guise  of  a  progressive 
or  any  other  form  of  tax,  it  will  be  time  enough  to  consider  whether 
the  judicial  power  can  afford  a  remedy  by  applying  inherent  and 
fundamental  principles  for  the  protection  of  the  individual,  even 
though  there  be  no  express  authority  in  the  constitution  to  do  so. 
That  the  law  which  we  have  construed  affords  no  ground  for  the 
contention  that  the  tax  imposed  is  arbitrary  and  confiscatory,  is 
obvious."!  The  South  Dakota  court  remarks:  "It  must  be  conceded 
that,  if  the  legislature  can  fix  rates  of  taxation,  it  can  increase  such 
rates,  and  upon  grounds  of  public  policy  it  might  place  a  limit  in 
the  value  above  which  all  transmissions  would  go  to  the  state. 


64  INHERITANCE  TAX  LAW.  [§70. 

Our  highest  court  has  also  said  recently:  "When  logic  and  the 
policy  of  a  state  conflict  with  a  fiction  due  to  historical  tradition, 
the  fiction  must  give  way." ' 

It  is  true  that  the  opposite  doctrine  has  been  frequently  laid 
down  under  the  guise  of  the  theory  that  a  right  of  succession  on 
death  is  a  creature  of  law  and  not  a  natural  right.  This  has  been 
expressed  by  our  supreme  court  as  follows:^  "Though  the  general 
consent  of  the  most  enlightened  nations  has,  from  the  earliest 
historical  period,  recognized  a  natural  right  in  children  to  inherit 
the  property  of  their  parents,  we  know  of  no  legal  principle  to 
prevent  the  legislature  from  taking  away  or  limiting  the  right 
of  testamentary  disposition  or  imposing  such  conditions  upon  its 
exercise  as  it  may  deem  conducive  to  public  good."  ^ 

1  Per  White,  J.,  in  Knowlton  v.  Moore,  178  U.  S.  41,  109,  20  S.  Ct.  747,  44  L 
Ed.  969. 

2  Per  Whiting,  P.  J.,  In  re  McKennan,  25  S.  D.  369, 126  N.  W.  611, 618,  reversed 
on  rehearing,  130  N.  W.  33. 

INHERITANCE  TAXES  MAY  EAT  UP   AN   ENTIRE  ESTATE 
AND  POSSIBLY  BANKRUPT  THE   EXECUTOR. 

[From  the  New  York  Commercial,  July  1,  1911.] 
There  has  just  been  instituted  here  in  New  York  by  one  Bunyan  Lucas  of 
Shawnee,  Okla.,  a  suit  at  law  to  break  the  will  of  John  W.  Hunt,  a  rich  New 
Yorker,  who  died  in  Dallas,  Texas,  last  December,  leaving  an  estate  said  to  be 
valued  at  $1,000,000;  he  was  a  half-brother  of  Lucas  and  to  the  latter  he  be- 
queathed $1,000  and  a  farm  in  Oklahoma;  something  over  $100,000  was  devised 
to  other  relatives  and  friends;  and  the  will  directs  that  the  residue  of  the  estate 
shall  be  used  to  establish  a  charitable  or  benevolent  institution  in  Georgia  as  a 
memorial  to  the  testator;  the  will  was  executed  in  Asbury  Park,  N.  J.,  and  was 
recently  admitted  to  probate  in  Florida;  Lucas  alleges  that  the  probating  of  the 
will  was  unlawful  and  that  a  residuary  bequest  of  this  sort  is  invalid  in  New  York 
state.  The  case  bids  fair  to  open  up  some  highly  interesting  questions  of  law, 
inasmuch  as  six  different  states  are  directly  or  indirectly  interested  in  it;  and 
if  the  properties  involved,  whether  personal  or  real  estate,  are  scattered  about 
in  different  states,  the  possibilities  in  the  way  of  inheritance  taxes  almost  run 
away  with  the  imagination.  Suppose,  for  instance,  this  residuary  estate  of 
$1,000,000  consists  of  stocks  and  bonds  of  Oklahoma  corporations  and  that  the 
will  stands.  Oklahoma  taxes  such  securities  owned  by  non-residents  when 
passing  by  inheritance,  and  the  corporations  themselves  are  responsible  for  the 
tax  if  they  transfer  title  to  them  before  the  tax  is  paid;  the  first  $100  is  exempt; 
from  $100  to  $600  the  tax  is  five  per  cent;  on  any  excess  above  $600  the  tax 
is  progressive  —  one-tenth  of  one  per  cent  increase  on  five  per  cent  for  every 
1100;  and  where  the  excess  is  over  $95,600  the  inheritance  tax  is  100  per  cent! 
Now  suppose  the  executor  of  this  Hunt  will  sends  the  Oklahoma  stocks  and 
bonds  out  there  for  transfer  from  the  testator  to  himself  so  that  he  may  convert 


§  70.]  CLASSIFICATION  BY  AMOUNT.  65 

them  into  cash  with  which  to  endow  the  Georgia  memorial  institution  —  the 
state  of  Oklahoma  sets  its  mathematician  at  work  with  a  table  of  Napier's 
logarithms,  and  in  due  season  he  reports  that  the  state's  share  of  that  $1,000,000 
Linder  the  inheritance  tax  law  is  $975,965!  As  the  corporations  would  not 
transfer  the  securities  until  this  amount  was  paid,  the  executor  would  have  to 
raise  it  somehow  and  pay  it  over  to  the  state;  then,  with  the  securities  registered 
n  his  own  name,  he  could  sell  them  and  if  they  brought  par  value,  after  the 
^975,965  had  been  deducted,  he  would  have  just  $24,035  left  for  establishing  the 
Georgia  memorial.  That  would  be  quite  bad  enough  —  but  up  would  step 
:he  sovereign  state  of  New  York  and  demand  $209,872.50  of  this  executor  with 
jnly  $24,035  in  his  pocket  as  its  tax  share  of  the  property  of  a  dead  New  Yorker; 
ind  it  could  hold  him  personally  responsible  for  the  payment  of  the  tax  in  full. 
[t  will  thus  be  seen  that  inheritance  taxes  can  more  than  eat  up  an  entire  estate 
—  under  certain  circumstances  they  might  bankrupt  an  inheritor  and  an  executor 

DOth. 

^Per  Holmes,  J.,  in  Blackstone  v.  Miller,  188  U.  S.  189,  23  S.  Ct.  277,  47  L. 
Ed.  439. 

^See  ante,  s.  29. 

^Per  Brown,  J.,  in  United  States  v.  Perkins,  163  U.  S.  625,  628,  affirming 
In  re  Merriam,141  N.  Y.  479,  36  N.  E.  505,  in  which  the  court  cites  the  following 
:ases:  Matter  oj  Swift,  137  N.  Y.  77;  Matter  of  Hoffman,  143  N.  Y.  327;  School- 
^eld  V.  Lynchburg,  78  Va.  366;  Strode  v.  Commonwealth,  52  Pa.  St.  181;  State  v. 
Dalrymple,  70  Md.  294,  299. 


CHAPTER  XV. 


NOTICE. 

§  71.    Notice  to  Parties. 

§  72.    Notice  to  Collecting  Officers  Unnecessary. 

Sec.  71.    Notice  to  Parties. 

It  is  the  prevailing  view  that  parties  taxed  must  have  some 
notice  of  the  proceedings/  and  a  right  of  appeal  from  the  appraisal 
is  insufficient ,2  although  it  has  been  held  that  notice  is  unnecessary 
on  the  ground  that  the  tax  does  not  take  property  of  the  legatee 
but  merely  imposes  a  condition  upon  its  acquisition.^  It  is  enough 
that  the  probate  court  has  power  to  hear  and  determine  all  questions 
in  relation  to  such  tax  that  may  arise,  subject  to  appeal  as  in 
other  cases,*  and  it  is  not  fatal  that  the  law  vests  a  tax  in  the 
state  at  once  on  the  death  of  the  decedent,  provided  notice  is  given 
of  the  proceedings  for  collection.^  Notice  by  registered  mail  to  non- 
residents may  be  sufficient.®  A  defect  in  the  statute  consisting 
of  want  of  notice  may  be  cured  by  an  amendment  providing  for 
notice  without  re-enacting  the  whole  statute.'' 

*N.  Y.  St.  1885,  c.  483,  was  attacked  on  the  ground  that  no  proper  notice 
was  given  to  the  taxpayer.  The  court  construes  section  13  of  the  act  liberally 
as  requiring  the  surrogate  to  give  notice  to  all  persons  interested,  and  it  is  further 
provided  that  immediately  after  he  has  assessed  a  tax  the  surrogate  shall  "give 
notice  by  mail  to  all  parties."  The  section  further  provides  a  right  of  appeal 
and  upon  such  appeal  there  is  another  opportunity  to  be  heard.  There  is  still 
further  opportunity  to  be  heard  under  section  16  of  the  act,  which  provides  for 
the  service  of  a  citation  on  an  order  to  show  cause  why  the  tax  should  not  be  paid. 
It  is  clear  that  the  person  thus  cited  may  allege  any  reason  whatever  which 
shows  that  he  ought  not  to  pay  it.  He  may  answer  that  he  has  not  had  an 
opportunity  to  be  heard  at  the  appraisal  and  that  therefore  the  tax  as  to  him 
is  void.  He  may  show  any  error  affecting  the  validity  of  the  tax,  or  that  he 
has  never  received  and  never  will  receive  the  inheritance  nor  legacy,  and  it 
would  undoubtedly  be  a  justification  for  refusing  co  pay  that  he  absolutely 
renounced  and  refused  to  accept  or  receive  the  inheritance  or  legacy.  If  the 
surrogate  should  err  in  his  decision  there  would  be  the  right  of  appeal  to  the 
supreme  court. 

The  court  concludes  that  in  all  these  ways  there  is  sufficient  provision  for  notice 
and  hearing  for  all  parties  interested.     In  re  McPherson,  104  N.  Y.  306,  323, 


§72.]  NOTICE.  67 

10  N.  E.  685,  58  Am.  Rep.  502,  followed  in  State  v.  District  Court,  41  Mont. 
357,  109  P.  438,  442.     See  further,  post,  s.  331. 

2The  court  notices  the  claim  that  the  tax  is  against  the  estate  alone  and 
remarks  that  the  claim  is  not  against  the  estate  alone,  but  as  a  rule  the  adminis- 
trator has  nothing  to  do  with  the  real  estate.  The  section  giving  the  district 
court  jurisdiction  to  hear  and  determine  questions  relating  to  the  tax  does  not 
afford  such  hearing  as  avoids  the  constitutional  objection,  as  it  does  not  give  the 
court  authority  to  attack  the  valuation  for  the  purposes  of  taxation.  Ferry  v. 
Campbell,  110  Iowa  290,  81  N.  W.  604,  50  L.  R.  A.  92.  See  In  re  McPherson, 
104  N.  Y.  321,  10  N.  E.  685.     Contra,  Hostetter  v.  State,  26  Ohio  Cir.  Ct.  702. 

Notice  of  the  appointment  of  the  appraiser  and  of  a  hearing  on  the  appraisal 
is  unnecessary.  A  right  of  appeal,  however,  implies  notice.  In  re  Belcher,  211 
Pa.  St.  615,  619,  61  A.  252. 

3  Union  Trust  Co.  v.  Durfee,  125  Mich.  487,  494,  84  N.  W.  1101,  7  Detroit 
Leg.  N.  597. 

*  State  V.  Hamlin,  86  Me.  495,  507,  30  A.  76,  41  Am.  St.  Rep.  569,  25  L.  R.  A. 
632. 

^Trippet  v.  State,  149  Cal.  521,  86  P.  1084,  8  L.  R.  A.  (N.  S.)  1210. 

*Mont.  Revised  Code,  s.  7738,  gives  sufficient  notice  to  satisfy  the  constitu- 
tion of  the  appraisal  and  assessment  of  the  tax.  The  clause  provides  for  notice 
"by  registered  mail,"  and  the  provision  lays  upon  the  court  the  duty  to  fix  the 
time  for  the  appraisement  within  such  reasonable  limits  as  will  give  every  person 
interested  the  opportunity  to  be  present  and  have  a  hearing  if  he  so  desires.  This 
may  be  difficult,  as  where  in  the  case  at  bar  the  testator  died  in  Ireland  where  he 
resided,  but  the  task  is  no  more  difficult  for  the  court  in  Montana  than  for  an 
Irish  court.  The  statute  further  provides  that  after  the  tax  has  been  assessed 
the  court  shall  immediately  give  notice  by  registered  mail,  and  this  is  an  additional 
notice,  which  requires  knowledge  by  the  court  of  the  names  and  whereabouts 
of  all  interested  persons,  and  this  knowledge  it  is  presumed  the  court  will  get. 
State  V.  District  Court,  41  Mont.  357,  109  P.  438,  442. 

Terry  v.  Campbell,  110  Iowa  290,  81  N.  W.  604,  50  L.  R.  A.  92. 

Sec.  72.    Notice  to  Collecting  Officers  Unnecessary. 

There  is  no  constitutional  requirement  that  the  collecting 
officer  be  notified  of  the  proceedings  for  assessment.  The  New 
York  court  of  appeals  has  remarked  on  this  subject:  "That  the 
doctrine  of  notice  has  any  application  in  such  proceedings  to  the 
case  of  the  comptroller,  is  a  proposition  which  has  neither  support 
in  some  requirement  of  the  act,  nor  is  justified  by  his  relation  to 
the  subject-matter.  He  is  not  a  person  who  has  any  interest  in  the 
property.  He  is  an  utter  stranger  to  it.  Contingently  upon  the 
refusal  or  neglect  to  pay  a  tax  due  under  the  act,  it  may  become 
his  duty  to  notify  the  district  attorney  to  proceed  to  enforce 
collection.  The  performance  of  that  duty,  however,  involves  the 
idea  of  a  failure  of  the  surrogate  to  act  at  all,  or  of  a  neglect  or 
refusal    to  obey  the  decree  of    the  surrogate's  court.     It   doubt- 


68  INHERITANCE  TAX  LAW.  [§72. 

less  is  very  proper  that  the  surrogate  should  cause  the  comptroller 
to  be  notified  of  the  proceedings  for  appraisement  and  assessment, 
in  order  that  a  question  which  concerns  the  interests  of  the  state 
may  be  tried  out  in  the  fullest  possible  manner ;  but  nothing  in  the 
law,  or  in  the  relations  of  the  comptroller,  makes  notice  to  him  a 
prerequisite  to  a  complete  determination  by  the  surrogate  of  the 
questions  presented  in  the  proceedings.  The  doctrine  of  notice 
is  one  which  finds  application  when  it  is  sought  to  tax  the  property 
of  the  citizen.  When  he  is  to  be  assessed,  it  is  essential  that  he 
shall  be  given  an  opportunity  to  be  heard,  to  establish  a  demand 
against  him.  As  matter  of  fact,  in  this  proceeding  it  appears 
that  the  comptroller  was  caused  to  be  notified  by  the  surrogate 
before  he  passed  upon  the  question  of  the  liability  of  these  legacies 
to  taxation;  so  that  he  had  his  opportunity  to  appear  and  be 
heard,  if  he  had  chosen  to  avail  himself  of  it.  I  can  see  no  more 
force  in  the  argument  as  to  an  implied  requirement  of  notice  to 
him,  than  if  the  argument  was  made  in  the  case  of  the  assess- 
ment and  taxation  of  property,  under  the  general  system  of  taxa- 
tion in  the  state,  that  some  state  official  should  have  notice  and 
the  opportunity  to  be  "heard." 

Per  Gray,  J.,  in  In  re  Wolfe,  137  N.  Y.  205,  211,  33  N.  E.  156,  affirming  66 
Hun  389,  29  Abb.  N.  Cas.  340,  21  N.  Y.  Suppl.  515,  reversing  2  Connolly  600. 
Notice  was  later  required  even  of  orders  of  exemption.  In  re  Collins,  104  N.  Y. 
App.  Div.  184,  93  N.  Y.  Suppl.  342. 


CHAPTER  XVI. 


RETROACTIVE  LEGISLATION. 

§73.     Statutes  Construed  as  Prospective. —  Powers. 

§  74.  Statutes  Applying  Retroactively  to  Estates  in  Process  of  Ad- 
ministration. 

§  75.    Decisions  of  the  Supreme  Court. 

§  76.     When  Property  is  Distributed. 

§  77.     Effect  of  Premature  Distribution. 

§  78.     After  Title  has  Passed. 

§  79.     Exemptions. 

§  80.    Tax  on  Increase  in  Value. 

§  81.  Location  of  Assets  in  State  Insufficient  Basis  for  Retroactive 
Legislation. 

§  82.  Constitution  Inapplicable  to  Conditions  Prior  to  its  Enact- 
ment. 

§  83.     Effect  of  a  Subsequent  Treaty. 

§  84.     Gift  Inter  Vivos. 

§  85.     Remainder  Interests  Vested  before  Passage  of  Statute. 

§  86.     Curative  Act. 

Sec.  73.    Statutes  Construed  as  Prospective. — Powers. 

Inheritance  taxes,  like  other  laws,  are  prospective  in  operation 
unless  expressly  made  retroactive,  and  apply  only  to  the  estates 
of  decedents  who  have  died  since  their  enactment,^  although  passed 
before  distribution, ^  and  although  the  will  is  filed  and  probated 
after  the  passage  of  the  statute.'  So  an  amendment  to  the  inherit- 
ance laws  must  be  treated  as  prospective  in  the  absence  of  language 
indicating  it  is  retrospective  in  character.* 

To  construe  an  inheritance  tax  as  applying  to  estates  where  dis- 
tribution had  not  been  made  when  the  statute  was  passed,  although 
the  testator  died  before  that  time,  would  result  in  great  inequality, 
as  the  liability  to  taxation  would  in  many  instances  be  determined 
by  the  fact  whether  proceedings  for  the  settlement  of  the  estate 
were  commenced  before  or  after  the  act  went  into  effect.  It  is 
unnecessary  to  impute  to  the  legislature  a  purpose  to  frame  legis- 
lation which  would  thus  have  the  practical  effect  to  disturb  vested 
rights  and  create  a  test  of  liability,  thus  depending  upon  accident 
and  chance.^ 


70  INHERITANCE  TAX  LAW.  [§74. 

A  good  example  of  the  tendency  to  construe  statutes  prospectively 
may  be  found  in  Pennsylvania,  where  the  act  of  1850  declared  that 
"the  words  'being  within  this  commonwealth'  shall  be  so  con- 
strued as  to  relate  to  all  persons  who  have  been  at  the  time  of 
their  decease,  or  now  may  be,  domiciled  within  this  commonwealth, 
as  well  as  to  estates ;  and  this  is  declared  to  be  the  true  intent  and 
meaning  of  said  act."  The  court  holds,  in  a  well  considered  opinion, 
that  this  language  should  be  applied  prospectively  to  include  the 
estate  of  one  who  died  after  its  passage.^ 

A  tax  on  the  execution  of  a  power  is  valid  although  the  power 
was  created  before  the  passage  of  the  statute.^ 

^Lacey  v.  Treasurer  (Iowa,  1911),  132  N.  W.  843.  Gilbertson  v.  Ballard,  125 
Iowa  420,  101  N.  W.  108.  Cf.  110  Iowa  290.  Succession  of  Oyon,  6  Rob.  (La.) 
504.  Succession  of  Deyraud,  9  Rob.  (La.)  357,  relying  on  Succession  of  Oyon, 
9  Rob.  (La.)  501.  In  re  Lombard's  Appeal,  88  Me.  587,  34  A.  530.  Howe  v. 
Howe,  179  Mass.  546,  552,  55  L.  R.  A.  626.  Tilford  v.  Dickinson,  79  N.  J.  L. 
302,  79  Atl.  1119,  reversing  1910  N.  J.  L.,  75  Atl.  574.  In  re  Brooks,  6 
Dem.  Surr.  (N.  Y.)  165,  20  N.  Y.  St.  149.  In  re  Travis,  19  Misc.  Rep.  393, 
44  N.  Y.  Suppl.  349,  2  Gibbons  91.  Eury  v.  State,  72  Ohio  St.  448,  74  N.  E. 
650.  Cahen  v.  Brewster,  203  U.  S.  543,  550,  27  S.  Ct.  174,  51  L.  Ed.  310,  affirm- 
ing 115  La.  378,  39  S.  37. 

2  Carter  v.  Whitcomb,  74  N.  H.  482,  69  A.  779,  17  L.  R.  A.  (N.  S.)  733n. 

3  In  re  Lombard's  Appeal,  88  Me.  587,  34  A.  530. 

4  Provident  Hospital  &  Training  Assn.  v.  People,  198  111.  495. 

^  In  re  Collateral  Inheritance  Tax,  88  Me.  587,  34  A.  530.  See,  however, 
Attorney  General  v.  Stone,  209  Mass.  186,  95  N.  E.  395. 

6  In  re  Line,  155  Pa.  St.  378,  380,  26  A.  728,  32  Wkly.  Notes  Cas.  376. 

7  Orr  v.  Oilman,  183  U.  S.  278,  288, 22  S.  Ct.  213, 46  L.  Ed.  196  (affirming  In  re 
Dows,  167  N.  Y.  227,  60  N.  E.  439,  52  L.  R.  A.  433,  88  Am.  St.  Rep.  508). 

[Retroactive  statute  of  limitation,  see  post,  s.  403.] 

Sec.  74.    Statute  Applying  Retroactively  to  Estates  in  the 
Process  of  Administration. 

It  is  competent  for  the  state  to  impose  a  tax  on  inheritances 
which  are  in  gremio  legis  before  distribution,  by  a  statute  passed 
after  the  death  of  the  decedent,^  which  is  not  void  as  an  ex  posl 
facto  law.2  The  tax  may  be  imposed  at  any  time  from  and  includ- 
ing the  death  of  the  testator  to  distribution.^  One  reason  given 
is  that  a  right  to  take  a  legacy  may  be  subject  to  the  laws  for  the 
assessment  and  collection  of  a  tax  as  a  premium  upon  the  right  and 
privilege  to  receive  the  inheritance,  inasmuch  as  it  is  subject  to 
laws  which  authorize  the  taxation  of  the  very  property  bequeathed.* 

It  has  been  held  in  certain  cases  that  inheritance  taxes  cannot  be 
made  retroactive.^ 


§74]  RETROACTIVE  LEGISLATION.  71 

^Lacey  v.  State  Treasurer  (Iowa,  1911),  121  N.  W.  179,  185  (McClain,  J.,  dis- 
senting). Succession  of  Oyon,  6  Rob.  (La.)  504.  Succession  of  Stauffer,  119  La. 
Ann.  66,  43  S.  928.  Stevens  v.  Bradford,  185  Mass.  439,  70  N.  E.  425.  Attorney 
General  v.  Stone,  209  Mass.  186,  95  N.  E.  395  (applying  only  to  cases  in  which 
tax  remained  unpaid).  Hostetter  v.  State,  26  Ohio  Cir.  Ct.  702.  In  re  Short, 
16  Pa.  St.  (4  Harris)  63.  Commonwealth  v.  Smith,  20  Pa.  St.  (8  Harris)  100 
(increase  of  interest  charged  for  non-payment).  Attorney  General  v.  Middleton, 
3  Hurl.  &  N.  125. 

La.  St.  1904,  c.  45,  provided  that  the  inheritance  tax  might  be  "collected  on 
all  successions  not  finally  closed  and  administered  upon."  It  was  argued  that 
the  closing  of  the  succession  cannot  affect  the  question  as  to  when  the  rights 
of  the  heirs  vested  and  cannot  be  the  cause  for  differentiation  among  the  heirs, 
and  that  such  a  classification  is  purely  arbitrary  and  that,  besides,  such  a  classi- 
fication rests  on  the  theory  that  the  tax  is  one  on  property,  when  in  fact  it  is  one 
on  the  right  of  inheritance.  But  the  court  holds  that  the  property  bequeathed 
was  subject  to  the  jurisdiction  of  the  court  until  it  had  passed  out  of  the  suc- 
cession of  the  testator,  and  it  was  not  improper  classification  to  make  the  tax 
depend  upon  a  fact  without  which  it  would  have  been  invalid.  "In  other  words, 
those  who  are  subject  to  be  taxed  cannot  complain  that  they  are  denied  the 
equal  protection  of  the  laws  because  those  who  cannot  legally  be  taxed  are  not 
taxed."  Cahen  v.  Brewster,  203  U.  S.  543,  552,  27  S.  Ct.  174,  51  L.  Ed.  310, 
affirming  115  La.  378,  39  S.  37. 

When  Estate  not  Finally  Closed.  La.  St.  1906,  c.  109,  p.  173,  provides  that 
the  act  shall  affect  all  successions  not  finally  closed  or  in  which  the  final  account 
has  not  been  filed;  so  where  the  decedent  died  January  11,  1906,  the  succession 
was  closed  by  a  judgment  February  7,  1906,  recognizing  the  heirs  ordering  them 
to  be  put  into  possession, and  as  this  was  done  before  the  La.  St.  1906  went  into 
effect,  this  succession  was  not  affected  by  that  statute  but  was  governed  by  the 
La.  St.  1904.    Succession  of  Pritchard,  118  La.  Ann.  883,  43  S.  537. 

2  Carpenter  v.  Pennsylvania,  17  How.  456. 

^  The  court  remarks  that  there  is  nothing  in  the  case  of  United  States  v.  Perkins, 
163  U.  S.  625,  Magoun  v.  Illinois  Trust  &  Savings  Bank,  170  U.  S.  283,  Knowl- 
ton  V.  Moore,  178  U.  S.  41,  which  restrains  the  power  of  the  state  as  to  the  time 
of  the  imposition  of  the  tax.  "It  may  select  the  moment  of  death,  or  it  may 
exercise  its  power  during  any  of  the  time  it  holds  the  property  from  the  legatee." 
Where  the  testator  died  in  May,  1904,  before  the  statute  went  into  effect,  the 
statute  properly  was  made  to  impose  the  tax  upon  the  estate.  Cahen  v.  Brewster, 
203  U.  S.  543,  551,  27  S.  Ct.  174,  51  L.  Ed.  310,  affirming  115  La.  378,  39  S.  37. 

See  Carpenter  v.  Commonwealth,  17  How.  456,  462. 

^  Gelsthorpe  v.  Furnell,  20  Mont.  299,  51  P.  267,  270,  39  L.  R.  A.  170.  The 
court  relies  upon  In  re  McPherson,  104  N.  Y.  306,  10  N.  E.  685,  58  Am.  Rep. 
502. 

^  Pullen  V.  Commissioners,  66  N.  C.  361,  362.  See  In  re  Pell,  171  N.  Y.  48, 
60,  63  N.  E.  789,  57  L.  R.  A.  540,  89  Am.  St.  Rep.  791,  reversing  60  N.  Y.  App. 
Div.  286,  70  N.  Y.  Suppl.  195. 

A  Pennsylvania  intestate  died  leaving  only  collateral  relatives  and  an  illegiti- 
mate son  who  was  legitimatized  by  the  legislature  after  the  death  of  the  intestate. 
The  estate  descended  and  vested  in  the  collateral  heirs,  and  the  state  was  entitled 
to  collect  the  collateral  inheritance  tax.    The  moment  a  man  dies  leaving  heirs 


72  INHERITANCE  TAX  LAW.  [§75 

lineal  or  collateral,  his  estate  vests  and  is  beyond  the  constitutional  power  of 
the  legislature.    Galhraith  v.  Commonwealth,  14  Pa.  St.  (2  Harris)  258. 

Sec.  75.    Decisions  of  the  Supreme  Court. 

The  validity  cannot  be  questioned  of  a  tax  imposed  on  personal 
property  in  the  hands  of  the  executor  or  administrator  before  dis- 
tribution. Our  supreme  court  has  affirmed  this  doctrine  in  an 
early  decision  and  again  quite  recently. 

In  Carpenter  v.  Commonwealth,  17  How.,  the  court  remarks  at 
page  462:  It  is  true  "that  the  rights  of  donees  under  a  will  are 
vested  at  the  death  of  the  testator  .  ,  but  until  the  period  for 
distribution  arrives,  the  law  of  the  decedent's  domicile  attaches  to 
the  property,  and  all  other  jurisdictions  refer  to  the  place  of  the 
domicile  as  that  where  the  distribution  should  be  made.  .  .  .  The 
personal  estate,  so  far  as  it  has  a  determinate  owner,  belongs  to 
the  executor.  The  rights  of  the  donee  are  subordinate  to  the  con- 
ditions, formalities  and  administrative  control  prescribed  by  the 
state  in  the  interest  of  its  public  order,  and  are  only  irrevocably 
established  upon  its  abdication  of  this  control,  at  the  period  of 
distribution.  If  the  state,  during  this  period  of  administration  and 
control  by  its  tribunals  and  their  appointees,  thinks  fit  to  impose 
a  tax  upon  the  property,  there  is  no  obstacle  in  the  constitution 
and  laws  of  the  United  States  to  prevent  it."  ^ 

In  a  recent  case  it  appeared  that  the  Louisiana  statute  of  1904 
became  operative  in  New  Orleans  July  30,  1904,  and  the  court  holds 
that  it  embraced  all  successions,  those  opened  and  not  settled  as 
well  as  to  be  opened,  and  that  it  is  not  void  as  retroactive  on  that 
ground.  The  court  holds  that  the  power  to  tax  is  without  limit 
in  its  force  and  in  the  extent  of  its  search ;  that  the  legatees  acquire 
no  vested  right  in  the  property  bequeathed  which  could  enable 
them  to  successfully  defend  their  inheritance  against  the  demand 
of  the  state.  It  was  property  within  the  limits  of  the  state  which 
the  state  could  tax  for  the  purposes  mentioned  until  it  passed 
out  of  the  succession  of  the  testator.  The  court  notes  that  it  does 
not  appear  just  to  tax  all  successions  opened  since  the  statute 
went  into  effect  and  not  yet  closed,  and  not  tax  those  that  have 
been  opened  and  closed  in  that  time.  The  court  replies  that 
it  would  be  utterly  impracticable  to  tax  successions  that  have 
been  closed,  for  the  reason  that  there  is  no  succession  remaining. 
The  tax  is  not  a  tax  upon  the  property  itself  but  upon  its  trans- 
mission.    It  is  a  tax  upon  the  right  to  dispose  of  property  and 


§§76-78.]  RETROACTIVE  LEGISLATION.  73 

**as  long  as  the  succession  —  the  ideal  or  juridical  person  —  re- 
mains in  the  hands  of  executors,  the  legislative  power  may  classify 
it  and  subject  it  to  a  tax."  ^ 

1  Per  Campbell,  J.,  in  Carpenter  v.  Commonwealth,  17  How.  456,  462. 
^Succession  of  Levy,  115  La.  378,  39  S.  37,  affirmed  Cahen  v.  Brewster,  203 
U.  S.  543,  552,  27  S.  Ct.  174,  51  L.  Ed.  310. 

Sec.  76.    When  Property  is  Distributed. 

No  inheritance  tax  will  be  construed  as  affecting  property 
already  distributed. 

Where  the  testator  died  in  1903  and  his  property  was  in  large  part  distributed 
before  the  passage  of  La.  St.  1904,  the  tax  is  not  operative  as  to  such  property, 
as  the  statutes  should  not  be  construed  as  retroactive  or  as  impairing  vested 
rights.    Succession  of  Stauffer,  119  La.  Ann.  66,  43  S.  928. 

Sec.  77.     Effect  of  PrematureDistribution. 

An  unauthorized  distribution  will  not  deprive  the  state  of 
jurisdiction  to  tax.  In  an  Iowa  case  the  testator  died  in  1897, 
after  the  passage  of  the  collateral  inheritance  law,  but  before  it 
had  been  made  valid  and  enforceable  by  amending  the  uncon- 
stitutional provision  as  to  filing  appraisement.  Before  this  amend- 
atory act  went  into  effect,  the  executors  were  appointed  and 
distributed  the  estate  without  any  authority  from  the  probate 
court,  and  before  the  executors  had  filed  proof  of  notice  of  their 
appointment  or  an  inventory,  and  before  the  expiration  of  the 
time  for  filing  claims.  The  probate  court  still  had  jurisdiction 
of  the  estate  and  the  payment  could  not  affect  the  inheritance  law 
where  no  final  accounting  was  made  until  after  the  amendatory 
act  went  into  effect. 

Montgomery  v.  Gilhertson,  134  Iowa  291,  111  N.  W.  964,  10  L.  R.  A.  N.  S.  986. 

Sec.  78.    After  Title  has  Passed. 

It  has  been  decided  in  Iowa  that  a  retroactive  statute  cannot 
operate  to  affect  the  title  to  real  estate  which  passes  on  death, ^  or 
to  bequests  in  personal  property  vesting  before  the  act  took  effect.^ 

^  Where  the  testator  died  afrer  the  enactment  of  Iowa  St.  1896,  c.  28,  and  before 
the  amendment  enacted  by  Iowa  St.  1898,  c.  37,  and  where  the  first  statute  was 
void  for  lack  of  notice  on  appraisal,  the  court  holds  that  the  amendment  although 
retroactive  in  form  cannot  authorize  a  legal  inheritance  tax  on  real  estate  of 
the  testator.  The  court  distinguishes  the  case  of  Ferry  v.  Campbell,  110  Iowa 
290,  81  N.  W.  604,  50  L.  R.  A.  92,  as  that  case  applied  solely  to  personal  property. 
The  court  shows  that  title  to  personal  property  does  not  pass  to  the  legatees  or 


74  INHERITANCE  TAX  LAW.  [§§79-80. 

distributees  until  actual  distribution,  while  real  estate  passes  at  once  on  the  death 
of  testator  without  any  further  action  by  the  administrator.  The  amending 
statute  is  not  in  the  nature  of  a  curative  act,  but  purports  only  to  aid  in  the 
collection  of  a  valid  tax.  If  then  the  land  was  not  subject  to  or  liable  for  the  pay- 
ment of  the  tax  the  act  has  no  application.  At  the  death  of  the  testator  there 
was  no  remedy  by  which  a  tax  could  be  fixed  or  enforced.  A  tax  that  cannot 
be  enforced  by  any  remedy  is  no  tax  at  all.  If  a  tax  on  succession,  the  amount 
of  which  cannot  be  ascertained,  may  relate  back  one  year,  it  may  stretch  back 
over  a  period  of  twenty  or  any  number  of  years  and  the  citizens  never  know  with 
any  degree  of  certainty  what  burdens  are  to  be  imposed.  The  court  distinguishes 
the  case  Gelsthorpe  v.  Furnell,  20  Mont.  299,  51  P.  267,  39  L.  R.  A.  170,  as  it  appears 
from  that  case  that  real  estate  in  Montana  is  subject  to  the  control  of  the  court 
and  held  in  possession  by  the  administrator  until  the  order  of  distribution. 
Herriott  v.  Potter,  115  Iowa  648,  89  N.  W.  91.  To  the  same  effect  see  Lacey  v. 
Treasurer  (Iowa,  1911),  132  N.  W.  843. 
^  Lacey  v.  State  Treasurer  (Iowa,  1911),  132  N.  W.  843. 

Sec.  79.    Exemptions. 

A  retroactive  extension  of  the  exemptions  from  tax  was  affirmed 
in  Maryland  but  found  void  under  the  peculiar  provisions  of  the 
California  statute.  The  Maryland  statute  declared  that  the 
collateral  inheritance  tax  shall  not  be  imposed  where  property 
may  pass  from  a  deceased  v/ife  to  her  surviving  husband;  and 
that  in  all  cases  where  such  a  tax  has  been  "heretofore  claimed 
of  but  not  actually  paid  by  the  husband  of  any  decedent,"  such 
claim  shall  be  released  or  abandoned.  The  court  says  that  this 
is  not  exactly  an  exemption,  but  a  release,  and  so  does  not  fall 
within  the  rule  that  exemptions  are  to  be  strictly  construed.  The 
law  is  valid  and  the  statute  applied  to  a  case  which  is  pending 
on  appeal  when  the  law  was  passed.^ 

On  the  other  hand,  a  California  statute  extending  the  exemp- 
tions of  the  existing  law  and  providing  that  the  exemptions  shall 
apply  to  all  cases  where  taxes  have  not  been  paid  under  existing 
law  is  void  as  in  violation  of  the  constitution,  which  provides  that 
the  legislature  shall  not  make  any  gift  or  donation  of  any  public 
money  or  thing  of  value.  Under  the  statute  the  inheritance  tax 
became  the  property  of  the  state  on  the  death  of  the  decedent. ^ 

^  Montague  v.  State,  54  Md.  481. 

2  In  re  Stanford's  Estate,  126  Cal.  1 12, 58  P.  462, 45  L.  R.  A.  788.   See  further,  s.  88 

Sec.  80.    Tax  on  Increase  in  Value. 

The  Montana  act  of  1897  provided  that  a  tax  should  be  levied 
and  collected  "upon  the  increase  of  all  property  arising  between 
the  date  of  death  and  the  date  of  the  decree  of  distribution."     The 


§§81-82.]  RETROACTIVE  LEGISLATION.  75 

argument  was  made  that  the  words  "increase  of  all  property" 
included  only  those  estates  the  property  of  which  is  of  such  a  char- 
acter that  it  increases  in  kind,  as,  for  instance,  when  it  consists  in 
whole  or  in  part  of  live  stock,  such  as  sheep,  cattle,  etc.  But  the 
court  holds  that,  following  the  common  acceptance  of  the  word 
"increase,"  an  increase  means  increase  in  value  as  well  as  increase 
in  kind.  The  court  upholds  the  method  pursued  by  the  lower 
court,  which  appointed  an  appraiser  to  ascertain  the  value  of  the 
estate  for  the  purpose  of  enabling  it  to  fix  the  amount  of  inherit- 
ance tax  to  be  paid  by  the  executor  prior  to  the  final  distribution 
among  its  devisees. 
In  re  Tuohy,  35  Mont.  431,  90  P.  170.     See  further,  post,  s.  334. 

Sec.  81.    Location  of  Assets  in  State  Insufficient. 

The  testator,  a  resident  of  New  Jersey,  died  there  March  19, 1882, 
leaving  personal  property  in  New  York  state,  and  some  of  the 
assets  were  not  removed  to  New  Jersey  until  after  May  1,  1892, 
when  the  New  York  statute  of  1892,  c.  399,  became  operative. 
The  court  holds  that  the  fact  that  the  property  was  in  New  York 
when  the  statute  of  1892  went  into  effect  does  not  make  it  subject 
to  tax,  as  this  would  render  the  statute  retroactive.  "If  the  right 
of  taxation  because  of  decease  does  not  exist  at  the  time  of  death, 
it  never  can  be  thereafter  imposed  upon  the  ground  of  such  death." 

In  re  Pettit,  171  N.  Y.  654,  63  N.  E.  1121,  affirming  65  N.  Y.  App.  Div.  30, 
72  N.  Y.  Suppl.  469. 

Sec.  82.     Constitution    Inapplicable    to    Conditions    Prior 
to  Its  Enactment. 

The  Louisiana  constitution  of  1898  provided  that  the  inheritance 
tax  could  not  be  enforced  when  the  property  in  question  shall  have 
borne  its  just  proportion  of  taxes  prior  to  that.  These  provisions 
and  the  provisions  of  the  Louisiana  statutes  carrying  these  articles 
of  the  constitution  into  effect  do  not  extend  or  reach  back  to  condi- 
tions anterior  to  the  constitution  itself,  and  where  taxes  due  in 
1878  and  1883  on  certain  lands  had  not  been  paid  the  collector 
urged  that  it  made  no  difference  how  far  back  in  the  past  the  failure 
to  pay  taxes  may  have  occurred  nor  who  the  owners  of  the  lot 
may  have  been  at  that  time;  but  the  court  holds  that  taxes  due 
before  the  passage  of  the  constitution  do  not  affect  the  question 
of  inheritance  tax. 

Succession  of  Westfeldt,  122  La.  Ann.  836,  48  S.  281. 


76  INHERITANCE  TAX  LAW.  [§§83-85- 

Sec.  83.    Effect  of  a  Subsequent  Treaty. 

The  validity  of  an  inheritance  tax  levied  under  the  laws  of 
Louisiana  upon  the  estate  of  one  who  died  in  1848  is  not  affected 
by  a  treaty  between  the  United  States  and  France,  ratified  in 
1853,  providing  that  Frenchmen  shall  in  no  case  be  subject  to  taxes 
on  transfers,  inheritances  or  others,  different  from  those  paid  by 
the  citizens  of  the  United  States.  The  court  holds  that  the  tax 
vested  in  the  state  at  the  death  of  testator,  and  that  the  property 
vested  in  the  petitioner  at  that  time  as  heir,  and  that  therefore 
the  treaty  had  no  effect  upon  it. 

Prevost  V.  Greneaux,  19  How.  1, 

Sec.  84.    Gifts  Inter  Vivos. 

An  inheritance  tax  is  not  retroactive  to  cover  prior  gifts  inter 
vivos  made  before  the  passage  of  the  act.^  In  a  New  York  case  the 
deceased  executed  a  trust  deed  in  1875  transferring  all  his  property 
to  trustees  in  contemplation  of  his  then  pending  marriage,  by  the 
terms  of  which  the  net  income  of  all  the  property  was  made  pay- 
able to  the  deceased  for  his  life  and  at  his  death  the  principal  was 
to  be  paid  to  his  widow  and  the  issue  of  the  marriage.  The  de- 
ceased died  in  1901.  The  marriage  took  place  before  1885.  The 
right  as  a  property  right  to  take  the  gifts,  when  the  time  for 
possession  and  enjoyment  arrived,  had  fully  accrued  at  the  marriage 
and  the  birth  of  the  children,  free  from  any  existing  tax;  subse- 
quent legislation  imposing  such  a  tax  must  be  considered  uncon- 
stitutional. No  reservation  being  made  of  the  power  of  revocation, 
it  became  operative  and  effective  as  a  grant  upon  execution  and 
delivery,  wholly  irrespective  of  the  time  when  possession  was 
to  be  given  and  the  estate  conveyed  .^ 

1  In  re  Birdsall,  22  Misc.  Rep.  180,  49  N.  Y.  Suppl.  450,  2  Gibbons  293. 
2/w  re  Craig,  181  N.  Y.  551,  74  N.  E.  1116,  affirming  97  N.  Y.  App.  Div.  289, 
89  N.  Y.  Supp.  971.     See  also,  Lacey  v.  Treasurer  (Iowa,  1911),  132  N.  W.  843. 

Sec.  85.     Remainder    Interests    Vested    before    Passage    of 
Statute. 

No  tax  accrues  on  a  vested  remainder  where  the  testator  dies 
before  the  passage  of  the  statute  and  the  life  tenant  dies  after- 
wards,^ and  so  of  a  contingent  interest  ,2  or  of  a  legacy  to  be  paid 
when  the  legatee  reaches  twenty-one,^  or  of  vested  remainders 
under  a  contract.* 


§85.]  RETROACTIVE  LEGISLATION.  77 

An  attempt  to  lay  such  a  tax  in  New  York  was  held  void  so  far 
as  the  remainders  had  vested,  the  court  remarking:  **In  the  case 
before  us  it  is  an  undisputed  fact  that  these  remainders  had  vested 
in  1863,  and  the  only  contingency  leading  to  their  divesting  was 
the  death  of  a  remainderman  in  the  lifetime  of  the  life  tenant,  in 
which  event  the  children  of  the  one  so  dying  would  be  substituted. 
If  these  estates  in  remainder  were  vested  prior  to  the  enactment 
of  the  Transfer  Tax  Act  there  could  be  in  no  legal  sense  a  transfer 
of  the  property  at  the  time  of  possession  and  enjoyment.  This 
being  so,  to  impose  a  tax  based  on  the  succession  would  be  to 
diminish  the  value  of  these  vested  estates,  to  impair  the  obligation 
of  a  contract  and  take  private  property  for  public  use  without 
compensation.^ 

1  Miller  v.  McLaughlin,  141  Mich.  425,  104  N.  W.  777,  12  Detroit  Leg.  N.  601. 
In  re  Forsyth,  10  Misc.  Rep.  477,  32  N.  Y.  Suppl.  175.  In  re  Travis,  19  Misc. 
Rep.  393,  44  N.  Y.  Suppl.  349,  2  Gibbons  91.  In  re  Meyer,  83  N.  Y.  App. 
Div.  381,  82  N.  Y.  Suppl.  329.  In  re  Hitchins,  43  Misc.  485,  89  N.  Y.  Suppl. 
472  (vested  through  defeasible  interest  in  remainder).  In  re  Backhouse,  185 
N.  Y.  544,  77  N.  E.  1181,  affirming  110  N.  Y.  App.  Div.  737.  96  N.  Y.  Suppl. 
466.  In  re  Langdon,  153  N.  Y.  6,  46  N.  E.  1034,  11  N.  Y.  App.  Div.  220,  43 
N.  Y.  Suppl.  419.  Vanderbilt  v.  Eidman,  196  U.  S.  480,  501,  25  S.  Ct.  331,  49 
L.  Ed.  563.  See,  however,  Cahen  v.  Brewster,  203  U.  S.  543,  551,  27  S.  Ct.  174. 
51  L.  Ed.  310,  affirming  115  La.  378,  395,  more  fully  reported,  ante,  s.  75. 

Where  the  children  of  the  testator  took  vested  interests  subject  to 
open  and  let  in  after-born  children  on  the  one  hand,  and  on  the  other  hand 
subject  to  be  defeated  by  death  without  issue,  it  is  obvious  that  a  right  of  suc- 
cession to  the  estates  in  remainder  passed  at  once  on  the  death  of  the  testator; 
and  where  the  testator  died  in  1876,  these  remainder  interests  were  not  subject 
to  the  inheritance  tax. 

The  court  distinguishes  In  re  Curtis,  142  N.  Y.  219,  on  the  ground  that  that 
case  did  not  decide  as  claimed  that  such  remainder  interests  were  taxable  when 
they  became  beneficial  interests.  It  was  claimed  that  the  beneficial  interests 
did  not  pass  until  the  termination  of  the  life  estates.  And  the  court  says  that 
in  one  sense  that  is  true,  but  says  that  a  necessary  delay  in  appraisal  as  pro- 
vided for  by  the  statute  of  1892  is  a  very  different  matter  from  the  provision 
that  no  beneficial  right  of  succession  passed  at  all  until  after  the  death  of  the 
life  tenants.  To  include  such  cases  would  give  the  statute  a  retrospective  opera- 
tion and  subject  to  taxation  rights  of  succession  which  accrued  before  the  statute 
came  into  existence.  To  say  that  no  beneficial  interest  passed  into  hands  where 
it  was  taxable  is  very  different  from  saying  that  no  beneficial  interest  passed 
at  all.    In  re  Seaman,  147  N.  Y.  69,  41  N.  E.  401,  reversing  87  Hun  619. 

^Eury  v.  State,  72  Ohio  St.  448,  454,  74  N.  E.  650. 

^In  re  Cogswell,  4  Dem.  Surr.  (N.  Y.)  248. 
^Lacey  v.  Treasurer  (Iowa,  1911),  132  N.  W.  843. 

^  Per  Bartlett,  J.,  in  In  re  Pell,  171  N.  Y.  48,  55,  63  N.  E.  789,  57  L.  R.  A. 
648,  89  Am.  St.  Rep.  791,  reversing  60  N.  Y.  App.  Div.  286,  70  N.  Y.  Suppl.  196. 


78  INHERITANCE  TAX  LAW.  [§86. 

Sec.  86.    Curative  Act. 

A  curative  act  to  heal  a  constitutional  flaw  in  a  statute  may  be 
retrospective  in  its  operation/  except  possibly  where  it  would  operate 
on  real  estate,  the  title  to  which  has  passed  to  the  devisee.^ 

1  Although  a  judgment  restraining  the  collection  of  an  inheritance  tax  on  the 
ground  that  the  statute  was  unconstitutional  has  been  obtained,  still  the  legis- 
lature may  thereupon  cure  the  defect  in  the  statute  by  a  retroactive  amendment 
to  it,  and  the  supreme  court  may  then  reverse  the  judgment  and  permit  the  tax 
to  be  collected.  A  judgment  is  not  of  itself  a  contract  in  a  constitutional  sense 
so  that  its  effect  cannot  be  taken  away  by  legislation.  Ferry  v.  Campbell,  110 
Iowa  290,  81  N.  W.  604,  50  L.  R.  A.  92. 

2  Herriott  v.  Potter,  115  Iowa  648,  89  N.  W.  91. 


^  CHAPTER  XVII. 


REPEAL  OR  AMENDMENT. 

§  87.  What  Law  Governs. 

§  88.  Amendment  Extending  Exemptions. 

§  89.  Amendment  without  Repeal. 

§  90.  Amendment  does  not  Affect  Validity  of  Tax  already  Imposed. 

§  91.  Repealing  Act  a  Continuation  of  Earlier  Act. 

§  92.  Under  California  Constitution  Prohibiting  Surrender  of  Pub- 
lic Rights. 

1  93.  Implied  Repeal  by  New  Complete  Act  or  Revenue  Law. 
§  94.  Repeal  Prevents  Subsequent  Recovery  of  Taxes  Due. 

§  95.     Income  Due  after  Repeal. 

§  96.    Effect  of  Repeal  after  Appeal  Taken. 

§  97.     Saving  Clause. 

Sec.  87.    What  Law  Governs. 

The  tax  is  governed  by  the  statute  in  force  at  the  death  of  the 
testator,  although  this  may  be  repealed^  or  amended  before  the 
imposition  of  the  tax.^  An  attempted  amendment  by  an  uncon- 
stitutional statute  does  not  affect  the  original  act.^ 

^Quessart  v.  Canonge,  3  La.  560. 

La.  St.  1828,  enacting  a  ten  per  cent  tax,  was  repealed  in  1830,  but  in  the 
meantime  the  testator  had  died  and  the  tax  was  held  properly  charged  upon  the 
estate.  Whatever  may  be  the  effect  of  the  repeal  of  a  law  in  criminal  matters, 
it  leaves  all  civil  rights  acquired  under  the  law  unaffected.  A  tax  cannot  be 
assimilated  to  a  forfeiture  which  presupposes  an  offence.  Arnaud  v.  Arnaud, 
3  La.  336. 

2  Warrimer  v.  People,  6  Dem.  Sum  (N.  Y.)  211.  In  re  Moore,  90  Hun  162, 
35  N.  Y.  Suppl.  782. 

^Eastwood  v.  Russell  (N.  J.  1911),  81  A.  108. 

Sec.  88.    Amendment  Extending  Exemptions. 

An  amendment  extending  exemptions  has  no  effect  on  an  estate 
of  one  dying  before  the  passage  of  the  amending  act  unless  expressly 
so  provided. 

Provident  Hospital  &  Training  Assn.  v.  People,  198  111.  495.  Connell  v. 
Crosby,  210  111.  380,  71  N.  E.  350.  In  re  Ryan,  3  N.  Y.  Suppl.  136.  In  re 
Thompson,  14  N.  Y.  St.  Rep.  487.  In  re  Arnett,  49  Hun  599,  18  N.  Y.  St. 
576,  2  N.  Y.  Suppl.  428.  In  re  Wolfe,  66  Hun  389,  29  Abb.  N.  Gas.  340,  21 
N.  Y.  Suppl.  515,  affirming  15  N.  Y.  Suppl.  539  (s.  c.  137  N.  Y.  205,  33  N.  E. 
156),  where  the  assessment  had  been  completed  before  the  amendment. 


80  INHERITANCE  TAX  LAW.  [§§89-91. 

The  fact  that  the  language  in  the  statute  of  1887  declares  that  the  statute 
of  1885  "is  amended  so  as  to  read  as  follows"  is  immaterial,  as  is  also  the  fact 
that  the  statute  of  1887  closes  with  the  words  "all  acts  and  parts  of  acts  incon- 
sistent with  the  provisions  of  this  act  are  hereby  repealed."  In  re  Miller,  110 
N.  Y.  216,  223,  18  N.  E.  139,  affirming  47  Hun.  394.  See  Kissam's  Estate, 
3  N.  Y.  Suppl.  135,  6  Dem.  Surr.  171.  Cf.  In  re  Ryan,  3  N.  Y.  Suppl.  136.  See 
also  In  re  Stanford's  Estate,  126  Cal.  112,  58  P.  462,  45  L.  R.  A.  788.  Mon- 
tague V.  State,  54  Md.  481.     See  ante,  s.  79. 


Sec.  89.    Amendment  without  Repeal. 

An  amendment  in  the  absence  of  repeal  operates  to  render  the 
law  continuous,  with  the  result  that  a  tax  accrued  under  the  former 
law  remains  unaffected. 

Succession  of  Pritchard,  118  La.  Ann.  883,  43  S.  537.  In  re  Prime,  136  N.  Y. 
347,  355,  32  N.  E.  1091,  18  L.  R.  A.  713,  affirming  64  Hun  50. 


Sec.  90.    Amendment    does    not    AfEect    Validity    of    Tax 
Already  Imposed. 

An  amendment  will  not  of  itself  affect  the  validity  of  a  tax 
imposed  under  a  prior  act. 

Provident  Hospital  &f  Training  Assn.  v.  People,  198  111.  495.  In  re  Cager,  111 
N.  Y.  343,  347,  19  N.  Y.  St.  497,  18  N.  E.  866,  affirming  46  Hun  657. 

Estate  of  Stanford,  126  Cal.  112,  58  P.  462,  45  L.  R.  A.  788,  is  explained  as 
not  holding  that  the  law  in  question  provides  that  the  state  shall  succeed  as 
heir  in  certain  classes  of  cases  to  five  per  cent  of  the  property  of  the  decedent. 
The  real  meaning  and  effect  of  the  decision  is  that  the  law  establishes  the  suc- 
cession tax  in  certain  cases  and  that  the  right  of  the  state  to  such  tax  vests 
immediately  upon  the  death  of  the  ancestor  or  testator,  and  hence  that  the 
repeal  of  the  law  does  not  affect  the  right  of  the  state  to  the  tax.  In  re  Martin's 
Estate,  153  Cal.  225,  94  P.  1053.     In  re  Bowen's  Estate  (Cal.  1908),  94  P.  1055. 


Sec.  91.    Repealing  Act  a  Continuation  of  Earlier  Act. 

So  far  as  the  later  act  is  the  same  or  similar  to  the  earlier,  the 
later  is  to  be  construed  a  continuance  of  the  other  and  all  pro- 
visions inconsistent  are  repealed. 

In  re  Howard,  80  Vt.  489,  68  A.  513.  See  In  re  Jones,  54  Misc.  202,  105 
N.  Y.  Suppl.  932. 

Cal.  St.  1905,  c.  314,  substantially  enacted  the  provisions  of  the  former  law 
respecting  the  payment  and  collection  of  succession  taxes,  and  was  done  with 
the  knowledge  of  the  existence  of  certain  uncollected  taxes  and  with  the  intent 
to  continue  in  force  a  mode  and  means  for  their  collection.  And  the  court  has 
the  authority  under  this  statute  to  order  the  executor  to  deduct  from  certain 


§§92-94.]  REPEAL  OR  AMENDMENT.  81 

legacies  the  amount  of  the  tax,  especially  in  view  of  St.  1905,  c.  85,  to  the  effect 
that  the  court  must  be  satisfied  that  any  inheritance  tax  has  been  paid  before 
any  decree  or  distribution  of  an  estate  is  made.  In  re  Bowen's  Estate  (Cal. 
1908),  94  P.  1055. 

The  provision  of  s.  8  of  the  act  of  1893,  that  the  estate  shall  not  be  distributed 
until  the  administrator  produces  a  receipt  showing  that  a  tax  has  been  paid,  is 
also  found  in  s.  11  of  the  repealing  act  of  1905.  This  provision  is  therefore 
simply  continued  in  force  by  the  act  of  1905,  and  therefore  the  estate  of  one 
who  died  before  the  repealing  act  was  passed  cannot  be  distributed  until  the 
tax  is  paid.  After  the  repealing  act  went  into  effect  the  repealing  act  could 
not  renounce  the  vested  right  of  the  state  to  the  inheritance  tax.  In  re  Lander, 
6  Cal.  App.  744,  93  P.  202. 


Sec.  92.    Under   California   Constitution  Prohibiting  Sur- 
render of  Public  Rights. 

The  California  constitution  prohibiting  any  surrender  of  property 
due  the  state  prevents  the  operation  of  a  repealing  act  upon  it. 

In  re  Stanford's  Estate,  126  Cal.  112,  58  P.  462,  45  L.  R.  A.  788.  In  re  Lander, 
6  Cal.  App.  744,  93  P.  202.  In  re  Martin's  Estate,  153  Cal.  225,  94  P.  1053.  In  re 
Bowen's  Estate  (Cal.  1908),  94  P.  1055. 

The  right  of  the  state  to  the  inheritance  tax  under  the  law  of  1893  is  immedi- 
ately upon  the  death  of  the  decedent  a  vested  right  which  cannot  be  surrendered 
by  a  legislative  act  and  no  amendment  or  extension  can  take  away  this  right. 
So  a  tax  due  before  the  statute  of  1905  was  passed  can  be  collected  after  it  is 
passed.     Trippet  v.  State,  149  Cal.  521,  86  P.  1084,  8  L.  R.  A.  (N.  S.)  1210. 


Sec.  93.     Implied  Repeal  by  New  Complete  Act  or  Revenue 
Law. 

A  statute  purporting  to  cover  the  whole  subject  of  inheritance 
taxes  is  a  substitute  and  impliedly  repeals  the  existing  law.^  The 
Tennessee  inheritance  law  of  1893  was  repealed  by  the  general 
revenue  law  passed  later  on  the  same  day ,2  and  revived  by  the 
omission  of  inheritance  taxes  from  the  general  revenue  acts  of  1895 
and  1897.3 

^Succession  of  Frigalo,  123  La.  Ann.  71,  48  S.  652. 

The  court  holds  that  the  Virginia  statute  of  1856,  imposing  taxes,  is  a  perfect 
tax  law  imposing  all  taxes  intended  to  be  imposed  for  the  support  of  the  govern- 
ment, but  it  omitted  the  tax  on  collateral  inheritances  for  the  purpose  of  dis- 
continuing it,  and  therefore  it  repealed  by  implication  the  existing  inheritance 
law.    Fox  V.  Commonwealth,  16  Gratt.  (Va.)  1. 

^Bailey  v.  Drane,  96  Tenn.  (12  Pickle)  16,  33  S.  W.  573. 

^Zickler  V.    Union  Bank  &'  Trust  Co..  104  Tenn.  277.  57  S.  W.  341. 


82  INHERITANCE  TAX  LAW.  [§§95-97. 

Sec.  94.    Repeal  Prevents  Subsequent  Recovery  of  Taxes  Due. 

No  proceedings  can  be  maintained  after  repeal  in  the  absence 
of  a  saving  clause  to  collect  a  tax  accrued  before  repeal. 

Friend  v.  Levy,  76  Ohio  St.  26,  51,  80  N.  E.  1036. 

The  Maryland  code,  ss.  106,  107,  was  amended  by  Md.  St.  1860,  c.  163,  pro- 
viding that  where  the  executor  renounced  his  commission  he  shall  not  be  taxed 
thereon.  Where  the  repealing  section  was  enacted  before  the  passage  of  the 
executor's  account,  the  executor,  having  renounced  his  commission,  was  not 
liable  to  the  state  tax  of  ten  per  cent  on  such  commissions.  Owings  v.  State, 
22  Md.   116. 

Sec.  95.    Income  Due  after  Repeal. 

Income  to  be  received  only  after  the  repeal  is  not  subject  to  tax. 

Union  Trust  Co,  of  San  Francisco  v.  Lynch,  148  Fed.  49,  affirmed  164  Fed. 
161,  90  C.  C.  A.  147,  214  U.  S.  523,  29  S.  Ct.  702,  53  L.  Ed.  1067. 

Sec.  96.    Effect  of  Repeal  after  Appeal  Taken. 

Where  a  new  law  was  passed  in  California  in  1905,  after  a  case 
was  taken  to  the  supreme  court  at  Washington  repealing  the 
prior  statutes  without  any  clause  saving  the  right  of  the  state  in 
respect  to  charges  already  accrued  to  the  state,  the  court  was 
asked  to  reverse  the  judgment  of  the  California  court  on  the  ground 
that  the  state  no  longer  had  any  authority  whatever  to  levy  an 
inheritance  tax.  The  supreme  court  holds  that  it  is  its  duty  to 
decide  the  federal  question  and  to  leave  the  local  question  to  the 
supreme  court  of  California. 

Campbell  v.  California,  200  U.  S.  87,  26  S.  Ct.  182,  50  L.  Ed.  382. 

Sec.  97.    Saving  Clause. 

A  saving  clause  is  often  inserted  in  a  repeal,  preserving  all  taxes 
due  under  the  repealed  statute.^ 

The  fact  that  under  the  United  States  statute  of  1898  the  tax 
was  not  due  and  payable  for  a  year  after  the  death  of  the  testator 
does  not  free  the  estate  from  the  tax  where  the  testator  died  within 
a  year  before  the  passage  of  the  repealing  act  of  1902.  The  testa- 
tor died  March  15,  1902.  An  inheritance  tax  was  paid  January 
17,  1905.  The  saving  clause  of  section  8  of  the  act  of  1902,  that 
all  taxes  or  duties  imposed  prior  to  the  taking  effect  of  that  act 
shall  be  subject  to  the  provisions  of  section  30  of  the  statute  of 
1898,  operated  to  save  a  vested  right  to  the  immediate  possession 
or  enjoyment  of  a  legacy .^ 


§  97.]  REPEAL  OR  AMENDMENT.  83 

A  very  peculiar  result  was  reached  in  Vermont  recently.  The 
testator  died  June  1,  1904,  and  Vermont  statute  1904,  c.  30,  took 
effect  December  9,  1904.  It  was  claimed  that  the  estate  was  not 
affected  by  the  statute  of  1904,  but  the  court  says  that  so  far  as 
the  provisions  of  the  two  acts  are  the  same  or  similar,  the  later 
act  is  to  be  construed  as  a  continuance  of  the  other,  and  all  acts 
or  parts  of  acts  inconsistent  with  the  provisions  of  the  later  act 
were  repealed.  But  such  repeal  was  not  to  affect  the  validity  of 
a  tax  accrued  or  accruing  at  the  time  of  the  enactment  thereof, 
and  the  court  finds  that  since  the  law  of  1896  did  not  include 
debts  due  from  non-residents,  the  tax  here  in  controversy  was  not 
accrued,  nor  was  it  accruing  before  the  provisions  of  the  new  act, 
including  such  debts,  took  effect,  and  therefore  the  estate  was  sub- 
ject to  the  statute  of  1904.^ 

Effect  of  Saving  Clause  on  Remainders. — A  saving  clause  in  a 
repeal  saving  all  rights  which  had  accrued  will  not  save  remain- 
ders where  the  life  tenant  died  after  the  repeal,  as  the  words 
include  only  cases  where  the  legacy  is  actually  demandable,*  and 
the  same  result  is  reached  where  the  legacy  is  only  payable  on 
the  legatee  reaching  a  certain  age  which  accrues  after  the  re- 
peal ,5  or  where  the  estate  was  not  settled  till  after  the  repeal.^ 

Clause  Saving  only  Estates  where  Inventory  Already  Filed. — A 
provision  that  the  statute  be  repealed,  "except  as  to  estates 
in  which  the  inventory  has  already  been  filed  at  the  date  of  the 
passage  of  this  act,"  is  unequal  and  therefore  void  within  the 
decision  in  State  v.  Ferris,  53  Ohio  St.  314.^ 

^  Hertz  V.  Woodman,  218  U.  S.  205,  224,  30  S.  Ct.  621. 

"If  the  repealer  was  without  any  saving  clause,  there  could  be  no  doubt  that 
the  tax  in  question  would  be  invalid,  because  such  a  repealer  would  abolish  the 
machinery  by  which  the  assessment  could  be  laid,  and  such  special  taxes  as 
these  can  only  be  imposed  by  the  machinery  provided  by  the  legislature."  Hoyt 
V.  Hancock,  65  N.  J.  Eq.  688,  55  A.  1004.  See,  however,  In  re  Jones,  54  Misc. 
202,  105  N.  Y.  Suppl.  932,  holding  that  assessment  could  be  made  under  a  law 
repealed  without  a  saving  clause  under  the  general  statutory  construction  law. 

^  Hertz  v.  Woodman,  218  U.  S.  205,  30  S.  Ct.  621. 

Contra,  McCoach  v.  Bamberger,  161  Fed.  90,  affirming  142  Fed.  120,  73  C.  C. 
A.  610.  Tilghman  v.  Eidman,  131  Fed.  651,  affirmed  in  203  U.  S.  580,  27  S.  Ct. 
779,  51  L.  ,R.  A.  326.  United  States  v.  Marion  Trust  Co.,  205  U.  S.  539,  27  S.  Ct. 
794,  51  L.  Ed.  119,  affirming  142  Fed.  120,  73  C.  C.  A.  610,  135  Fed.  866,  127 
Fed.  386.  United  States  v.  Marion  Trust  Co.,  143  Fed.  301,  74  C.  C.  A.  539, 
affirmed  in  206  U.  S.  566,  27  S.  Ct.  794,  51  L.  Ed.  1191.  United  States  v.  Stephen- 
son, 212  U.  S.  572. 

'7w  re  Howard,  80  Vt.  489,  68  A.  513. 


84  INHERITANCE  TAX  LAW.  [§97. 

^Clapp  V.  Mason,  94  U.  S.  589,  24  L.  Ed.  212,  Fed.  Cas.  9233.  Mason  v. 
Sargent,  104  U.  S.  689,  20  L.  Ed.  894.  United  States  v.  Rankin,  3  McCrary  113, 
8  Fed.  872.  United  States  v.  Hazard,  8  Fed.  380.  United  States  v.  Brice,  8  Fed. 
381.    See   United  States  v.  Townsend  (1881),  14  Phila.  (Pa.)  493,  8  Fed.  306. 

5  United  States  v.  New  York  Ins.  &f  Trust  Co.,  9  Ben.  413,  Fed.  Cas.  15,  873 
Sturges  V.   United  States,  117  U.  S.  363. 

8  United  States  v.  Kelley,  28  Fed.  845. 

'  Fmn<i  V.  Levy,  76  Ohio  St.  26,  49,  80  N.  E.  1036. 


CHAPTER  XVIII. 


TRANSFERS  OTHER  THAN  BY  WILL. 

§   98.  Transfers  Inter  Vivos  and  Causa  Mortis. 

§   99.  What  Law  Governs  Deed. 

§  100.  Interests  under  Deed  Dependent  on  Death. 

§  101.  Deed  Dependent  on  Will. 

§  102.  Trust  Deed. 

§  103.  Trust  Imposed  by  Extrinsic  Evidence. 

§  104.  Sale. 

§  105.  Joint  Deposit. 

§  106.  Compromise  of  Interests  under  Will. 

§  107.  Interest  in  Insurance  or  Beneficial  Society. 

§  108.  Curtesy  or  Dower,  Statutory  Rights  of  Surviving  Spouse. 

§  109.  Rights  in  Community  Property. 

§  110.  Homestead. 

Sec.  98.    Transfers  Inter  Vivos  and  Causa  Mortis. 

The  inheritance  tax  acts  commonly  cover  transfers  inter  vivos 
made  in  contemplation  of  death, ^  and  include  gifts  causa  mortis,'^ 
but  are  not  limited  to  gifts  causa  mortis.^ 

1  Under  111.  St.  1895,  p.  301,  s.  1,  a  gift  may  be  subject  to  tax  if  made  in  contem- 
plation of  the  death  of  the  donor  although  the  transfers  were  absolute  and  were 
accepted  by  the  donees  who  entered  into  possession  and  ownership  of  the  prop- 
erty transferred  and  after  the  transfers  the  donor  had  no  interest  in  property. 
It  was  claimed  that  a  gift  causa  mortis  is  a  transfer  of  property  made  without 
consideration  in  contemplation  of  death,  and  that  the  stipulation  that  the  gift 
was  absolute  prevents  it  from  being  a  gift  causa  mortis.  But  the  court  finds  that 
as  the  gifts  were  made  in  contemplation  of  death  they  were  gifts  inter  vivos  made 
in  contemplation  of  death  and  within  the  designation  of  gifts  causa  mortis.  Mer- 
rifield  v.  People,  212  111.  400,  72  N.  E.  446. 

A  deposit  in  a  savings  bank  in  trust  for  another  is  taxable  so  far  as  it  represents 
deposits  made  by  the  decedent  out  of  his  own  funds,  but  not  so  far  as  ic  was  con- 
tributed by  a  third  party.    In  re  Rosenberg,  114  N.  Y.  Suppl.  726. 

Un  re  Edwards,  146  N.  Y.  380,  41  N.  E.  89,  affirming  85  Hun  436,  66  N.  Y. 
St.  Rep.  231,  32  N.  Y.  Suppl.  901. 

[Interests  under  trusts,  see  post,  s.  235.] 

^In  re  Benton,  234  111.  366,  84  N.  E.  1026.  In  re  Birdsall,  22  Misc.  Rep.  180, 
49  N.  Y.  Suppl.  450,  462,  2  Gibbons  293.  In  re  Palmer,  117  N.  Y.  App.  Div. 
360,  102  N.  Y.  Suppl.  236.     In  re  Price,  62  Misc.  149,  116  N.  Y.  Suppl.  283. 


86  INHERITANCE  TAX  LAW.  [§§  99-100. 

Sec.  99.    What  Law  Governs  Deed. 

A  trust  deed  for  the  grantor  for  life  with  remainder  over  to 
others  constitutes  a  transfer  to  the  remaindermen  at  the  date  of 
the  execution  of  the  deed  and  is  governed  by  the  law  in  force  at 
that  time. 

In  re  Craig,  181  N.  Y.  551,  74  N.  E.  1116,  affirming  97  N.  Y.  App.  Div.  289, 
89  N.  Y.  Suppl.  971. 

The  testator  conveyed  property  in  trust  to  assign  the  property  as  the  grantor 
might  by  last  will  appoint,  and  for  want  of  such  appointment  to  her  heirs,  reserv- 
ing no  right  of  revocation  in  the  deed.  The  deed  was  signed  in  1857  in  Pennsyl- 
vania and  subsequently  the  grantor  moved  to  New  York,  where  she  lived  until  her 
death  in  1885.  The  court  holds  that  this  is  a  deed  intended  to  take  effect  after 
the  death  of  the  grantor,  within  the  meaning  of  the  statute  of  1826.  Common- 
wealth V.  Kuhn,  2  Pa.  Co.  Ct.  248. 

See  further,  ante,  ss.  25,  26. 

Sec.  100.     Interests  under  Deed  Dependent  on  Death. 

A  deed  is  not  subject  to  tax  unless  it  is  dependent  on  the  death 
of  the  grantor  and  to  take  effect  at  his  death. ^ 

It  seems  to  be  clear  that  w^here  the  statute  taxes  generally 
transfers  "on  death,"  this  subjects  to  taxation  interests  under  a 
deed  where  the  interests  depend  upon  and  date  from  the  death  of 
the  grantor ,2  although  the  beneficiary  may  have  possession  and  en- 
joyment of  the  income  before  the  death  of  the  decedent.^  The 
same  result  is  reached,  of  course,  where  the  interests  depend  on  two 
contemporaneous  instruments  construed  together  as  one.^ 

^ Where  a  grantor  made  a  deed  of  an  undivided  three-fourths  interest  of  land 
to  a  brother  and  two  sisters,  reserving  a  one-fourth  interest  to  himself,  and  deliv- 
ered it  to  a  third  person  with  instructions  to  record  it  and  sell  the  land  and  divide 
the  proceeds  equally  among  the  grantees  and  himself,  and  he  died  before  it  was 
recorded  or  the  land  sold,  the  deed  is  not  one  taking  effect  in  possession  or  enjoy- 
ment after  the  death  of  the  grantor  and  is  therefore  not  subject  to  the  inheritance 
tax.  The  statute  relates  plainly  to  estates  granted  in  deeds  or  conveyances  which 
in  some  way  make  the  estate  granted  dependent  on  the  grantor's  death;  that  is, 
to  interests  in  real  estate  the  possession  or  enjoyment  of  which  is  postponed  until 
after  the  death  of  the  grantor.  The  deed  in  question  contained  no  reference  to 
the  death  of  the  grantor  and  there  was  nothing  in  the  conveyance  which  indi- 
cates that  it  was  the  grantor's  purpose  to  postpone  possession  or  enjoyment  of 
the  interests  granted  until  after  his  death.  In  re  Bell,  (Iowa,  1911,)  130  N.  W. 
798. 

2/»  re  Line,  155  Pa.  St.  378,  393,  26  A.  728,  32  Wkly.  Notes  Cas.  376.  The 
court  quotes  with  approval  DuBois's  Appeal,  121  Pa.  St.  386. 

In  re  Maris,  14  Pa.  Co.  Ct.  171,  3  Pa.  Dist.  33.    (1893.) 

The  testator  made  his  will  December  1,  1881,  bequeathing  his  estate  to  cer- 
tain collateral  relatives  and  for  religious  and  charitable  purposes.    August  14, 


§  100.]  TRANSFERS  OTHER  THAN  BY  WILL.  87 

1882,  he  executed  a  deed,  assigning  all  his  property  to  trustees  for  their  own  use 
and  benefit  during  his  life,  and  at  his  death  to  hold  the  same  for  the  uses  and  pur- 
poses of  his  will.  The  court  holds  that  the  property  is  subject  to  a  collateral  in- 
heritance tax,  as  the  deed  was  not  to  take  effect  in  enjoyment  until  after  the  death 
of  the  testator.    Appeal  of  Seibert,  110  Pa.  St.  329,  1  A.  346. 

Where  the  decedent  transferred  her  property  to  trustees  in  trust  to  collect 
the  income  and  apply  the  same  to  her  use  during  her  life  and  after  her  death  to 
divide  and  pay  over  the  same  and  the  proceeds  among  her  three  nieces,  reserving 
the  power  to  modify  the  instrument,  the  court  holds  that  it  is  not  important  to 
determine  whether  the  trust  instrument  was  made  in  contemplation  of  death. 
The  real  question  is  whether  the  remainders  which  the  nieces  took  were  intended 
to  "take  effect  in  possession  or  enjoyment"  at  or  after  the  death  of  the  donor. 
And  the  court  holds  that  it  is  quite  clear  that  these  nieces  did  take  by  an  instru- 
ment intended  to  take  effect  at  or  after  the  death  of  the  donor.  In  re  Green,  153 
N.  Y.  223,  47  N.  E.  292,  reversing  7  N.  Y.  App.  Div.  339. 

3  Where  a  trustee  gives  the  income  of  his  estate  to  beneficiaries  for  life  and  the 
principal  to  them  at  his  death,  it  is  as  to  the  principal  a  transfer  intended  to  take 
effect  at  the  death,  and  hence  subject  to  the  inheritance  tax.  In  re  Patterson, 
127  N.  Y.  Suppl.  284. 

In  1893  the  decedent  deposited  certain  sums  of  money  with  a  trust  company 
under  a  trust  agreement  that  the  income  was  to  be  paid  to  a  certain  third  party 
and  at  the  expiration  of  five  years  from  the  date  of  the  agreement  the  decedent 
might  withdraw  the  whole  trust  fund  by  giving  the  company  written  notice  of 
an  intention  so  to  do  six  months  before  that  time,  and  the  company  could  pay 
off  the  trust  fund  if  it  chose  by  giving  him  a  like  notice  of  its  intention.  If  no  no- 
tice was  given  by  either  party,  the  trust  fund  was  to  remain  during  another  term 
of  five  years  and  the  right  of  withdrawing  or  paying  off  the  principal  sum  might 
be  exercised  at  intervals  of  five  years  from  the  date  of  the  agreement.  In  case 
of  the  death  of  the  decedent  before  the  termination  of  the  trust,  the  trust  fund  was 
to  be  payable  to  a  certain  third  party.  The  decedent  died  before  the  trust  fund 
was  terminated  and  the  court  holds  that  a  tax  is  due  on  the  transfer  to  the  third 
party.  The  court  holds  that  this  gift  was  intended  to  take  effect  in  possession 
or  enjoyment  after  the  death  of  the  grantor,  as  the  beneficiary  could  have  no  pos- 
session or  enjoyment  of  the  principal  until  after  his  death;  and  the  fact  that  she 
had  possession  and  enjoyment  of  the  income  in  his  lifetime  makes  no  difference. 
The  income  and  principal  stood  each  by  itself  and  were  as  independent  of  each 
other  as  if  the  income  had  been  given  to  a  third  person.  The  property  is  subject 
to  a  tax  to  be  assessed  as  of  a  time  thirty  days  after  the  expiration  of  the  five 
years  referred  to  in  the  agreement  and  interest  is  to  be  paid  upon  the  tax  from  that 
time.     New  England  Trust  Co.  v.  Abbot,  205  Mass.  279,  91  N.  E.  379. 

*The  decedent  in  1893  transferred  to  his  four  daughters  eleven  shares  of  stock 
in  a  certain  company,  and  the  daughters  on  the  same  day  delivered  to  him  an  in- 
strument reciting  that  he  had  transferred  the  stock  on  condition  that  he  is  to 
receive  all  dividends  during  his  life,  and  also  on  condition  that  he  has  the  right 
to  vote  upon  the  stock  as  though  no  transfer  had  been  made.  The  agreement 
further  provided  that  it  was  not  revocable,  but  to  continue  in  full  force  until  the 
death  of  the  decedent.  The  court  holds  that  the  two  instruments  being  executed 
at  the  same  time  must  be  construed  together  as  a  single  instrument;  that  the 
effect  of  these  was  to  transfer  to  the  daughters  the  remainder  in  stock  after  the 


88  INHERITANCE  TAX  LAW.  [§§  101-104. 

donor's  death,  reserving  to  the  latter  an  estate  for  his  life.  The  court,  relying  on 
In  re  Green,  153  N.  Y.  223,  holds  that  this  is  a  gift  of  remainder  after  the  death 
of  the  donor  and  is  taxable  as  a  transfer  "intended  to  take  effect  in  possession  or 
enjoyment  at  or  after  such  death."  In  re  Brandeth,  169  N.  Y.  437,  62  N.  E.  563, 
58  L.  R.  A.  148,  reversing  58  N.  Y.  App.  Div.  575,  69  N.  Y.  Suppl.  142. 


Sec.  101.    Deed  Dependent  on  Will. 

Where  the  settlor  in  a  voluntary  trust  deed  reserves  the  right 
to  limit  in  his  will  the  terms  upon  which  the  beneficiaries  might 
enjoy  his  bounty,  and  he  does  make  a  will,  then  devolution  of  the 
property  takes  place  under  the  will. 

In  re  Douglass  County,  84  Neb.  506,  121  N.  W.  593. 

Sec.  102.    Trust  Deed. 

There  is  no  tax  where  property  is  placed  outright  in  trust  for 
another  not  dependent  on  death,  but  a  deed  in  trust  will  create 
taxable  interests  under  the  circumstances  indicated  in  the  follow- 
ing sections. 

Where  a  trust  deed  was  executed,  dated  December  1,  1892,  directing  the  trus- 
tees to  pay  the  net  income  to  the  guardian  of  a  certain  grandson  until  his  majority 
on  December  3,  1895,  when  the  principal  shall  be  paid  to  him,  this  was  not  sub- 
ject to  the  inheritance  tax.  In  re  Masury,  159  N.  Y.  532,  53  N.  E.  1127, 
affirming  28  N.  Y.  App.  Div.  580. 

Sec.  103.    Trust  Imposed  by  Extrinsic  Evidence. 

Where  a  legatee  took  a  legacy  impressed  with  a  trust  imposed 
by  facts  extrinsic  to  the  will,  for  purposes  exempt  from  taxation, 
the  legacy  is  still  taxable,  as  the  legatee  takes  under  the  will  the  legal 
title  and  the  equitable  rights  did  not  accrue  under  the  will  but 
from  extrinsic  evidence  alone. 

In  re  Edson,  159  N.  Y.  568,  54  N.  E.  1092,  affirming  38  N.  Y.  App.  Div.  19, 
56  N.  Y.  Suppl.  409. 

Sec.  104.    Sale. 

The  meaning  of  the  word  "sale"  as  used  in  the  Ohio  statute 
includes  only  transactions  which,  though  in  form  sales,  are  in  fact 
gifts.  Since  the  act  is  within  the  legislative  power  granted  and 
not  within  the  letter  or  spirit  of  any  limitation,  it  is  valid. 

Hagerty  v.  State,  55  Ohio  St.  613,  626,  45  N.  E.  1046,  affirming  12  C.  C.  R.  606. 


§§  105-106.1  TRANSFERS  OTHER  THAN  BY  WILL.  89 

Sec.  105.    Joint  Deposit. 

Where  the  husband  and  wife  deposited  money  in  a  savings  bank  in 
their  joint  names,  with  account  payable  to  either  or  survivor,  the 
wife  has  an  interest  in  the  deposit  to  give  her  an  equal  right  with 
him  to  withdraw  it  during  their  joint  lives  and  vests  her  with  the 
absolute  title  in  case  she  survives  him.  The  court  holds  that  in 
this  case  it  was  not  the  intention  of  either  party  to  divest  himself 
of  the  control  and  use  of  this  money  so  long  as  both  lived,  and 
that  the  accounts  were  entered  so  that  either  could  draw  money 
during  their  joint  lives  as  a  matter  of  convenience,  and  upon  the 
death  of  either  the  deposits  would  become  the  absolute  property 
of  the  survivor.  The  court  holds  that  the  husband  did  not  sur- 
render the  absolute  possession  and  dominion  of  the  money  in 
question  during  his  lifetime,  and  that,  although  there  was  no 
intention  on  the  part  of  the  parties  to  evade  the  transfer  tax  law, 
yet  as  the  transfer  had  not  become  absolute  until  the  death  of  the 
depositor  such  parts  of  the  different  deposits  as  were  not  the 
money  of  the  wife  when  deposited  are  taxable.^ 

A  joint  deposit  in  a  savings  bank  made  up  of  sums  which  were 
given  by  the  decedent  to  his  wife  is  not  taxable. ^ 

1  In  re  Kline,  65  Misc.  446,  121  N.  Y.  Suppl.  1090. 

Contra.  The  act  of  depositing  money  in  the  joint  names  of  the  husband  and 
wife  indicates  an  intent  to  invest  the  title  of  the  money  in  the  survivor,  and  the 
deposit  being  joint  is  in  the  nature  of  an  agreement  or  contract  between  the 
husband  and  wife,  is  not  testamentary  nor  does  it  depend  upon  the  intestacy  or 
testacy  of  the  decedent.  In  this  case  there  is  no  suggestion  that  the  joint  deposit 
was  made  with  intent  to  evade  the  transfer  tax.  The  survivorship  is  a  mere 
incident.  In  re  Stebbins,  52  Misc.  438,  103  N.  Y.  Suppl.  563.  In  re  Graves, 
52  Misc.  433,  103  N.  Y.  Suppl.  571.  See  National  Safe  Deposit  Co.  v.  Stead, 
250  111.  584,  95  N.  E.  973,  upholding  law  forbidding  safety  deposit  companies 
from  delivering  contents  of  box  leased  jointly  on  death  of  a  lessee  except  on  ten 
day's  notice  to  state  officials.     See  also  In  re  Wilkins'  Estate,  129  N.  Y.  S.  600. 

An  irrevocable  trust  in  the  guise  of  a  joint  deposit  was  found  in  In  re  Pierce, 
132  N.  Y.  App.  Div.  465,  116  N.  Y.  Suppl.  816,  reversing  60  Misc.  25,  112  N.  Y. 
Suppl.  594. 

2/m  re  Rosenberg,  114  N.  Y.  Suppl.  726.     See  post,  s.  158. 

Sec.  106.    Compromise  of  Interests  under  Will. 

The  question  whether  sums  paid  in  compromise  of  litigation 
are  subject  to  tax  may  depend  on  the  wording  of  the  taxing  statute 
and  usually  resolves  itself  into  a  question  whether  the  property 
passes  under  the  will  or  on  death,  or  by  virtue  of  the  agreement. 
There  seems  to  be  some  confusion  in  the  cases  and  considerable 


90  INHERITANCE  TAX  LAW.  [§106. 

difference  of  opinion  has  developed,  ranging  from  the  Massachusetts 
view  that  agreements  among  the  parties  cannot  be  considered 
as  affecting  interests  under  the  tax,  to  the  Pennsylvania  doctrine 
that  the  man  who  actually  receives  the  property  should  pay  the 
tax.  The  Massachusetts  court  in  its  most  recent  decision  has 
expressly  refused  to  follow  the  Pennsylvania  view.^  It  would  seem 
that  the  Massachusetts  doctrine  is  preferable  both  on  principle  and  as 
a  practical  matter  of  policy.  The  other  view  is  an  open  inducement 
to  unscrupulous  persons  to  make  such  collusive  arrangement 
as  may  save  their  pocketbooks  at  the  expense  of  their  conscience. 

Payments  made  in  good  faith  to  heirs  in  settlement  of  contests 
over  the  validity  of  a  will  should  be  included  in  reckoning  the 
inheritance  tax,^  even  though  the  will  is  disallowed  by  agreement, 
and  the  balance,  after  paying  certain  sums  to  the  legatees,  is  given 
to  the  contestants,^  although  such  sums  may  not  be  taxed  on  the 
ground  that  they  are  not  interests  under  the  will  within  the  lan- 
guage of  the  act.*  So  payments  in  adjustment  of  conflicting  claims 
to  an  estate  under  different  wills  are  subject  to  tax.^ 

A  testator  made  two  wills  and  the  heirs  of  the  sole  legatee  in 
the  first  will  contested  the  second  will,  but  compromised  under  an 
agreement  by  which  the  will  was  to  be  probated  and  the  estate  was 
to  pass  under  the  last  will  in  default  of  a  contest.  In  so  passing 
it  became  subject  to  the  inheritance  tax  and  moneys  paid  out  by 
those  receiving  it,  whether  in  litigating  the  contest  or  in  buying 
their  peace,  ought  not  to  be  deducted  from  the  estate  in  ascertain- 
ing the  value  of  the  property  subject  to  such  tax.^  The  court  holds 
that  payments  in  adjustment  of  conflicting  claims  to  an  estate 
by  those  asserting  title  thereto  cannot  be  construed  as  debts  nor 
treated  as  expenses  in  its  settlement.  The  entire  estate  including 
the  sums  to  be  paid  the  contestant  passed  to  the  legatees  of  the 
deceased  upon  his  death,  and  payments  in  settlement  are  in  law 
by  the  legatees  rather  than  an  expense  of  the  estate.  The  court 
relies  on  In  re  Westurn,  152  N.  Y.  93,  46  N.  E.  315.  The  court 
distinguishes  the  case  of  In  re  Hawley,  214  Pa.  St.  525,  as  in  that 
case  the  daughters  who  took  the  property  under  the  will  and  paid 
over  in  compromise  were  direct  descendants  and  therefore  no 
tax  was  due,  while  in  this  case  the  estate  was  acquired  by  the 
heirs  as  they  were  collateral,  was  subject  to  the  tax,  and  in  paying 
it  out  they  were  handling  their  own  property.  The  court  also 
distinguishes  In  re  Kerr,  159  Pa.  St.  512,  28  A.  3  54,  as  there  the 
compromise  was  of  a  contest  over  the  testator's  title.^ 


§  106.1  TRANSFERS  OTHER  THAN  BY  WILL.  91 

The  testator  had  made  two  wills  and  the  second  will  was  con- 
tested and,  under  an  agreement  of  compromise  executed  by  the 
parties,  it  was  agreed  that  contestants  were  to  "pay  C.  the  legacy 
given  her  under  said  [second]  will."  The  court  was  evenly  divided 
on  the  question  whether  this  payment  was  subject  to  the  inherit- 
ance tax.  If  the  payment  was  made  under  the  will  it  was  subject 
to  the  tax,  and  if  the  payment  went  under  the  agreement  it  was 
not.^ 

But  where  the  legatees  who  are  all  collateral  relatives  of  the 
testator  made  a  compromise  with  a  son  whereby  they  paid  him 
a  certain  sum  in  settlement,  and  in  consideration  thereof  he  with- 
drew his  contest  and  the  will  was  admitted  to  probate,  the  collateral 
legatees  are  not  liable  to  pay  the  collateral  inheritance  tax  on 
money  paid  to  the  son.  The  reason  is  that  the  amount  paid  the 
son  "was  never  received  by  them  as  legatees,  and  under  the  act 
it  is  only  so  much  of  the  estate  which  actually  passes  to  them  by 
virtue  of  the  will  that  is  liable  to  the  tax."^ 

A  contest  over  the  will  was  compromised  by  an  agreement.  The 
contest  against  the  will  was  withdrawn  and  the  jury  thereupon 
found  in  favor  of  the  will.  The  contest  was  made  by  the  collateral 
heirs  and  the  compromise  provided  that  the  widow  who  was  the 
sole  devisee  should  deed  one-half  of  the  property  devised  to  the 
collateral  heirs,  and  this  was  done.  The  court  holds  that  the  col- 
lateral heirs  do  not  derive  their  title  under  the  will  but  from  the 
deed  of  the  widow;  that  they  therefore  do  not  take  by  inherit- 
ance, will,  deed,  grant,  gift  or  otherwise  from  the  testator,  and 
hence,  under  the  provisions  of  the  Tennessee  statute,  no  inheritance 
or  succession  tax  attaches  to  the  property  in  transfer. 

The  counsel  suggested  that  by  fraud  and  collusion  the  state 
might  be  entirely  defeated  of  its  tax,  but  the  court  replies  that 
there  is  no  semblance  of  proof  in  the  record  that  this  compromise 
was  not  made  in  the  utmost  good  faith  and  not  as  a  mere  subter- 
fuge to  evade  the  payment  of  the  tax.^*^  On  the  other  hand  the 
opposite  result  has  been  reached  in  Colorado.^^ 

It  may  be  that  money  paid  to  one  who  under  no  theory  could 
take,  whether  the  decedent  died  testate  or  intestate,  should  not  be 
subject  to  tax. ^2 

Money  paid  in  compromise  of  a  claim  against  the  testator's  title  ^' 
or  to  settle  claims  of  creditors  named  as  legatees,  however,  should 
not  be  taxed,  as  it  forms  no  part  of  the  estate  of  the  decedent.^* 
A  compromise  may  create  interests  to  take  effect  in  the  future 


92  INHERITANCE  TAX  LAW.  [§  106. 

such  that  they  may  be  subject  to  tax,  although  the  statute  came  into 
existence  after  the  death  of  the  original  testator. ^^  A  statutory 
agreement  of  compromise  of  a  will  is  not  in  Massachusetts  a  ''will" 
within  the  terms  of  the  inheritance  act.^^ 

^Baxter  v.  Stevens,  209  Mass.  459,  95  N.  E.,  854. 

2/m  re  Mark,  40  Misc.  507,  82  N.  Y.  Suppl.  803,  such  payments  cannot  be  de- 
ducted as  expenses  of  administration.  See  Matter  of  Demers,  84  N.  Y.  S.  1109, 
41  Misc.  470. 

3/«  re  Rubincam  (1881),  14  Phila.  (Pa.)  306.  The  court  suggests  that  if  an 
absolute  sum  had  been  fixed  as  the  price  of  the  consent  of  the  contestant  to  the 
compromise,  which  she  might  perhaps  claim  as  a  debt  from  the  other  parties  i  n 
interest,  she  could  not  have  been  charged  with  a  tax.  Cf.  In  re  Hawley,  214 
Pa.  St.  525,  63  A.  1021,  noted  post,  n.  14. 

*Page  V.  Rives,  Fed  Cas.  10,666,  1  Hughes  297,  where  the  statute  taxed 
"a  distributive  share  in  an  intestate's  estate"  and  "a  legacy." 

5  Where  a  son  contested  a  will  of  his  father,  and  to  settle  his  contest  he  was  paid 
a  sum  in  excess  of  the  legacy  provided  by  the  will,  this  sum  is  subject  to  taxation. 
The  money  was  paid  to  him  by  virtue  of  his  heirship  because  he  was  the  son  of 
the  decedent.    People  v.  Rice,  40  Colo.  508,  91  P.  33. 

fi/w  re  Wells,  142  Iowa  255,  120  N.  W.  713. 

'/»  re  Wells,  142  Iowa  255, 120  N.W.  713.  In  re  Pepper's  Est.,  159  Pa.  St.  908, 
28  A.  353.  In  re  Stone's  Est.,  132  Iowa  136.  In  re  Cook's  Est.,  187  N.  Y.  253, 
79  N.  E.  991. 

8/«  re  Wells,  142  Iowa  255,  120  N.  W.  713. 

9/»  re  Pepper,  159  Pa.  St.  508,  28  A.  353,  4  Pa.  Dist.  R.  101. 

10  English  v.  Crenshaw,  120  Tenn.  531 , 1 10  S.  W.  210.  The  court  relies  upon  In  re 
Kerr,  109  Pa.  St.  512,  28  A.  354,  and  upon  In  re  Hawley,  214  Pa.  St.  525,  63  A. 
1021,  construing  a  Pennsylvania  statute  almost  identical  with  that  in  Tennessee. 

"The  testator  died  in  1869  leaving  a  will  devising  property  to  a  certain  school, 
and  if  the  legislature  should  pass  any  act  which  will  defeat  the  carrying  out  of 
this  legacy,  then  he  bequeathed  the  fund  to  his  illegitimate  children.  The  ille- 
gitimate children  claimed  that  the  clause  creating  the  fund  was  illegal  under  Vir- 
ginia statutes  and  that  they  were  therefore  entitled,  and  a  settlement  was  made 
with  them  for  three  hundred  thousand  dollars.  The  court  holds  that  the  es- 
tate taken  by  the  illegitimate  children  was  an  executory  devise  and  was  void  for 
remoteness;  that  as  they  were  not  entitled  to  any  legacy,  the  three  hundred 
thousand  dollars  paid  them  was  not  paid  as  a  legacy  and  was  not  liable  to  taxa- 
tion; that  it  was  not  paid  as  a  distributive  share,  as,  being  illegitimate  children, 
they  would  be  entitled  to  no  interest  in  the  estate  if  he  died  intestate.  Page  v. 
Rives,  Fed.  Cas.  10,  666,  1  Hughes  297. 

12  People  v.  Rice,  40  Colo.  508,  91  P.  33. 

I'The  allowance  or  compromise  of  the  claims  of  third  persons  simply  reduces 
the  estate  afterwards  passing  to  volunteers  with  the  same  effect  as  if  the  reduction 
had  been  caused  by  the  payment  of  debts,  or  as  if  the  payment  or  surrender  had 
been  the  result  of  a  suit  terminating  in  favor  of  the  claimant.  In  re  Kerr,  159 
Pa.  St.  512,  513,  28  A.  354,  2  Pa.  Dist.  R.  535. 

"  Where  legatees  claim  that  the  writing  was  a  valid  will  an  d  the  provision  for 
their  benefit  was  in  discharge  of  an  obligation  and  the  heirs  denied  the  validity 


§  106.]  TRANSFERS  OTHER  THAN  BY  WILL.  93 

of  the  writing  as  a  will,  because  of  the  want  of  testamentary  capacity,  and  a 
settlement  was  made  in  which  the  employees  were  treated  as  creditors  and  allowed 
a  part  of  their  demands,  this  was  clearly  a  compromise  of  a  doubtful  right  to  avoid 
litigation,  by  which  the  heirs  parted  with  a  portion  of  the  estate  for  the  purchase 
of  peace.  The  employees  took  nothing  under  the  will  and  the  money  paid  them 
was  not  subject  to  tax  unless  the  whole  arrangement  was  collusive.  The  claim 
of  the  commonwealth  was  not  affected  by  the  fact  that  the  annuities  provided 
for  the  sisters  of  the  decedent  were  secured  to  them  without  abatement. 
The  contest  was  as  to  the  whole  writing  and  not  as  to  a  part.  If  it 
was  invalid  their  claims  as  annuitants  fail  with  the  others.  The  will 
was  refused  probate  and  the  money  paid  to  the  legatees  was  not  subject 
to  the  collateral  tax.  So  payment  made  to  other  legatees  who  had  no 
demand  against  the  estate  were  also  relieved  from  the  tax.  In  re  Hawley, 
214  Pa.  St.  525,  63  A.  1021. 

1^  The  testator  died  before  1892  and  the  Iowa  inheritance  law  went  into  effect 
in  1896.  In  1892  the  devisee  of  certain  land  entered  into  an  agreement  with  the 
collateral  heirs  by  which  the  devisee  was  to  have  the  use  of  the  land  for  his  life 
and  on  his  death  that  it  should  go  over  to  the  collateral  heirs,  this  agreement 
being  made  in  consideration  the  collateral  heirs  would  not  contest  the  will.  The 
devisee  died  in  1906  and  the  court  holds  that  the  interest  acquired  by  the  collateral 
heirs  is  subject  to  the  tax,  as  the  statute  is  very  clear  and  applies  to  all  cases  where 
wills,  grants,  deeds,  etc.,  are  made  or  intended  to  take  effect  in  possession  or  en- 
joyment after  the  death  of  the  grantor  or  donor.  Here  even  if  the  title  passed 
either  mediately  or  immediately  from  testator,  it  did  not  take  effect  either  in 
possession  or  enjoyment  until  after  the  death  of  the  devisee,  the  estate  of  the  tes- 
tator was  subject  to  the  control  of  the  district  court  in  virtue  of  the  contract  for 
a  long  time  after  the  collateral  inheritance  law  went  into  effect,  and  by  reason  of 
that  fact  the  land  was  subject  to  the  tax.  The  collateral  heirs  by  making  a  con- 
tract with  the  devisee  surrendered  their  right  to  take  immediate  possession  and 
enjoyment  of  the  property  and  if  they  now  have  title  through  the  testator  they 
by  their  own  acts  delayed  the  determination  of  their  rights  until  after  the  col- 
lateral inheritance  tax  law  went  into  effect.  Whether  the  collateral  heirs  took 
under  the  will  of  the  testator  or  not  it  is  very  clear  that  the  property  did  not  pass 
by  will,  deed,  grant,  etc.,  to  take  effect  in  possession  or  enjoyment  immediately. 
Possession  and  enjoyment  were  clearly  postponed  until  the  death  of  the  devisee. 
The  payment  of  a  tax  can  only  be  defeated  by  such  a  bona  fide  conveyance  as 
parts  absolutely  with  the  title,  possession  and  enjoyment  during  the  grantor's 
lifetime. 

The  majority  of  the  court  finds,  however,  that  the  land  which  was  not  devised 
directly  to  the  devisee  but  which  was  covered  by  contract  is  not  subject  to  the 
tax,  for  the  reason  that  it  vested  immediately  upon  the  death  of  the  testator  in 
the  collateral  heirs  and  cannot  be  made  subject  to  a  tax  created  by  a  subsequent 
act  of  the  legislature. 

Deemer,  J.,  who  writes  the  majority  opinion,  dissents  from  this  last  conclusion, 
believing  that  by  the  contract  the  vesting  in  possession  and  enjoyment  was  post- 
poned until  the  death  of  the  devisee  and  that  until  that  event  it  was  uncertain 
who  might  take.  Lacey  v.  State  Treasurer,  (Iowa,  1909,)  121  N.  W.  179  (McClain 
J.,  dissenting). 

^'Baxter  v.  Stevens,  209  Mass.  459,  95  N.  E.  854. 


94  INHERITANCE  TAX  LAW.  [§107. 

The  court  cites  and  relies  on  In  re  Graves,  242  111.  212,  In  re  Wells,  142  Iowa 
255,  In  re  Cook,  187  N.  Y.  253,  and  declines  to  follow  In  re  Pepper,  159  Pa.  St. 
508,  In  re  Kerr,  159  Pa.  St.  512. 

Where  there  is  a  contest  over  a  will,  and  under  the  Massachusetts  statute  the 
contest  is  settled  by  a  compromise  agreement  for  distribution,  and  the  will  is 
never  probated,  the  compromise  is  for  the  purpose  of  the  inheritance  tax,  the  will 
under  which  the  property  passed.    McCoy  v.  Gilly  156  Fed.  985. 

Sec.  107.    Interest  in  Insurance  or  Beneficial  Society. 

Rights  under  beneficiary  societies  are  not  subject  to  tax  and  are 
not  considered  as  a  conspiracy  to  evade  the  collateral  inheritance 
law,  although  the  payments  are  dependent  on  death.^  In  a  New 
York  case  the  testator  was  a  member  of  the  New  York  produce 
exchange,  and  was  a  subscriber  to  the  gratuity  fund  of  that  body, 
which  under  its  by-laws  belonged  to  beneficiaries  provided  for  on 
his  death  and  was  not  liable  to  the  payment  of  debts  or  legacies. 
This  money  passed,  not  by  virtue  of  will  or  of  any  administration, 
but  by  the  contract  of  the  testator  with  the  produce  exchange. 

The  distinction  between  the  two  classes  of  policies,  —  the  first 
class  where  the  contract  is  made  for  the  benefit  of  the  insured  and 
the  proceeds  pass  to  his  personal  representatives  as  part  of  his  estate, 
and  the  second  class  where  the  contract  was  made  for  the  benefit 
of  others  and  the  proceeds  are  transferred  to  them  by  the  terms  of 
the  contract,  —  was  clearly  laid  down  by  the  court.^ 

So  a  life  insurance  policy  assigned  to  the  wife  of  the  decedent,' 
or  payable  to  the  wife  and  assigned  by  her  in  trust,  is  not  subject 
to  tax.^ 

A  life  insurance  policy  on  the  life  of  the  decedent  held  by  him 
at  the  time  of  his  death  is  property  owned  by  him  at  his 
death  and  so  under  that  act  subject  to  appraisal  for  the  purposes 
of  taxation  under  the  New  York  inheritance  law.  The  argument 
was  made  that  it  was  only  property  liable  to  taxation  under  the 
general  tax  law  of  the  state  which  could  be  taxed  under  the  act 
relating  to  taxable  transfers,  and  that  inasmuch  as  life  insurance 
policies  cannot  be  included  in  the  valuation  of  the  taxpayer's 
property  under  the  general  law,  they  cannot  be  considered  in 
assessing  the  tax  under  the  collateral  inheritance  law.  But  the 
taxable  transfer  law  has  no  reference  or  relation  to  the  general  law. 
While  the  object  of  both  is  to  raise  revenue  for  the  support  of  the 
government,  they  have  nothing  else  in  common.^ 

Where  a  tax  was  levied  on  the  right  under  an  insurance  contract 
to  certain  commissions  on  renewal  premiums,  the  claim  was  made 


§  108.]  TRANSFERS  OTHER  THAN  BY  WILL.  95 

that  the  inheritance  tax  could  not  be  exacted  because  the  value  of 
the  inheritance  was  too  uncertain,  as  the  policies  on  renewal  might 
be  suffered  to  lapse  and  hence  that  the  premiums  might  never 
be  collected.  The  court  holds  that  the  certainty  or  uncer- 
tainty of  policies  being  renewed  is  a  matter  pertaining  to 
the  insurance  business,  and  that  the  actuary  of  the  company 
can  no  doubt  make  an  estimate  sufficiently  close  for  all  practical 
purposes  of  the  actual  or  present  value  of  this  claim  against  the 
company.^ 

Un  re  Vogel,  1  Pa.  Co.  Ct.  352,  18  Wkly.  Notes  Cas.  242. 

2/»  re  Fay,  25  Misc.  Rep.  468,  55  N.  Y.  Suppl.  749. 

3  Where  two  policies  upon  their  face  were  payable  to  the  estate  of  the  decedent, 
and  at  his  death  were  found  in  his  safe  deposit  vault,  and  attached  to  each  policy 
was  an  assignment  of  it  in  consideration  of  love  and  affection  to  his  wife,  the  comp- 
troller contends  that  under  section  220  the  tax  is  payable  upon  the  transfer  of 
those  policies,  upon  the  theory  that  the  transfer  was  first  by  death  and  second  by 
an  assignment  to  take  effect  in  possession  or  enjoyment  at  the  death  of  the  decedent. 
The  court  holds  that  as  against  the  state  the  deceased  was  not  possessed  of  the 
policies  at  the  time  of  his  death  and  that  the  widow  did  not  obtain  title  to  them 
through  his  will  or  by  the  laws  of  the  state  of  New  York.  This  is  an  absolute 
present  assignment  of  the  interests  of  the  assignor  in  the  policy,  therefore  no 
transfer  tax  is  assessable.  In  re  Parsons,  117  N.  Y.  App.  Div.  321,  102  N.  Y. 
Suppl.  168,  affirming  51  Misc.  370,  101  N.  Y.  Suppl.  430. 

*  Where  a  life  insurance  policy  was  made  payable  to  the  wife  of  the  decedent 
and  she  joined  with  him  in  conveying  it  to  a  trust  company  in  trust  in  contempla- 
tion of  death,  though  without  giving  up  her  rights  in  it,  therefore  this  property 
remained  the  property  of  the  wife,  and  was  not  a  part  of  the  estate  of  the  dece- 
dent, and  therefore  was  not  subject  to  the  inheritance  tax.  State  v.  Bullen,  143 
Wis.  512,  523,  128  N.  W.  109. 

6  In  re  Knoedler,  140  N.  Y.  377,  35  N.  E.  601,  affirming  68  Hun  150. 

6  Succession  of  Fell,  119  La.  Ann.  1037,  448,  879. 

[See  further,  post,  s.  218.1 

Sec.  108.    Curtesy  or  Dower,  Statutory  Rights  of  Surviving 
Spouse. 

Probably  in  most  states  dower  or  curtesy  rights  do  not  fall  within 
the  class  of  interests  under  the  intestate  laws  subject  to  tax,^ 
although  when  dower  is  released  and  the  property  so  released 
passes  to  taxable  beneficiaries,  the  tax  must  be  imposed  on  that 
property  .2 

It  is  obvious  that  dower  rights  when  exercised  must  be  deducted 
in  fixing  the  valuation  of  other  interests  given  under  the  will,^  and 
no  statutory  rights  can  be  allowed  to  things  which  would  be  exempt 
if  they  did  exist  when  such  rights  are  not  allowed  by  state  law  unless 
they  actually  do  exist. ^ 


96  INHERITANCE  TAX  LAW.  [§  108. 

The  exemption  to  the  widow  of  certain  articles  enumerated  under 
the  New  York  statute  renders  them  not  subject  to  the  transfer 
tax  whether  the  decedent  died  testate  or  intestate.  This  property 
is  not  to  be  included  in  estimating  the  value  of  the  estate  subject 
to  tax.^  So  the  value  of  a  year's  support  for  the  widow  under 
the  statute  is  not  subject  to  tax  in  Tennessee.^ 

One  taking  a  legacy  in  lieu  of  dower  must  pay  the  tax,  as  by 
accepting  the  legacy  she  elects  to  take  under  the  will/  but  the  value 
of  the  wife's  dower  must  be  deducted  from  the  property  where  a 
legacy  is  given  her  not  expressed  to  be  in  lieu  of  dower .^  In  Illi- 
nois, however,  the  contrary  result  is  reached,  as  in  that  state  such 
rights  are  held  to  be  intestate  rights,^  although  taken  under  an 
ante-nuptial  agreement  in  lieu  of  dower,^^  and  there  the  surviving 
spouse  may  lose  his  exemption  by  claiming  curtesy  or  dower. ^^ 

1  Crenshaw  v.  Moore  (Tenn.  1911),  137  S.  W.  924.  Comm.  v.  Powell,  51  Pa. 
St.  438. 

The  fact  that  the  widow  took  less  than  the  law  allowed  her  makes  no 
difference,  as  she  still  took  her  dower  rights.  The  court  must  look  at  the  true 
character  of  the  transaction,  and  in  doing  so  cannot  permit  it  to  be  submerged  in 
mere  form.    Appeal  of  Commonwealth,  34  Pa.  St.  (10  Casey)  204. 

The  widow's  dower  became  vested  as  an  inchoate  estate  upon  her  marriage 
and  consummate  upon  the  death  of  her  husband,  independent  of  the  will  and  not 
by  virtue  thereof,  and  is  therefore  not  subject  to  the  transfer  tax.  In  re  Weiler, 
122  N.  Y.  Suppl.  608. 

Curtesy  was  found  not  taxable  in  the  following  cases.  This  estate  is  an  ancient 
one  arising  from  the  marriage  relation  and  not  by  inheritance  or  from  the  wife's 
estate  and  is  not  an  incident  to  the  wife's  death  and  intestacy.  In  re  Green,  68 
Misc.  1,  124  N.  Y.  Suppl.  863,  129  N.  Y.  S.  54.  In  re  Starbuck,  137  N.  Y. 
App.  Div.  866, 122  N.  Y.  Suppl.  584,  affirming  63  Misc.  156, 116  N.  Y.  Suppl.  1030. 

2/«  re  Small,  151  Pa.  St.  1, 16,  25  A.  23,  30  Wkly.  Notes  Cas.  521. 

'  "Obviously  under  sections  1  and  2  of  the  Inheritance  Tax  Law  as  construed 
by  this  court  in  the  cases  heretofore  cited,  the  legislature  intended  that  a  person 
should  be  taxed  only  on  the  beneficial  interest  that  he  receives.  The  only  bene- 
ficial interest  in  the  real  estate  that  passed  to  the  daughter  in  this  case  from  her 
father's  estate  was  the  value  of  this  real  estate  less  the  value  of  the  dower  interest 
of  the  mother.  The  county  court  decided  rightly  in  deducting  the  cash  value  of 
said  dower  when  fixing  the  beneficial  interest  received  by  and  taxed  against  the 
daughter."    Per  Carter,  J.,  in  People  v.  Nelms,  241  111.  571,  89  N.  E.  683. 

The  court  distinguishes  In  re  Kingman,  220  111.  563,  77  N.  E.  135,  as  in  that 
case  the  estate  was  for  years  and  not  for  life.  People  v.  Nelms,  241  111.  571,  89 
N.  E.  683. 

*In  re  Libolt,  102  N.  Y.  App.  Div.  29,  92  N.  Y.  Suppl.  175. 
^In  re  Page,  39  Misc.  Rep.  220,  79  N.  Y.  Suppl.  382.     In  re  Stuyvesant's 
Estate,  72  Misc.  295,  13  N.  Y.  S.  197. 

•  Crenshaw  v.  Moore,  (Tenn.  1911,)  137  S.  W.  24. 


§  109.]  TRANSFERS  OTHER  THAN  BY  WILL.  97 

7  In  re  Riemann,  42  Misc.  Rep.  648,  87  N.  Y.  Suppl.  731.  In  re  De  Graaf,  24 
Misc.  Rep.  147,  53  N.  Y.  Suppl.  591,  2  Gibbons  516. 

8  Under  the  law  the  widow  is  not  put  to  her  election  as  between  dower  and  the 
provision  by  the  will;  and  therefore  the  value  of  the  wife's  dower,  since  it  is  not 
taxable,  should  be  deducted  from  the  gross  value  ot  the  lands  devised  to  others 
for  the  purposes  of  the  inheritance  tax.  In  re  Shields,  68  Misc.  264,  124  N.  Y. 
Suppl.  1003.  But  where  the  widow  fails  to  elect  she  is  presumed  to  have  elected 
to  take  under  the  will.     In  re  Stuyvesant's  Estate,  72  Misc.  295, 131  N.  Y.  S.  197. 

9  People  v.  Field,  248  111.  147,  93  N.  E.  721,  Billings  v.  People,  189  111.  472, 59  N. 
E.  798,  59  L.  R.  A.  507. 

Under  the  Illinois  statute  of  1895,  page  303,  section  1,  "intestate  laws"  include 
the  widow's  dower.  It  was  contended  that  dower  is  of  great  antiquity  and  was 
not  created  by  statute  but  by  the  common  law;  but  the  court  holds  that  the  in- 
stitution of  dower  is  subject  to  full  legislative  control  and  may  be  changed  or  mod- 
ified at  any  time.  The  court  holds  that  the  "intestate  laws"  referred  to  are  those 
laws  of  the  state  which  cover  the  devolution  of  estates  and  of  persons  dying  intes- 
tate and  include  all  applicable  rules  of  the  common  law  in  force  in  this  state  and 
they  regulate  and  control  the  interest  which  the  widow  took  in  her  husband's 
property  at  his  death.   Billings  v.  People,  189  111.  472,  477,  59  L.  R.  A.  807. 

"  Where  the  testator  signed  an  ante-nuptial  agreement  by  which  the  wife  took 
a  certain  sum  in  lieu  of  her  dower  rights  on  his  death,  the  court  holds  that  this 
sum  taken  under  the  agreement  is  not  exempt  from  the  inheritance  tax.  It  being 
in  lieu  of  dower  it  is  subject  to  tax  as  dower  is.  The  amount  received  should  not 
be  deducted  in  estimating  the  market  value  of  the  estate.  People  v.  Field,  248 
111.  147,  93  N.  E.  721,  referring  to  Billings  v.  People,  189  111.  472. 

^^  111.  St.  1895,  s.  2,  exempting  the  life  estate  in  any  property  devised  or 
bequeathed  to  the  wife  of  the  testator,  does  not  apply  when  the  wife  renounces 
the  will  and  elects  to  take  her  statutory  rights.  Connell  v.  Crosby,  210  111.  380, 
393,  71  N.  E.  350. 

Sec.  109.     Rights  in  Community  Property. 

The  inheritance  tax  on  community  property  depends  on  whether 
the  survivor  takes  by  inheritance  or  by  virtue  of  the  marriage 
relation.     The  tax  is  levied  in  Calif ornia^  and  not  in  Louisiana.^ 

It  was  claimed  in  one  case  that  the  surviving  wife's  share  of  the 
property  was  acquired  under  the  California  constitution  of  1849, 
and  that  therefore  the  wife  acquired  a  vested  right  in  the  com- 
munity property,  which  was  protected  by  the  federal  constitution. 
The  court  finds,  however,  that  the  declaration  in  the  constitution 
of  1849,  that  "laws  shall  be  passed  more  clearly  defining  the  rights 
of  a  wife  in  relation  as  well  to  her  separate  property  as  to  that  held 
in  common  with  her  husband,"  amounts  to  no  more  than  a  mandate 
to  the  legislature  to  define  and  prescribe  the  rights  of  the  wife 
in  the  property  of  the  community.  It  was  the  design  of  the  con- 
stitution of  1849  to  preserve  so  far  as  might  be  the  rights  to  the 
community  property  which  wives  had  enjoyed.     But  even  under 


98  INHERITANCE  TAX  LAW.  [§  110. 

the  Spanish  law  the  wife  had  no  vested  estate  in  the  community 
property,  but  it  was  a  mere  expectancy  so  long  as  the  community 
exists.  The  court  finds,  therefore,  that  the  California  inheritance 
tax  law  is  not  in  violation  of  the  federal  constitution,  on  the  ground 
that  it  takes  away  a  vested  interest.^ 

1  The  inheritance  tax  statute  was  passed  presumably  in  view  of  the  California 
decisions  that  the  wife  took  her  share  of  the  community  property  upon  the  death 
of  her  husband  by  succession  as  his  heir.  In  re  Mofifitt's  Estate,  153  Cal.  359,  95 
P.  653.  In  re  Sim's  Estate,  153  Cal.  365,  95  P.  655.  People  v.  Lebus,  Cal.  1908, 
96  P.  1118. 

^Succession  of  Marsal,  118  La.  Ann.  212,42  S.  778  (usufruct  in  community  prop- 
erty is  taken  under  marriage  contract  and  not  by  inheritance).  See  Succession 
of  Baker,  (La.  1911,)  55  So.  714. 

8  In  re  Moffit,  153  Cal.  359,  95  P.  1025,  affirming  on  rehearing  95  P.  653, 
deciding  the  question  as  to  the  federal  constitution,  which  was  not  considered  in 
the  original  opinion. 

Sec.  110.     Homestead. 

Property  set  apart  by  the  court  as  homestead  in  California  is 
not  subject  to  tax,^  although  the  wife  to  whom  the  homestead  is  set 
apart  is  also  a  devisee  and  legatee. ^ 

^The  California  statute  of  1905,  c.  314,  section  1,  provides  that  all  property 
which  shall  pass  by  will  or  by  the  intestate  laws  shall  be  subject  to  the  inheritance 
tax.  It  was  claimed  that  this  language  included  property  set  apart  to  the  widow 
as  a  homestead.  The  court  finds,  however,  that  where  the  power  of  setting  apart 
as  a  homestead  is  exercised  by  the  probate  court,  the  devisee  and  legatees  take 
no  beneficial  interest  whatever.  The  probate  court  may  even  set  apart  as  a  home- 
stead real  property  specifically  devised  by  a  will  and  thus  defeat  the  devise.  Where 
it  is  so  set  apart  as  a  homestead  the  title  of  the  person  to  whom  it  is  so  set  apart 
is  in  no  way  derived  by  will,  but  comes  solely  from  the  homestead  order.  It  is 
clear,  therefore,  that  what  the  widow  takes  under  this  order  of  the  probate  court 
she  does  not  take  by  will  or  by  the  intestate  laws  of  the  state.  The  language,  "pass 
by  will  or  by  the  intestate  laws  of  this  state,"  means  to  pass  by  virtue  and  force 
of  the  law  of  this  state  governing  testate  or  intestate  succession. 

It  was  further  claimed  that  the  property  of  the  testator  passed  to  the  devisees 
and  that  subsequently  by  an  order  of  the  probate  court  the  homestead  was 
carved  out  of  it.  The  court  says  that  the  right  to  any  tax  imposed  vested  in  the 
state  at  the  moment  of  death  and  could  not  be  legally  divested  by  any  depart- 
ment of  the  state,  but  that  the  right  so  vested  to  the  tax  imposed  by  the  act ;  and 
when  it  is  determined  that  the  act  imposed  no  tax  as  to  property  lawfully  diverted 
by  the  court  in  probate  with  the  consequence  that  it  could  never  be  distributed  to 
the  devisee,  legatee  or  heir,  it  is  apparent  that  no  vested  right  to  the  state  is 
impaired.  Therefore,  the  inheritance  tax  cannot  be  assessed  on  such  property. 
In  re  Kennedy,  157  Cal.  517,  108  P.  280. 

2  In  re  Kennedy,  157  Cal.  517,  108  P.  280. 


I 


CHAPTER  XIX. 


TRANSFERS  IN  CONTEMPLATION    OF  DEATH. 

§111.  Definition. 

§  112.  Intent  to  Evade  Tax. 

§  113.  Deed  Made  before  Valid  Statute  Enacted. 

§  114.  A  Question  of  Fact. 

§  115.  Burden  on  Heirs  to  Show  Good  Faith. 

§  116.  Heirs  of  Grantee  not  Bound  by  his  Statements. 

§  117.  Will  Contemporaneous  with  Deed. 

§  118.  Illness  or  Impending  Death. 

§  119.  Life  Estate  Reserved  to  Grantor. 

§  120.  Grantor  Retaining  Control. 

§  121.  Grantor  Retaining  no  Control. 

§  122.  Power  of  Revocation. 

§  123.  Where  Decedent  Transfers  Property  to  Corporation  and  Retains 

Life  Interest  in  its  Stock. 

§  124.  Conveyance  for  Consideration  where  Possession  is  Postponed 

till  the  Death  of  the  Grantor. 

§  125.  Where  Property  Burdensome  to  Grantor. 

§  126.  Purpose  to  Reduce  Estate  to  Affect  Widow's  Election  as  to 

Dower. 

§  127.  When  Deed  never  Delivered. 

§  128.  Where  Deed  never  Recorded. 

§  129.  Deed  Executed  before  Statute  Enacted. 

§  130.  Liability  of  Executors. 

Sec.  111.    Definition. 

The  words  "in  contemplation  of  death"  commonly  used  in  the 
inheritance  statutes  do  not  refer  merely  to  that  general  expectation 
of  death  which  every  mortal  entertains,^  but  to  impending  approach- 
ing decease.^  The  language  is  not  confined  to  gifts  causa  mortis,^ 
and  it  has  been  said  to  be  limited  only  to  cases  of  evasion.*  The 
contemplation  of  death  must  be  the  impelling  motive,  without 
which  the  conveyance  would  not  be  made,  in  order  to  subject  a 
transfer  of  property  to  the  inheritance  tax.^ 

*  The  words  "in  contemplation  of  death"  do  not  refer  to  that  general  expecta- 
tion which  every  mortal  entertains,  but  rather  the  apprehension  which  arises 
from  some  existing  condition  of  body  or  some  impending  peril.  In  re  Baker,  178 
N.  Y.  575,  70  N.  E.  1094,  affirming  83  N.  Y.  App.  Div.  530,  38  Miss.  151,  77  N.  Y. 
Suppl.  170. 


100  INHERITANCE  TAX  LAW.  [§  112. 

«  "A  gift  is  made  in  contemplation  of  an  event  when  it  is  made  in  the  expecta- 
tion of  that  event  and  having  it  in  view,  and  the  gift  when  the  donor  is  looking 
forward  to  his  death  as  impending  and  in  view  of  that  event,  is  within  the  lan- 
guage of  the  statute."  Per  Cartwright,  J.,  in  Rosenthal  v.  People,  211  111.  306, 
71  N.  E.  1121. 

"The  meaning  of  the  words  'in  contemplation  of  death,'  as  used  in  the  statute, 
must  be  inferred  and  ascertained  from  the  context  of  the  act  and  the  object  sought 
to  be  accomplished  by  the  law.  It  is  manifest  that  they  were  intended  to  cover 
transfers  of  parties  who  were  prompted  to  make  them  by  reason  of  the  expectation 
of  death,  and  which,  in  view  of  that  event,  accomplish  transfers  of  the  property 
of  decedents  in  the  nature  of  a  testamentary  disposition.  It  is  therefore  obvious 
that  they  are  not  used  as  referring  to  that  expectation  of  death  generally  enter- 
tained by  every  person.  The  words  are  evidently  intended  to  refer  to  an  expecta- 
tion of  death  which  arises  from  such  a  bodily  or  mental  condition  as  prompts 
persons  to  dispose  of  their  property  and  bestow  it  on  those  whom  they  regard  as 
entitled  to  their  bounty.  This  accords  with  the  general  objects  and  purposes  of 
the  law,  namely,  the  imposition  of  a  tax  on  the  devolution  of  property  involved 
in  the  demise  of  the  owner."  .  .  .  Per  Siebecker,  J.,  in  State  v.  Pabst,  139  Wis. 
561,  589,  121  N.  W.  351. 

3  "The  claim  that  the  words  can  include  only  gifts  causa  wof^w  attributes  to 
them  too  restricted  a  meaning.  A  transfer  valid  as  a  gift  inter  vivos,  if  made  under 
circumstances  which  impress  it  with  the  distinguishing  characteristics  of  being 
prompted  by  an  apprehension  of  impending  death,  occasioned  by  a  bodily  or 
mental  state  which  has  a  basis  for  the  apprehension  that  death  is  imminent, 
would  be  a  transfer  made  in  contemplation  of  death  within  the  meaning  of  the 
law."    Per  Siebecker,  J.,  in  State  v.  Pahst,  139  Wis.  561,  589,  121  N.  W.  351. 

^In  re  Spaulding,  163  N.  Y.  607,  57  N.  E.  1124,  affirming  49  N.  Y.  App.  Div. 
541,  549. 

s  People  V.  Burkhalter,  247  111.  600,  93  N.  E.  379. 

Sec.  112.    Intent  to  Evade  Tax. 

The  words  "in  contemplation  of  death"  are  intended  to  cover  all 
transfers  made  with  the  intention  of  evading  the  death  duties,^ 
although  intent  to  evade  need  not  necessarily  appear .^ 

1  In  re  Thorne,  162  N.  Y.  238, 56  N.  E.  625, 44  N.  Y.  App.  Div.  8,  60  N.  Y.  Suppl. 
419.  In  re  Spaulding,  163  N.  Y.  607,  57  N.  E.  1124,  affirming  49  N.  Y.  App.  Div. 
541,  549.  In  re  Baker,  178  N.  Y.  575,  70  N.  E.  1094,  affirming  83  N.  Y.  App, 
Div.  530,  38  Wis.  151,  77  N.  Y.  Suppl.  170.  In  re  Bullard,  76  N.  Y.  App.  Div. 
207,  78  N.  Y.  Suppl.  491,  affirming  37  Misc.  663,  76  N.  Y.  Suppl.  309. 

Where  the  decedent  made  an  absolute  deed  of  land  and  took  a  bond  back  from 
the  grantee  to  pay  the  income  to  the  grantor  for  his  life,  this  is  a  conveyance 
in  contemplation  of  death  within  the  terms  of  the  Pennsylvania  inheritance  tax 
of  1826,  especially  where  it  was  made  during  the  last  sickness  of  the  grantor.  "It 
is  true,  the  obligation  of  the  bond  was  not  inserted  as  a  condition  or  reservation 
in  the  deed;  it  was  in  form  a  mere  personal  obligation;  but  this  contention  does 
not  involve  a  technical  question  of  title  nor  of  lien;  the  whole  matter  depends 
upon  the  single  fact  whether  or  not  the  transfer  was  made  or  intended  to  take 
effect  in  enjoyment  at  the  death  of  the  grantor.    The  policy  of  the  law  will  not 


i 


§§  113-116.]  TRANSFERS  IN  CONTEMPLATION  OF  DEATH.  101 

permit  the  owner  of  an  estate  to  defeat  the  plain  provisions  of  the  collateral  in- 
heritance law,  by  any  devise  which  secures  to  him,  for  life,  the  income,  profits, 
and  enjoyment  thereof;  it  must  be  by  such  a  conveyance  as  parts  with  the  pos- 
session, the  title,  and  the  enjoyment  in  the  grantor's  lifetime."  Per  Clark,  J., 
in  Reish  v.  Commonwealth,  106  Pa.  St.  521,  526. 

2  The  tax  is  due  in  a  case  where  the  grantor  suffered  from  spinal  trouble  with 
a  malignant  growch  and  became  rapidly  worse,  and  where  three  days  after  the 
making  of  the  grant  he  made  his  will  and  died  at  the  end  of  a  month,  although  no 
evidence  appeared  of  his  intent  to  defraud  the  state  of  his  inheritance  tax.  No 
such  intention  needs  to  appear.  The  statute  includes  all  gifts  made  in  contempla- 
tion of  death,  and  that  language  does  not  naturally  nor  necessarily  involve  a 
fraudulent  intent.    Rosenthal  v.  People,  211  111.  306,  71  N.  E.  1121. 

Sec.  113.    Deed  Made  before  Valid  Statute  Enacted. 

Where  a  transfer  was  made  while  an  unconstitutional  statute 
was  in  force,  and  later  before  the  death  of  the  transferror  the  court 
passed  an  act  which  was  valid,  the  court  says  that  it  is  possible 
that  the  parties  may  have  had  the  possibilities  of  an  inheritance 
tax  in  mind,  but  the  law  which  the  state  was  attempting  to  apply  was 
not  then  in  force  and  the  case  therefore  does  not  present  the  question 
of  the  effect  of  a  transfer  of  property  with  the  intention  and  for 
the  purpose  of  avoiding  the  operation  of  an  existing  inheritance 
tax  law. 

State  V.  Probate  Court,  Washington  County,  102  Minn.  268,  286,  113  N.  W.  888. 
Whether  tax  retroactive  as  to  gifts  inter  vivos,  see  ante,  s.  84. 

Sec.  114.    A  Question  of  Fact. 

The  question  whether  a  deed  is  made  in  contemplation  of  death 
is  a  question  of  fact  on  which  the  finding  of  the  trial  court  is  final. 

People  V.  Kelley,  218  111.  509,  75  N.  E.  1038.  In  re  BuUard,  76  N.  Y.  App.  Div. 
207, 78  N.  Y.  Suppl.  491,  affirming  37  Misc.  663,  76  N.  Y.  Suppl.  309.  In  re  Thorne, 
162  N.  Y.  238,  56  N.  E.  625,  44  N.  Y.  App.  Div.  8,  60  N.  Y.  Suppl.  419. 

Sec.  115.     Burden  on  Heirs  to  Show  Good  Faith. 

The  heirs  of  the  grantor  are  usually  the  only  persons  who  can 
show  the  nature  of  the  conveyance,  and  a  lack  of  evidence  on  this 
question  shows  a  lack  of  good  faith. 

In  re  Palmer,  17  N.  Y.  App.  Div.  360,  102  N.  Y.  Suppl.  236. 

Sec.  116.     Heirs  of  Grantee  not  Bound  by  His  Statements. 

The  heirs  of  the  grantee  are  not  bound  by  his  statements  as  to 
the  interest  of  the  grantor. 


102  INHERITANCE  TAX  LAW.  [§§117-118. 

The  testator  died  in  1893  giving  his  nephew  a  life  interest  in  certain  property 
and  providing  that  in  default  of  a  will  the  remainder  of  the  estate  should  pass  to 
the  heirs  of  the  nephew.  At  the  appraisal  of  the  estate  of  the  testator  the  nephew 
stated  that  the  testator  at  the  cime  of  his  death  was  the  owner  of  certain  real 
estate  although  the  fact  was  that  the  testator  had  previously  executed  and  de- 
livered to  the  nephew  a  deed  of  the  property.  The  court  holds  that  the  heirs 
of  the  nephew  are  not  bound  by  his  acts  but  have  a  right  to  rely  upon  the  deed 
rather  than  upon  the  will,  and  that  therefore  they  cannot  be  assessed  for  an  in- 
heritance tax  for  the  transfer  of  this  real  estate.  In  re  Mather,  179  N.  Y.  526, 
71  N.  E.  1134,  affirming  90  N.  Y.  App.  Div.  382,  85  N.  Y.  Suppl.  657,  84  N.  Y. 
Suppl.  1105,  41  Misc.  414. 

Sec.  117.    Will  Contemporaneous  with  Deed. 

The  fact  that  the  grantor  makes  his  will  within  a  short  time  of,^ 
or  simultaneously  with  making  the  deed  in  question  ,2  is  significant 
that  it  was  made  in  contemplation  of  death. 

^Rosenthal  v.  People,  211  111.  306,  71  N.  E.  1121. 

2  State  V.  Pahst,  139  Wis.  561,  593,  121  N.  W.  351.  See,  however,  In  re  Mahl- 
stedt,  67  N.  Y.  App.  Div.  176,  73  N.  Y.  Suppl.  818. 

Sec.  118.    Illness  or  Impending  Death. 

The  fact  that  a  conveyance  is  made  by  a  decedent  while  ill,  and 
shortly  before  his  death,  is  a  strong  circumstance  showing  that  it 
was  made  in  contemplation  of  death. ^ 

On  the  question  whether  a  deed  was  made  in  contemplation 
of  death,  evidence  was  introduced  as  to  the  cause  of  his  death, — 
diabetes.  The  decedent's  declaration  three  years  before  his  death, 
that  in  recognition  of  the  valuable  aid  of  his  sons  in  building  up 
his  estate  he  intended  to  dispose  of  part  of  his  estate  to  them,  was 
put  in  as  evidence.  But  the  court  remarks  that  it  is  significant 
that  he  did  not  do  so  then  or  in  the  immediately  succeeding  years. 
The  court  remarks  that  considering  his  condition,  the  execution  of 
the  deed  of  gift  and  the  will  simultaneously  indicates  that  he  was 
disposing  of  his  property  to  those  whom  he  regarded  as  natural 
objects  of  his  bounty  rather  than  that  he  was  transferring  it  to 
them  as  compensation  for  worthy  and  valuable  service  rendered  by 
them.  He  knew  his  condition  and  was  aware  of  the  outcome  to  be 
inferred  from  his  symptoms.  The  deed  of  gift  was  made  about  six 
months  before  his  death  and  the  court  finds  that  the  evidence 
abundantly  sustains  the  conclusion  of  the  trial  court  that  the  deed 
of  gift  was  made  in  contemplation  of  death. 

The  death  certificate  of  the  decedent's  attending  physician  was 
proper  evidence  under  Wisconsin  statutes,   where  it  was  intro- 


I 


§  119.]  TRANSFERS  IN  CONTEMPLATION  OF  DEATH.  103 

duced  as  evidence  of  its  contents  on  the  issue  of  whether  the  deed 
made  was  made  in  contemplation  of  death.^ 

1  Jn  re  Palmer,  17  N.  Y.  App.  Div.  360, 102  N.  Y.  Suppl.  236.  Reish  v.  Common- 
wealth, 106  Pa.  St.  521,  526. 

Where  a  woman  seventy-nine  years  old  was  afflicted  with  consumption  from 
which  she  knew  she  could  not  recover  and  was  very  weak,  and  made  a  transfer 
of  property  eight  days  before  her  death,  the  court  finds  that  this  was  made  in 
contemplation  of  death  under  the  New  York  statute.  In  re  Birdsall,  22  Misc. 
Rep.  180,  49  N.  Y    Suppl.  450,  2  Gibbons  293. 

Where  the  decedent  was  suffering  from  a  chronic  disease  and  cen  days  before 
his  death  he  sends  for  his  attorney,  telling  him  that  he  desired  to  make  such  a 
disposition  of  his  property  as  would  save  his  son  the  nuisance  of  a  will  contest, 
and  executes  deeds  by  which  he  conveys  all  his  real  estate  to  his  adopted  son,  this 
transfer  is  subject  to  the  inheritance  tax.  In  re  Price,  62  Misc.  149,  116  N.  Y. 
Suppl.  283.  In  this  case  the  grantor  suffered  from  spinal  trouble,  with  a  malig- 
nant growth,  and  made  his  will  three  days  after  the  deed  and  died  at  the  end  of 
a  month,  and  a  tax  was  levied.    Rosenthal  v.  People,  211  111.  306,  71  N.  E.  1121. 

2  State  V.  Pahst,  139  Wis.  561.  591.  121  N.  W.  351. 


Sec.  119.    Life  Estate  Reserved  to  Grantor. 

A  deed  reserving  a  Hfe  estate  in  the  grantor  is  commonly  subject 
to  tax  on  the  death  of  the  grantor.^  The  decedent  in  1896  trans- 
ferred a  large  amount  of  property  to  one  Crispell  on  an  oral  agree- 
ment that  principal  and  income  should  belong  to  Crispell,  and 
that  he  could  dispose  of  it  at  any  time  he  chose,  but  that  the  dece- 
dent was  to  have  the  income  as  long  as  he  lived,  although  the 
gift  was  to  be  absolute  to  Crispell.  In  1897  the  decedent  made 
another  gift  to  Crispell  on  a  written  agreement  that  the  decedent 
was  to  have  for  life  such  part  of  the  net  income  as  he  might  wish, 

Ewith  power  to  the  decedent  to  give  his  sister  ten  thousand  dollars 
jput  of  the  security  transferred.  The  court  holds  that  under  these 
agreements  the  testator  reserved  a  life  interest  to  himself;  that 
although  possession  of  the  securities  was  given  to  the  donee,  this 
■id  not  make  him  their  absolute  owner,  and  the  donee  during  the 
Honor's  life  held  the  securities  in  trust  to  pay  the  income  to  the 
donor.  The  gift  is  therefore  taxable  under  the  transfer  act  of 
1896  as  a  transfer  to  take  effect  after  the  death  of  the  donor.^ 

Where  one  makes  a  deed  in  trust  for  the  sole  benefit  of  the  ces- 
tuis  but  reserves  unto  himself  a  certain  income  for  life,  the  court 
may  divide  the  property  and  levy  an  inheritance  tax  on  that  por- 
tion of  it  necessary  to  raise  the  income  stipulated.^ 

Where  a  grantor  by  a  trust  deed  conveys  property  to  trustees 
in  trust  to  pay  an  annuity  to  his  daughter  for  life,  and  the  balance 


104  INHERITANCE  TAX  LAW.  [§  120. 

of  the  income  to  the  grantor,  and  on  his  death  to  pay  over  the  prin- 
cipal as  provided  in  the  trust  deed,  this  transfer  to  the  remainder- 
men on  his  death  is  intended  to  "take  effect  in  possession  or 
enjoyment  at  or  after  the  death"  of  the  donor,  and  was  therefore 
subject  to  the  inheritance  tax  under  N.  Y.  St.  1892,  c.  399,  s.  1, 
the  trust  deed  being  dated  in  September,  1892,  and  the  testator 
dying  in  1898.'' 

1  In  re  Ogsbury,  71  N.  Y.  App.  Div.  71,  39  N.  Y.  Suppl.  978.  Appeal  of  Wright, 
38  Pa.  St.  (2  Wright)  507.    Reish  v.  Commonwealth,  106  Pa.  St.  521,  526. 

2  In  re  Cornell,  170  N.  Y.  423,  63  N.  E.  445,  modifying  66  N.  Y.  App.  Div.  162, 
73  N.  Y.  Suppl.  32. 

3  People  V.  Kelley,  218  111.  509,  75  N.  E.  1038,  following  People  v.  Moir,  207 
111.  180,  69  N.  E.  905,  99  Am.  St.  Rep.  205. 

4  In  re  Cruger,  166  N.  Y.  602,  59  N.  E.  1121,  affirming  54  N.  Y.  App.  Div.  405, 
66  N.  Y.  Suppl.  636.  See,  however.  United  States  v.  Leverich,  9  Fed.  586,  holding 
that  cestui  did  not  "die  possessed  of"  property. 

Sec.  120.    Grantor  Retaining  Control. 

The  fact  that  the  grantor  retains  control  of  the  property  is  a 
very  strong  circumstance  to  show  that  the  transaction  is  subject 
to  tax.i 

In  one  case  a  grantor  gave  a  trust  transferring  property  described 
in  trust  for  his  three  sisters,  reserving  to  himself  certain  powers; 
namely,  to  direct  the  payment  of  the  income  to  himself  for  life, 
or  to  such  other  persons  as  he  may  designate  in  writing,  to  with- 
draw the  securities  and  secure  others,  to  alter  or  amend  the  trust 
and  add  property  thereto  and  terminate  the  same  at  any  time  by  a 
written  notice  to  a  trustee. 

The  court  holds  that  the  donor  has  reserved  during  his  life  such 
numerous  and  extensive  powers  over  the  property  transferred 
as  to  preclude  the  legitimate  inference  of  an  intention  on  his  part 
that  they  were  to  take  effect  in  absolute  possession  or  enjoyment 
before  his  death.  If  a  person  intends  in  good  faith  to  make  an 
absolute  gift  of  his  property  during  his  life  to  others  and  thereby 
make  a  provision  for  them  which  shall  not  be  contingent  upon 
the  event  of  his  death,  there  is  no  prohibition  in  the  act  in  that 
respect.  But  in  this  case  the  trust  deed  did  not  constitute  an  abso- 
lute gift  of  the  grantor's  property  during  his  life.^ 

1  In  re  Ogsbury,  7  N.  Y.  App.  Div.  71, 39  N.  Y.  Suppl.  978.  (Where  income  for 
use  of  grantor  for  life,  and  on  his  death  as  he  may  by  will  appoint.) 

Where  the  decedent  deposited  money  in  savings  banks  in  trust  for  his  children, 
these  interests  are  identical  with  those  passing  by  a  will.     The  decedent  reserved 


§  121.1  TRANSFERS  IN  CONTEMPLATION  OF  DEATH.  105 

to  himself  all  of  the  rights  of  ownership  in  the  interests  until  his  death,  when  he 
is  presumed  to  have  intended  that  each  trust  shall  come  to  an  end  and  that  the 
funds  shall  revert  to  his  estate  if  the  beneficiaries  do  not  survive  him.  In  re 
Barbey,  114  N.  Y.  Suppl.  725. 

Where  the  decedent  made  deeds  of  his  farms  and  t  he  deeds  remained  unrecorded 
and  in  the  possession  of  the  grantor  until  his  death;  that  the  insurance  continued 
to  be  payable  to  the  grantor  and  he  made  contracts  with  the  tenants;  that  the 
son  continued  to  reside  on  the  home  farm  and  work  it;  that  the  farms  continued  to 
be  assessed  to  the  grantor  who  paid  the  taxes;  that  the  crops  were  mostly  marketed 
at  the  grantor's  warehouse,  and  the  accounts  kept  in  his  books,  practically  as 
though  he  owned  them;  that  all  settlements  with  the  tenants  were  made  by  the 
grantor,  is  evidence  sufficient  to  show  that  the  transfer  is  within  the  statute  as 
intended  to  take  effect  only  on  death.  In  re  Jones,  65  Misc.  121, 120  N.  Y.  Suppl. 
862. 

The  fact  that  the  cestuVs  rights  depend  on  his  surviving  the  testator  shows 
that  the  transfer  is  in  contemplation  of  death.  In  re  Patterson's  Estate,  130 
N.  Y.  S.  970,  affirming  127  N.  Y.  S.  284. 

2  In  re  Bostwick,  160  N.  Y.  489,  55  N.  E.  208,  affirming  38  N.  Y.  App.  Div.  223, 
56  N.  Y.  Suppl.  495. 

Sec.  121.     Grantor  Retaining  no  Control. 

The  fact  that  the  grantor  reserves  no  control  whatever  over 
the  property  transferred  is  a  circumstance  showing  that  the  gift 
is  made  in  good  faith.  So  a  conveyance  did  not  take  effect  in  con- 
templation of  death  where  the  grantor  was  not  in  immediate  danger 
of  death  at  the  time  the  deed  was  delivered,  and  the  conveyance 
was  made  as  a  provision  for  the  grantor's  two  sons  and  the  deed 
was  withheld  from  record  by  mutual  arrangement  between  the 
parties  but  was  fully  delivered  to  the  trustee  and  possession  of 
the  premises  turned  over  to  the  trustees  at  the  time  of  the  delivery 
of  the  trust  deed.  It  is  not  the  object  of  the  Illinois  statute  to 
prevent  a  parent  from  giving  the  whole  or  any  portion  of  his  prop- 
erty to  his  children  in  his  lifetime  if  he  so  desire.^ 

Where  an  old  man,  eighty-six  years  old,  physically  feeble  but 
mentally  active,  makes  two  gifts  to  his  children,  of  securities  of 
large  amounts,  stating  to  them  that  his  property  is  a  burden  to  him, 
that  he  intends  to  give  it  to  them  and  shall  divide  a  part  of  it  at 
the  present  time,  and  where  the  securities  are  actually  delivered 
and  transferred  to  the  donees,  and  the  testator  exercises  no  control 
over  them  whatever,  these  gifts  are  not  gifts  in  contemplation  of 
death  within  the  meaning  of  the  New  York  transfer  statute.^ 

1  People  v.  Kelley,  218  111.  509,  75  N.  E.  1038. 

2  In  re  Spaulding,  163  N.  Y.  607,  57  N.  E.  1124,  affirming  49  N.  Y.  App.  Div. 
641. 


106  INHERITANCE  TAX  LAW.  [§§  122-123- 

A  case  close  to  the  line  appeared  where  the  testator,  at  the  age  of  eighty-three, 
gave  his  daughter  certificates  of  stock  by  transferring  his  certificates  in  writing 
on  the  back  and  delivering  them  to  the  daughter;  but  the  certificates  were  never 
transferred  on  the  books  of  the  company  and  the  testator  continued  to  receive 
the  dividends  and  act  as  officer  of  the  company  in  question.  The  court  finds  that 
though  the  facts  are  open  to  doubt,  still  no  fraud  or  bad  faith  appeared  to  the 
surrogate  and  his  decision  on  that  matter  is  therefore  final.  In  re  Bullard,  76  N.  Y. 
App.  Div.  207,  78  N.  Y.  Suppl.  491,  affirming  37  Misc.  663,  76  N.  Y.  Suppl.  309. 

Sec.  122.    Power  of  Revocation. 

That  the  grantor  reserves  a  power  of  revocation  is  a  sure  indi- 
cation that  the  deed  was  in  contemplation  of  death. 

Appeal  of  Wright,  38  Pa.  St.  (2  Wright)  507. 

In  re  Line,  155  Pa.  St.  378,  393,  26  A.  728,  32  Wkly.  Notes  Cas.  376. 

Sec.  123.    Where  Decedent  Transfers  Property  to  Corpora- 
tion and  Retains  Life  Interest  in  its  Stock. 

A  very  ingenious  Minnesota  gentleman  organized  a  corporation 
and  conveyed  to  it  his  property  in  return  for  the  issue  to  him  of  most 
of  its  capital  stock.  His  wife  and  children  all  signed  agreements  by 
which  the  transferror  agreed  to  transfer  to  the  wife  and  children, 
certain  shares  of  the  stock  on  their  agreement  to  lease  the  same 
stock  to  the  transferror  for  life,  and  on  the  agreement  that  the 
wife  transfer  the  stock  which  she  was  to  receive  to  the  children 
who  were  to  lease  it  to  her  for  life  on  the  same  conditions.  The 
court  holds  that  the  absolute  ownership  of  the  stock  was  not  in  the 
original  transferror,  but  that  the  effect  of  these  transactions  was  to 
give  him  a  life  estate  with  an  interest  in  reversion  in  the  wife  and 
children.  The  court  holds  that  a  life  estate  in  personal  property, 
although  unknown  at  common  law,  may  now  be  created,  and  that 
the  original  transferror  reserved  no  power  of  disposition  of  property, 
and  a  will  made  after  the  transfers  assuming  to  give  the  stock  to 
other  persons  would  have  been  of  no  effect,  and  that  therefore  the 
stock  did  not  pass  by  inheritance. 

State  V.  Probate  Court,  Washington  County,  102  Minn.  268,  292,  113  N.  W.  888. 

Sec.  124.    Conveyance  for  Consideration  where  Possession 
is  Postponed  till  the  Death  of  the  Grantor. 

In  a  Pennsylvania  case  a  will  devised  land  to  James  and  John, 
two  brothers,  and  provided  that  if  James  should  not  build  on  his 
land  he  might  sell  it  to  his  brother  John  at  two  thousand  dollars 


§  125.]  TRANSFERS  IN  CONTEMPALTION  OF  DEATH.  107 

besides  what  he  was  to  pay  out  of  it.  James  sold  to  John  his 
share  for  thirty-five  hundred  dollars  and  John  sold  part  of  this  for 
fifteen  hundred  dollars.  Later,  at  the  request  of  John,  James 
released  all  claims  under  his  father's  will  on  condition  that  John 
should  convey  all  the  land  to  James's  children,  they  to  take  posses- 
sion at  John's  death  and  give  up  an  obligation  for  the  two  thousand 
dollars  payable  after  his  death.  John  died  unmarried  and  without 
issue,  and  it  was  held  that  the  share  of  the  land  which  had  belonged 
to  John  originally  is  subject  to  the  tax,  but  the  portion  of  James  is 
not  subject  to  tax.  Substantially  it  was  agreed  that  the  children 
of  James  should  purchase  back  that  share  after  John's  death  by 
refunding  to  his  estate  what  he  had  paid  their  father  for  it.  Their 
notes  for  two  thousand  dollars  have  gone  into  the  inventory  of  the 
present  estate,  which  is  of  course  to  pay  the  tax.  Part  of  the 
consideration  was  that  John  should  convey  the  entire  estate  to 
his  nephews  and  nieces.  But  it  cannot  be  said  that  this  share  was 
John's  at  the  time  of  his  death,  or  that  it  was  within  the  spirit  of 
the  proviso  in  the  will.  It  is  not  found  or  pretended  that  the  object 
was  to  evade  the  tax,  and  the  note  given  for  the  transfer  excludes 
such  a  pretension.  Had  James  continued  the  owner  under  his 
father's  will,  it  would  have  passed  to  the  children  on  his  death  and 
there  would  have  been  no  claim  upon  it  by  the  state  for  the  tax  on 
the  estate  of  John. 
Appeal  of  Waugh,  78  Pa.  St.  (28  P.  F.  Smith)  436. 

Sec.  125.    Where  Property  Burdensome  to  Grantor. 

Gifts  have  been  sustained  made  by  aged  persons  or  those  in  fail- 
ing health  on  the  ground  that  the  care  of  property  was  a  burden 
to  them. 

In  re  Spaulding,  163  N.  Y.  607,  57  N.  E.  1124,  affirming  49  N.  Y.  App.  Div.  541. 
In  re  Mahlstedt,  67  N.  Y.  App.  Div.  176,  73  N.  Y.  Suppl.  818.  In  re  Groves,  52 
Misc.  433,  103  N.  Y.  Suppl.  571. 

The  testator  was  the  president  and  the  owner  of  nearly  all  the  stock  in  a  cor- 
poration, and  it  was  his  duty  to  sign  all  corporation  notes,  drafts,  checks  and  other 
papers,  but  this  duty  becoming  burdensome  during  his  illness  and  he  having  been 
told  by  his  physician  that  when  he  recovered  he  would  have  to  take  a  long  vaca- 
tion, he  expressed  the  desire  that  he  might  transfer  his  stock  to  his  wife,  so  that 
she  could  become  a  member  of  the  company  at  once  and  transact  the  business  in 
his  place.  He  did  this,  retaining  only  one  share  for  himself  so  that  he  might  con- 
tinue to  be  a  member  of  the  company  and  have  a  right  to  vote  at  its  meetings. 

The  court  holds  that  this  is  not  a  transfer  in  contemplation  of  death  although 
the  testator  died  within  three  weeks  after  the  transfer.  The  testator  had  a  natural 
right  to  give  this  stock  to  his  wife,  and  his  wife  took  possession  of  it  and  voted  upon 


108  INHERITANCE  TAX  LAW.  [§§  126-129. 

it  and  the  circumstances  under  which  it  was  transferred  show  that  his  death 
was  not  in  mind  in  making  the  transfer.  The  fact  that  he  made  a  will  on  the  same 
day  was  not  evidence  of  the  contemplation  of  death  except  as  a  remote  contin- 
gency. There  is  a  strong  dissenting  opinion  on  the  ground  that  the  testator  had 
been  advised  to  put  his  worldly  affairs  in  order  and  that  he  was  too  weak  to  sign 
the  assignment  and  was  at  the  time  desperately  ill,  and  that  positive  evidence  of 
an  intention  to  evade  the  statute  should  not  be  required.  In  re  Mahlstedt,  67 
N.  Y.  App.  Div.  176,  73  N.  Y.  Suppl.  818. 

Sec.    126.     Purpose   to    Reduce   Estate   to   Affect  Widow's 
Election  as  to  Dower. 

Where  an  old  man  suffering  from  an  incurable  disease  makes 
gifts  of  a  large  portion  of  his  property  to  various  relatives  because 
he  is  afraid  that  his  wife  will  claim  her  statutory  dower  in  his 
property,  which  on  her  death  would  go  to  his  stepson,  and  where 
the  object  of  the  gifts  to  relatives  is  to  avoid  this  result  by  reducing 
the  estate  so  that  the  wife  by  self-interest  will  desire  to  take  under 
his  will  and  not  her  statutory  interest,  this  gift  is  made  "in  con- 
templation of  death"  within  the  language  of  the  Illinois  statute. 
In  re  Benton,  234  111.  366,  84  N.  E.  1026. 

Sec.  127.    Where  Deed  Never  Delivered. 

Where  the  testator  had  given  a  deed  of  the  property  in  question 
to  the  sister,  which  deed  the  court  finds  never  was  delivered  until 
after  the  death  of  the  testator,  the  property  remained  the  property 
of  the  testator  and  subject  to  the  inheritance  tax. 

Appeal  of  Davenport  (Pa.  1888),  14  A.  346.  See  also  In  re  Jones,  65  Misc.  121 , 
120  N.  Y.  S.  862. 

See  further,  post,  s.  164. 

Sec.  128.    Where  Deed  Never  Recorded. 

A  tax  may  be  imposed  where  the  deed  is  never  recorded  and  re- 
mains in  the  possession  of  the  grantor,^  but  where  the  transaction 
is  for  consideration  no  tax  will  be  imposed,  though  the  deed  is 
never  placed  on  record.^ 

1  In  re  Jones,  65  Misc.  121,  120  N.  Y.  Suppl.  862. 

2/w  re  McCormick,  15  Pa.  Co.  Ct.  621,  3  Pa.  Dist.  838,  25  Pittsb.  Leg.  Int. 
N.  S.  91. 

Sec.  129.    Deed  Executed  before  Statute  Enacted. 

A  transfer  before  the  statute  was  enacted  cannot  be  in  contempla- 
tion of  death  within  its  meaning. 

In  re  Hendricks,  3  N.  Y.  Suppl.  281,  1  Con.  Surr.  301.  In  re  Demers,  41  Misc. 
Rep.  470,  84  N.  Y.  Suppl.  1109. 


§130.]  TRANSFERS  IN  CONTEMPLATION  OF  DEATH.  109 

Sec.  130.    Liability  of  Executors. 

Where  a  decedent  makes  a  deed  in  contemplation  of  death,  his 
executors  should  be  made  to  pay  the  tax. 

Appeal  of  Wright,  38  Pa.  St.  (2  Wright)  507.    See  In  re  McKennan,  25  South 
Dakota  369,  126  N.  W.  611,  reversed  on  rehearing,  130  N.  W.  33. 
As  to  the  liability  of  executors  see  further,  post,  s.  317. 


CHAPTER  XX. 


CONSIDERATION. 

§  131.  In  General. 

§  132.  Deed  Made  under  Contract  to  Sell. 

§  133.  Ante-Nuptial  Contract. 

§  134.  Transfer  by  Will  for  Consideration. 

§  135.  Will  under  Contract  to  Leave  by  Will. 

§  136.  Advancements. 

§  137.  Services. 

§  138.  Support. 

Sec.  131.    In  General. 

Transfers  by  deeds  are  commonly  taxable  only  when  made  with- 
out consideration.^  The  consideration  has  been  upheld  where  it 
consists  in  an  agreement  to  erect  a  monument,^  or  to  pay  the  trans- 
ferror an  annuity,^  or  by  a  mother  to  surrender  an  illegitimate  child,'' 
or  an  oral  waiver  of  a  previous  written  contract.^  So  where  a  son 
was  in  partnership  with  his  father  under  a  contract  which  pro- 
vided in  part  that  on  the  father's  death  his  interest  in  the  partner- 
ship should  belong  to  the  son,  this  is  not  a  transfer  taxable  under 
the  United  States  statute  of  1898,  as  the  son  had  vested  rights 
under  the  partnership  agreement  during  the  life  of  the  testator.® 

^In  re  Palmer,  17  N.  Y.  App.  Div.  360,  102  N.  Y.  Suppl.  236.  Blair  v.  Herold, 
150  Fed.  199,  158  Fed.  804,  86  C.  C.  A.  64. 

Where  the  decedent  conveyed  a  farm  to  his  nephew  for  a  good  consideration 
and  where  the  deed  was  never  placed  on  record  until  after  the  grantor's  death, 
the  transfer  is  not  subject  to  an  inheritance  tax  in  the  absence  of  evidence  of  intent 
to  convey.  In  re  McCormick,  15  Pa.  Co.  Ct.  621,  3  Pa.  Dist.  838,  25  Pittsb.  Leg. 
Int.  N.  S.  91. 

2/w  re  Edgerton,  158  N.  Y.  671,  52  N.  E.  1124,  affirming  35  N.  Y.  App.  Div. 
125,  54  N.  Y.  Suppl.  700. 

3/«  re  Edgerton,  158  N.  Y.  671,  52  N.  E.  1124,  affirming  35  N.  Y.  App.  Div, 
125,  54  N.  Y.  Suppl.  700. 

4  In  re  Demers,  41  Misc.  470,  84  N.  Y.  Suppl.  1109. 

'^Lamh  v.  Morrow,  140  Iowa  89,  117  N.  W.  1118,  18  L.  R.  A.  N.  S.  226. 

^  Blair  v.  Herold,  150  Fed.  199,  affirmed  in  86  C.  C.  A.  64,  158  Fed.  804. 
[Bequest  to  creditor,  see  post,  s.  236.] 


§§132-134.1  CONSIDERATION.  HI 

Sec.  132.    Deed  Made  under  Contract  to  Sell. 

At  the  time  of  the  decedent's  death  she  was  under  contract  to 
sell  lands  in  another  state  and  left  a  conveyance  thereof  which  was 
delivered  on  the  day  after  her  death  in  consideration  of  the  price 
named  in  the  contract.  As  the  land  was  not  subject  to  tax 
there  is  no  tax  on  its  proceeds. 

In  re  Baker,  67  Misc.  360,  124  N.  Y.  Suppl.  827. 

Sec.  133.    Ante-Nuptial  Contract. 

An  ante-nuptial  agreement  for  settlement  of  property  made  in 
good  faith  is  not  subject  to  tax,i  even  where  the  husband  trans- 
ferred certain  stock  to  the  wife,  and  the  next  day  she  transferred 
the  same  stock  back  to  him  as  trustee  to  apply  to  the  mutual  use 
of  the  parties  during  their  joint  lives.  This  is  not  a  gift  to  the  wife 
in  contemplation  of  death.  The  court  holds  that  the  two  agree- 
ments are  not  contemporaneous.^ 

1  In  re  Baker,  178  N.  Y.  575,  70  N.  E.  1094,  affirming  83  N.  Y.  App.  Div.  530, 
38  Misc.  151,  77  N.  Y.  Suppl.  170. 

2/n  re  Miller,  77  N.  Y.  App.  Div.  473,78  N.  Y.  Suppl.  930,  overruling  75  N.Y. 
Suppl.  929. 

Sec.  134.    Transfer  by  Will  for  Consideration. 

It  seems  to  be  immaterial  for  purposes  of  the  inheritance  tax 
whether  the  transfer  by  will  is  a  gratuity  or  is  for  consideration. 

The  will  of  Jay  Gould  recited  that  his  son  having  conducted  his  business  for 
many  years  with  great  ability  he  had  fixed  the  value  of  the  son's  services  at  five 
million  dollars;  and  evidence  was  introduced  that  this  legacy  was  by  agreement 
in  view  of  the  son's  services  and  was  for  compensation  and  no  other  purpose.  The 
court  holds,  however,  that  the  New  York  statute  does  not  limit  the  tax  to  prop- 
erty "gratuitously  given  by  will,"  but  that  the  word  "transfer"  covers  the  gift 
by  will,  whatever  the  method  may  be,  whether  to  pay  a  debt,  or  to  discharge  a 
moral  obligation,  or  to  benefit  a  relative  for  whom  the  testator  entertained  a 
strong  affection.  In  re  Gould,  156  N.  Y.  423,  428,  51  N.  E.  287,  modifying  19 
N.  Y.  App.  352. 

Under  the  Massachusetts  statute  of  1909,  chapter  490,  part  IV,  section  1,  a 
transfer  for  a  consideration  is  not  exempt  from  tax  unless  "the  consideration, 
whatever  form  it  may  assume,  is  not  only  valuable,  but  full,  by  covering  the  value 
in  money,  or  the  equivalent  in  money  of  the  property  transferred.  ...  If  ser- 
vices rendered,  or  to  be  rendered,  constitute  the  consideration  .  .  .  their  value 
may  be  inquired  into  and  ascertained,  and  where  in  "money's  worth"  they  equal 
or  exceed  the  fair  value  of  the  property  at  the  death  of  the  transferror,  no  tax  can 
be  imposed.  If  they  fall  below  such  value,  there  i«5  no  provision  for  a  reduction, 
leaving  the  excess  only  to  be  taxed  as  a  gratuity.'  Per  Braley,  J.,  in  State  Street 
Trust  Co.  V.  Stevens,  209  Mass.  373.  95  N.  E.  851. 


112  INHERITANCE  TAX  LAW.  [§135. 

Sec.  135.    Will  under  Contract  to  Leave  by  Will. 

Interests  under  a  will  made  in  pursuance  of  an  ante-nuptial 
contract  to  leave  by  will  are  subject  to  the  inheritance  tax  where 
the  testator  had  during  his  life  a  discretion  to  use  his  own  property,^ 
but  not  where  the  contract  creates  vested  interests  in  the  benefi- 
ciaries, as  then  their  rights  accrue  under  the  contract  and  not 
under  the  will.^ 

^  The  testator  died  in  1901  leaving  a  will,  and  the  inheritance  tax  was  compro- 
mised by  the  executor.  An  action  was  brought  relying  on  an  ante-nuptial  con- 
tract with  the  testator  to  leave  by  will  certain  property,  which  agreement  the 
testator  had  failed  to  fulfill.  The  action  ended  by  a  judgment  for  the  plaintiff, 
and  the  court  ordered  the  executors  to  turn  over  to  the  plaintiff  the  property  cov- 
ered by  the  contract.  The  court  holds  that  this  transfer  is  subject  to  the  inherit- 
ance tax,  as  it  was  not  a  contract  to  convey,  but  a  contract  to  make  a  will.  Had 
the  deceased  performed  his  agreement  and  bequeathed  the  property  the  estate 
would  have  been  subject  to  the  tax.  It  does  not  affect  the  question  of  the  liability 
of  the  estate  to  taxation  that  in  consequence  of  the  failure  of  the  testator  to  carry 
out  his  promise  the  beneficiary  was  obliged  to  resort  to  a  court  for  relief.  The 
judgment  of  the  court  converts  the  devisees  or  heirs  at  law,  as  the  case  may  re- 
quire, into  trustees  for  the  beneficiary  under  the  original  agreement.  Therefore 
the  devolution  of  the  property  has  in  fact  taken  place  under  the  will  and  such  dev-- 
olution  is  subject  to  the  transfer  tax.  In  re  Kidd,  188  N.  Y.  274,  279,  80  N.  E. 
924,  reversing  115  N.  Y.  App.  Div.  205,  100  N.  Y.  Suppl.  917. 

A  husband  bought  and  paid  for  a  house  and  lot  which  he  had  conveyed  to 
his  wife  on  the  understanding  that  she  should  make  her  will  devising  the  prop- 
erty to  him  in  case  she  died  before  he  died.  Pursuant  to  this  understanding  she 
made  her  will  and  died  February  20,  1866,  and  the  court  holds  that  the  inherit- 
ance tax  should  be  assessed  on  her  estate.  The  legal  title  to  the  property  and  the 
ownership  were  in  her  when  she  died.  "The  fact  that  the  will  was  made  on  account 
of  an  agreement  to  that  effect  by  the  wife  when  she  took  her  title  rendered  it 
none  the  less  an  instrument  creating  a  beneficial  interest  in  the  husband  on  her 
death,  and  that  under  the  statute  is  the  succession  to  be  taxed."  Ransom  v. 
United  States,  Fed.  Cas.  11,  574. 

The  testator  made  an  agreement  to  leave  property  by  will  in  consideration  of 
care  and  support  to  be  given  him  for  the  rest  of  his  life  and  he  made  a  will  carrying 
out  the  agreement.  The  court  finds  that  this  is  not  a  "bona  fide  purchase  for  full 
consideration  for  money  or  money's  worth  made  ...  to  take  effect  .  .  .  after 
the  death  of  the  grantor."  The  court  finds  that  the  devisee  took  no  title  in  her 
lifetime,  but  that  the  words  quoted  applied  only  to  a  deed  and  not  to  a  will.  As 
the  will  was  made  and  allowed  the  devisee  is  bound  by  an  effective  performance 
of  the  agreement  and  must  take  compensation  under  the  will,  and  as  an  incident 
of  the  transfer  of  the  estate  to  her  she  must  suffer  the  assessment  of  the  tax.  The 
court  suggests  that  for  actual  disbursements  incurred  in  the  service  the  devisee 
may  well  be  a  creditor  of  the  estate.  In  re  Perry  (Mass.  Middlesex  County  Pro- 
bate  Court,   July,   1911). 

2  Where  in  1899  the  testator  entered  into  an  ante-nuptial  contract  in  writing, 
by  the  terms  of  which  in  consideration  of  his  marriage  he  agreed  to  provide  for 


§§136-137.]  CONSIDERATION.  113 

her  by  his  last  will  and  testament  in  case  she  survived  him,  the  court  holds  that 
a  provision  under  his  will  is  in  the  nature  of  a  debt  and  is  therefore  not  subject 
to  taxation  under  the  transfer  tax  law.  In  re  Baker,  178  N.  Y.  575,  70  N.  E.  1094, 
affirming  83  N.  Y.  App.  Div.  530,  82  N.  Y.  Suppl.  390,  38  Misc.  151,  77  N.  Y. 
Suppl.  170. 

The  testator  devised  all  his  property  to  his  mother  and  entered  into  a  written 
contract  with  her  that  in  consideration  of  the  devise  she  would  leave  by  will  one- 
half  of  the  property  she  received  to  A.  B.  The  testator  died  leaving  his  mother 
surviving  and  on  her  death  she  devised  the  property  in  accordance  with  her  con- 
tract. The  inheritance  tax  act  was  passed  after  the  making  of  the  contract  by 
the  mother  and  before  her  death,  and  the  court  holds  that  the  property  passing 
to  A.  B.  is  not  subject  to  the  tax.  The  court  says  that  reading  the  will  and  contract 
together  as  they  must  be  read,  the  mother  took  a  life  estate  only  with  an  obliga- 
tion to  leave  by  will  to  A.  B.  and  that  therefore  A.  B.  really  took  under  the  will  of 
the  testator  and  not  under  that  of  the  mother.  The  court  relies  on  Emmons  v. 
Shaw,  171  Mass.  410,50  N.  E.  1033,  and  In  re  Lansing,  182  N.  Y.  238,  74  N.  E. 
882,  in  both  of  which  cases  the  exercise  of  a  power  to  appoint  by  will  was 
referred  to  the  original  will  and  no  tax  is  levied  where  the  statute  was  passed 
after  the  original  will  went  into  effect.  Winn  v.  Schenck,  33  Ky.  L.  Rep.  615, 
110  S.  W.  827. 


Sec.  136.    Advancements. 

Advancements  are  subject  to  the  inheritance  tax,  as  they  are 
not  made  on  valuable  consideration. 

Sums  lent  in  advance  to  the  sons  are  not  regarded  as  advancements,  but  they 
are  claims  belonging  to  the  estate,  and  hence  they  are  subject  to  the  inheritance 
tax.    In  re  Bartlett,  4  Misc.  Rep.  380,  25  N.  Y.  Suppl.  990. 

The  United  States  statute  of  1864  covers  an  advance  made  by  a  father  to  his 
son,  as  it  is  a  gift  made  without  valuable  or  adequate  consideration.  The  fact 
that  the  son  was  named  in  his  father's  will  does  not  give  him  any  vested  or  con- 
tingent estate  but  is  a  bare  possibility  not  assignable  and  can  therefore  not  be 
made  the  basis  for  a  consideration.     United  States  v.  Banks,  17  Fed.  322. 

Long  prior  to  the  death  of  the  testator  he  advanced  to  the  beneficiaries  on  ac- 
count of  their  legacy  at  different  times  sums  which  aggregated  four  thousand 
dollars  and  took  from  them  their  bonds  in  corresponding  amounts  condi- 
tioned for  the  payment  during  his  life  of  an  annuity  or  yearly  sum  equal  to  the 
interest  at  six  per  cent  on  the  advancements.  The  court  holds  that  this  was 
really  a  device  to  evade  the  tax  and  its  meaning  that  the  testator  should  receive 
a  life  income  from  his  legacy  and  that  full  enjoyment  of  the  principal  should  be 
had  by  the  legatee  only  after  the  testator's  death.  In  re  Conwell,  5  Pa.  Co.  Ct. 
368,  22  Wkly.  Notes  Cas.  183. 

Sec.  137.    Services. 

A  deed  for  services  may  well  be  found  to  be  made  on  adequate  con- 
sideration and  therefore  not  subject  to  the  tax,^  but  the  tax  is  due 
where  the  grantor  transferred  by  deed  all  his  real  and  personal  prop- 


114  INHERITANCE  TAX  LAW.  [§137 

erty  in  consideration  of  the  grantee's  services  rendered  and  to  be 
rendered,  in  trust,  nevertheless,  for  the  use  and  benefit  of  the  grantor 
during  the  term  of  his  natural  life,  and  at  his  death  to  become 
the  property  of  the  grantee  absolutely.  There  was  a  col- 
lateral agreement  to  the  effect  that  the  grantor  during  his 
life  should  have  the  right  to  use  any  portion  of  the  properties 
mentioned,  and  as  the  grantee  never  got  full  title,  the  tax 
must  be  assessed  .^ 

Where  a  legacy  is  stated  to  be  for  services,  the  legatee  should 
renounce  his  legacy  and  prove  as  a  creditor,  as  otherwise  he  will 
be  taxed  as  a  legatee.^ 

1  United  States  v.  Hart,  4  Fed.  292. 

The  testator's  wife  died  in  1897,  leaving  a  daughter  thirty-five  years  old, 
who  was  a  deaf  mute.  After  the  death  of  the  mother  a  companion  for  the  daughter 
who  had  lived  in  the  family  married,  and  thereafter  the  testator  entered  into  a 
contract  with  another  companion  whereby  in  consideration  of  her  continuing  to 
act  as  companion  of  and  caring  for  the  daughter  as  long  as  the  daughter  lived, 
the  testator  undertook  to  convey  and  transfer  to  the  daughter  all  the  property 
he  possessed.  The  comrade  faithfully  performed  her  part  of  the  contract  until 
1904,  when  the  daughter  died  and  the  testator  conveyed  from  time  to  time  various 
parts  of  his  property  to  the  companion.  It  appeared  that  the  companion  had 
exclusive  dominion  over  the  property.  The  testator  was  seventy-four  years  old 
when  he  made  the  agreement,  but  he  was  in  good  health  though  not  strong.  The 
testator  might  well  expect  the  daughter  to  outlive  him;  but  he  did  not  transfer 
his  property  to  his  daughter  or  in  trust  for  her.  Instead  he  sold  it  in  considera- 
tion of  a  contract  for  her  care,  the  performance  of  which  began  and  was  finished 
in  her  lifetime.  The  motive  for  transferring  the  property  was  not  his  impending 
death  but  his  desire  to  provide  for  his  daughter's  future  whether  he  lived  or  died. 
The  contemplation  of  death  must  be  the  impelling  motive  without  which  the 
conveyance  would  not  be  made,  in  order  to  subject  a  transfer  of  property  to  the 
inheritance  tax.     People  v.  Burkhalter,  247  111.  600,  93  N.  E.  379. 

The  person  claiming  exemption  for  services  must  show  that  they  equalled 
in  value  the  amount  transferred.  State  Street  Trust  Co.  v.  Stevens,  209  Mass.  373, 
95  N.  E.  851. 

^Inre  Skinner,  45  Misc.  559,92  N.  Y.  Suppl.972  (s.c.  106  N.  Y.  App.  Div.  217, 
94  N.  Y.  Suppl.  144). 

^The  testator  gave  a  legacy  to  a  doctor  in  view  of  his  care  and  services  during 
the  testator's  years  of  sickness  "without  asking  any  reward  for  services  rendered, 
as  he  knew  my  means  were  somewhat  limited." 

"By  neglecting  to  present  any  account  to  the  executor,  or  prove  any  claim 
against  the  estate,  and  having  accepted  the  gratuity  which  the  deceased  provided 
for  him  in  her  will,  it  was  the  duty  of  the  executor,  on  its  payment  to  him,  to  de- 
duct therefrom  the  tax  which  had  been  assessed  by  the  surrogate.  If  he  desired 
to  escape  the  payment  of  the  tax,  or  was  dissatisfied  with  the  amount  of  the  legacy, 
he  should  have  established  his  debt,  if  he  had  any,  against  the  estate,  and  had  it 
paid  by  the  executor  in  the  usual  manner,  and  let  the  legacy  to  him  go  into  the 
residuary  assets. 


S 138.]  CONSIDERATION.  115 

'The  times  have  been 

That,  when  the  brains  were  out,  the  man  would  die, 
And  there  an  end;  but  now  they  rise  again, 
With  twenty  mortal  murders  on  their  crowns, 
And  push  us  from  our  stools. ' 

So,  in  the  settlement  of  estates,  the  legal  skeletons  of  stale  claims  and  outlawed 
demands  stalk  forth  from  their  charnel  houses  and  their  graves,  and  seek  to  push 
from  their  stools  the  guests  whom  the  testator  has  invited  to  the  feast."  Per 
Kennedy,  S.,  in  In  re  Doty,  7  Misc.  Rep.  193,  56  N.  Y.  St.  626,  27  N.  Y.  Suppl. 
653,  656. 

Sec.  138.    Support. 

A  deed  made  in  good  faith  in  consideration  of  the  support  of  the 
grantor,^  reserving  the  right  to  reside  on  the  premises,^  is  made  on  a 
vaUd  consideration  and  is  not  subject  to  the  transfer  tax.  So  where 
the  testator,  in  1900,  joined  with  his  wife  in  making  a  deed  of  real 
estate  to  the  son  of  his  adopted  child  in  consideration  of  support 
for  himself  and  his  wife  for  the  rest  of  their  lives,  and  the  son 
carried  out  the  contract  faithfully,  and  the  testator  died  in  1906, 
having  by  his  will  provided  that  certain  expenses  should  be  paid 
out  of  the  personal  estate  and  not  by  the  son  as  the  contract 
required,  the  court  holds  that  the  property  so  transferred  is  not 
subject  to  the  inheritance  tax.  The  son  took  immediate  posses- 
sion of  the  land  and  continued  to  occupy  the  same  down  to  the 
date  of  trial.  The  son  paid  the  taxes  on  the  land,  had  full  posses- 
sion, and  the  testator  never  claimed  ownership  after  the  conveyance, 
in  fact  expressly  disclaimed  any  interest  in  the  land,  and  many 
times  asserted  that  it  belonged  exclusively  to  the  son.  It  was  not 
suggested  that  these  arrangements  were  for  the  purpose  of  defeating 
the  inheritance  tax.^ 

*  In  re  Hulse,  15  N.  Y.  Suppl.  770  ("in  consideration  of  a  home  for  me  at  his 
house  during  my  life"). 

2  In  re  Hess,  187  N.  Y.  554,  80  N.  E.  1111,  affirming  110  N.  Y.  App.  Div.  476, 
96  N.  Y.  Suppl.  990. 

«Lcw&  v.  Morrmn,  140  Iowa  89, 117  N.  W.  1118, 18  L.  R.  A.  (  N.  S.)  226. 


CHAPTER  XXI. 


POWERS. 


§  139.    In  General. 
§  140.    What  Law  Governs. 

§  141.    When  Power  is  Created  before  Passage  of  Statute. 
§  142.    Immaterial  Whether  Power  Created  by  Will  or  by  Deed. 
§  143.    Where  Appointment  is  to  Same  Persons  Named  in  Original 
Instrument. 

Sec.  139.    In  General. 

Powers  are  usually  treated  in  inheritance  statutes  as  merely 
designating  interests  under  the  will  of  the  original  decedent.  A 
tax  on  interests  under  a  power  created  by  will  should  be  treated  for 
the  purposes  of  the  inheritance  tax  as  though  the  interests  arose 
under  the  will  itself.^  Therefore  relationship  must  be  reckoned 
as  from  the  original  decedent  and  not  from  the  donee  of  the  power .^ 
Some  statutes,  however,  notably  New  York,  assess  the  tax  on  the 
exercise  of  the  power  itself,  and  in  such  states  the  fund  is  treated 
for  taxing  purposes  as  passing  from  the  donee  directly  to  the 
beneficiary,^  and  remainder  interests  under  the  power  are  taxable 
only  on  the  exercise  of  the  power  and  not  as  a  remainder  under  the 
original  will.^  Such  a  tax  must  be  on  the  value  of  the  property 
transferred  under  the  power .^  Where  the  donee  of  the  power  of 
appointment  in  her  will  gave  a  direction  to  repay  a  loan  hereto- 
fore made  to  her  out  of  the  fund  over  which  she  exercised  her 
power,  this  is  a  transfer  to  the  creditor,  and  was  taxable  under  the 
New  York  statute  of  1897 .« 

Where  the  testator  gave  property  to  his  wife  to  be  disposed  of 
as  she  might  think  proper  without  any  remainder  or  trust  being 
created,  this  was  an  absolute  estate  to  the  wife,  and  therefore  on 
her  death,  without  exercising  her  power,  there  was  no  reason  for 
levying  a  tax  on  the  heirs  of  the  original  testator.^ 

The  value  of  an  estate  subject  to  a  power  should  be  deducted  in 
reckoning  the  value  of  remainder  interests.  A  will  gave  a  certain 
estate  in  trust  to  pay  the  income  to  the  wife  for  life,  the  remainder 
to  the  nephew;  but  the  codicil  gave  the  wife  power  to  appoint  the 


§  140.1  POWERS.  117 

portion  of  the  estate  given  to  the  nephew.  The  court  holds  that 
from  the  interest  of  the  nephew  should  be  deducted  the  value  of 
the  property  over  which  the  wife  had  the  power  of  appointment.^ 

A  statute  imposing  a  tax  on  transfers  from  persons  dying  seized  of 
property  does  not  cover  an  exercise  of  a  power  by  will  of  a  cestui.^ 

^Emmons  v.  Shaw,  171  Mass.  410,  413.  In  re  Stewart,  131  N.  Y.  274,  30  N.  E. 
184,  14  L.  R.  A.  836.  In  re  Backhouse,  185  N.  Y.  544,  77  N.  E.  1181,  affirming 
110  N.  Y.  App.  Div.  737,  96  N.  Y.  Suppl.  466.     As  to  exemptions,  see  post,  s.  254. 

The  collateral  inheritance  tax  is  assessed  only  on  property  which  was  the 
absolute  property  of  the  testator  and  not  on  that  of  which  she  only  held  the 
power  of  appointment.     In  re  Lisle,  22  Pa.  Super.  Ct.  262  (1903). 

2  Commonwealth  v.  Williams,  13  Pa.  St.  (1  Harris)  29. 

Where,  however,  the  power  of  appointment  is  exercised  improperly,  the  estate 
passes  as  the  estate-  of  the  donee  to  collaterals  of  the  donee.  Commonwealth  v. 
Sharpless,  2  Chest.  Co.  Rep.  (Pa.)  246. 

3  Minot  V.  Stevens,  207  Mass.  588,  93  N.  E.  573,  under  St.  1909,  c.  527,  differing 
from  the  former  statute  construed  in  Emmons  v.  Shaw,  171  Mass.  410.  In  re 
Rogers,  172  N.  Y.  617,  64  N.  E.  1125,  affirming  71  N.  Y.  App.  Div.  461,  75 
N.  Y.  Suppl.  835.  In  re  Walworth,  61  N.  Y.  App.  Div.  171,  72  N.  Y.  Suppl.  984 
(holding  that  relationship  must  be  reckoned  from  the  donee  of  the  power). 

4  In  re  Howe,  176  N.  Y.  570,  68  N.  E.  1118,  affirming  86  N.  Y.  App.  Div.  286, 
83  N.  Y.  Suppl.  825. 

6  In  re  Tucker,  27  Misc.  Rep.  616,  59  N.  Y.  Suppl.  699. 

The  testator  died  in  December,  1887,  leaving  a  life  estate  with  a  power  of 
appointment  in  the  life  tenant.  The  life  tenant  died  in  1904  after  exercising  the 
power,  and  the  court  holds  that  although  all  property  was  made  subject  to  the 
tax  under  the  will  of  the  original  testator,  still  the  exercise  of  the  power  of 
appointment  is  taxable  under  the  statute  of  1897.  The  court  holds  that  the 
fact  that  the  tax  was  erroneously  assessed  in  1888  on  the  whole  interest  instead 
of  merely  on  the  life  interest  does  not  prevent  the  collection  of  the  tax  on  the 
exercise  of  the  power  of  appointment.  In  re  Buckingham,  106  N.  Y.  App.  Div. 
13,  94  N.  Y.  Suppl.  130. 

6  In  re  Rogers,  172  N.  Y.  617,  64  N.  E.  1125,  affirming  71  N.  Y.  App.  Div. 
461,  75  N.  Y.  Suppl.  835. 

7  In  re  Lynn,  34  Misc.  681,  70  N.  Y.  Suppl.  730. 

^  In  re  Field,  36  Misc.  Rep.  279,  73  N.  Y.  Suppl.  512. 
^Gallard  v.  Winans,  111  Md.  434,  472,  74  A.  626. 

[Contingent  remainder  arising  by  appointment  after  death  of  testator  taxable, 
see  post,  s.  233,  n.  2.] 

Sec.  140.    What  Law  Governs. 

Under  statutes  taxing  the  power  as  created  under  the  will  of  the 
testator  no  tax  is  due  where  the  power  is  created  by  the  will  of  a 
,  non-resident,i  although  the  donee  is  a  resident.^  Under  the  New 
York  act  making  the  exercise  of  the  power  the  basis  of  the  tax 
no  tax  can  be  assessed  in  New  York  where  the  grantor  resided,  if  the 
donee  of  the  power  was  a  non-resident,  except  as  to  property  located 


118  INHERITANCE  TAX  LAW.  [§  141. 

in  New  York,^  while  the  tax  should  be  laid  where  the  donee  of  the 
power  was  a  resident  of  the  state,  although  the  funds  were  actually 
held  by  trustees  outside  the  state.* 

*  What  law  governs  exercise  by  non-resident  of  power  under  will  of  resident, 
see  ante,  s.  20. 

'^  Where  a  citizen  of  Maryland  created  a  life  estate  with  a  power  of  appoint- 
ment to  a  citizen  of  Pennsylvania,  and  the  life  tenant  exercised  the  power  by 
will,  the  state  was  not  entitled  to  an  inheritance  tax  upon  the  exercise  of  the 
power.  The  fund  was  in  Maryland  at  the  testator's  death,  the  interest  made  by  it 
was  received  by  the  appointor  to  her  own  use  during  her  lifetime  and  the  appointee 
asks  no  more  than  to  be  permitted  to  receive  the  principal  from  the  executors 
free  from  encumbrances  or  deduction  as  her  successor.  This  is  a  plain  case  of  a 
foreign  legacy  received  abroad,  which  is  not  taxable  in  Pennsylvania.  Common- 
wealth V.  Duffield,  12  Pa.  St.  (2  Jones)  277,  Brightly  N.  P.  469. 

There  is  no  transfer  subject  to  tax  in  New  York  where  all  of  the  assets  are 
in  the  state  of  Maryland  held  by  trustees  residing  in  Maryland  under  a  will  of  a 
citizen  of  Maryland  pursuant  to  the  laws  of  that  state,  although  the  donee  was 
a  resident  of  New  York.    In  re  Thomas,  39  Misc.  Rep.  136,  78  N.  Y.  Suppl.  981. 

'  The  jurisdiction  of  the  state  of  New  York  is  limited  to  the  property  situated 
in  this  state  at  the  time  of  the  death  of  the  donee  of  the  power.  In  re  Kissel, 
65  Misc.  443,  121  N.  Y.  Suppl.  1088,  affirmed  in  142  N.  Y.  934,  127  N.  Y. 
Suppl.  1127. 

*  The  question  is  not  where  the  property  was  located  or  whether  it  was  real 
estate  or  personal  property  but  whether  the  beneficiary  came  into  its  possession 
through  the  exercise  of  a  privilege  conferred  by  the  state  of  New  York.  The 
appointee  under  the  power  gets  all  of  her  rights  by  reason  of  the  exercise  of  the 
power  and  privilege  granted  by  the  state  of  New  York.  In  re  Hull,  186  N.  Y. 
586,  79  N.  E.  1107,  affirming  111  N.  Y.  App.  Div.  322,  97  N.  Y.  Suppl.  701. 

Sec.  141.    When  Power  is  Created  before  Passage  of  Statute. 

Unless  the  exercise  of  the  power  is  expressly  made  taxable, 
no  tax  should  be  levied  where  the  power  is  created  before  the 
passage  of  the  inheritance  tax  statute,  though  the  donee  dies  after- 
wards.^ A  tax  may,  however,  be  valid  when  levied  on  the  exercise 
of  a  power  created  by  the  will  of  one  who  died  before  the  passage 
of  the  taxing  act,^  or  by  a  deed  executed  before  its  passage.^ 

"It  is  quite  immaterial  that  there  was  no  statute  imposing  a 
succession  tax  of  any  kind  in  force  when  the  power  was  created. 
That  transfer  is  not  taxed,  and  the  statute  makes  no  effort  to 
reach  it.  It  is  the  practical  transfer  through  the  exercise  of  the 
power  by  will  that  is  taxed  and  nothing  else  [under  N.  Y.  St.  1897]. 
The  right  of  the  legislature  to  impose  a  tax  on  the  privilege  of 
exercising  a  power  by  will  is  not  affected  by  the  fact  that  no  such 
tax  was  imposed  when  the  power  was  created.""* 


§141.1  POWERS.  119 

However,  the  provision  in  the  New  York  act  of  1897,  that  the 
failure  or  omission  to  exercise  the  power  of  appointment  subjects 
the  property  to  a  transfer  tax  in  the  same  manner  as  if  the  donee 
of  the  power  had  owned  the  property  and  devised  it  by  will,  is 
ineffective,  as  where  there  is  no  transfer  there  can  be  no  tax;  and 
a  transfer  made  before  the  passage  of  the  act  relating  to  transfers 
is  not  affected  by  it.  If  it  be  assumed  that  a  remainder  interest 
in  default  of  the  execution  of  a  power  is  contingent,  nevertheless  it  is 
acquired  under  the  will  of  the  testator  and  cannot  be  subject  to 
tax  when  the  testator  died  before  the  imposition  of  a  transfer  tax. 
It  then  became  a  property  right  in  the  remainderman,  which  was 
just  as  sacred  and  just  as  immune  from  any  legislative  attack  as 
any  other  property  right ;  and  where  the  power  of  appointment  is 
not  exercised,  no  tax  can  be  laid  upon  it.^ 

The  Massachusetts  court,  on  the  contrary,  holds  that  property 
held  subject  to  a  power  may  be  said  by  the  legislature  to  be  not 
vested  in  anybody,  and  that  when  it  vests  in  possession  through 
a  proper  disposition  of  it,  which  is  dependent  upon  the  will  and 
conduct  of  the  donee,  a  succession  tax  may  be  imposed,  whether 
the  succession  is  determined  by  action  or  refraining  from  action 
on  the  part  of  the  donee.® 

Where  a  will  left  property  to  A.  B.  with  power  to  dispose  of  it 
absolutely  by  will  or  otherwise,  and  further  provided  that  any  part 
of  the  property  undisposed  of  at  the  death  of  A.  B.  should  go  to 
the  heirs  of  the  testator,  the  provision  over  to  the  heirs  was  void 
under  Kentucky  law,  and  hence  the  heirs  took  by  descent  from 
A.  B.  and  not  under  the  will  of  the  testator,  and  therefore  the  suc- 
cession was  subject  to  an  inheritance  tax,  the  statute  of  1906  being 
passed  after  the  original  testator  died  and  before  the  death  of 
A.  B.7 

1  Hoyt  V.  Hancock,  65  N.  J.  Eq.  688,  55  A.  1004,  relying  upon  In  re  Harbeck 
161  N.  Y.  211.  The  names  of  the  appointees  must  be  read  into  the  original 
instrument  though  designated  by  a  later  instrument.  In  re  Harbeck,  161  N.  Y. 
211,  55  N.  E.  850,  reversing  43  N.  Y.  App.  Div.  188,  59  N.  Y.SuppI.  362.  See, 
however,  Crocker  v.  Shaw,  174  Mass.  266. 

2  Minot  V.  Stevens,  207  Mass.  588,  93  N.  E.  573.  In  re  Vanderbilt,  163  N.  Y. 
597,  57  N.  E.  1127,  affirming  50  N.  Y.  App.  Div.  246,  63  N.  Y.  Suppl.  1079. 
In  re  Dows,  167  N.  Y.  227,  232,  60  N.  E.  439,  52  L.  R.  A.  433,  88  Am.  St.  Rep. 
508,  affirming  60  N.  Y.  App.  Div.  630  (affirmed  sub  nomine,  Orr  v.  Gilman,  183 
U.  S.  278,  22  S.  Ct.  213,  46  L.  Ed.  1961).  In  re  Rogers,  172  N.  Y.  617, 64  N.  E. 
1125,  affirming  71  N.  Y.  App.  Div.  461,  75  N.  Y.  Suppl.  835.  In  re  Potter,  51 
N.  Y.  App.  Div.  212,  64  N.  Y.  Suppl.  1013.    In  re  Brooks,  65  N.  Y.  St.  Rep. 


120  INHERITANCE  TAX  LAW.  [§  141. 

255,  32  N.  Y.  Suppl.  176,  1  Gibbons  188.  In  re  Hull,  586,  79  N.  E.  1107,  affirm- 
ing 111  N.  Y.  App.  Div.  322,  97  N.  Y.  Suppl.  701. 

The  testator  died  in  1890,  and  his  son  died  in  1899,  leaving  a  will  exercising 
a  power  of  appointment  given  him  in  the  will  of  his  father,  and  it  was  claimed 
that  the  New  York  statute  of  1897,  section  220,  subdivision  5,  was  in  violation 
of  the  fourteenth  amendment,  in  violation  of  section  10  of  article  1  of  the  United 
States  constitution.  The  court  quotes  at  length  from  Carpenter  v.  Pennsylvania, 
17  How.  456,  where  a  retroactive  state  statute  was  held  constitutional.  The 
court  finds  that  the  New  York  court  of  appeals  held  that  it  was  the  execution  of 
the  power  of  appointment  which  subjected  grantees  under  the  statute  to  the 
transfer  tax.  This  conclusion  is  binding  upon  this  court  in  so  far  as  it  involves 
a  construction  of  the  will  and  of  the  statute.  Even  if  the  view  of  the  New 
York  court  was  wrong,  it  was  an  error  which  the  United  States  supreme  court 
has  no  power  to  review.  Orr  v.  Gilman,  183  U.  S.  278,  288,  22  S.  Ct.  213,  46 
L.  Ed.  196  (affirming  In  re  Dows,  167  N.  Y.  227,  60  N.  E.  439,  52  L.  R.  A.  433, 
88  Am.  St.  Rep.  508). 

The  testator  died  in  1874,  leaving  a  will  giving  his  wife  one-third  of  his  property 
for  life,  with  remainder  to  his  son  and  daughter,  and  vesting  in  his  widow  the 
power  to  appoint  remainders  to  such  of  his  descendants  as  she  might  by  will 
direct.  The  son  died  in  1879,  leaving  property  to  his  mother  for  life,  remainder 
to  his  sister,  and  the  mother  died  in  1896,  having  exercised  the  power  of  appoint- 
ment in  favor  of  her  daughter.  The  mother's  will  was  admitted  to  probate 
February  29,  1896,  and  the  daughter  died  on  that  same  day,  and  her  will  was 
admitted  to  probate  in  January,  1898,  the  daughter  being  a  residuary  legatee 
under  the  will  of  her  mother.  The  court  holds  that  the  two  estates  in  remainder 
which  vested  absolutely  in  the  daughter  on  the  death  of  her  mother  under  her 
father's  and  brother's  wills  were  taxable  in  passing  to  the  residuary  legatee  of 
the  daughter.  The  court  also  held  that  the  amount  to  which  the  daughter  was 
entitled  as  a  residuary  legatee  under  her  mother's  will  was  not  taxable,  it  appear- 
ing that  there  had  been  no  settlement  of  the  executor's  accounts  under  the  will, 
and  consequently,  the  amount  of  the  residuary  estate,  if  any  there  should  be, 
was  unascertained.  But  the  court  holds  that  when  the  estate  of  the  mother  is 
settled  it  will  be  the  duty  of  the  executor  to  see  that  the  transfer  tax  is  paid 
before  distributing  the  residue  to  the  legal  representative  of  the  daughter. 

As  to  the  two  estates  in  remainder  under  the  wills  respectively  of  the  father 
and  brother  of  the  daughter,  the  latter  was  vested  with  the  title  to  the  residue 
on  the  death  of  each  testator,  but  possession  and  enjoyment  were  postponed 
until  the  falling  in  of  the  life  estate,  and  when  that  event  occurred  the  entire 
estate,  legal  and  equitable,  vested  instantly  in  the  remainderman.  The  executor 
of  the  daughter,  under  the  circumstances,  was  liable  to  pay  the  transfer  tax 
before  he  could  distribute  the  personal  property  in  his  hands,  or  to  the  possession 
of  which  he  was  immediately  entitled.  In  re  Rohan-Chabot,  167  N.  Y.  280,  283, 
60  N.  E.  598,  affirming  44  N.  Y.  App.  Div.  340. 

^  Crocker  v.  Shaw,  174  Mass.  266  (although  the  statute  contains  no  express 
provision  making  it  applicable  whether  the  transfer  was  made  before  or  after 
the  passage  of  the  act). 

A.  by  trust  deed  executed  prior  to  the  passage  of  Mass.  St.  1891,  c.  425,  placed 
property  in  trust  for  herself  for  life  and  on  her  death  subject  to  appointment 
under  her  will.    She  died  in  1895  leaving  a  will  and  the  court  holds  that  interests 


§§  142-143.  POWERS.  121 

under  her  will  are  taxable.  The  court  holds  that  the  property  passed  by  a  deed 
intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of  the  grantor. 
It  makes  no  difference  that  the  donor  of  the  power  and  the  person  executing  it 
are  one  and  the  same.    Crocker  v.  Shaw,  174  Mass.  266. 

The  statute  of  1897  does  not  attempt  to  impose  a  tax  upon  property  but  upon 
the  exercise  of  the  power  of  appointment.  The  beneficiary  is  compelled  to 
resort  to  the  will  in  order  to  establish  his  rights,  for  the  deed  alone  would  not 
suffice.  "The  privilege  of  making  a  will  is  not  a  natural  or  inherent  right,  but 
one  which  the  state  can  grant  or  withhold  in  its  discretion.  If  granted,  it  may 
be  upon  such  conditions  and  with  such  limitations  as  the  legislature  sees  fit  to 
create.  The  payment  of  a  sum  in  gross,  or  of  an  amount  measured  by  the  value 
of  the  property  affected,  may  be  exacted,  or  the  right  may  be  limited  to  one  or 
more  kinds  of  property  and  withdrawn  as  to  all  others.  The  legislature  could 
provide  that  no  power  of  appointment  should  be  exercised  by  will,  or  that  it 
should  be  exercised  only  upon  the  payment  of  a  gross  or  ratable  sum  for  the 
privilege.  It  could  exact  this  condition,  independent  of  the  date  or  origin  of  the 
power.  All  this  necessarily  flows  from  the  absolute  control  by  the  legislature  of 
the  right  to  make  a  will."  Quoting  In  re  Vanderbilt,  163  N.  Y.  597,  and  In  re 
Dows,  167  N.  Y.  227.  Per  Vann,  J.,  in  In  re  Delano,  176  N.  Y.  486,  491,  64 
L.  R.  A.  279,  177  N.  Y.  540,  69  N.  E.  1122,  reversing  82  N.  Y.  App.  Div.  147, 
81  N.  Y.  Suppl.  762  (affirmed  suh  nomine,  Chanter  v.  Kelsey,  205  U.  S.  466, 
27  S.  Ct.  550,  51  L.  Ed.  882). 

4/«  re  Delano,  176  N.  Y.  486,  494,  64  L.  R.  A.  279,  177  N.  Y.  540,  69  N  .E. 
1122,  reversing  82  N.  Y.  App.  Div.  147,  81  N.  Y.  Suppl.  762  (affirmed  sub  nomine, 
Chanter  v.  Ketsey,  205  U.  S.  466,  27  S.  Ct.  550,  51  L.  Ed.  882). 

^In  re  Lansing,  182  N.  Y.  238,  248,  74  N.  E.  882,  modifying  103  N.  Y.  App. 
Div.  596.  This  decision  is  considered  and  upheld  in  a  note  in  19  Harvard  Law 
Review  121. 

«  Minot  V.  Stevens,  207  Mass.  588,  93  N.  E.  573. 

7  Commonweatth  v.  Stolt,  132  Ky.  234,  116  S.  W.  687,  withdrawing  opinion,  114 
S.  W.  279. 

Sec.  142.     Immaterial  whether  Power  Created  by  Will  or  by 
Deed. 

It  is  immaterial  how  the  power  is  created,  whether  by  will  or  by 
deed,  in  considering  the  right  to  tax  the  exercise  of  the  power. 

In  re  Delano,  176  N.  Y.  486,  493,  64  L.  R.  A.  279,  177  N.  Y.  544,  69  N.  E. 
1122,  reversing  82  N.  Y.  App.  Div.  147,  81  N.  Y.  Suppl.  762  (affirmed  suh 
nomine.  Chanter  v.  Ketsey,  205   U.  S.  466,  27  S.  Ct.  550,  51  L.  Ed.  882). 

Sec.  143.    Where  Appointment  is  to  Same  Persons  Named  in 
Original  Instrument. 

Where  the  power  is  exercised  by  appointing  to  the  same  persons 
as  are  named  in  the  will  in  default  of  appointment,  the  beneficiaries 
have  a  right  to  elect  whether  to  take  under  the  original  will  instead 
of  under  the  power. ^     An  election  to  take  under  the  original  will 


122  INHERITANCE  TAX  LAW.  [§  143. 

rather  than  under  the  power  need  not  be  in  any  particular  form, 
and  it  is  sufficient  if  it  appears  by  opposition  to  the  imposition  of 
a  transfer  tax.^  Where  the  will  of  the  donee  directs  distribution 
according  to  the  provisions  of  the  original  will,  this  is  a  refusal  or 
renunciation  of  the  power  by  the  donee .^  Where  the  original  will 
is  to  such  children  as  the  donee  may  appoint,  there  is  a  necessity 
for  the  exercise  of  the  power,  and  the  children  appointed  must 
make  their  title  through  the  donee  ;^  but  where  the  appointment 
names  a  portion  only  of  the  beneficiaries  named  in  the  will,  they 
take  under  the  will,  as  the  appointment  was  an  injury  rather  than 
a  benefit  to  them.^  The  same  result  was  reached  where  the  power 
was  exercised  to  four  of  the  beneficiaries  named  in  the  will.^ 

1  In  re  Lewis,  194  N.  Y.  550,  affirming  129  N.  Y.  App.  Div.  905,  reversing 

60  Misc.  643,  on  authority  of  In  re  Lansing,  182  N.  Y.  238,  and  In  re  Haggerty, 
194  N.  Y.  550,  87  N.  E.  1120,  affirming  128  N.  Y.  App.  Div.  479,  112  N.  Y. 
Suppl.  1017.     In  re  Spencer,  119  N.  Y.  App.  Div.  883,  107  N.  Y.  Suppl.  543. 

In  an  earlier  case,  however,  the  court  says  that  as  the  power  of  appointment 
was  exercised  by  the  life  tenant  and  as  it  was  only  in  case  of  a  failure  to  exercise 
the  power  that  the  remainder  vested  in  the  children  of  the  donee,  they  derived 
their  title  to  the  property  through  the  exercise  of  the  power  of  appointment 
and  not  directly  under  the  will  of  the  testator.  In  re  Lowndes,  60  Misc.  503, 
113  N.  Y.  Suppl.  1114. 

2  In  re  Chapman,  133  N.  Y.  App.  Div.  337,  117  N.  Y.  Suppl.  679,  affirming 

61  Misc.  593,  115  N.  Y.  Suppl.  981. 

^Inre  Langdon,  153  N.  Y.  6,  9,  46  N.  E.  1034,  affirming  11  N.  Y.  App.  Div. 
220,  43  N.  Y.  Suppl.  419.  i 

^In  re  Cooksey,  182  N.  Y.  92,  98,  74  N.  E.  880,  affirming  100  N.  Y.  App.  D  v. 
516,  91  N.  Y.  Suppl.  1091. 

^  In  re  Ripley,  192  N.  Y.  536,  84  N.  E.  574,  affirming  122  N.  Y.  App.  Div. 
419,  106  N.  Y.  Suppl.  844.  See,  however,  In  re  Warren,  62  Misc.  444,  116  N.  Y. 
Suppl.  1034. 

6  People  V.  Williams,  127  N.  Y.  Suppl.  749. 


CHAPTER  XXII. 


METHODS  OF  AVOIDING  TAX. 

§  144.  Any  Collusive  Arrangement  Illegal. 

§  145.  No  Duty  to  Point  out  Property  to  Tax  Officials. 

§  146.  Advancement. 

§  147.  Assignments  by  Beneficiaries. 

§  148.  Brokers  Holding  Stock  in  their  own  Name. 

§  149.  Compromise  of  Interests  under  Will. 

§  150.  Consideration. 

§  151.  Transfers  in  Contemplation  of  Death. 

§  152.  Creation  of  Corporation  Leaving  Life  Estate  in  Decedents. 

§  153.  Disclaimer  by  Beneficiary. 

§  154.  Disclaimer  by  Executor. 

§  155.  Executor  Paying  Legacy  with  his  own  Money. 

§  156.  Homestead  Set  Ofif. 

§  157.  Insurance  or  Beneficial  Societies. 

§  158.  Property  Held  Jointly. 

§  159.  Marshaling  Local  Assets  and  Debts. 

§  160.  Various  Gifts  to  Same  Person. 

§  161.  Quick  Transfer  of  Stock  in  Foreign  Corporation. 

§  162.  Premature  Distribution  after  Taking  Assets  out  of  Jurisdiction. 

Sec.  144.    Any  Collusive  Arrangement  Illegal. 

"No  mere  device  intended  to  evade  the  payment  of  tax  due  the 
commonwealth  can  be  effective.  Courts  look  beyond  the  form  of 
any  arrangement  by  which  the  commonwealth  is  deprived  of  a 
tax  to  its  substance  to  ascertain  its  real  purpose.  An  agreement 
to  set  aside  a  will  and  to  make  distribution  in  accordance  with  its 
provisions  will  not  relieve  legacies  passing  to  collaterals  from  tax. 
Such  an  agreement  is  evidently  collusive.  But  money  paid  in 
good  faith  in  compromise  of  threatened  litigation  is  not  subject 
to  tax.  Pepper's  Estate,  159  Pa.  St.  508;  Kerr's  Estate,  159  Pa. 
St.  512." 

Per  Fell,  J.,  in  In  re  Hawley,  214  Pa.  St.  525,  527,  63  A.  1021. 

Sec.  145.    No  Duty  to  Point  out  Property  to  Tax  Officials. 

Unless  clearly  set  forth  in  the  taxing  statute  the  executor  is  under 
no  duty  to  aid  the  tax  collectors  in  locating  the  property  of  the 
estate^  outside  the  estate  of  a  non-resident  decendent.^ 


124  INHERITANCE  TAX  LAW.  [§§  146-148. 

^  Under  the  statute  of  1885,  chapter  483,  the  administrator  was  under  no  duty 
or  obligation  to  voluntarily  aid  the  appraiser  in  any  manner  whatever  in  making 
the  appraisal;  and  the  court  holds  therefore  that  the  administrator  was  not 
guilty  of  any  fraudulent  acts  in  failing  to  apprise  the  appraiser  of  certain  claims 
belonging  to  the  estate.     In  re  Smith,  14  Misc.  Rep.  169,  35  N,  Y.  Suppl.  701. 

2  In  re  Bishop,  82  N.  Y.  App.  Div.  112,  81  N.  Y.  S.  474. 

[What  inventory  should  contain,  see  post,  ss.  323,  324.] 

Sec.  146.     Advancements. 

Advancements  as  a  means  to  avoid  the  inheritance  tax  are 
considered  above,  in  section  136. 

Sec.  147.    Assignments  by  Beneficiaries. 

An  assignment  by  a  beneficiary  to  another  can  have  no  effect 
on  the  inheritance  tax. 
See  further,  post,  s.  224. 

Sec.  148.     Brokers  Holding  Stock  in  their  own  Name. 

It  is  clear  that  the  common  practice  of  carrying  stock:  in  the 
name  of  stockbrokers  will  not  of  itself  suffice  to  avoid  taxation, 
although  it  may  in  some  cases  render  it  a  little  more  difficult  for 
the  tax  collectors  to  discover  the  property.  The  practice  has  the 
advantage  of  giving  the  executors  more  freedom  in  a  quick  sale  of 
securities  in  those  states  which  require  payment  of  the  tax  before 
transfer.  Where  the  decedent  does  business  in  one  state  and  re- 
sides in  another,  this  arrangement  might  enable  the  executors  to 
remove  securities  from  the  state  where  the  decedent  had  his  place 
of  business,  when  the  actual  location  of  the  securities  is  made  a 
basis  for  taxation. 

The  futility  of  the  practice  was  well  explained  in  a  New  York 
case  where  the  decedent,  a  resident  of  Louisiana,  had  ordered  the 
purchase  through  her  stockbrokers  in  New  York  of  certain  stock, 
and  the  certificates  were  taken  in  the  name  of  the  brokers,  but  paid 
for  by  her,  and  the  stock  was  transferred  on  the  books  of  the  cor- 
poration, which  was  a  New  York  corporation,  to  the  brokers, 
who  thereupon  endorsed  their  name  upon  the  blank  transfer  printed 
upon  the  certificates,  so  that  the  same  could  be  transferred  to  the 
testatrix,  and  the  certificates  so  endorsed  were  then  delivered  by 
the  brokers  to  the  testatrix.  The  court  holds  that  although  she 
did  not  have  the  legal  title  to  the  stock  at  the  time  of  her  death, 
she  did  have  an  equitable  title  which  at  any  time  she  could  have 
transferred  into  a  legal  title  by  simply  presenting  the  certificates 


§§  149-152.]  METHODS  OF  AVOIDING  TAX.  125 

to  the  officers  of  the  corporation,  and  that  this  was  an  interest 
in  the  property  which  passed  by  her  will  and  which  was  taxable. 
She  was  entitled  at  any  time  to  become  vested  with  the  legal  title, 
and  certainly  this  equitable  title  was  something  more  than  a  mere 
chose  in  action.  It  was  in  effect  a  property  interest  in  the 
domestic  corporation.^ 

However,  if  an  investor  carries  stock  in  a  foreign  corporation 
in  the  name  of  a  broker  in  his  own  state  he  practically  may 
avoid  taxation  at  the  hands  of  states  which  assume  to  tax  stock  of 
their  corporations  owned  by  non-residents. 

It  has  been  suggested  that  stock  might  be  placed  in  the  hands 
of  brokers  or  others  under  a  trust  agreement,  that  notes  be  then 
issued  to  the  beneficiaries,  thus  rendering  their  claims  debts  to  be 
allowed  like  other  debts. 

i/»  re  Newcomb,  172  N.  Y.  608,  64  N.  E.  1123,  affirming  71  N.  Y.  App.  Div. 
606,  76  N.  Y.  Suppl.  222. 

Sec.  149.    Compromise  of  Interests  under  Will. 

A  compromise  may  be  so  framed  that  no  tax  can  be  collected,  in 
some  circumstances. 

In  re  Hawley,  214  Pa.  St.  525,  63  A.  1021.     See  further,  ante,  s.  106. 

Sec.  150.    Consideration. 

The  effect  of  the  existence  of  consideration  in  avoiding  the 
inheritance  tax  is  considered  in  a  separate  chapter  (Chapter  XX). 

Sec.  151.    Transfers  in  Contemplation  of  Death. 

The  most  common  attempt  to  evade  the  tax  is  by  means  of 
transfers  of  one  kind  or  another  during  the  life  of  the  decedent, 
in  contemplation  of  death,  to  the  objects  of  his  bounty,  and  such 
transfers  are  so  common  that  we  require  a  separate  chapter  for  their 
consideration  (Chapter  XIX). 

Sec.  152.    Creation  of  Corporation  Leaving  Life  Estate  in 
Decedent. 

Where  an  owner  of  large  property  created  a  corporation  to  which 
he  conveyed  all  his  property,  and  then  had  the  corporation  issue  the 
stock  in  such  a  way  that  he  held  a  life  estate  only  in  it,  the  court 
was  precluded  by  the  stipulation  under  which  the  case  came  before 
it  that  there  was  no  verbal  or  outside  agreement  not  before  the 
court  from  considering  the  question  whether  the  agreement  was 


126  INHERITANCE  TAX  LAW.  [§153 

made  so  that  the  heirs  would  not  be  required  to  pay  an  inheritance 
tax,  and  the  court  holds  that  no  inheritance  tax  is  due. 

State  V.  Probate  Court,  Washington  County,  102  Minn.  268,  294,  113  N.  W.  888. 


Sec.  153.    Disclaimer  by  Beneficiary. 

In  some  cases  a  renunciation  by  the  legatee  may  be  effective 
in  avoiding  the  transfer  tax.  The  most  effective  method  for  evad- 
ing the  collateral  inheritance  tax  yet  devised  appears  to  have  been 
sanctioned  by  the  court  in  In  re  Stone,  132  Iowa  136,  109  N.  W.  465. 
In  this  case  the  collateral  legatees  and  others  interested  under  the 
will  all  united  in  renouncing  the  provisions  of  the  will  and  agreeing 
that  the  property  might  be  distributed  as  in  case  of  intestacy, 
and  the  court  holds  that  the  parties  have  a  right  to  do  this  and  that 
the  result  is  that  the  state  has  no  interest  in  the  collection  of  any 
collateral  inheritance  tax,  as  the  property  then  passed  entirely  to 
lineal  descendants  not  subject  to  the  tax.  The  question  whether 
the  parties  had  any  collateral  agreement  among  themselves  as  to 
the  distribution,  so  that  the  collateral  legatee  really  obtained  some 
benefit,  was  not  suggested  to  the  court,  and  the  effect  of  any  such 
agreement  was  not  involved  in  the  decision. 

In  a  New  York  case  the  legatees  renounced  the  legacy,  and  the 
property  bequeathed  therefore  went  to  the  residuary  legatees. 
The  court  therefore  holds  that  the  tax  should  be  laid  at  the  rate  as 
if  the  legacy  had  been  originally  given  to  the  residuary  legatees. 
The  tax  is  laid  solely  upon  the  transfer  and  not  upon  the  property 
transferred,  nor  upon  the  estate  of  the  legatee.  If  the  legatee 
renounces  a  gift,  refuses  to  receive  it,  no  tax  can  be  collected  with 
respect  to  him  because  there  has  been  no  transfer  to  him.  His  right 
to  renounce  the  privilege  of  accepting  the  donation  is  not  denied 
or  forbidden  by  the  statute,  and  on  his  effective  renunciation  the 
title  or  ownership  of  the  property  remains  in  the  estate  to  be  dis- 
posed of  under  the  terms  of  the  will,  and  the  succession  is  taxable 
in  accordance  with  the  nature  of  the  ultimate  devolution.^ 

Where  it  appeared  that  the  beneficiaries  under  a  residuary  clause 
conceded  its  invalidity  as  a  perpetuity,  and  abandoned  all  claim  to 
the  property  to  the  heirs,  who  sold  it  and  received  the  consideration 
therefor,  and  that  it  did  not  pass  under  the  will,  the  surrogate  had 
jurisdiction  to  find  that  the  property  did  not  pass  under  the  will, 
and  that  no  tax  was  assessable  against  the  residuary  beneficiaries 
named.2     In  Pennsylvania,  however,  it  has  been  held  in  the  lower 


154-156.1  METHODS  OF  AVOIDING  TAX.  127 

courts  that  as  title  to  the  property  passed  on  the  death  of  the  dece- 
dent, a  subsequent  renunciation  cannot  affect  the  liability  of  the 
beneficiary  to  taxation.^ 

1  In  re  Wolfe,  179  N.  Y.  599,  72  N.  E.  1152,  affirming  89  N.  Y.  App.  Div.  349. 
The  court  affirms  and  distinguishes  In  re  Wolfe,  89  N.  Y.  App.  Div.  349,  179 
N.  Y.  599,  as  there  there  was  no  transfer  by  will  to  the  executors,  and  there- 
fore no  transfer  tax  could  be  imposed  as  the  executors  renounced  the  gift.  In  re 
Cook,  187  N.  Y.  253,  79  N.  E.  991,  reversing  114  N.  Y.  App.  Div.  718,  99 
N.  Y.  Suppl.  1049. 

2  In  re  Ullman,  137  N.  Y.  403,  33  N.  E.  480. 

3  In  re  Frank,  9  Pa.  Co.  Ct.  662.     In  re  Small,  11  Pa.  Co.  Ct.  1. 

Sec.  154.    Disclaimer  by  Executor. 

The  surrogate  has  authority  under  the  New  York  statute  of 
1892  to  appoint  an  appraiser  to  appraise  property  adjudged  to  be 
subject  to  the  will  of  a  deceased  person  in  an  action  between  the 
heirs,  although  the  executor  had  claimed  that  it  was  not  a  part  of 
the  estate,  as  it  had  been  given  to  a  certain  heir  during  the  life  of 
the  decedent. 

In  re  Lansing,  31  Misc.  Rep.  148,  64  N.  Y.  Suppl.  1125. 

Sec.  155.    Executor  Paying  Legacy  with  his  own  Money. 

Where  the  executor  contributes  the  legacy  out  of  his  own  funds, 
no  tax  is  payable.  Where  one  of  the  executors  previous  to  the 
death  of  the  testator  had  so  invested  the  testator's  property  that 
it  was  worthless,  and  then  on  his  death  destroyed  his  will,  one  of 
the  legatees  by  threats  of  criminal  prosecution  obtained  payment 
of  her  legacy  from  the  executor,  at  the  same  time  assigning  the 
legacy  and  all  her  interest  in  the  same  to  the  executor.  The  legacy 
was  paid  with  the  individual  property  of  the  executor.  The 
legacy  was  two  thousand  dollars,  and  the  total  assets  of  the  estate 
of  the  testator  amounted  to  less  than  eight  hundred  dollars. 
The  court  holds  that  no  transfer  tax  can  be  levied  on  this 
legacy,  as  the  legatee  never  received  any  property  from  the  estate 
and  has  in  fact  assigned  all  her  rights  against  the  estate. 

In  re  Weed,  10  Misc.  Rep.  628,  32  N.  Y.  Suppl.  777. 

Sec.  156.    Homestead  Set  Oflf. 

In  some  states  the  parties  may  avoid  the  tax  by  having  property 
set  aside  as  homestead  under  local  statutes.  We  have  considered 
this  topic  under  s.  110. 


128  INHERITANCE  TAX  LAW.  [§§157-161 

Sec.  157.    Insurance  or  Beneficial  Societies. 

Investors  are  commonly  safe  in  investing  their  money  in  life 
insurance  or  beneficiary  policies  of  various  kinds,  as  we  have  en- 
deavored to  show  under  section  107. 

Sec.  158.     Property  Held  Jointly. 

The  effect  of  making  deposits  in  the  joint  names  of  two  or  more 
persons  is  considered  elsewhere  at  section  105. 

Some  trust  companies  will  not  transfer  stock  held  jointly  on  the 
signature  of  the  surviving  owner. 

The  Indiana  statute  prohibiting  a  safe  deposit  company  from 
delivering  the  contents  of  a  box  leased  by  deceased  jointly  on  death 
of  a  lessee  except  on  ten  days'  notice  to  state  ofhcials,  is  valid. ^ 

Where  the  testator  and  his  brother  had  been  doing  business 
under  an  agreement  dated  1877,  reciting  that  the  parties  are 
"jointly"  interested  in  firm  property,  on  the  death  of  the  intestate 
the  court  on  the  evidence  finds  that  the  whole  estate  of  the  intestate 
is  subject  to  the  inheritance  tax.^ 

»  National  Safe  Deposit  Co.  v.  Stead,  250  111.  584,  95  N.  E.  973. 
2  In  re  Wormser,  28  Misc.  608,  59  N.  Y.  Suppl.  1088. 

Sec.  159.    Marshaling  Local  Assets  and  Debts. 

The  executors  of  estates  with  property  in  more  than  one  state 
should  use  great  care  in  choosing  the  property  they  will  use  for 
paying  legacies  and  debts,  for  a  proper  marshaling  of  assets  may 
well  make  large  differences  in  the  taxes  payable.  We  have  treated 
this  subject  fully  under  sections  204,  354. 

Sec.  160.    Various  Gifts  to  Same  Person. 

Where  in  separate  items  of  a  will  two  or  more  legacies  or  devises 
are  given  to  the  same  person,  it  matters  not  whether  the  property 
pass  under  one  or  more  items  of  the  will  or  whether  the  property 
passing  under  more  than  one  item  be  real  or  personal,  the  tax  is 
collectible  on  the  aggregate  of  such  property  above  the  exemption. 

In  re  Inheritance  Tax,  7  Ohio  N.  P.  547,  5  Low.  Dec.  555. 

Sec.  161.     Quick  Transfer  of  Stock  in  Foreign  Corporation. 

In  states  which  impose  no  penalty  on  foreign  executors  or  admin- 
istrators for  failure  to  pay  the  tax,  and  prescribe  no  lien,  there  is 
grave  doubt  as  to  the  ability  of  the  state  to  collect  the  tax  from  a 


§162.]  METHODS  OF  AVOIDING  TAX.  129 

non-resident  executor  or  administrator,  provided  he  can  get  the 
stock  transferred  before  the  state  takes  any  action.  As  a  practical 
matter  the  state  authorities  are  not  Hkely  to  know  of  the  death  of  a 
non-resident  stockholder,  and  it  would  seem  easy  in  these  states  to 
have  the  stock  quietly  transferred.  The  authors  see  no  reason,  how- 
ever, why  even  after  the  stock  has  been  transferred  the  state  officials 
could  not  sue  in  the  state  of  the  domicile  and  recover  the  tax  in  an 
ordinary  action.  The  chances  of  their  being  advised  of  the  death 
of  a  non-resident  decedent  in  time  to  take  such  action  would  seem 
to  be  slight.  For  example,  in  Michigan,  stock  in  Calumet  &  Hecla 
and  Osceola  Mining  Company  can  be  transferred  without  any 
reference  to  the  state  authorities. 
[See  further,  post,  s.  203.] 

Sec.  162.    Premature  Distribution  after  Taking  Assets  out 
of  Jurisdiction. 

A  proceeding  to  fix  the  transfer  tax  under  the  statute  of  1892 
is  not  lost,  as  to  personal  property  in  New  York  belonging  to  a 
foreign  testator,  by  the  fact  that  his  property  is  all  distributed 
and  the  accounts  of  the  executors  closed  under  the  laws  of  the 
domicile.  Having  done  that,  and  having  taken  out  of  New  York 
all  the  property  of  the  decedent  and  distributed  it,  they  cannot  now 
urge  lack  of  jurisdiction  to  fix  a  tax  in  New  York. 

In  re  Hubbard,  21  Misc.  Rep.  566,  48  N.  Y.  S.  869. 


CHAPTER  XXIII 


TITLE  OF  DECEDENT. 

§  163.  Before  Possession  Taken  of  Certificates  of  Stock. 

§  164.  Deeds  Signed  and  not  Delivered. 

§  165.  Property  Already  Brought  by  Legatee. 

§  166.  Property  Standing  in  Name  of  Another. 

Sec.  163.    Before  Possession  Taken  of  Certificates  of  Stock. 

A  gift  in  contemplation  of  death  was  made  by  a  father  to  a 
daughter,  and  she  died  within  a  few  days  of  his  death  before  the 
certificates  of  stock  had  been  actually  transferred  to  her,  and 
before  she  had  received  any  dividends.  The  stock  passed  under  her 
will  as  her  property,  and  so  passing  is  a  transfer  under  the  transfer 
tax  law  of  the  state  which  must  suffer  a  tax. 

In  re  Borup,  28  Misc.  Rep.  474,  59  N.    Y.  Suppl.  1097. 

Sec.  164.    Deeds  Signed  and  not  Delivered. 

Where  a  testator  signed  certain  deeds  and  other  papers  and 
placed  them  in  envelopes  described  as  property  of  persons  by 
whom  they  were  endorsed,  and  placed  the  envelopes  in  a  box  in  a 
bank,  this  property  was  still  his  for  the  purposes  of  the  tax  where 
he  received  the  income  from  it  and  treated  it  as  his  own  during  his 
life. 

In  re  Sharer,  36  Misc.  Rep.  502,  73  N.  Y.  Suppl.  1057. 
See  further,  post,  ss.  127,  128. 

Sec.  165.    Property  Already  Bought  by  Legatee. 

Property  nominally  included  in  the  will  which  had  been  already 
bought  and  paid  for  by  the  legatees  is  not  subject  to  tax.  It 
seemed  that  the  provisions  in  the  will  were  due  to  the  anxiety 
of  the  testator  that  his  sisters  should  not  be  disturbed  in  the 
occupancy  of  the  home  he  granted  to  them. 

In  re  Morris  (Orph.  Ct.),  1  Pa.  Dist.  R.  818. 


I 


I 


§166.]  LIFE  OF  DECEDENT.  131 

Sec.  166.    Property  Standing  in  Name  of  Another. 

Where  a  large  part  of  the  estate  in  another  state  is  invested  in 
the  name  of  a  nephew  of  the  testator,  this  money  is  taxable  under 
the  law  of  Pennsylvania.^ 

The  state  must  show  not  only  that  the  persons  against  whom 
it  claims  are  not  of  the  exempted  class,  but  that  the  estate  out  of 
which  the  tax  is  alleged  to  be  payable  passed  to  those  persons  from 
one  who  died  seized  or  possessed  of  the  same.  Under  the  Pennsyl- 
vania act  actual  seisin  and  actual  possession  is  necessary,  and  a 
person  cannot  be  seised  of  an  estate  which  is  limited  to  take  effect 
only  after  his  death. ^  So  the  exercise  of  a  power  by  a  cestui  is  not 
taxable  under  such  a  statute.^ 

1  In  re  Miller,  182  Pa.  St.  157,  162,  37  A.  1000,  citing  In  re  Williamson,  153  Pa- 
St.  508,  26  A.  246,  32  Wkly.  Notes  Cas.  93. 

Stock  standing  in  name  of  stockbroker,  see  ante,  s.  148;  in  joint  names,  see 
ante,  s.  158. 

2  In  re  Swann,  12  Pa.  Co.  Ct.  135. 

^Gallard  v.  Winans,  111  Md.  434,  472,  74  A.  626. 


CHAPTER  XXIV. 


REAL  ESTATE. 

§  167.  Real  Estate  Subject  to  Mortgage. 

§  168.  Share  of  Co-Tenant.  —  Liability  for  Improvements. 

§  169.  Effect  of  Decree  as  to  Title. 

§  170.  Effect  of  Partition  Proceedings. 

§  171.  Delivery  of  Deed. 

§  172.  Leasehold  Interests. 

Sec.  167.    Real  Estate  Subject  to  Mortgage. 

Where  real  estate  is  devised  subject  to  mortgage,  the  interest 
or  equity  of  the  testator  in  the  real  estate  only  is  to  be  considered 
as  devised,  and  the  executors  have  no  right  to  deduct  the  amount 
of  the  mortgages  from  the  value  of  the  personal  estate  in  settling 
the  inheritance  tax  in  New  York.^ 

The  testator  at  the  date  of  his  death  owned  equities  in  real 
estate  subject  to  mortgages  and  directed  by  his  will  that  these 
mortgages  be  paid  out  of  his  personal  estate.  The  court  holds 
that  the  personal  estate  should  be  appraised  as  it  was  at  the 
testator's  death,  less  debts  and  mortgages  payable.  The  court 
holds  that  the  estate  must  be  appraised  in  the  condition  in  which 
it  was  at  the  death  of  the  testator .^ 

i/«  re  Sutton,  3  N.  Y.  App.  Div.  208,  38  N.  Y.  Suppl.  277,  affirming  15  Misc. 
659,  38  N.  Y.  Suppl.  102.  In  re  Kene,  8  Misc.  Rep.  102,  29  N.  Y.  Suppl.  1078. 
See,  however,  further,  post^  s.  353. 

2/«  re  Offerman,  25  N.  Y.  App.  Div.  94,  48  N.  Y.  Suppl.  993,  following  In  re 
Sutton,  3  N.  Y.  App.  Div.  208,  38  N.  Y.  Suppl.  277,  and  In  re  Livingston,  1 
N.  Y.  App.  Div.  568,  37  N.  Y.  Suppl.  463.  In  re  De  Graaf,  24  Misc.  Rep.  147, 
53  N.  Y.  Suppl.  591,  2  Gibbons  516.  In  re  Livingston,  1  N.  Y.  App.  Div.  568, 
37  N.  Y.  Suppl.  463. 

[Real  estate  of  non-resident,  see  post,  s.  197.] 

Sec.  168.    Share  of  Co-Tenant.  —  Liability  for  Improvements. 

Where  the  decedent  was  a  co-tenant  of  land  on  which  other  co- 
tenants  had  made  improvements,  and  where  each  co-tenant  pre- 
sumed and  knew  what  the  others  were  doing,  and  the  improvements 


§§  169-171.1  REAL  ESTATE.  133 

were  made  under  such  conditions  that  on  partition  the  co-tenants 
would  be  entitled  to  allowance  for  the  improvements,  only  the 
balance  of  the  interest  of  the  decedent  should  be  taxed,  notwith- 
standing the  fact  that  no  proceeding  for  contribution  had  been 
commenced,  and  notwithstanding  the  fact  that  it  might  be 
claimed  that  no  contribution  would  ever  be  asked.  Still  this  does 
not  justify  the  taxation  of  property  that  the  decedent  did  not 
own,  which  does  not  pass  to  the  heirs  at  law  as  her  property. 
In  re  Wood,  123  N.  Y.  Suppl.  574. 

Sec.  169.    Effect  of  Decree  as  to  Title. 

A  decree  of  a  district  court  passing  upon  a  title  to  land  involved 
in  an  agreement  of  compromise  of  a  will  is  of  no  effect  on  the 
question  of  inheritance  tax,  as  the  state'  treasurer  was  not  a  party 
to  that  suit  and  was  in  no  way  interested  therein. 

Lacey  v.  State  Treasurer,  (Iowa,  1909,)  121  N.  W.  179. 

Sec.  170.    Effect  of  Partition  Proceedings. 

The  succession  tax  is  not  a  tax  upon  land.  The  fact  that  partition 
proceedings  were  held  under  which  the  plaintiff's  equitable  interest 
in  certain  real  estate  was  satisfied  by  an  assignment  to  him  of 
personal  property,  does  not  relieve  him  from  the  payment  of  a 
succession  tax  on  his  share  of  the  estate,  for  the  obvious  reason 
that  he  received  the  full  value  of  the  real  estate  in  other  property 
assigned  to  him  belonging  to  the  same  estate. 

Scholey  v.  Rew,  90  U.  S.  (23  Wall.)  331,  349,  23  L.  R.  A.  99.  See  further, 
post,  s.  186,  n.  5. 

Sec.  171.    Delivery  of  Deed. 

Where  the  beneficial  owner  of  land  for  whom  another  is  hold- 
ing the  legal  title  as  bailee  directs  the  holder  of  the  legal  title  to 
give  the  property  to  his  son,  and  the  holder  of  the  title  executes 
a  deed,  which  he  gives  to  his  son,  telling  him  to  give  it  to  the 
person  named  by  the  beneficial  owner  when  he  calls  for  it,  —  this 
is  a  good  delivery  of  the  deed,  and  the  land  cannot  be  held  for  an 
inheritance  tax  from  the  estate  of  the  beneficial  owner,  especially 
where  the  grantee  under  the  deed  had  entered  on  the  land  and 
made  improvements  on  the  property. 

Stinger  v.  Commonwealth,  26  Pa.  St.  (2  Casey)  422,  428. 


134  INHERITANCE  TAX  LAW.  [§172. 

Sec.  172.    Leasehold  Interests. 

Leasehold  interests  under  long  leases  made  real  estate  by  statute 
should  be  treated  as  real  estate. 

Perpetual  leases  on  real  estate  in  Japan  are  real  estate.  In  re  Vivanti, 
138  N.  Y.  App.  Div.  281,  122  N.  Y.  Suppl.  954,  reversing  63  Misc.  618,  118  N.  Y. 
Spupl.  680. 


CHAPTER  XXV. 


PERSONAL  PROPERTY. 

§  173.  When  Estate  Insolvent. 

§  174.  Charge  on  Future  Rents. 

§  175.  Claim  against  Estate  of  Another. 

§  176.  Gift  on  Condition  Legacies  Paid. 

§  177.  Fraudulent  Conveyance. 

§178.  Good  Will. 

§  179.  Income  after  Death. 

§  180.  Lessee's   Interest. 

§  181.  Stock  in  Joint  Stock  Association. 

§  182.  Money  for  Investment. 

§  183.  Loan  to  Partnership. 

§  184.  Profits  of  Partnership. 

§  185.  Seat  in  Stock  Exchange. 

§  186.  Conversion  in  General. 

§  187.  Conversion  in  Pennsylvania. 

§  188.  Manumission  of  Slave. 

Sec.  173.     When  Estate  Insolvent. 

Where  the  estate  is  insolvent  so  that  there  is  no  inheritance  or 
legacy  for  the  heirs,  no  inheritance  tax  can  be  collected. 

The  plaintiff  brought  suit  to  recover  the  amount  of  the  internal  revenue  tax 
he  paid  in  1872  to  the  United  States  collector,  on  the  ground  that  he  as  lessee 
of  the  real  estate  was  obliged  to  pay  the  tax  to  avoid  eviction  and  that  the  pay- 
ment inured  to  the  benefit  of  the  succession.  The  court  holds  that  as  the 
succession  was  insolvent  there  was  no  inheritance  or  legacy  for  the  heirs  and  it 
was  not  liable  to  an  internal  revenue  tax,  and  therefore  no  recovery  could  be 
had.     Johnson  v.  Dunbar,  28  La.  Ann.  271. 

Sec.  174.     Charge  on  Future  Rents. 

A  legacy  charged  on  the  future  rents  and  profits  of  land  is  still 
subject  to  tax  as  personal  property. 

Where  a  devise  is  made  to  a  lineal  descendant  with  the  direction  to  her  to 
pay  two  thousand  dollars  a  year  out  of  the  rents  and  profits  of  the  land 
devised,  the  words  of  the  Pennsylvania  act  of  1887  are  sufficient  to  cover  this 
bequest  although  payable  by  the  devisee  of  the  land  out  of  its  future  rent.  In  re 
Lea,  194  Pa.  St.  524,  45  A.  337. 


136  INHERITANCE  TAX  LAW.  [§§175-178. 

Sec.  175.    Claim  against  Estate  of  Another. 

A  claim  against  the  estate  of  another  is  property  subject  to  the 
inheritance  tax. 

In  re  Huber,  86  N.  Y.  App.  Div.  458,  83  N.  Y.  Suppl.  769.     In  re  Rohan- 
Chabot,  167  N.  Y.  280,  284,  60  N.  E.  598. 
Appraisal  of  claims,  see  post,  s.  340. 

Sec.  176.    Gift  on  Condition  Legacies  Paid. 

Where  an  estate  is  given  to  a  widow  on  condition  she  pay  legacies 
to  collateral  relatives,  the  gift  to  the  collateral  relatives  is  direct 
and  is  subject  to  the  inheritance  tax. 

Nieman's  Estate,  131  Pa.  St.  346,  351,  18  A.  900. 

Sec.  177.    Fraudulent  Conveyance. 

Where  a  partner  in  a  firm  invested  the  profits  with  the  firm 
and  transferred  this  account  to  his  wife  to  protect  his  wife  from 
his  creditors,  on  the  death  of  the  wife  a  transfer  tax  should  be 
levied  on  the  property.^ 

The  executor  claimed  that  certain  property  had  been  given  to 
one  of  the  heirs  under  the  will,  and  the  heir  also  claimed  the  gift, 
and  the  surrogate  in  a  proceeding  to  assess  the  tax  failed  to  assess 
this  property  on  the  theory  that  it  had  been  given  to  the  heir. 
Subsequently,  in  a  contest  between  the  heirs,  it  was  determined 
that  this  gift  was  fraudulent  and  void  and  the  court  then  decided 
that  as  it  now  appeared  that  the  property  was  transferred  by  the 
will  of  the  testator  and  not  by  gift,  it  became  taxable  under  the 
statute.2 

1  In  re  Anthony,  40  Misc.  Rep.  497,  82  N.  Y.  Suppl.  789. 

2  In  re  Lansing,  31  Misc.  Rep.  148,  64  N.  Y.  Suppl.  1125. 

Sec.  178.     Good  Will. 

The  good  will  of  a  firm  is  taxable  under  the  transfer  tax,^  and 
so  where  a  business  was  conducted  and  carried  on  by  an  adminis- 
tratrix in  the  name  of  the  decedent,  the  good  will  of  the  business 
is  an  asset  in  her  hands,  and  as  such  it  is  taxable.^ 

1  In  re  Dun,  40  Misc.  Rep.  509,  82  N.  Y.  Suppl.  802,  reversing  39  Misc.  616, 
80  N.  Y.  Suppl.  657. 

See  further,  post,  s.  341. 

2  In  re  Keahon,  60  Misc.  508,  113  N.  Y.  Suppl.  926. 


§§  179-181.]  PERSONAL  PROPERTY.  137 

Sec.  179.     Income  after  Death. 

Income  received  after  the  testator's  death  is  not  included  in  the 
appraisal. 1  The  will  directed  that  the  income  of  the  testator's 
estate  for  the  first  year  after  his  death  should  be  added  to  the 
principal,  then  both  principal  and  interest  applied  indiscriminately 
to  the  payment  of  expenses,  debts  and  legacies.  The  result  is 
that  the  corpus  of  the  estate  has  been  preserved  to  the  extent  of 
the  first  year's  income,  upon  which  sum  no  collateral  inheritance 
tax  was  paid.  The  court  holds  that  the  direction  of  the  testator 
resulted  in  allowing  so  much  more  of  the  principal  to  pass  to  the 
collateral  heirs,  but  that  this  direction  does  not  increase  the  amount 
liable  to  the  tax.^ 

1  In  re  Miller,  5  Pa.  Co.  Ct.  522,  22  W.  Notes  Cas.  11.     See  ante,  s.  334,  n.  2. 

The  will  bequeathed  to  the  testator's  partners  his  interest  in  the  partnership 
assets  on  condition  that  they  pay  ninety  per  cent  of  its  appraised  value  to  his 
executors  in  fifteen  equal  annual  instalments.  It  appeared  that  the  probate 
court  made  a  finding  that  the  inheritance  tax  should  be  fixed  from  time  to 
time  as  the  money  or  property  of  the  estate  should  come  into  the  hands  of  the 
executors  and  not  at  the  present  value  of  future  payments  to  be  made  by 
the  partners.  The  supreme  court  finds  this  finding  immaterial  on  the  question 
of  the  municipal  tax.  Port  Huron  v.  Wright,  150  Mich.  279,  14  Detroit  Leg. 
N.  720,  114  N.  W.  76. 

« In  re  Williamson,  153  Pa.  St.  508,  521,  26  A.  246,  32  W.  Notes  Cas.  93,  11  Pa. 
Co.  Ct.  235. 

See  further,  post,  s.  334. 

Sec.  180.    Lessee's  Interest. 

The  interest  of  a  lessee  of  real  estate  is  personal  property  subject 
to  taxation  under  the  New  York  act  of  1896,  although  buildings 
erected  by  the  tenant  may  be  assessed  to  him  as  land  under  the 
tax  law. 

In  re  Althause,  168  N.  Y.  670,  61  N.  E.  1127,  affirming  63  N.  Y.  App.  Div. 
252,  71  N.  Y.  Suppl.  445. 

Sec.  181.    Stock  in  Joint  Stock  Association. 

Shares  in  a  joint  stock  association  are  personal  property  although 
its  assets  are  principally  real  estate,  and  the  real  estate  should  be 
considered  in  appraising  the  value  of  the  stock  even  under  an 
inheritance  tax  that  leaves  real  estate  exempt. 

The  court  discusses  the  difference  between  joint  stock  associations  and  cor- 
porations and  concludes  that  "the  fact  that  a  joint  stock  association  is  not  in 
legal  contemplation  a  corporation,  and  not  liable  to  taxation  under  acts  seeking 


138  INHERITANCE  TAX  L^W.  [§§182-185. 

to  reach  corporations,  in  no  way  militates  against  the  position  assumed  by  the 
comptroller  in  this  case.  It  is  competent  for  private  individuals  to  create  a 
joint  stock  association,  issue  shares  of  stock,  and  in  that  form  dispose  of  property 
by  last  will  and  testament.  The  associates  by  contract  have  created  the  same 
situation  as  to  shares  of  stock  that  a  corporation  secures  by  charter."  Per 
Bartlett,  J.,  in  In  re  Jones,  172  N.  Y.  575,  65  N.  E.  570,  60  L.  R.  A.  476,  reversing 
69  N.  Y.  App.  Div.  237,  74  N.  Y.  Suppl.  702. 

Sec.  182.     Money  for  Investment. 

The  decedent,  a  non-resident,  three  days  before  his  death  sent 
one  hundred  thousand  dollars  to  New  York  city  for  the  purpose  of 
purchasing  stock  in  a  foreign  corporation,  and  he  died  before  the 
transaction  was  completed.  The  court  holds  that  this  money  is 
not  subject  to  the  New  York  transfer  tax. 

In  re  Leopold,  35  Misc.  Rep.  369,  71  N.  Y.  Suppl.  1032. 

Sec.  183.    Loan  to  Partnership. 

Where  a  partner  makes  a  loan  to  a  partnership,  this  money  as 
regards  the  rest  of  the  world  is  capital  and  not  a  loan,  therefore 
subject  to  the  transfer  tax  on  the  partner's  death. 

In  re  Probst,  40  Misc.  Rep.  431,  82  N.  Y.  Suppl.  396. 

Sec.  184.    Profits  of  Partnership. 

Profits  permitted  to  remain  on  deposit  with  the  partnership 
should  be  included  among  the  taxable  assets. 
In  re  Probst,  40  Misc.  Rep.  431,  82  N.  Y.  Suppl.  396. 

Sec.  185.     Seat  in  Stock  Exchange. 

The  court  holds  that  a  seat  in  the  stock  exchange  is  property 
and  subject  to  tax  within  the  meaning  of  the  N.  Y.  St.  1896, 
c.  908,  s.  242.1  A  seat  in  the  stock  exchange  is  a  privilege  of  value 
subject  to  the  inheritance  tax.^ 

^"In  determining  the  construction  to  be  given  to  the  broad  and  comprehensive 
language  of  section  242,  we  must  consider  that  the  statute  has  a  history  plainly 
indicating  the  trend  of  legislative  action  and  that  as  to  the  transfer  tax  it  is  a 
literal  reproduction  of  the  then  existing  law.  First  enacted  in  1885  (Chap.  483) 
the  inheritance  tax  law  was  limited  to  property  passing  to  collateral  relatives. 
It  was  subjected  to  repeated  amendments,  the  effect  of  which  in  nearly  every 
instance  was  either  to  enlarge  the  class  of  persons  subject  to  the  tax  or  to  extend 
its  application  to  some  species  of  property  which  the  courts  had  held  not  to  fall 
within  its  terms.  The  distinction  between  property  justly  subject  to  ordinary 
taxation  and  that  liable  to  the  imposition  of  the  transfer  tax  was  early  appre- 
ciated.    In  Matter  of  Knoedler  (140  N.  Y.377),  a  policy  of  life  insurance  payable 


I 
I 


§  186.]  PERSONAL  PROPERTY.  139 

to  the  estate  of  the  deceased  was  held  subject  to  the  tax.  In  the  opinion  there 
rendered  Judge  Maynard  said:  The  argument  is  made  that  it  is  only  property 
which  is  liable  to  taxation  under  the  General  Tax  Law  of  the  state  which  can  be 
taxed  under  the  act  relating  to  taxable  transfers,  and  that,  inasmuch  as  life  insur- 
ance policies  cannot  be  included  in  the  valuation  of  a  taxpayer's  property  under 
the  general  law,  they  cannot  be  considered  in  assessing  a  tax  upon  the  collateral 
inheritance.  The  main  premise  upon  which  this  proposition  rests  is  manifestly 
inadmissible.  The  taxable  transfer  law  has  no  reference  or  relation  to  the 
general  law,  ...  it  proceeds  upon  a  new  theory  of  the  right  of  the  government 
to  tax  and  establishes  a  new  system  of  taxation.  It  takes  the  right  of  succession 
to  property  and  measures  the  tax  in  the  method  specifically  prescribed.  All 
property  having  an  appraisal  value  must  be  considered,  whether  it  is  such  as 
might  be  taxed  under  the  general  law  or  not.  Many  kinds  of  property  might  be 
enumerated  which  are  not  assessable  under  the  general  law,  but  which  are  ap- 
praisable  under  the  collateral  inheritance  tax.'  Such  was  the  settled  construc- 
tion of  the  inheritance  tax  laws  when  the  act  of  1896  was  passed.  That  act,  as 
already  said,  was  a  revision  of  the  existing  law,  and  an  attempt  to  bring  into  a 
single  statute  all  existing  legislation  relative  to  taxation  by  the  state.  In  Henavie 
V.  N.  Y.  C.  &  H.  R.  R.  R.  Co.  (154  N.  Y.  281)  Judge  Vann  said:  The  rule  in 
the  case  of  a  revision  of  statutes  is  that  where  the  law,  as  it  previously  stood, 
was  settled  either  by  adjudication  or  by  frequent  application  of  the  statute 
without  question,  a  mere  change  in  the  phraseology  is  not  to  be  construed  as  a 
change  in  the  law,  unless  the  purpose  of  the  legislature  to  work  a  change  is  clear 
and  obvious.'  Therefore,  because  section  242  prescribes  that  'all  property' 
shall  be  subject  to  the  transfer  tax  and  because  the  revision  of  the  statute  should 
not  be  held  to  work  a  change  m  the  settled  law  unless  the  legislative  intent  to 
that  effect  is  clearly  manifest,  we  are  of  opinion  that  the  seat  held  by  the  testator 
was  subject  to  the  tax  imposed  upon  it."  Per  Cullen,  J.,  in  In  re  Hellman,  174 
N.  Y.  254,  257,  66  N.  E.  809,  95  Am.  St.  Rep.  582,  reversing  77  N.  Y.  App.  Div. 
355,  79  N.  Y.  Suppl.  201. 
2/«  re  Curtis,  31  Misc.  Rep.  83,  64  N.  Y.  Suppl.  574. 

Sec.  186.    Conversion  in  General. 

It  is  the  general  rule  in  this  country  that  the  doctrine  of  equit- 
able conversion  cannot  be  invoked  to  affect  the  imposition  of  the 
inheritance  tax.  So  a  direction  to  invest  in  real  estate  leaves  the 
gift  one  of  personal  property,^  and  a  mere  power  of  sale,^  or  even 
an  absolute  direction  to  sell  real  estate,  will  not  transform  it  to 
personal  property  for  the  purposes  of  the  tax.^  However,  a  direc- 
tion to  sell  realty  will  make  the  interest  personalty  in  the  hands 
of  the  estate  of  the  beneficiary.'*  So  an  interest  in  partition  pro- 
ceedings ^  and  legacies  to  be  paid  from  the  proceeds  of  real  estate, 
which  the  will  directed  the  executor  to  sell,  are  personalty.^ 

^  Where  the  will  directed  the  remainder  to  be  paid  to  a  certain  New  York  church 
"ten  thousand  dollars  towards  the  building  of  a  new  church,"  this  bequest  cannot 
be  treated  as  real  estate,  but  is  personal  property,  and  by  no  rule  of  equitable 


140  INHERITANCE  TAX  LAW.  [§187. 

conversion  can  it  become  real  estate  until  it  has  been  invested  in  real  estate  as 
directed.  It  must  therefore  be  treated  as  a  legacy  of  money.  Sherrill  v.  Christ 
Church,  121  N.  Y.  701,  702,  25  N.  E.  50,  reversing  In  re  Van  Kleeck,  55  Hun  472. 

2 The  doctrine  of  equitable  conversion  is  not  applicable  to  subject  real  estate 
to  taxation.  In  re  Swift,  137  N.  Y.  77,  88,  32  N.  E.  1096,  18  L.  R.  A.  709,  64 
Hun  639,  16  N.  Y.  Suppl.  193,  19  N.  Y.  Suppl.  292. 

^Connell  v.  Crosby,  210  111.  380,  71  N.  E.  350  (land  in  another  state  cannot  be 
taxed  as  personal  property).  McCurdy  v.  McCurdy,  197  Mass.  248,  83  N.  E. 
881.  In  re  Curtis,  142  N.  Y.  219.  /wreDows,  167  N.  Y.  227,  232,  60  N.  E.  439, 
52  L.  R.  A.  433,  88  Am.  St.  Rep.  508,  affirming  60  N.  Y.  App.  Div.  630  (affirmed 
suh  nomine,  Orr  v.  Oilman,  183  U.  S.  278,  22  S.  Ct.  213,  46  L.  Ed.  196.  In  re 
Sutton,  3  N.  Y.  App.  Div.  208,  38  N.  Y.  Suppl.  277,  affirming  15  Misc.  659, 
38  N.  Y.  Suppl.  102.  In  re  Berry,  23  Misc.  Rep.  230,  51  N.  Y.  Suppl.  1132, 
2  Gibbons  346.     Contra,  In  re  Wheeler,  1  Misc.  Rep.  450,  22  N.  Y.  Suppl.  1075. 

*/«  re  Mills,  177  N.  Y.  562,  69  N.  E.  1127,  affirming  86  N.  Y.  App.  Div.  555, 
84  N.  Y.  Suppl.  1 135.  Under  the  New  York  statute  of  1892,  chapter  399,  legacies 
to  lineal  descendants  out  of  the  proceeds  of  testator's  real  estate  are  exempt  as 
real  estate.  In  re  Cobb,  14  Misc.  Rep.  409,  71  N.  Y.  St.  506,  36  N.  Y.  Suppl. 
448. 

5/«  re  Stiger,  7  Misc.  Rep.  268,  28  N.  Y.  Suppl.  163.     See  further,  ante,  s.  170. 

«  United  States  v.  Watts,  1  Bond  580,  Fed.  Cas.  16,  653. 

Sec.  187.    The  Pennsylvania  Rule. 

In  Pennsylvania  the  rules  of  equitable  conversion,  through  a 
direction  in  the  will  to  sell  or  invest  in  real  estate,  transform  the 
property  for  the  purposes  of  the  inheritance  tax,^  and  mere  in- 
sufficiency of  personal  property  may  work  a  conversion  of  the 
real  estate  by  implication.^  This  doctrine  results  in  subjecting  to 
the  Pennsylvania  tax  real  estate  of  a  resident  situated  outside  the 
state,^  unless  the  proceeds  are  to  be  invested  outside  the  state,^ 
and  in  exempting  from  tax  real  estate  in  Pennsylvania  belonging 
to  a  non-resident  decedent.^  Even  in  Pennsylvania  a  conversion 
will  not  take  place  through  a  mere  power  to  sell,^  or  where  the 
conversion  of  real  estate  is  postponed.^ 

*/«  re  Handley,  181  Pa.  St.  339,  37  A.  587,  reversing  judgment,  3  Lack.  Leg. 
N.9. 

Lien.  Where  there  is  a  conversion  of  land  situated  in  Pennsylvania  into 
personal  property  the  lien  of  the  tax  should  be  transferred  from  the  land  to  the 
fund  which  it  produced.     In  re  Brown,  5  Pa.  Dist.  R.  286. 

^ Where  the  Pennsylvania  testator  gave  his  executors  full  power  to  sell  real 
estate  if  necessary  for  any  purpose  of  his  estate  and  it  became  necessary  to  sell 
to  pay  legacies,  and  sale  was  made,  the  real  estate  situated  in  other  states  should 
be  charged  with  the  collateral  inheritance  tax.  The  power  to  sell  if  necessary 
to  make  distribution  became  under  the  manifest  intent  of  the  testator  a  direction 
to  sell.  The  pecuniary  legacies  are  to  be  paid  before  the  residue.  The  testator 
intended  them  to  be  paid  in  cash.     He  must  therefore  have  foreseen  the  necessity 


§  188.]  PERSONAL  PROPERTY.  141 

for  the  sale  of  his  real  estate,  where  the  pecuniary  legacies  aggregate  very  much 
more  than  the  amount  of  the  personal  estate.  In  re  Vanuxem,  212  Pa.  St.  315, 
61  A.  876,  1  L.  R.  A.  N.  S.  400. 

On  the  question  of  conversion  of  real  estate  where  the  trustees  had  a  power 
only  to  sell,  the  argument  that  it  was  necessary  to  sell  the  lands  to  pay  debts  is 
not  convincing  where  it  did  not  appear  that  at  the  date  of  the  will  the  decedent  con- 
ceived such  a  necessity  to  exist.  That  the  real  estate  in  other  states  is  not  now 
of  sufficient  value  to  pay  his  debts,  is  by  no  means  conclusive  that  he  did  not 
regard  it  as  sufficient  for  that  purpose,  when  he  executed  his  will;  and  that 
therefore  he  intended  that  his  Wisconsin  lands  should  not  be  delivered  to  the  bene- 
ficiaries as  real  estate.  Besides,  he  owned  several  mining  locations  in  Canada 
which  he,  like  most  men  who  invest  in  such  property,  regarded  as  of  great  value. 
In  re  Dalrymple,  215  Pa.  St.  367,  374,  64  A.  554. 

Un  re  Dalrymple,  215  Pa.  St.  367,  372,  64  A.  654.  In  re  Williamson,  153  Pa. 
St.  508,  521,  26  A.  246,  32  Wkly.  Notes  Cas.  93.  Miller  v.  Commonwealth,  111 
Pa.  St.  321,  2  A.  492.     Williamson's  Estate,  153  Pa.  St.  508. 

What  Law  Governs.  A  note  in  19  Harvard  Law  Review,  pp.  201,  202,  dis- 
cusses conversion  and  suggests  that  the  question  as  to  whether  a  conversion  has 
taken  place  must  be  determined  by  the  law  of  the  state  where  the  land  is  situate 
since  that  state  alone  has  dominion  over  the  property.  But  if  it  is  determined  that 
there  is  a  conversion  succession  will  occur  by  the  law  of  the  decedent's  domicile 
as  in  the  case  of  other  personalty. 

*The  will  of  a  resident  of  Pennsylvania  directed  that  real  estate  situated  out- 
side of  Pennsylvania  should  be  sold  on  the  death  of  the  wife  who  was  made  life 
tenant  and  the  proceeds  invested  in  mortgages  in  the  state  where  the  land  lay. 
The  direction  to  invest  the  proceeds  out  of  the  state  prevents  them  from  being 
brought  within  the  state  of  Pennsylvania  and  there  distributed;  and  therefore 
the  fund  never  came  within  the  jurisdiction  of  Pennsylvania  and  so  is  not  subject 
to  an  inheritance  tax.     In  re  Hale,  161  Pa.  St.  181,  183,  28  A.  1071. 

^In  re  Coleman,  159  Pa.  St.  231,  232,  28  A.  137.  In  re  Lamberton,  40  Pa. 
Super.  Ct.  548. 

Where  the  testator  domiciled  in  New  York  directed  all  his  real  estate  to  be 
sold,  this  rendered  the  real  estate  personal  property,  and  gave  it  a  situs  at  the 
place  of  his  domicile;  and  therefore  the  fund  realized  from  it  was  not  subject 
to  an  inheritance  tax  in  Pennsylvania,  although  the  testator  appointed  executors 
in  Pennsylvania  as  to  all  of  his  estate  not  situated  in  New  York,  and  the  Pennsyl- 
vania executors  improperly  paid  the  collateral  tax  on  the  real  estate  situated 
in  Pennsylvania.  In  re  Shoenberger,  221  Pa.  St.  112,  118,  70  A.  579,  19  L.  R.  A. 
N.  S.  290. 

«/w  re  Dalrymple,  215  Pa.  St.  367,  374,  64  A.  554.  Appeal  of  Drayton,  61  Pa. 
St.  (11  P.  F.  Smith)  172.     In  re  Hale,  161  Pa.  St.  181  (till  death  of  life  tenant). 

^  In  re  Handley,  181  Pa.  St.  339,  346,  37  A.  587,  reversing  judgment,  3  Lack. 
Leg.  N.  9. 

Sec.  188.    Manumission  of  Slave. 

The  manumission  or  bequest  of  freedom  to  a  slave  by  the  last 
will  and  testament  confers  on  such  slave  the  identical  rights  which 
would  pass  if  the  testator  had   bequeathed   the    same  slave   to 


142  INHERITANCE  TAX  LAW.  [§188. 

another  person,  and  therefore  the  bequest  of  freedom  is  a  legacy 
on  which  the  executor  is  Hable  to  pay  a  tax  on  the  appraised  value 
of  the  slave.^  The  court  bases  its  decision  on  the  theory  that  a 
large  part  of  the  personal  property  in  the  state  consists  of  slaves, 
which  should  pay  their  share  of  the  taxes.^ 

^State  V.  Dorsey,  6  Gill  (Md.)  388. 
^Spencer  v.  Negro  Dennis,  8  Gill  (Md.)  314. 


CHAPTER  XXVI. 


PLEDGE  OR  COLLATERAL. 

§  189.    When  Collateral  Redeemed. 
§  190.     Stock  Pledged  with  Brokers. 
§  191.     Stock  Pledged  by  Non-Resident. 

Sec.  189.    When  Collateral  Redeemed. 

Where  a  resident  of  New  York  had  pledged  stock  as  collateral 
for  a  loan,  and  the  executor  paid  the  loan  and  redeemed  the  stock, 
the  title  to  the  stock  has  teverted  to  the  estate  of  the  pledgor  and 
it  is  in  a  situation  to  be  taxed  as  property  of  the  estate. 

In  re  Hurcomb,  36  Misc.  Rep.  755,  74  N.  Y.  Suppl.  475. 

Sec.  190.    Stock  Pledged  with  Brokers. 

Where  the  stock  was  purchased  by  a  stock  broker  for  a  cus- 
tomer with  her  own  money,  and  they  held  the  stock  as  collateral 
with  other  stock  deposited  with  them,  the  court  holds  that  the 
customer  was  merely  the  pledgee  of  the  stock,  the  brokers  being 
the  owners  of  the  property  subject  to  a  right  to  redeem  upon  pay- 
ing the  entire  amount  of  the  debt,  and  therefore  the  stock  should 
not  be  included  in  the  transfer  of  the  estate  of  the  customer.  A 
subsequent  sale  of  the  stock  by  the  brokers  for  the  satisfaction  of 
their  lien  extinguishes  whatever  right  or  title  the  decedent  had, 
and  demonstrated  that  instead  of  being  the  owner  of  the  property 
the  estate  was  indebted  in  a  large  sum  to  the  brokers. 

In  re  Havemeyer,  32  Misc.  Rep.  416,  66  N.  Y.  Suppl.  722. 

Sec.  191.    Stock  Pledged  by  Non-Resident. 

The  testator  was  a  non-resident  of  New  York  and  had  a  specu- 
lative stock  account  with  brokers  in  the  city  of  New  York,  and  on  the 
day  of  his  death  owed  them  large  sums  of  money  on  stocks  and 
bonds  purchased  by  them  for  him  with  their  own  money.  The 
court  holds  that  the  deceased  was  under  contract  with  the  brokers 
to  apply  certain  pledged  securities  to  the  payment  of  the  debt 
and  the  executrix  performed  that  contract.     The  executrix  argued 


144  INHERITANCE  TAX  LAW.  [§  191. 

that  having  paid  a  portion  of  the  debt  with  pledged  non-taxable 
securities,  which  are  not  under  the  transfer  law  tax  considered 
as  "property"  in  this  state,  she  has  a  right  to  treat  such  portion 
of  the  debt  as  still  existing  for  the  purpose  of  offsetting  against  it 
property  otherwise  taxable.  But  the  court  holds  that  the  execu- 
trix cannot  argue  that  the  balance  of  the  debt,  after  applying 
taxable  property  pledged  which  has  actually  been  paid  with  non- 
taxable securities  pledged  for  that  purpose,  should  be  carried  as  a 
debt  to  credit  and  offset  against  clearly  .taxable  property.  And 
while  for  the  purposes  of  taxation  non-taxable  property  is  not  to 
be  treated  as  taxable  property,  yet  it  was  part  of  the  estate  of  the 
deceased  which  passed  to  the  executrix,  and  she  chose  to  cause  its 
sale  and  application  to  the  debt  of  the  deceased;  and  therefore 
the  balance  of  the  taxable  property  in  the  state  of  New  York  con- 
sisting of  real  estate  and  personal  property  is  subject  to  the  tax.^ 

The  testator,  a  resident  of  Illinois,  at  his  death  was  the  owner  of 
bonds  and  stocks  actually  within  the  state  of  New  York  of  corpora- 
tions organized  under  the  laws  of  New  York  state;  and  he  also 
owned  other  personal  property  in  New  York,  the  aggregate  value 
of  all  this  property  being  about  $774,000.  At  the  time  of  his 
death  he  was  indebted  to  various  persons  in  New  York  in  the  sum 
of  something  over  $800,000.  That  indebtedness  was  secured  by  a 
pledge  of  bonds  actually  located  with  the  state  worth  $20,000  and 
partly  by  a  pledge  of  stock  of  various  corporations  incorporated 
under  the  laws  of  states  other  than  the  state  of  New  York,  the 
market  value  of  such  stocks  being  in  excess  of  the  amount  of  the 
whole  indebtedness.  The  court  holds  that  for  the  purposes  of 
taxation  the  testator's  personal  estate  in  New  York  amounted 
to  $744,000,  from  which  should  be  deducted  the  expenses  of  ad- 
ministration, executor's  commissions  and  debts  to  the  amount  of 
$58,000,  that  being  the  value  of  the  bonds  and  of  the  stock  of  New 
York  corporations  pledged  as  collateral  security  to  the  creditors 
in  the  city  of  New  York.  It  was  claimed  that  inasmuch  as  the 
decedent  at  the  time  of  his  death  was  indebted  to  local  creditors 
to  an  amount  greater  than  the  market  value  of  the  local  assets, 
there  was  no  property  of  the  decedent  within  the  state  of  New  York 
subject  to  a  transfer  tax;  and  that  all  the  local  assets  of  the  dece- 
dent were  primarily  liable  for  the  payment  of  the  indebtedness  to 
local  creditors  to  the  entire  extent  of  such  property;  and  that 
the  local  assets  to  the  amount  of  $58,000  specifically  pledged  as 
collateral  security  for  the  payment  of  the  indebtedness  to  local 


§  191.]  PLEDGE  OR  COLLATERAL.  145 

creditors  are  liable  to  be  entirely  used  for  the  purpose  of  such 
payment. 

Where  the  whole  estate  is  within  the  state  of  New  York  and 
the  decedent  is  a  resident  of  the  state,  undoubtedly  debts  are 
to  be  deducted  from  the  value  of  the  property,  but  in  this  case  the 
indebtedness  to  the  New  York  creditors  is  a  general  indebtedness 
against  the  whole  estate.  Here  domestic  creditors  have  in  their 
hands  legal  title  by  a  pledge  and  a  right  to  resort  for  the  payment 
of  their  debts  to  securities  belonging  to  a  non-resident  decedent 
which  are  not  taxable  under  the  laws  of  this  state;  and  therefore 
the  indebtedness  due  such  creditors  is  not  to  be  offset  against  the 
value  of  the  property  of  such  decedent  otherwise  taxable  under  the 
transfer  law  of  the  state.^ 

1  In  re  Burden,  47  Misc.  329,  95  N.  Y.  Suppl.  972. 

2  In  re  Pullman,  46  N.  Y.  App.  Div.  574,  62  N.  Y.  Suppl.  395. 


CHAPTER  XXVII. 


DOUBLE  TAXATION. 

§  192.  Disputed  Domicile. 

§  193.  Double  Taxation  at  Domicile  of  Owner  and  at  Situs  of  Property. 

§  194.  Reciprocal  Provisions. 

§  195.  Lapsed  Legacy. 

§  196.  The  Louisiana  Rule. 

Sec.  192.    Disputed  Domicile. 

Where  the  proper  state  court  administers  the  estate  of  a  decedent 
as  that  of  a  resident,  and  its  decree  is  by  state  law  binding  on  all 
claimants  against  the  estate,  a  final  decree  by  such  a  court  after 
payment  of  the  tax  is  a  bar  to  proceedings  in  the  courts  of  another 
state  on  the  theory  that  the  decedent  resided  there. ^  But  where 
the  first  decree  does  not  purport  to  be  binding  on  all  claimants, 
it  is  perfectly  possible  that  the  courts  of  two  states  may  each  decide 
the  decedent  to  be  a  resident  of  that  state,  in  which  case  each  state 
will  assess  on  the  whole  property  on  that  basis. ^ 

1  Tilt  V.  Kelsey,  207  U.  S.  43,  28  S.  Ct.  1,  52  L.  Ed.  95. 

^  The  fact  that  the  California  courts  decided  that  a  certain  decedent  was  a 
resident  of  California  and  administered  his  estate  and  assessed  a  tax  on  that 
basis  does  not  bar  the  New  York  courts.  It  is  not  res  judicata  as  to  them,  as  the 
California  decree  was  by  California  law  binding  only  on  "heirs,  legatees  or 
devisees,"  and  did  not  purport  to  adjudicate  taxes.  In  re  Cummings,  142  App. 
Div.  377, 127  N.  Y.  Suppl.  109,  reversing  63  Misc.  621, 118  N.  Y.  Suppl.  684. 

Where  there  is  a  question  whether  a  married  woman  is  domiciled  within  the 
state  of  New  Jersey  or  of  New  York,  the  fact  that  the  will  was  never  probated 
in  New  Jersey,  but  the  probate  was  taken  out  in  New  York,  does  not  deprive 
the  state  of  New  Jersey  of  jurisdiction  to  levy  an  inheritance  tax  upon  it.  The 
authority  of  the  surrogate  does  not  depend  upon  the  probate  of  the  will,  which 
speaks  from  the  death  of  the  testatrix.  In  re  Hartman,  70  N.  J.  Eq.  664,  668, 
62  A.  560. 

Certain  facts  proving  domicile  are  considered  ante,  s.  19,  n.  3. 

The  extra-territorial  effect  of  a  judgment  as  to  domicile  is  considered  ante,  s.21. 

Sec.  193.    Double  Taxation  at  Domicile  of  Owner  and  at 
Situs  of  Property. 

Double  taxation,  both  in  the  state  where  the  property  is  situ- 
ated and  in  the  state  of  its  owner's  domicile,  has  been  so  often 


§  194.]  DOUBLE  TAXATION.  147 

approved  by  our  highest  courts  that  its  validity  can  no  longer  be 
disputed,^  whether  or  not  the  tax  was  in  force  befo.e  the  property 
was  placed  in  the  foreign  jurisdiction .^ 

^  Frothinghatn  v.  Shaw,  175  Mass.  59,  61,  78  Am.  St.  Rep.  475.  In  re  Stanton, 
142  Mich.  491,  105  N.  W.  1122,  12  Detroit  Leg.  N.  829.  Mann  v.  Carter,  74  N.  H. 
345,  68  N.  E.  130,  relying  on  the  following  cases:  Hartman  Case,  70  N.  J.  Eq. 
664,  667;  Hopkins  Appeal,  77  Conn.  644;  Bridgeport  Trust  Co.,  77  Conn.  657; 
Matter  of  Swift,  137  N.  Y.  77,  18  L.  R.  A.  709;  Matter  of  Houdayer,  150  N.  Y. 
37,  34  L.  R.  A.  235,  55  Am.  St.  Rep.  642;  State  v.  Dalrymple,  70  Md.  294, 
3  L.  R.  A.  372;  Eidman  v.  Martinez,  184  U.  S.  578,  581.  (But  see  In  re  Joyslin, 
76  Vt.  88.)  In  re  Lewis,  203  Pa.  St.  211,  217,  52  A.  215.  Blackstone  v.  Miller, 
188  U.  S.  189,  23  S.  Ct.  277,  47  L.  Ed.  439,  affirming  171  N.  Y.  682,  69  N.  Y. 
App.  Div.  127  (not  a  deprivation  of  the  privileges  and  immunities  of  a  citizen 
of  another  state  or  a  violation  of  the  fourteenth  amendment). 

"The  question  presented  is  not  one  of  general  equities,  but  of  jurisdic- 
tion. It  has  been  held  and  logically  tha  the  taxing  authorities  must  be  con- 
trolled solely  by  the  laws  of  the  state,  and  not  by  proceedings  in  another  and 
distinct  jurisdiction,  to  ascertain  whether  or  not  a  certain  tax  should  be  levied 
or  collected.  Payment  in  one  state  is  not  a  defence  when  called  upon  to  pay  in 
the  other  unless  so  provided  by  law.  Mann  v.  State  Treasurer,  74  N.  H.  345, 
68  A.  130,  15  L.  R.  A.  N.  S.  150.  Blackstone  v.  Miller,  188  U.  S.  189,  206,  207, 
23  Sup.  Ct.  277,  47  L.  Ed.  439."  Per  Root,  J.,  in  In  re  Douglas  County,  84  Neb. 
506,  121  N.  W.  593. 

"The  fact  that  two  states,  dealing  each  with  its  own  law  of  succession,  both 
of  which  the  plaintiff  in  error  has  to  invoke  for  her  rights,  have  taxed  the  right 
which  they  respectively  confer,  gives  no  cause  for  complaint  on  constitutional 
grounds.  The  universal  succession  is  taxed  in  one  state,  the  singular  succession 
is  taxed  in  another.  The  plaintiff  has  to  make  out  her  right  under  both  in  order 
to  get  the  money."  Per  Holmes,  J.,  in  Blackstone  v.  Miller,  188  U.  S.  189,  207, 
23  S.  Ct.  277,  47  L.  Ed.  439,  affirming  171  N.  Y.  682,  69  N.  Y.  App.  Div.  127. 

Where  the  testator  died  living  in  New  Hampshire  and  having  savings  bank 
deposits  in  Massachusetts,  these  deposits  are  subject  to  tax  in  New  Hampshire 
although  they  were  also  subject  to  tax  in  Massachusetts.  This  is  not  double 
taxation,  as  the  two  burdens  are  created  by  two  different  independent  states  for 
wholly  different  local  purposes.    Mann  v.  Carter,  74  N.  H.  345,  68  N.  E.  130. 

Double  taxation  should  he  avoided  in  construction  when  possible.  In  re  Enston, 
113  N.  Y.  174,  182,  21  N.  E.  87,  3  L.  R.  A.  464,  22  N.  Y.  St.  569,  reversing 
46  Hun  506,  19  Abb.  N.  Cas.  227,  10  N.  Y.  St.  380. 

*  The  fact  that  the  law  imposing  a  tax  was  in  force  before  the  deposit  was 
made  by  a  non-resident  in  New  York  does  not  seem  to  be  relied  upon  by  the 
court.  Blackstone  v.  Miller,  188  U.  S.  189,  23  S.  Ct.  277,  47  L.  Ed.  439.  affirm- 
ing 171  N.  Y.  682,  69  N.  Y.  App.  Div.  127,  relying  upon  Magoun  v.  Illinois 
Trust  &f  Savings  Bank,  170  U.  S.  283. 

Sec.  194.    Reciprocal  Provisions. 

The  following  states  have  reciprocal  provisions  for  the  inherit- 
ance tax  paid  in  another  state:    West  Virginia,  statute  of  1904, 


148  INHERITANCE  TAX  LAW.  [§195 

chapter  6,  sect.  6;  Massachusetts  statute  1907,  chapter  563,  sect. 
3;  Vermont  Statute  1904,  number  30,  sect.  3.  Connecticut 
tried  a  reciprocal  provision,  statute  of  1903,  chapter  63,  but 
has  now  adopted  a  retaliatory  arrangement,  statute  of  1907, 
chapter  179.^ 

This  has  been  construed  in  Vermont  to  cover  only  what  is 
actually  paid  to  the  foreign  jurisdiction,  after  deducting  the 
discount  there  allowed,  and  not  to  include  the  tax  actually 
there  assessed.^ 

^  "The  amendment  passed  in  1903  removed  the  bar  erected  by  the  original 
act,  against  the  use  of  any  of  its  provisions  for  imposing  a  transfer  tax  on  per- 
sonal property  of  non-residents.  It  proceeds  to  authorize  such  a  transfer  tax 
and  to  prescribe  the  machinery  for  its  collection,  coupling  this,  however,  with 
instructions  to  the  treasurer  not  to  collect  such  transfer  tax  in  any  case  where 
the  decedent  resided  in  a  state  which  does  not  collect  transfer  or  succession  taxes 
from  personal  property  therein  'belonging  to  the  estates  of  Connecticut  dece- 
dents.' The  amendment  recognizes  the  justice  of  the  scheme  adopted  in  the 
original  act,  and  attempts  its  modification  only  so  far  as  may  be  necessary  to 
add  to  the  force  of  example  the  influences  of  reciprocity."  Per  Hammersley,  J., 
in  In  re  Gallup,  76  Conn.  617,  627,  57  A.  699. 

2  In  re  Meadon,  81  Vt.  490,  70  A.  1064. 

Sec.  195.     Lapsed  Legacy. 

Double  taxation  was  enforced  rigidly  in  the  following  English 
case:  The  father  died  leaving  certain  fees  to  his  son;  the  son 
died  leaving  issue  which  survived  the  father  and  devising  the 
property  to  trustees  upon  certain  trusts. 

The  English  wills  act,  section  33,  provides  that  where  property 
is  devised  to  the  child  of  the  testator  who  dies  in  the  tes- 
tator's lifetime  leaving  an  issue  which  survives  the  testator, 
such  devise  "shall  not  lapse  but  shall  take  effect  as  if  the 
death  of  such  person  had  happened  immediately  after  the 
death  of  the  testator." 

The  findings  act  provides  that  an  estate  duty  shall  be  levied  on 
all  property  passing  at  a  person's  death,  of  which  the  deceased  was 
at  the  time  of  his  death  competent  to  dispose.  The  government 
collected  an  inheritance  tax  from  the  father's  estate  and  the  court 
further  holds  that  the  effect  of  the  wills  act  was  to  pass  the  real 
estate  to  the  child  in  fee  to  devolve  as  part  of  his  property,  and 
consequently  that  it  was  subject  to  a  second  inheritance  tax  from 
his  executors. 

In  re  Scott  (Eng.),  83  L.  T.  613. 


§  196.]  DOUBLE  TAXATION.  149 

Sec.  196.    The  Louisiana  Rule. 

The  Louisiana  constitution  forbids  an  inheritance  tax  when 
the  property  passing  has  borne  its  just  proportion  of  taxes  prior 
to  the  death  of  the  decedent.  This  exempts  an  interest  in  a  part- 
nership which  has  paid  the  usual  taxes/  but  not  stock  in  a  corpora- 
tion which  has  paid  the  tax.^ 

The  contract  of  an  insurance  agent  with  his  company  pro- 
vided that  in  case  of  his  death  his  representative  should  be  entitled 
to  certain  commissions  on  renewals.  It  was  claimed  that  as  the 
premiums  had  been  taxed,  therefore  the  inheritance  tax  should 
not  be  laid.  The  court  holds,  however,  that  the  premiums  do  not 
form  the  subject-matter  of  the  inheritance,  but  are  due  to  and  are 
paid  to  and  belong  to  the  company,  and  the  heirs  inherit  simply 
an  incorporeal  right  whose  only  relation  to  the  premiums  is  that 
its  amount  is  determined  by  a  computation  based  on  their  net 
amount,  and  the  contract  does  not  invest  the  heirs  with  the  owner- 
ship of  the  premiums  Or  any  part  thereof,  but  only  with  the  right 
to  require  of  the  insurance  company  payment  of  an  amount  of 
money  measured  by  the  net  amount  of  the  premiums,  and  the 
right  thus  inherited  has  never  been  assessed  and  has  never  borne 
taxes  .^ 

It  was  argued  that  the  tax  should  not  be  collected  on  bonds 
belonging  to  the  estate,  because  in  1905  the  decedent  sold  certain 
real  estate  on  which  the  taxes  had  been  paid  and  with  the  proceeds 
of  the  sale  during  the  same  year  purchased  bonds  which  she 
owned  at  the  time  of  her  death  in  January,  1906.  It  is  not  con- 
tended that  any  taxes  have  ever  been  paid  on  these  bonds  but  it 
is  argued  that  as  the  decedent  had  paid  all  taxes  assessed  against 
her  real  estate  and  with  the  proceeds  of  the  sale  purchased  bonds, 
the  latter  must  be  construed  in  the  light  of  property  which  has  borne 
its  just  proportion  of  taxes.  The  court  holds  that  there  would  be 
weight  in  this  contention  if  the  constitution  had  exempted  persons 
who  have  paid  all  the  taxes  assessed  against  them,  but  as  the  law 
excepts  property  inherited  it  cannot  construe  the  article  so  as  to 
substitute  persons  for  property.  The  question  of  the  exemption 
of  property  from  the  tax  can  only  arise  after  the  opening  of  the 
succession  by  the  death  of  the  decedent,  and  the  right  of  the  heirs 
and  of  the  fisc  must  be  determined  by  the  state  of  facts  then  exist- 
ing. That  other  property  formerly  owned  by  the  decedent  may 
have  borne  its  just  proportion  of  taxes  is  a  matter  entirely  foreign 
to  the  inquiry.^ 


150  INHERITANCE  TAX  LAW.  [§196. 

^Succession  of  Stauffer,  119  La.  Ann.  66,  43  S.  928. 

2  The  taxation  of  corporate  capital  stock,  franchises  and  property  is  not  a 
taxation  of  the  shares  held  by  individual  stockholders;  and  therefore  these 
taxes  are  not  exempt  from  the  operation  of  the  inheritance  tax  law  of  1904. 
Succession  of  Kohn,  115  La.  Ann.  71,  38  S.  898. 

^Succession  of  Fell,  119  La.  Ann.  1037,  44  S.  879. 

^Succession  of  Pritchard,  118  La.  Ann.  883,  43  S.  537. 


CHAPTER  XXVIII. 


ESTATES  OF  NON-RESIDENT  DECEDENTS. 

§  197.    Realty  of  Non-Resident.  —  Corporation    Owning    Property  in 

State. 
§  198.     Personalty  of  Non-Resident. 
§  199.     Jurisdiction  Based  Solely  on  the  Situs  of  Personal  Property 

in  the  State. 
§  200.     Domestic  Stock  Owned  by  Non-Resident. 
§  201.     Non-Resident's  Stock  in  Foreign  Corporation. 
§  202.     Where  Beneficiary  Alone  is  within  the  Jurisdiction. 
§  203.     Removal  of  Property  before  Taxation. 
§  204.     Marshaling  Local  Assets  of  Non-Resident. 
§205.     Federal  Act  of  1898.  — AUens. 
§  206.     Effect  of  Place  of  Execution  of  Will. 

Sec.  197.    Realty  of  Non-Resident.  —  Corporation  Owning 
Property  in  State. 

The  succession  to  real  estate  depending  on  the  law  of  its  situs, 
real  estate  of  a  non-resident  may  well  be  subject  to  an  inheritance 
tax  at  its  situs/  and  not  at  the  domicile  of  the  decedent.^ 

Some  states,  as  appears  in  our  table  at  p.  1285,  are  claiming  an 
inheritance  tax  on  stock  of  non-residents  in  corporations  which 
are  not  even  organised  under  their  laws,  but  own  property  within 
the  state.  We  know  of  no  decisions  supporting  such  a  tax,  and 
believe  that  the  general  principles  of  corporate  taxation  forbid  it. 
It  would  seem  to  be  involved  in  the  reasoning  of  the  court  in  a 
recent  New  York  case,  which  discusses  the  distinction  between  a 
corporation  and  a  joint  stock  association.^  Such  a  tax  might 
conceivably  be  justified  under  some  such  language  as  follows:  — 

"The  attitude  of  a  holder  of  shares  of  capital  stock  is  quite 
other  than  that  of  a  holder  of  bonds  towards  the  corporation 
which  issued  them.  While  the  bondholders  are  simply  creditors, 
whose  concern  with  the  corporation  is  limited  to  the  fulfillment  of 
its  particular  obligation,  the  shareholders  are  persons  who  are 
interested  in  the  operation  of  the  corporate  property  and  fran- 
chises, and  their  shares  actually  represent  undivided  interests  in 
the  corporate  enterprise.     The  corporation  has  the  legal  title  to 


152  INHERITANCE  TAX  LAW.  [§197. 

all  the  properties  acquired  and  appurtenant,  but  it  holds  them 
for  the  pecuniary  benefit  of  those  persons  who  hold  the  capital 
stock.  They  appoint  the  persons  to  manage  its  affairs,  they 
have  the  right  to  share  in  surplus  earnings,  and,  after  dissolution, 
they  have  the  right  to  have  the  assets  reduced  to  money  and  to 
have  them  ratably  distributed.  Each  share  represents  a  distinct 
interest  in  the  whole  of  the  corporate  property."^ 

The  same  court  has,  however,  recently  distinctly  denied  the 
validity  of  such  a  tax.^ 

^Appeal  of  Gallup,  76  Conn.  617,  57  A.  699.  In  re  Vinot,  7  N.  Y.  Suppl.  517. 
Callahan  v.  Woodbridge,  171  Mass.  595,  598.  Thomson  v.  Lord  Advocate,  12  Clark 
&  Finnelly  1.  Contra,  In  re  Stanton,  142  Mich.  491,  105  N.  W.  1122,  12  Detroit 
Leg.  N.  829. 

A  note  in  19  Harvard  Law  Review,  p.  201,  discusses  the  liability  of  foreign 
real  estate  to  the  collateral  inheritance  tax.  The  editor  points  out  that  the 
inheritance  tax  being  a  tax  on  a  privilege  in  the  case  of  personalty  each  state 
allows  the  property  within  its  jurisdiction  to  pass  by  the  law  of  the  state  of  the 
decedent's  domicile  and  therefore  two  states  may  each  grant  a  privilege  and 
may  each  levy  a  tax.  But  in  the  case  of  realty  title  passes  by  the  lex  rei  sitcB  and 
that  state  alone  controls  the  privilege  of  succession. 

^Lorillard  v.  People,  6  Dem.  Surr.  (N.  Y.)  268.  Commonwealth  v.  Coleman, 
52  Pa.  St.  468.    In  re  Bittinger,  129  Pa.  St.  338. 

The  heirs  and  legatees  do  not  receive  by  inheritance  under  the  laws  of  Louisiana 
real  estate  in  another  state.  The  legislature  must  be  supposed  to  have  measured 
the  burden  of  the  tax  by  the  extent  of  the  right  and  privilege  which  it  has  itself 
conferred  and  not  upon  that  which  has  been  conferred  by  the  laws  of  another 
state.    Succession  of  Westfeldt,  122  La.  Ann.  836,  48  S.  281. 

'/«  re  Jones,  172  N.  Y.  575,  65  N.  E.  570,  60  L.  R.  A.  476,  reversing  69  N.  Y. 
App.  Div.  237,  74  N.  Y.  Suppl.  702,  reported  more  fully  ante,  s.  181. 

^Per  Gray,  J.,  in  In  re  Bronson,  150  N.  Y.  1,  8,  44  N.  E.  707,  34  L.  R.  A.  238, 
55  Am.  St.  Rep.  632,  modifying  1  N.  Y.  App.  Div.  646,  37  N.  Y.  Suppl.  476. 

Stock  was  called  an  "interest"  in  corporate  property  in  In  re  Culver,  145  Iowa 
1,  123  N.  W.  743. 

^"The  assessment  of  the  stockholder  is  computed  upon  the  value  of  his  inter- 
est in  the  whole  of  the  corporate  property,  as  evidenced  by  the  number  of  the 
shares  of  stock  which  he  holds.  Their  market  value  may,  or  may  not,  represent, 
proportionately,  the  actual  value  of  the  corporate  properties.  Very  often  it 
does  not  and  the  market  value  of  the  shares  of  capital  stock  may  be  quite  dis- 
proportionately influenced  by  considerations,  or  by  circumstances,  having  little 
reference  to  actual  conditions.  That  value,  whatever  it  may  be  in  the  market, 
is  the  worth  attached  to  an  interest  in  the  corporate  assets  and  properties,  re- 
garded as  a  whole.  A  share,  of  capital  stock  represents  the  distinct  interest 
which  its  holder  has  in  the  .corporation,  and  his  right  to  participate  in  the  dis- 
tribution of  the  neti  earnings  of  the  corporation,  as  a  going  concern,  or  in  that 
of  its  assets,  upon  a  dissolution,  and  is  proportionate  to  the  number  of  shares  which 
he  holds.  They  evidence  the  extent  of  his  proprietary  interest  and  their  assess- 
ment for  taxation  purposes  must  be  upon  that  interest,  regarded  as  an  entity. 


§  198.]  ESTATES  OF  NON-RESIDENT  DECEDENTS.  153 

and  is  unapportionable  with  reference  to  the  situs  of  the  corporate  properties. 
The  tax,  imposed  by  the  state  upon  the  transfer  of  such  property,  upon  the 
decease  of  its  owner,  is  not  upon  the  property  which  passes;  it  is  upon  the  right 
of  succession  to  it.  The  transfer  tax  act  operates  upon  that  general  right  to 
succeed  to  the  interest  of  the  deceased  in  the  corporation,  and  it  is  inconceivable 
that  the  value  of  the  interest,  upon  which  the  tax  is  computed,  is  determinable  by 
the  location  of  the  corporate  properties."  Per  Gray,  J.,  in  In  re  Palmer,  183 
N.  Y.  238,  241,  76  N.  E.  16,  affirming  102  N.  Y.  App.  Div.  616,  92  N.  Y.  Suppl. 
1137.  (See  further,  post,  s.  211.) 
[Status  of  stock  pledged  by  non-resident,  see  ante,  s.  191.] 
[Jurisdiction  of  probate  courts  over  real  estate  of  non-resident  decedents, 
see  post,  s.  388.] 

[Ancillary  administration  in  case  of  non-residents,  see  post,  s.  389.] 
[Exercise  by  non-resident  of  power  under  will  of  resident,  see  ante,  s.  20.] 
[Application  of  tax  acts  to  estates  of  non-residents,  see  ante,  s.  19.] 

Sec.  198.    Personalty  of  Non-Resident. 

Personal  property  of  a  non-resident  is  subject  to  tax  by  the 
state  wliere  the  property  is  situated,^  except  in  Pennsylvania, 
which  holds  that  securities  of  a  non-resident,  though  physically 
within  the  state,  are  not  subject  to  the  inheritance  tax.^  This 
does  not  apply  to  tangible  property  within  the  state,  which  is 
subject  to  tax  even  in  Pennsylvania.^ 

1  Callahan  v.  Woodbridge,  171  Mass.  595,  597.  Greves  v.  Shaw,  173  Mass.  205, 
210.  Frothingham  v.  Shaw,  175  Mass.  59,  78  Am.  St.  Rep.  475.  Neilson  v. 
Russell,  76  N.  J.  L.  655,  71  A.  286,  reversing  76  N.  J.  L.  27,  69  A.  476.  Dixon  v. 
Russell,  79  N.  J.  L.  490,  76  A.  982,  reversing  78  N.  J.  L.  296,  73  Atl.  51.  Tilford 
v.  Dickinson,  (N.  J.,  1911,)  79  Atl.  1119,  reversing  79  N.  J.  L.  302,  75  Atl. 
574.  Alvany  v.  Powell,  2  Jones  Eq.  (N.  C.)  51.  In  re  Romaine,  127  N.  Y. 
80,  85,  27  N.  E.  759,  12  L.  R.  A.  401,  affirming  58  Hun  109  (the  act  of 
1887  did  not  discriminate  between  testators  and  intestates).  In  re  Lord,  186 
N.  Y.  549,  79  N.  E.  1110,  affirming  111  N.  Y.  App.  Div.  152,  97  N.  Y.  Suppl.  553. 
In  re  Vinot,  7  N.  Y.  Suppl.  517.  Contra,  Appeal  of  Gallup,  76  Conn.  617,  57  A. 
699,  construing  phrase,  "property  within  the  jurisdiction  of  this  state";  an 
amendment,  however,  striking  out  the  words  "by  the  inheritance  laws  of  this 
state"  and  inserting  instead  "by  inheritance"  allows  such  taxation. 

The  state  has  a  right  to  tax  personal  estate  of  non-residents  which  exists 
in  the  state  of  New  York.  In  re  Romaine,  127  N.  Y.  80,  86,  27  N.  E.  759,  12 
L.  R.  A.  401,  affirming  58  Hun  109. 

As  to  personal  property  within  the  state  of  New  York  belonging  to  non- 
resident decedents,  succession  is  under  the  law  of  a  foreign  state  and  ihat  suc- 
cession cannot  be  taxed  by  New  York.  In  such  case  the  right  of  the  state  to 
impose  a  tax  is  based  on  its  dominion  over  the  property  situated  within  its  ter- 
ritory. This  is  a  property  tax  on  such  property.  In  re  Embury,  154  N.  Y.  746, 
49  N.  E.  1096,  affirming  19  N.  Y.  App.  Div.  214,  45  N.  Y.  Suppl.  881. 
^  The  legal  right  of  the  legislature  to  tax  the  succession  to  "property  of  a 
non-resident  owner  rests  upon  the  fact  that  the  property  is  within  the  state 


154  INHERITANCE  TAX  LAW.  [§198. 

and  subject  to  its  jurisdiction.  This  power  is  as  large  in  reference  to  the  property 
of  a  non-resident  decedent  as  in  reference  to  that  of  the  inhabitants  of  the  com- 
monwealth. It  covers  the  property  within  the  jurisdiction.  A  ground  for  its 
exercise  is  that  the  property  has  the  protection  of  our  laws  and  that  our  laws  are 
invoked  for  the  administration  of  it  when  a  change  of  ownership  is  to  be  effected." 
Per  Knowlton,  J.,  in  Callahan  v.  Woodhridge,  171  Mass.  595,  597. 

N.  Y.  St.  1885  imposed  a  tax  only  on  the  property  of  resident  decedents. 
In  re  Hall,  55  Hun  608,  8  N.  Y.  Suppl.  556,  following  In  re  Enston,  113  N.  Y. 
174,  21  N.  E.  87. 

**There  are  three  plans  which  may  be  followed  in  subjecting  the  estate 
of  a  deceased  person  to  a  succession  tax  :  (1)  A  tax  based  upon  the  distribution 
of  the  net  proceeds  of  a  decedent's  property  to  the  persons  upon  whom  it  devolves 
by  force  of  the  laws  of  the  taxing  state.  This  plan  includes  in  the  estate  subject 
to  the  tax  the  net  proceeds  of  a  decedent's  land  situate  in  the  taxing  state,  and  in 
case  the  decedent  was  domiciled  in  the  taxing  state,  but  not  otherwise,  of  all  his 
personal  property.  (2)  A  tax  based  upon  any  transfer,  actual  or  potential,  of  a 
decedent's  personal  property  situate  at  his  death  within  the  taxing  state,  whether 
the  net  proceeds  of  that  property  pass  to  the  decedent's  beneficiaries  by  force 
of  the  laws  of  the  taxing  state  or  not.  Under  this  plan  the  tax  is  more  nearly 
akin  to  an  ordinary  transfer  duty.  (3)  The  inclusion  in  one  act  of  a  tax  under 
each  of  these  plans.  There  would  seem  to  be  no  constitutional  objection  to  the 
adoption  of  either  plan.  Blackstone  v.  Miller,  188  U.  S.  189,  23  Sup.  Ct.  277, 
47  L.  Ed.  439.  Our  succession  tax  is  laid  in  pursuance  of  the  first  plan,  and  the 
act  is  framed  in  view  of  the  existing  law  of  domicile  in  relation  to  this  subject." 
Appeal  of  Gallup,  76  Conn.  617,  621,  57  A.  699. 

The  English  Rule.  "We  have  no  difficulty  in  distinguishing  between  this 
and  the  English  cases.  In  those  cases  the  several  acts  of  parliament  imposing 
probate,  legacy  and  succession  duties  underwent  construction.  In  England  the 
question  of  probate  duty  depends  upon  the  situs  of  the  property  and  not  the 
domicile  of  the  owner.  Attorney  General  v.  Hope,  1  Cromp.,  Mes.  &  Ros.  530. 
It  was  for  some  time  held  that  the  legacy  duty  imposed  by  36  Geo.  Ill,  ch.  52, 
and  48  Geo.  Ill,  ch.  149,  depended  upon  the  same  consideration.  Attorney 
General  v.  Cockerill,  1  Price  165.  But  these  cases  were  overruled  in  Thompson 
V.  Advocate  General,  12  Clark  &  Finnelly  1,  and  the  principle  was  settled  that  the 
law  of  the  domicile  of  the  owner  of  personal  property  determines  its  liability  to 
legacy  duty.  The  same  rule  was  adopted  in  respect  to  the  succession  duty  under 
16  and  17  Vic,  ch.  51.  Wallace  v.  Attorney  General,  L.  R.,  1  Ch.  App.  C.  1.  In  the 
case  last  referred  to.  Lord  Chancellor  Cranworth  said,  'Parliament  has,  no 
doubt,  the  power  of  taxing  the  succession  of  foreigners  to  their  personal  property 
in  this  country;  but  I  can  hardly  think  we  ought  to  presume  such  an  intention 
unless  it  is  clearly  stated.'  Thus  whilst  the  power  of  parliament  to  impose  the 
tax  without  reference  at  all  to  the  subject  of  domicile  is  distinctly  recognized, 
it  was  held  that  the  language  of  the  acts  did  not  furnish  any  indication  of  an 
intention  to  exercise  that  power,  and  that  therefore  the  law  of  the  domicile 
of  the  owner  fixed  the  liability  of  his  property  to  pay  these  taxes.  In  our  opinion, 
for  the  reasons  we  have  given,  the  Maryland  statute  cannot  be  so  construed." 
Per  McSherry,  J.,  in  State  v.  Dalrymple,  70  Md.  294,  304,  17  A.  82,  3  L.  R.  A. 
372. 

2  In  re  Schoenberger,  221  Pa.  St.  112,  119,  70  A.  579,  19  L.  R.  A.  (N.  S.)  290. 


§  199.]  ESTATES  OF  NON-RESIDENT  DECEDENTS.  155 

Property  in  Hands  of  Agent.  Where  the  testator  was  not  a  resident  of 
Pennsylvania  and  died  in  1898,  leaving  property  in  Pennsylvania  which  had  for 
a  long  while  been  in  Pennsylvania  in  the  hands  of  an  agent  for  purposes  of  invest- 
ment and  reinvestment,  this  personal  property  is  within  the  state  of  Pennsylvania, 
and  where  by  agreement  of  the  parties  the  property  was  distributed  by  an 
administrator  appointed  in  Pennsylvania,  the  court  holds  that  the  Pennsylvania 
tax  should  be  levied.  In  re  Lewis,  203  Pa.  St.  211,  214,  52  A.  205.  Singer  v. 
Guarantee  Trust  &  Safe  Deposit  Co.,  24  Pa.  Super.  Ct.  270. 

In  re  Lewis,  203  Pa.  St  211,  was  said  not  to  be  a  convincing  authority  —  one 
which  was  decided  upon  its  own  peculiar  facts,  and  is  not  to  be  stretched,  in 
In  re  Schoenberger,  221  Pa.  St.  112,  119,  70  A.  579,  19  L.  R.  A.  (N.  S.)  290. 

^Small's  Appeal,  151  Pa.  St.  1. 

Sec.  199.    Jurisdiction  Based  Solely  on  the  Situs  of  Personal 
Property  in  the  State. 

Jurisdiction  for  the  purpose  of  the  inheritance  tax  will  not 
arise  usually  simply  on  account  of  the  location  in  the  state  of 
intangible  property,^  such  as  stock ^  and  bonds,^  although  this 
result  has  been  reached  under  some  statutes  which  have  been 
construed  as  taxes  on  property.* 

"The  tendency  of  modern  legislation  in  this  country  is  to  extend 
the  state's  taxing  power  to  all  property  within  its  jurisdiction,  and 
this  is  especially  true  as  to  inheritance  taxes  on  the  right  of  suc- 
cession to  all  property,  whether  real  or  personal,  tangible  or  in- 
tangible, which  passes,  testate  or  intestate,  from  decedents  to 
other  persons. 

The  ancient  maxim  that  movables  follow  the  domicile  of  the 
person  was  an  outgrowth  of  conditions  which  have  long  since 
ceased  to  exist,  and  the  rule  has  been  greatly  limited  in  certain 
matters,  such  as  taxation  and  the  subjecting  of  personal  property 
of  non-residents  to  the  claims  of  local  creditors."^  So  the  tax  has 
been  imposed  on  personal  property  of  non-residents  left  in  the 
state,^  such  as  bonds ^  and  stock,  which  are  often  regarded  as  tangible 
assets,^  deposits  in  banks ,^  or  money  left  for  investment  with 
stockbrokers,^^  or  other  securities  kept  in  the  state  for  safety. ^^ 
Even  this  doctrine  may  not  apply  to  property  casually  brought  into 
the  state  for  a  temporary  purpose.^^ 

1  In  re  Enston,  113  N.  Y.  174,  178,  21  N.  E.  87,  3  L.  R.  A.  464,  22  N.  Y.  St. 
569,  reversing  46  Hun  506,  19  Abb.  N.  Cas.  227,  10  N.  Y.  St.  380,  5  Dem.  Surr. 
93,  8  N.  Y.  St.  781.     Thomson  v.  Advocate  General,  12  Clark  &  Finnelly  1. 

2  People  V.  Griffith,  245  111.  532,  543,  92  N.  E.  313.  In  re  Stanton,  142  Mich. 
491,  494,  105  N.  W.  1122,  12  Detroit  Leg.  N.  829. 

Stock  in  foreign  corporations  belonging  to  a  non-resident  is  not  taxable  in 
New  York  simply  because  the  certificates  were  in  the  state  of  New  York  at  the 


156  INHERITANCE  TAX  LAW 


199. 


date  of  the  death  of  the  testator.  The  stock  of  foreign  corporations  which 
formed  part  of  this  estate  were  not  property  in  the  legal  sense.  The  share  certifi- 
cates which  the  testator  held  represented  interests  which  he  possessed  in  the 
corporations  which  issued  them  and  the  legal  situs  of  that  species  of  personal 
property  is  where  the  corporation  exists  or  where  the  shareholder  has  his  domicile. 
In  re  James,  144  N.  Y.  6,  12,  38  N.  E.  961,  affirming  77  Hun  211,  27  N.  Y. 
Suppl.  288,  6  Misc.  206. 

"The  corporate  stocks  of  the  decedent  were  not,  under  the  general  laws  of 
this  state,  taxable  here,  although  the  share  certificates  may  have  been  held 
here  by  her  agents.     The  certificates  are  in  no  general  sense  property.     They 
simply  represent  interests  in  the  corporations,  and  the  situs  of  the  property 
owned  by  a  shareholder  in  a  corporation  is  either  where  the  corporation  exists 
or  at  the  domicile  of  the  shareholder;  it  can  in  no  proper  sense  be  said  to  be  where 
the  certificates  happen  to  be  in  the  hands  of  an  agent  in  a  state  where  the  cor- 
poration has  no  existence  and  the  owner  no  domicile.     So,  too,  the  bonds  of 
foreign  corporations  in  the  hands  of  the  agents  of  the  decedent  here  were  not, 
in  a  legal  sense,  property  within  this  state,  and  they  were  not,  under  the  general 
laws  or  the  policy  of  the  state,  taxable  here.     On  the  contrary,  they  were,  by 
the  general  policy  of  the  state,  exempted  from  taxation  here.    There  is  nothing  in 
the  act  of  1885  from  which  it  can  be  inferred  that  the  legislature  meant  so  far 
to  depart  from  its  general  system  and  policy  of  taxation  as  to  impose  here  a 
succession  tax  upon  property  thus  situated.    It  was  dealing  with  taxation  upon 
the  property  of  persons  domiciled  here,  and  used  language  sufficient  to  impose 
taxation  upon  such  property,  but  not  upon  property  of  non-residents  which  had 
no  situs  in  this  state.     It  cannot  be  presumed  that  it  was  the  intention  of  the 
legislature  to  impose  taxation  upon  all  the  property  of  any  decedent  found  within 
this  state.     Suppose  a  foreigner  should  come  here  with  negotiable  securities  in 
his  possession  for  the  purpose  of  buying  property  here,  and  soon  after  should 
die  here.    Or  suppose  a  merchant  should  come  here  from  some  other  state  with 
negotiable  drafts  or  securities  in  his  possession  and  should  die  here  shortly  after 
reaching  this  state;   can  it  be  supposed  in  either  of  such  cases  that  it  was  the 
legislative  intent  that  before  the  property  of  the  decedent  could  be  taken  out 
of  this  state  to  the  jurisdiction  of  his  domicile  it  should  be  subjected  to  a  tax  to 
enhance  the  revenues  of  the  state?    Then,  again,  if  this  act  is  to  be  so  construed 
as  to  reach  personal  estate  of  non-resident  decedents,  how  is  it  to  be  administered  ? 
There  are  no  means  of  ascertaining  here  how  much  of  the  estate  will  pass  to 
collateral  relatives  under  a  will  or  by  intestacy.    That  can  only  be  known  after 
the  entire  expenses  of  administration  and  the  debts  and  liabi'ities  of  the  deceased 
have  been  ascertained  and  deducted  at  the  place  of  his  domicile.    Suppose  a  non- 
resident dies,  leaving  $1,000,000  in  this  state,  and  is  largely  indebted  at  the 
place  of  his  domicile,  what  his  net  estate  will  be  after  deducting  debts  and  expenses 
of  administration  can  only  be  ascertained  at  his  domicile,  where  his  estate  must 
be  finally  administered,  and  adjusted,  and  there  can  be  no  way  of  adjusting  the 
estate  here,  as  there  is  no  machinery  in  the  law  here  appropriate  to  such  a  pur- 
pose; and  thus  it  would  be  impractical  to  administer  this  statute."    Per  Andrews, 
J.,  in  In  re  Enston,  113  N.  Y.  174,  181,  21  N.  E.  87,  3  L.  R.  A.  464,    22  N.  Y. 
St.  569,  reversing  46  Hun  506,  19  Abb.  N.  Cas.  227,  10  N.  Y.  St.  380,  5  Dem. 
Surr.  93,  8  N.  Y.  St.  781. 


I 


§  199.]  ESTATES  OF  NON-RESIDENT  DECEDENTS.  157 

3  People  V.  Griffith,  245  111.  532,  543,  92  N.  E.  313.  In  re  Gibbes,  176  N.  Y. 
565,  68  N.  E.  1117,  affirming  84  N.  Y.  App.  Div.  510,  83  N.  Y.  Suppl.  53,  revers- 
ing 83  N.  Y.  Suppl.  56. 

Rights  to  Unsigned  Bonds.  The  decedent  died  in  1905,  a  resident  of 
Alabama.  He  was  a  stockholder  in  a  certain  foreign  consolidated  coal  company . 
The  decedent  was  the  president  of  the  consolidated  company,  which  executed  a 
deed  of  trust  to  a  New  York  trust  company,  conveying  their  property  to  secure 
a  bond  issue.  The  decedent  as  president  of  the  consolidated  company  com- 
menced to  sign  these  bonds  in  Alabama,  but  they  were  never  all  signed  by  him 
before  his  death.  The  decedent  was  entitled  to  some  of  these  bonds,  but  he 
never  received  any  certificate  from  the  New  York  trust  company  or  any  one 
else  that  he  was  entitled  to  them,  although  such  a  certificate  was  delivered  to 
his  executrix  after  his  death.  The  direction  of  the  vice-president  of  the  con- 
solidated company  to  the  New  York  trust  company  to  deliver  to  the  decedent 
five  hundred  thousand  of  the  bonds  of  the  consolidated  company,  directing  that 
such  bonds  be  deposited  with  the  trust  company  for  safe  keeping  in  his  name, 
and  the  receipt  therefor  sent  to  the  consolidated  company  at  Alabama,  cannot  be 
considered  as  a  legal  disposition  of  the  bonds  which  belonged  to  the  coal  company, 
so  that  they  thereby  became  the  property  of  the  decedent.  If  the  decedent 
received  these  bonds  it  would  be  as  president  of  the  coal  company.  This  right 
to  receive  these  bonds  of  the  foreign  corporation  which  were  never  executed  and 
which  the  decedent,  a  non-resident,  was  entitled  to  receive  because  he  was  a 
stockholder  of  another  foreign  corporation,  was  not  property  within  this  state 
and  was  not  subject  to  taxation.  In  re  Hillman,  116  N.  Y.  App.  Div.  186,  101 
N.  Y.  Suppl.  640. 

*  The  statute  is  laid  on  the  amount  of  the  estate  being  within  the  common- 
wealth and  the  domicile  has  nothing  to  do  with  the  question,  so  the  tax  should 
be  collected  where  one  domiciled  in  France  bequeathed  a  legacy  to  a  citizen  of 
France  out  of  personal  property  situated  in  Pennsylvania.  Commonwealth  v. 
Smith,  5  Pa.  St.  (5  Barr.)  142. 

^  People  v.  Griffith,  245  111.  532,  92  N.  E.  313. 

6  People  V.  Griffith,  245  111.  532,  543,  92  N.  E.  313.  In  re  James,  144  N.  Y. 
6,  10,  38  N.  E.  961,  affirming  77  Hun  211,  27  N.  Y.  Suppl.  288,  6  Misc.  206, 
In  re  Gibbes,  176  N.  Y.  565,  68  N.  E.  1117,  affirming  84  N.  Y.  App.  Div.  510. 
83  N.  Y.  Suppl.  53,  reversing  83  N.  Y.  Suppl.  56.  Alvany  v.  Powell  (1854), 
55  N.  C.  61  (explained  in  State  v.  Brinn,  57  N.  C.  300).  See  In  re  Bronson,  150 
N.  Y.  1,  4,  44  N.  E.  707,  34  L.  R.  A.  238,  55  Am.  St.  Rep.  632,  modifying  1  N.  Y. 
App.  Div.  546,  37  N.  Y.  Suppl.  476. 

^  Callahan  v.  Woodbridge,  171  Mass.  595,  598.  In  re  Whiting,  150  N.  Y.  27, 
29,  44  N.  E.  715,  34  L.  R.  A.  232,  55  Am.  St.  Rep.  640,.  modifying  2  N.  Y.  App. 
Div.  590,  38  N.  Y.  Suppl.  131.  In  re  Merriam,  141  N.  Y.  479,  36  N.  E.  505, 
affirmed  in  United  States  v.  Perkins,  163  U.  S.  625, 16  Sup.  Ct.  1073, 41 L.  Ed.  287. 

»/»  re  Merriam,  141  N.  Y.  479,  485,  affirmed  in  United  States  v.  Perkins,  163 
U.  S.  625.  In  re  Whiting,  150  N.  Y.  27,  29,  44  N.  E.  715,  34  L.  R.  A.  232,  55 
Am.  St.  Rep.  640,  modifying  2  N.  Y.  App.  Div.  590,  38  N.  Y.  Suppl.  131.  Com- 
monwealth V.  Smith,  5  Pa.  St.  142.  See,  however,  the  New  York  act  of  1911 
defining  tangible  assets. 

»/wre  Romaine,  127  N.  Y.  80,  88,  27  N.  E.  759,  12  L.  R.  A.  401,  affirming 
58    Hun  109.     The  court  remarks  that  "no  one  doubts  that  succession  to  a 


158  INHERITANCE  TAX  LAW.  [§200. 

tangible  chattel  may  be  taxed  wherever  the  property  is  found  and  none  the  less 
that  the  law  of  the  situs  accepts  its  rules  of  succession  from  the  law  of  the  domicile, 
or  that  by  the  law  of  the  domicile  the  chattel  is  part  of  a  universitas  and  is  taken 
into  account  again  in  the  succession  tax  there."  The  court  holds  that  there  is 
no  distinction  for  the  purposes  of  taxation  between  the  power  to  tax  chattels  of 
a  non-resident  within  the  state  and  his  rights  in  a  deposit  in  a  trust  company 
within  the  state.  Blackstone  v.  Miller,  188  U.  S.  189,  204,  23  S.  Ct.  277,  47  L. 
Ed.  439,  affirming  171  N.  Y.  682,  69  N.  Y.  App.  Div.  127.  In  re  Myers  Estate, 
129  N.  Y.  Suppl.  194. 

10  In  re  Daly,  100  N.  Y.  App.  Div.  373,  91  N.  Y.  Suppl.  858,  reversing  37  Misc. 
724,  76  N.  Y.  Suppl.  507. 

In  Hands  of  Agent.  The  court  does  not  determine  whether  a  non-resident 
creditor  by  placing  intangible  property  in  the  hands  of  an  agent  within  this 
state  for  management  and  control  for  business  purposes  may  fix  its  situs  for 
taxation.    Gilbertson  v.  Oliver,  129  Iowa  568,  105  N.  W.  1002,  4  L.  R.  A.  N.S.953. 

11  In  re  Tiffany's  Estate,  128  N.  Y.  S.  106,  143  App.  Div. 327,  affirmed  95  N.  E. 
1140.  "Where,  however,  the  money  of  a  non-resident  is  invested  in  this 
state  as  it  was  by  Mr.  Romaine  in  the  bond  and  mortgage  in  question,  and  in  the 
deposits  made  by  him  in  the  savings  banks,  or  where  the  property  of  a  non- 
resident is  habitually  kept,  even  for  safety,  in  this  state,  we  think  that  the 
statute  applies  both  in  the  letter  and  spirit.  Such  property  is  within  this  state 
in  every  reasonable  sense,  receives  the  protection  of  its  laws  and  has  every 
advantage  from  government,  for  the  support  of  which  taxes  are  laid,  that  it 
would  have  if  it  belonged  to  a  resident."  Per  Vann,  J.,  in  In  re  Romaine,  127 
N.  Y.  80,  88,  27  N.  E.  759,  12  L.  R.  A.  401,  affirming  58  Hun  109.  See  In  re 
Tulane,  51  Hun  213,  4  N.  Y.  Suppl.  36  (securities  deposited  with  safe  deposit 
company  not  taxable  under  the  act  of  1885). 

12  In  re  Enston,  113  N.  Y.  174, 181,  21  N.  E.  87,  3  L.  R.  A.  464,  22  N.  Y.  St.  9. 
In  re  Phipps,  143  N.  Y.  641, 37  N.  E.  823,  affirming  77  Hun  325, 28  N.  Y.  Suppl.  330. 

"We  should  hesitate  before  applying  the  statute  to  any  property  casually 
brought  into  the  state  for  a  temporary  purpose,  as  by  a  visitor  or  traveler.  It 
might  well  be  held  that  such  property,  although  literally  'within  this  state,' 
was  not  here  in  the  sense  meant  by  the  statute,  on  account  of  the  transitory  and 
accidental  character  of  its  presence  and  the  immediate  custody  of  the  owner." 
(Citing  Herron,  Treasurer,  v.  Keeran,  59  Ind.  472,  476.)  In  re  Romaine,  127 
N.  Y.  80,  88,  27  N.  E.  759,  12  L.  R.  A.  401,  affirming  58  Hun  109. 

[Location  of  assets  in  state  insufficient  where  decedent  died  before  passage  of 
statute,  see  ante,  s.  81.  [ 

Sec.  200.    Domestic  Stock  Owned  by  Non-Resident. 

The  tax  is  imposed  commonly  on  a  non-resident  owner  of  stock 
in  a  domestic  corporation,^  or  in  national  banks  located  in  the 
state ,2  or  local  state  stock,*  although  the  certificates  are  actually 
outside  the  state,'*  and  although  actually  transferred  in  the  foreign 
jurisdiction  before  the  tax  is  collected.^ 

1  People  V.  Griffith,  245  111.  532,  543,  92  N.  E.  313.  Greves  v.  Shaw,  173  Mass. 
205.    In  re  Douglas  County,  84  Neb.  506,  121  N.  W.  593  (stock  held  in  trust  for 


§  200.]  ESTATES  OF  NON-RESIDENT  DECEDENTS.  159 

resident  by  non-resident  trustee).  In  re  Bushnell,  172  N.  Y.  649,  65  N.  E.  1115, 
affirming  73  N.  Y.  App.  Div.  325,  77  N.  Y.  Suppl.  4  (life  tenant  and  remainder- 
man). In  re  Palmer,  183  N.  Y.  238,  240,  76  N.  E.  16,  affirming  102  N.  Y.  App. 
Div.  616,  92  N.  Y.  Suppl.  1137.    In  re  Leavitt,  4  N.  Y.  Suppl.  179. 

Reason  for  Rule.  Corporate  shares  must  be  regarded  as  property  within  the 
broad  meaning  of  that  term,  hence  it  cannot  be  said,  if  the  property  repre- 
sented by  a  share  of  stock  has  its  legal  situs  either  where  the  corporation  exists, 
or  at  the  holder's  domicile,  that  the  state  is  without  jurisdiction  over  it  for  taxa- 
tion purposes.  Therefore,  stock  held  by  a  non-resident  in  a  New  York  corporation 
is  subject  to  tax  under  N.  Y.  St.  1892.  In  re  Bronson,  150  N.  Y,  1,  44  N.  E. 
707,  34  L.  R.  A.  238,  55  Am.  St.  Rep.  632,  modifying  1  N.  Y.  App.  Div.  546, 
37  N.  Y.  Suppl.  476. 

A  share  of  stock  in  a  corporation  may  be  defined  as  a  right  which  its 
owner  has  in  the  management,  profits  and  ultimate  assets  of  the  corporation. 
The  shares  of  stock  represent  interests  in  the  earnings  or  the  property  of  the 
corporation  and  a  certificate  is  not  stock  itself,  but  only  a  convenient  repre- 
sentation of  it,  though  one  may  be  a  stockholder  without  having  a  certificate 
issued  to  him.  The  court  finds  that  the  decedent  owned  an  "interest"  in  the 
property  of  the  bank  within  the  meaning  of  the  inheritance  statute  and  that 
such  interest  is  property  within  the  jurisdiction  of  the  state.  In  re  Culver, 
145  Iowa  1,  123  N.  W.  743,  citing,  inter  alia,  Faxton  v.  McCosh,  12  Iowa  527. 

The  New  Jersey  Rule.  A  legacy  in  an  English  estate  of  stock  in  a  New 
Jersey  corporation  is  not  taxable  by  the  New  Jersey  statute,  even  if  the  court 
disregards  the  technical  force  of  the  words  "inheritance,  distribution,  bequest 
and  devise,"  and  looks  at  the  tax  as  a  succession  tax.  The  tax  cannot  be  sus- 
tained as  a  property  tax.  The  ground  upon  which  it  can  be  sustained  is  that 
the  rights  of  testamentary  disposition  and  of  succession  are  creatures  of  law, 
and  the  court  thinks  that  it  follows  logically  that  the  only  law  which  can  impose 
the  terms  is  the  law  that  creates  the  right.  In  this  case  it  is  the  English  law. 
The  title  to  the  stock  passed  by  virtue  of  the  will  to  the  executors  from  the 
moment  of  the  testator's  death  and  the  probate  was  operative  only  as  the  authen- 
ticated evidence,  not  as  the  foundation  of  the  executors'  title.  The  English 
executors  were  authorized  without  probate  in  this  state  to  transfer  the  stock. 

The  court  remarks  that  the  New  Jersey  administration  is  ancillary  only  and 
the  provisions  of  the  statute  authorizing  the  executors  to  collect  the  tax  from 
the  legatee  or  to  take  it  from  the  legacy  cannot  be  enforced;  and  after  adminis- 
tration here  the  balance  of  the  estate  would  probably  be  transferred  to  the 
English  executors  for  distribution  in  accordance  with  the  laws  of  the  domicile  of 
the  testator.  Neilson  v.  Russell,  76  N.  J.  L.  655,  71  A.  286,  reversing  76  N.  J.  L. 
27,  69  A.  476.     Astor  v.  State,  75  N.  J.  Eq.  303,  72  A.  78. 

^Greves  v.  Shaw,  173  Mass.  205.  In  re  Cushing,  40  Misc.  Rep.  505,  82  N.  Y. 
Suppl.  795.    See  In  re  Culver,  145  Iowa  1,  123  N.  W.  743. 

National  bank  stock  is  taxable  at  the  place  where  the  bank  is  located  irre- 
spective of  the  domicile  of  the  owner  of  the  shares;  but  this  decision  is  based  on 
the  national  banking  act  which  expressly  so  provides.  Tappan  v.  Bank,  86 
U.  S.  (19  Wall.)  490,  22  L.  Ed.  189. 

3/»  re  Alexander  (1845),  3  Clark  87    (county  stock  and   Pennsylvania  state 
stock  owned  by  an  Englishman). 
*  Greves  v.  Shaw,  173  Mass.  205,  208. 


160  INHERITANCE  TAX  LAW.  [§§201-203. 

6/m  re  Fitch,  160  N.  Y.  87,  43  N.  E.  701,  affirming  39  N.  Y.  App.  Div.  609. 

The  provisions  of  the  statute  are  absolute  and  the  statute  assumes  that  the 
property  will  be  administered  by  an  executor  or  administrator  appointed  in 
Massachusetts.  It  could  not  be  supposed  that  the  question  whether  the  tax 
should  be  levied  or  not  should  depend  on  the  ability  or  inability  of  the  foreign 
executor  to  obtain  possession  of  it  without  a  suit.  Greve  v.  Shaw,  173  Mass. 
205,  209. 

Sec.  201.    Non-Resident's  Stock  in  Foreign  Corporation. 

Stocks  in  foreign  corporations  owned  by  a  non-resident  decedent 
are  not  subject  to  transfer  tax. 

In  re  Bishop,  82  N.  Y.  App.  Div.  112,  81  N.  Y.  Suppl.  474,  reversing  40  Misc. 
64,  81  N.  Y.  Suppl.  252.  lfa//gr  o/Jawe^,  144  N.  Y.  6,  38  N.  E.  961.  See  Matter 
ofEnston,  113  N.  Y.  174,  21  N.  E.  87,  3  L.  R.  A.  464.  Dunhamv. City  Trust  Co., 
115  N.  Y.  App.  Div.  584,  101  N.  Y.  Suppl.  87  (although  the  transfer  agent  is  a 
New  York  corporation). 

Sec.  202.    Where    Beneficiary    Alone  is  within   the  Juris- 
diction. 

The  mere  fact  that  the  beneficiaries  are  residents  within  the 
jurisdiction  is  not  enough  on  which  to  predicate  jurisdiction  to 
assess  the  tax  where  neither  the  decedent  nor  the  property  are 
situated  within  the  state. 

State  V.  Brim,  57  N.  C.  300.    State  v.  Brevard,  62  N.  C.  141. 

Where  the  testator  died  domiciled  in  Cuba,  leaving  legacies  of  property  in 
Cuba  to  residents  of  Pennsylvania,  no  inheritance  tax  in  Pennsylvania  can  be 
collected.  In  re  Hood,  21  Pa.  St.  (9  Harris)  106.  In  re  Bittinger,  129  Pa.  St. 
338,  345,  18  A.  132,  (land  outside  state). 

An  inheritance  tax  is  not  upon  the  property  itself  but  upon  the  right  to 
succeed  to  the  property;  the  succession  to  the  ownership  of  the  property  being 
by  permission  of  the  state  the  state  can  impose  conditions  regarding  such  privi- 
lege or  commission.  The  courts  therefore  have  upheld  the  imposition  of  the 
inheritance  tax  whenever  the  state  had  jurisdiction  of  the  beneficiary  or  the 
subject  matter  regardless  of  the  actual  location  of  the  personal  property  or 
the  domicile  of  the  decedent.    People  v.  Griffith,  245  111.  532,  92  N.  E.  313. 

Sec.  203.    Removal  of  Property  before  Taxation. 

In  states  which  impose  no  penalty  on  foreign  executors  or 
administrators  for  failure  to  pay  the  tax  and  prescribe  no  Hen,  there 
is  grave  doubt  as  to  the  ability  of  the  state  to  collect  the  tax  from 
a  non-resident  executor  or  administrator  provided  he  can  get  the 
stock  transferred  before  the  state  takes  any  action.  As  a  practical 
matter  the  state  authorities  are  not  likely  to  know  of  the  death 


§204.]  ESTATES  OF  NON-RESIDENT  DECEDENTS.  161 

of  a  non-resident  stockholder,  and  it  would  seem  easy  in  these 
states  to  have  the  stock  quietly  transferred.  For  example,  in 
Michigan,  stock  of  Calumet  &  Hecla  and  losceola  Mining  Company 
can  be  transferred  without  any  reference  to  the  state  authorities. 

While  the  New  York  statute  of  1887  was  in  effect  the  testator,  a  non- 
resident, died  leaving  deposits  and  stocks  on  deposit  in  New  York.  The  execu- 
tors promptly  withdrew  it  and  the  court  holds  that  the  tax  cannot  subsequently 
be  collected  under  the  laws  of  1892,  as  there  was  then  no  property  of  the 
estate  in  New  York  and  the  tax  cannot  be  legally  imposed  unless  the  statute 
in  addition  to  creating  a  tax  provided  for  an  officer  or  tribunal  who  shall  impose 
it  and  assess  the  property  on  notice  to  the  owner.  In  re  Embury,  154  N.  Y. 
746,  49   N.  E.  1096,  affirming    19    N.  Y.  App.  Div.  214,  45  N.  Y.  Suppl.  881. 

See  ante,  ss.  161,  162. 

Sec.  204.     Marshaling  Local  Assets  of  Non-Resident. 

The  representative  of  a  non-resident  decedent  may  often  avoid 
a  tax  by  paying  local  debts  with  local  assets,^  unless  the  local  debts 
are  secured  by  a  pledge  of  other  assets,^  or  by  using  local  assets  to 
pay  beneficiaries  who  are  not  subject  to  tax  under  local  law.^ 
But  where  the  administrator  of  the  foreign  intestate  elects  to 
appropriate  all  the  assets  situated  within  the  state  of  New  York 
in  payment  of  the  distributive  share  of  the  intestate's  brother, 
the  court  holds  that  this  action  cannot  prevent  the  imposition  of 
an  inheritance  tax  in  the  state  of  New  York.  The  court  distin- 
guishes the  case  of  In  re  James,  144  N.  Y.  6,  as  in  that  case  the 
property  was  appropriated  to  the  specific  legacies,  and  it  was  prop- 
erty which  was  in  Great  Britain  and  never  came  within  the  juris- 
diction of  New  York.  The  persons  entitled  to  the  legacies  could 
have  compelled  their  payment  out  of  the  English  fund  without 
resort  to  the  New  York  courts.  In  the  case  at  hand  the  situation 
is  radically  different.  Upon  the  intestate's  death  his  estate  passed 
eo  instanti  to  the  persons  who,  by  virtue  of  the  intestate  law,  were 
entitled  thereto. 

The  New  York  statute  involves  a  tax  upon  transfers  based  upon 
the  portion  of  the  estate  found  within  our  jurisdiction,  but  this 
is  not  a  tax  upon  the  specific  property  which  passes.  The  right 
of  the  state  to  the  tax  is  therefore  coincident  with  the  devolution 
of  title  or  interest;  and  the  right  of  the  state  to  exact  the  tax,  as 
well  as  the  obligation  of  the  transferee  to  pay  it,  depend  not  upon  a 
formal,  complete  and  immediate  change  of  title  or  possession, 
but  upon  the  instant  right  to  a  beneficial  share  or  interest  subject 
only  to  the  due  administration  of  the  estate. 


162  INHERITANCE  TAX  LAW.  [§204. 

"When  a  specific  foreign  legatee  of  a  foreign  testator  can  obtain 
satisfaction  of  his  legacy  in  a  foreign  jurisdiction,  the  executor 
cannot  be  compelled  to  pay  such  a  legacy  out  of  the  assets  within 
our  jurisdiction.  This  is  the  necessary  result  of  the  practical 
and  obvious  distinction  between  testacy  and  intestacy  as  applied  to 
this  subject  of  taxation.  If  a  specific  legatee  needs  not  the  interven- 
tion of  our  laws  or  courts  to  obtain  what  comes  to  him  under  a 
foreign  will  through  foreign  assets  in  a  foreign  jurisdiction,  our 
laws  cannot  coerce  an  executor  into  paying  his  legacy  out  of  funds 
within  our  jurisdiction  for  the  sole  purpose  of  exacting  a  tax. 
But  in  a  case  of  intestacy  the  rule  is  essentially  different,  because 
the  distributee  takes  an  undivided  interest  in  the  whole  estate; 
and  if  part  of  it  happens  to  be  within  our  jurisdiction,  he 
can  only  get  his  share  of  what  is  here  under  our  laws  and 
through  our  courts.  This  is  the  theory  upon  which  the  nephews 
and  nieces  of  the  intestate  in  the  case  at  bar  are  clearly  taxable 
under  our  statute."  * 

The  same  result  was  reached  in  a  case  of  testacy  in  a  recent  New 
Jersey  case.^  Where  no  such  election  is  made,  the  local  tax  must 
be  estimated  by  treating  the  local  assets  as  chargeable  with  a  pro- 
portionate share  of  taxable  legacies  in  the  proportion  that  local 
property  bears  to  the  whole  estate.^ 

Under  the  Massachusetts  statute  the  court  holds  that  the  execu- 
tors cannot  use  stock  in  Massachusetts  corporations  for  the  pay- 
ment of  debts  or  legacies  to  the  exemption  of  the  property  in  New 
Hampshire  and  so  relieve  it  from  liability  to  a  tax  imposed  by 
Massachusetts  law.  The  rights  of  all  parties,  including  the  rights 
of  the  commonwealth  to  its  tax,  vest  at  the  death  of  the  testator. 
The  executors  "cannot  by  independent  action,  in  attempting  to 
marshal  assets  according  to  their  personal  wishes,  enlarge  or 
diminish  the  rights  of  legatees  or  of  the  commonwealth.  .  .  .  The 
debts,  the  legacies  in  Massachusetts  exempt  from  taxation  and  the 
expenses  of  administration  are  chargeable  upon  the  general  assets, 
as  well  those  in  New  Hampshire  as  those  in  Massachusetts,  and 
only  a  proportional  part  of  the  property  in  Massachusetts  should 
be  used  in  paying  them.  The  balance  is  subject  to  the  payment 
of  a  tax  under  the  statute."  ^ 

In  a  recent  Washington  case  the  testator  was  a  resident  of 
Maine  and  died  there,  leaving  property  both  in  Maine  and  in 
Washington.  The  Maine  court  ordered  distribution  of  the  estate 
of  the  testator  within  the  state  of  Maine  to  collateral  heirs  and 


§204.]  ESTATES  OF  NON-RESIDENT  DECEDENTS.  163 

strangers  in  full,  and  this  was  done,  leaving  the  entire  estate  in 
Washington  to  pass  to  lineals. 

The  Washington  court  holds  that  it  must  presume  that  the 
authority  of  the  Maine  court  was  rightfully  exercised  and  cannot 
hold  the  executor  here  or  other  legatees  responsible  for  the  errors 
of  that  court.  The  fact  that  the  same  persons  acted  as  executors 
in  both  states,  and  that  the  executors  were  beneficiaries  under 
the  will,  can  make  no  difference. 

The  Washington  court  has  no  right  or  power  to  review  the 
judgment  of  the  court  of  Maine.  The  executor  in  Washington 
had  no  opportunity  to  collect  the  inheritance  tax  from  the  col- 
lateral heirs  and  strangers  to  the  blood,  and  this  court  will  not 
compel  him  to  pay  such  tax  out  of  his  own  funds  or  out  of  the 
funds  belonging  to  other  heirs  or  legatees.^ 

^Memphis  Trust  Co.  v.  Speed,  114  Tenn.  677,  88  S.  W.321. 

The  decedent  was  a  resident  of  the  state  of  Illinois,  and  was  a  member  of  the 
partnership  doing  business  in  New  York  and  in  Chicago.  The  New  York  branch 
was  mainly  occupied  with  manufacturing  and  the  Chicago  branch  in  selling, 
and  therefore  the  debts  owing  to  the  New  York  creditors  exceeded  the  value  of 
the  New  York  assets;  but  that  the  firm  did  not  owe  the  persons  from  whom 
it  purchased  the  goods  is  immaterial,  as  it  did  owe  for  discounts  and  loans  effected, 
the  proceeds  of  which  were  applied  towards  the  purchase  price  of  the  property. 
Therefore,  as  debts  in  New  York  exhausted  the  value  of  the  property  here  no  tax 
could  be  imposed.  In  re  King,  172  N.  Y.  616,  64  N.  E.  1122,  affirming  71  N. 
Y.  App.  Div.  581,  76  N.  Y.  Suppl.  220. 

^  Where  the  whole  estate  is  within  the  state  of  New  York  and  the  decedent 
is  a  resident  of  the  state,  undoubtedly  debts  are  to  be  deducted  from  the  value  of 
the  property,  as  the  indebtedness  to  the  New  York  creditors  is  a  general  indebted- 
ness against  the  whole  estate.  But  in  this  case  domestic  creditors  have  in  their 
hands  legal  title  by  a  pledge  and  a  right  to  resort  for  the  payment  of  their  debts 
to  securities  belonging  to  a  non-resident  decedent  which  are  not  taxable  under 
the  laws  of  this  state;  and  therefore  the  indebtedness  due  such  creditors  is  not 
to  be  offset  against  the  value  of  the  property  of  such  decedent  otherwise  taxable 
under  the  transfer  law  of  the  state.  In  re  Pullman,  46  N.  Y.  App.  Div.  574, 
62  N.  Y.  Suppl.  395.     See  further,  ante,  s.  191. 

^In  re  James,  144  N.  Y.  6,  11,  38  N.  E.  961,  affirming  77  Hun  211,  27  N.  Y. 
Suppl.  288,  6  Misc.  206.  In  re  Whiting,  69  Misc.  526,  127  N.  Y.  Suppl.  960, 
139  App.  Div.  905,  124  N.  Y.  Suppl.  1134.     See,  however,  the  Act  of  1911. 

The  decedent  was  a  resident  of  New  Jersey,  leaving  personal  property  in  New 
York  and  also  in  New  Jersey.  The  executor  paid  taxable  legacies  out  of  the  New 
Jersey  assets  and  distributed  the  New  York  assets  among  people  of  the  one  per 
cent  class  who  were  not  taxable  at  all,  because  the  New  York  assets  are  less  than 
ten  thousand  dollars  in  amount.  The  court  holds  that  it  was  the  legal  right  of 
the  executor  to  elect  to  pay  the  taxable  legacies  out  of  the  New  Jersey  assets 
and  to  distribute  the  New  York  assets  to  persons  who  under  our  law  are  exempt 
from  any  tax  whatever.     "It  was  his  plain  duty  to  exercise  this  right  in  the 


164  INHERITANCE  TAX  LAW.  [§204. 

interests  of  parties  claiming  under  the  will  as  legatees;  and  he  owed  no  duty 
to  the  state  of  New  York  to  do  anything  different.  He  had  this  right  of  election 
until  he  had  actually  appropriated  the  New  York  assets  to  the  payment  of  debts 
and  legacies.  There  was  no  warrant  of  law  to  justify  the  appraiser  in  assum- 
ing that  the  taxable  legacies  would  be  paid  pro  rata  out  of  both  funds.  The 
natural  inference  was  that  the  assets  would  be  marshaled  in  such  a  way  as  to 
require  the  smallest  payment  of  tax,  and,  if  the  intent  of  the  executor  was  material 
to  produce  a  different  result,  the  burden  of  proving  the  fact  rested  upon  the 
state,  and  the  executor  should  have  been  questioned  upon  the  subject  by  the 
appraiser  before  the  report  was  made."  Per  Thomas,  S.,  in  In  re  McEwan,  51 
Misc.  455,  101  N.  Y.  Suppl.  733. 

The  property  of  which  an  English  testator  died  possessed  in  Great  Britain 
is  largely  in  excess  of  the  amount  given  by  him  in  legacies  and  some  portion  of 
these  legacies  has  already  been  paid  from  the  English  estate,  and  the  executor 
has  declared  his  determination  of  appropriating  that  part  of  the  testator's  prop- 
erty to  their  payment  so  that  the  American  estate  shall  constitute  the  residuary 
estate  disposed  of  by  the  will  in  favor  of  the  testator's  brothers.  "This  he  may 
rightly  do  and  thus  save  the  estate  from  the  payment  of  the  succession  tax  imposed 
by  our  laws.  The  fact  of  such  an  appropriation  will,  of  course,  appear  upon  his 
accounting.  If  the  executor  determines  to  pay  the  legacies  from  the  English 
estate,  the  American  estate  is  thereby  freed  from  the  burden  of  the  special  tax, 
the  imposition  of  which  depends  upon  the  fact  of  a  succession  by  the  legatee  to 
some  property  which  is  within  the  state.  If  the  American  estate  is  appropriated 
to  persons  who  are  within  the  excepted  degrees  of  relationship  to  the  testator, 
the  right  to  claim  the  tax  from  the  executor  is  gone.  It  does  not  lie  with  the 
officers  of  the  state  to  say,  in  such  a  case,  which  part  of  the  testator's  property 
shall  be  appropriated  to  the  payment  of  the  legacies.  The  law  is  not  arbitrary 
in  its  application.  It  is  simply  absolute  in  its  requirements,  when  the  precise 
case  arises  which  it  was  framed  to  meet;  and  where,  as  here,  the  case  is  not  pre- 
sented of  an  appropriation  of  any  part  of  the  American  estate  in  payment  of  the 
legacies  to  the  foreign  legatees,  this  special  tax  law  cannot  and  should  not  apply. 
To  this  view  we  are  all  the  more  disposed  because  to  hold  otherwise  might  be 
to  subject  this  estate  to  taxation  both  in  Great  Britain  and  in  this  state.  Such  a 
result  of  a  double  taxation  is  one  which  the  courts  should  incline  to  avoid,  when- 
ever it  is  possible,  within  reason,  to  do  so."  Per  Gray,  ].,  in  In  re  James,  144 
N.  Y.  6,  11,  38  N.  E.  961,  affirming  77  Hun  211,  27  N.  Y.  Suppl.  288,  6  Misc.  206. 

Under  the  statute  of  1908,  chapter  310,  the  executors  have  no  right  to  marshal 
assets  by  electing  to  appropriate  New  York  assets  to  the  payment  of  legacies 
exempt  or  taxable  at  the  minimum  rate,  leaving  the  payment  of  legacies  at  a  higher 
rate  from  assets  outside  the  state.  The  executor  claimed  that  when  he  selected 
the  securities  in  New  York  to  pay  the  two  legacies  in  question  such  securities 
became  in  effect  as  much  "specifically  bequeathed"  as  if  named  directly  in  th{ 
will.  But  the  court  holds  that  the  will  fixed  the  character  of  the  legacies  as 
general  legacies  and  that  the  act  of  the  executor  could  not  change  this  character. 
In  re  Porter,  67  Misc.  19,  124  N.  Y.  Suppl.  676. 

The  testator  died  living  in  Missouri  and  owning  stock  in  a  Tennessee  corpora- 
tion and  the  will  gave  the  testator's  wife  one-half  of  the  residue.  The  widow 
elected  under  this  provision  of  the  will  to  take  the  stock  in  the  Tennessee  cor- 
poration and  the  court  holds  that  the  executor  had  a  right  upon  the  election 


§205.]  ESTATES  OF  NON-RESIDENT  DECEDENTS.  165 

of  the  widow  to  transfer  to  her  the  stock  in  the  Tennessee  corporation  in  payment 
of  her  one-half  interest,  provided,  of  course,  it  was  taken  at  a  fair  valuation  as 
compared  with  the  balance  of  the  residuary  estate  wherever  situated.  It  was 
argued  that  under  this  residuary  clause  which  in  terms  did  not  confer  any  right 
of  election  the  wife  had  no  right  to  make  a  selection  of  specific  property  left  in 
the  residuary  estate.  The  court  relies  upon  the  Matter  of  James,  144  N.  Y. 
6,  38  N.  E.  961,  where  the  whole  matter  was  discussed.  Memphis  Trust  Co.  v. 
Speed,  114  Tenn.  677,  88  S.  W.  321. 

^Per  Werner,  J.,  in  In  re  Ramsdill,190  N.  Y.  492,  496,  83  N.  E.  584,  reversing 
119  N.  Y.  App.  Div.  890. 

5  Tilford  V.  Dickinson,  79  N.  J.  L.  302, 75  A.  574,  reversed  on  another  point  in 
(N.  J.  1911,)  79  A.  1119. 

^  In  re  McEwan,  51  Misc.  Rep.  455,  101  N.  Y.  Suppl.  733.  Wieting  v.  Morrow, 
(Iowa,  1911,)  132  N.  W.  193. 

''Per  Knowlton,  C.  J.,  in   Kingsbury  v.  Chapin,  196  Mass.  533,  82  N.  E.  700. 

8/«  re  Clark,  37  Wash.  671,  80  P.  267. 

[See  further,  post,  s.  354.] 


Sec.  205.    Federal  Act  of  1898. — Aliens. 

Tlie  federal  act  of  1898  does  not  apply  to  intangible  personal 
property  of  a  non-resident  alien  who  never  had  a  domicile  in  the 
United  States  and  died  abroad,  such  personal  property  being 
within  the  United  States  and  having  passed  to  his  son,  also  an 
alien  domiciled  abroad,  as  sole  legatee  and  next  of  kin  of  the 
deceased,  partly  under  a  will  executed  abroad  and  partly  under 
the  intestate  laws  of  Spain.  There  is  no  question  of  the  power 
of  the  legislature  to  tax  the  personal  property  of  non-residents, 
but  the  question  is  of  its  intent  to  do  so  by  the  particular  act  in 
question.  As  the  property  in  this  case  did  not  pass  under  any 
will  executed  in  any  state  or  territory  of  the  United  States, 
or  by  the  intestate  laws  of  any  such  state  or  territory,  the 
case  is  not  within  the  literal  words  of  the  act  unless  the  word 
"state"  is  used  in  a  sense  broad  enough  to  include  a  foreign 
state  or  territory. 

The  court  finds  that  the  English  cases  reach  the  conclusion  that 
under  the  general  act  imposing  a  duty  upon  legacies,  the  law  of 
the  domicile  of  the  testator  controls.  If  he  be  domiciled  abroad, 
whether  an  alien  or  a  British  subject,  his  legacies  are  exempt 
whether  the  property  be  in  England  at  the  time  of  his  death  or 
be  subsequently  sent  there  by  his  executors  for  local  administra- 
tion and  distribution. 

The  words  in  the  act  of  1898,  confining  the  application  of  the 
act  to  property  passing  "either  by  will  or  by  the  intestate  laws  of 


166  INHERITANCE  TAX  LAW.  [§206. 

any    state    or    territory,"   limits  its  effect    to  wills  executed  in 
"any  state  or  territory"  under  which  property  passes. 

Eidman  v.  Martinez,  184  U.  S.  578,  590,  22  S.  Ct.  515,  46  L.  Ed.  697,  relying 
upon  United  States  v.  Hunnewell,  13  Fed.  617.  Moore  v.  Ruckgaber,  184  U.  S. 
593,  22  S.  Ct.  521,  46  L.  Ed.  705,  affirming  104  Fed.  947,  31  Civ.  Proc.  310 
(although  will  was  executed  in  this  country). 

Sec.  206.    Effect  of  Place  of  Execution  of  Will. 

Property  situated  in  this  country  belonging  to  a  non-resident 
decedent  is  not  subject  to  the  federal  inheritance  tax  of  1898, 
although  the  will  was  executed  in  New  York  in  1890,  during  a 
temporary  sojourn  there. 

Moore  v.  Ruckgaber,  184  U.  S.  593,  22  S.  Ct.  521,  46  L.  Ed.  705,  affirming 
104  Fed.  947,  31  Civ.  Proc.  310.  The  court  relies  upon  United  States  v.  Hunne- 
well, 13  Fed.  Rep.  617. 


CHAPTER  XXIX. 


PROPERTY  BEYOND  THE  JURISDICTION. 

§  207.  Foreign  Personal  Estate  of  Resident. 

§  208.  Foreign  Real  Estate  of  Resident. 

§  209.  Resident  Owner  of  Stock  in  Foreign  Corporation. 

§  210.  Non-Resident  Trustee  Holding  Property  for  Resident. 

§  211.  Property  in  other  States  of  Domestic  Corporation. 

§  212.  Corporations  Chartered  in  more  than  one  State. 

Sec.  207.    Foreign  Personal  Estate  of  Resident. 

The  liability  of  property  to  inheritance  tax  does  not  depend 
upon  its  location,  but  upon  whether  the  beneficiary  came  into  its 
possession  through  the  exercise  of  a  privilege  conferred  by  the 
state. ^  The  succession  to  personal  property  of  the  decedent 
wherever  situated  is  taxable  at  the  domicile  of  the  decedent,^ 
although  the  foreign  assets  may  have  been  distributed  in  the 
foreign  jurisdiction,*  and  although  the  state  of  the  situs  of  the 
property  may  have  already  imposed  a  tax  on  its  transfer,'*  but 
not  where  the  decedent's  debts  in  the  foreign  jurisdiction  exceeded 
his  property  there.^  Rulings  as  to  the  situs  of  personal  property 
under  the  general  tax  law  are  not  controlling  on  a  construction  of 
the  inheritance  law,  as  the  inheritance  laws  are  not  taxes  in  the 
strict  sense  of  the  term.^ 

^People  V. Griffith,  245  111.  532,  92  N.  E.  313. 

^Appeal  ofGallup,7Q  Conn.  617,  57  A.  699.  Frothingham  v.  Shaw,  175  Mass.  59, 
61,  78  Am.  St.  Rep.  475.  In  re  Swift,  137  N.  Y.  77,  88,  32  N.  E.  1096,  18  L.  R.  A. 
709,  64  Hun  639,  16  N.  Y.  Suppl.  193,  19  N.  Y.  Suppl.  292.  Estate  of  Cornell, 
170  N.  Y.  423,  63  N.  E.  445.  State  v.Bullen,  143  Wis.  512,  520,  128  N.  W.  109. 
Thomson  v.  Lord  Advocate,  12  Clark  8c  Finnelly  1.  In  re  Joyslin,  76  Vt.  88,  56  A. 
281,  appears  to  be  out  of  harmony  with  the  New  York  and  Massachusetts  rule. 

Tangible  Assets.  Under  the  Iowa  code,  s.  1467,  where  a  resident  of  Iowa 
died  owning  cattle  outside  the  state,  the  estate  was  not  required  to  pay  an  inherit- 
ance tax  on  these  cattle,  on  the  ground  that  tangible  property  like  this  may  have 
a  situs  other  than  that  of  the  domicile  of  the  owner,  and  that  there  may  be  a  dis- 
tinction between  tangible  property  such  as  horses  and  cattle  and  intangible 
property  such  as  debts  and  choses  in  action.  Cattle  belonging  to  the  deceased 
were  not  within  the  jurisdiction  of  the  state  unless  it  be  constructively.  The 
fact  that  the  cattle  were  sold  about  four  months  after  the  death  of  testator  and 
the  proceeds  brought  within  the  state  later  does  not  affect  the  matter.     The 


168  INHERITANCE  TAX  LAW.  [§§208-209. 

death  of  the  testator  seems  to  fix  the  time  when  the  property  became  subject 
to  the  tax,  and  at  the  death  of  the  testator  the  cattle  were  not  in  the  state.  When 
this  property  passed  to  the  collateral  heirs  it  was  clearly  not  subject  to  the  tax. 
If  the  property  had  been  distributed  in  the  state  of  Missouri  there  would  be 
no  doubt  that  it  would  not  have  been  subject  to  the  tax  imposed  by  our  law, 
and  the  bringing  of  the  proceeds  into  this  state  for  the  purpose  of  distribution 
would  not  make  it  subject  to  the  tax.  Weaver  v.  State,  110  Iowa  328,  81  N.  W. 
603.     See  the  New  York  act  of  1911. 

^Appeal  of  Hopkins,  77  Conn.  644,  655,  60  A.  657.  In  re  Dingman,  66  N.  Y. 
App.  Div.  228,  72  N.  Y.  Suppl.  694.  State  v.  Sullen,  143  Wis.  512,  523,  128 
N.  W.  109. 

*Inre  Hartman,  70  N.  J.  Eq.  664, 62  A.  560.  As  to  double  taxation,  see  further, 
ante.  Chapter  XXVII. 

^Commonwealth  v.  Coleman,  52  Pa.  St.  468,  473. 

6  People  V.  Griffith,  245  111.  532,  92  N.  E.  313. 

[Powers  over  assets  out  of  state,  see  ante,  s,  140.1 

Sec.  208.    Foreign  Real  Estate  of  Resident. 

The  jurisdiction  of  the  domicile  of  the  testator  cannot  impose 
a  tax  on  his  foreign  real  estate/  although  the  devisor  and  devisee 
are  both  residents  of  the  state .^ 

^Connell  v.  Crosby,  210  111.  380,  71  N.  E.  350.  In  re  Swift,  137  N.  Y.  77,  88 
32  N.  E.  1096,  18  L.  R;  A.  709,  64  Hun  639,  16  N.  Y.  Suppl.  193,  19  N.  Y.  Suppl. 
292.  Commonwealth  v.  Coleman,  52  Pa.  St.  468,  473.  In  re  Hale,  161  Pa.  St. 
181,  183,  28  A.  1071. 

Reason  of  the  Rule.  A  note  in  19  Harvard  Law  Review,  p.  201,  discusses 
the  liability  of  foreign  real  estate  to  the  collateral  inheritance  tax.  The  editor 
points  out  that  the  inheritance  tax  being  a  tax  on  a  privilege  in  the  case  of  per- 
sonalty each  state  allows  the  property  within  its  jurisdiction  to  pass  by  the  law 
of  the  state  of  the  decedent's  domicile  and  therefore  two  states  may  each  grant 
a  privilege  and  may  each  levy  a  tax.  But  in  the  case  of  realty  title  passes  by 
the  lex  rei  sitcB  and  that  state  alone  controls  the  privilege  of  succession. 

2  All  property  of  the  citizen  within  the  state  may  be  taxed  and  all  such  property 
outside  the  state  as  is  drawn  to  or  follows  in  law  the  domicile  or  person  of  the  owner, 
such  as  bonds  and  mortgages,  etc.,  no  matter  where  situated.  But  real  estate  is 
not  drawn  to  the  person  or  domicile  of  the  owner  for  taxation  or  any  other  purpose 
and  hence  cannot  be  taxed  outside  of  the  jurisdiction  where  it  is  situated.  The 
taxation  of  property  involves  the  reciprocal  duty  of  protection  on  the  part  of  the 
state  levying  such  tax.     In  re  Bittinger,  129  Pa.  St.  338,  345,  18  A.  132. 

Sec.  209.    Resident  Owner  of  Stock  in  Foreign  Corporation. 

Stock  in  foreign  corporations  is  almost  universally  taxable  at  the 
jurisdiction  of  the  owner's  domicile,^  although  the  certificates 
themselves  may  be  out  of  the  state .^ 

^Appeal  of  Gallup,  76  Conn.  617,  57  A.  699  (under  the  amendment  of  1903). 
Estate  of  Cornell,  170  N.  Y.  423,  63  N.  E.  445.     State  v.  Bullen,  143  Wis.    512, 


§§210-211.]     PROPERTY  BEYOND  THE  JURISDICTION.  169 

128  N.  W.  109.     Contra,  In  re  Thomas,  3  Misc.  Rep.  388,  24  N.  Y.  Suppl.  713 
under  N.  Y.  St.  1885. 
^Frothingham  v.  Shaw,  175  Mass.  59,  78  Am.  St.  Rep.  475. 

Sec.  210.      Non-Resident    Trustee    Holding    Property    for 
Resident. 

The  fact  that  certain  trust  property  passing  under  a  deed  of 
trust  was  at  the  intestate's  death  in  another  state  with  the  legal 
title  in  the  trustee  does  not  affect  the  liability  of  the  transfer  to 
taxation.  The  liability  accrued  at  the  time  of  the  transfer,  no 
matter  when  imposed.  The  deceased  was  a  resident  of  the  state 
at  the  time  of  the  transfer,  and  the  property  was  in  the  state  and 
the  transfer  was  made  in  the  state.  The  deed  in  question  was 
a  deed  in  trust  reserving  a  life  estate  to  the  grantor. 

In  re  Keeney,  194  N.  Y.  281,  287,  87  N.  E.  428,  affirming  128  N.  Y.  App. 
Div.  893.  See  further,  Frothingham  v.  Shaw,  175  Mass.  59,  78  Am.  St.  Rep.  475, 
where  the  securities  were  in  the  hands  of  agents  outside  the  state. 

Sec.  211.    Property  in  Other  States  of  Domestic  Corporation. 

Where  a  corporation  has  but  a  single  corporate  existence  under 
the  laws  of  one  state,  its  shareholders  have  an  interest  for  the 
purposes  of  the  succession  tax  in  all  the  corporate  property  wherever 
situated.^  So  where  a  non-resident  held  stock  in  a  New  York 
railroad  corporation,  it  was  claimed  that  the  tax  should  be  only 
upon  that  proportion  of  its  value  which  represents  the  proportion 
of  the  capital  and  assets  of  the  company  employed  within  the 
state  of  New  York.  Where  it  appeared  that  only  sixty-four 
per  cent  of  the  capital  was  invested  in  the  state  of  New  York,  it  is 
argued  that  the  appraisal  of  the  value  of  the  stock  should  have  been 
proportionately  less.  The  court  holds,  however,  that  the  market 
value  of  the  stock  may  or  may  not  represent  proportionately  the 
actual  value  of  the  corporate  properties.  "That  value,  whatever 
it  may  be  in  the  market,  is  the  worth  attached  to  an  interest  in  the 
corporate  assets  and  properties  regarded  as  a  whole.  A  share  of  cap- 
ital stock  represents  the  distinct  interest  which  its  holder  has  in  the 
corporation,  and  his  right  to  participate  in  the  distribution  of  the 
net  earnings  of  the  corporation.  They  evidence  the  extent  of  his 
proprietary  interest,  and  their  assessment  for  taxation  purposes 
must  be  upon  that  interest,  and  must  be  regarded  as  an  entity, 
and  is  unapportionable  with  reference  to  the  situs  of  the  corporate 
properties.     The  tax  imposed  by  the  state  upon  the  transfer  of 


170  INHERITANCE  TAX  LAW.  [§212. 

such  property,  upon  the  decease  of  its  owner,  is   not  upon  the 
property  which  passes;    it  is  upon  the  right  of  succession  to  it."  ^ 

Un  re  Cooley,  186  N.  Y.  220,  227,  78  N.  E.  939,  10  L.  R.  A.  N.  S.  1010,  reversing 
on  another  point,  113  N.  Y.  App.  Div.  388,  98  N.  Y.  Suppl.  1006. 

A  railroad  company  with  a  Massachusetts  charter  formed  by  the  consolidation 
of  Massachusetts  and  New  York  corporations,  and  owning  tracks  in  both  states, 
is  a  Massachusetts  corporation  so  far  as  the  Mass.  St.  1891,  c.  425,  is  concerned, 
and  stock  in  the  company  owned  by  a  non-resident  decedent  is  assessable  under 
that  statute.     Moody  v.  Shaw,  173  Mass.  375,  377. 

2  In  re  Palmer,  183  N.  Y.  238,  76  N.  E.  16,  affirming  102  N.  Y.  App.  616.  See 
further,  ante,  s.  197. 

Sec.  212.    Corporations  Chartered  in  more  than  one  State. 

The  courts  of  last  resort  of  three  states  have  decided  that  where 
the  same  railroad  corporation  is  incorporated  in  more  than  one 
state,  its  stock  for  the  purposes  of  the  inheritance  tax  in  each 
state  shall  be  appraised  only  at  that  proportional  part  of  the 
market  value  of  its  stock  as  the  value  of  its  franchises  and  property 
situated  within  the  state  bears  to  the  total  value  of  its  franchises 
and  property  wherever  situated.  These  decisions  have  been 
rendered  in  the  absence  of  specific  statutory  authority,  proceeding 
on  broad  lines  of  equity  in  the  effort  to  avoid  double  taxation. ^ 
Various  suggestions  for  estimating  this  value  have  been  made; 
among  others,  that  an  apportionment  based  upon  trackage  or 
figures  drawn  from  the  books  or  balance  sheets  of  the  company 
may  doubtless  be  easily  reached,  which  will  be  substantially  correct, 
and  any  inaccuracies  of  which,  when  reflected  in  a  tax  of  one  per 
cent,  will  be  inconsequential. ^ 

1  Kingsbury  v.  Chapin,  196  Mass.  533,  82  N.  E.  700.   See  further,  post,  s.  259. 

The  Boston  and  Maine  Railroad  is  a  domestic  corporation  in  each  of  the 
states  in  which  it  is  incorporated;  and  while  the  estate  of  a  deceased  non-resi- 
dent stockholder  requires  the  aid  of  the  probate  laws  of  this  state  to  effectuate  a 
transmission  of  the  stockholders'  right  in  the  property  of  the  local  corporation, 
their  aid  is  not  required  to  effectuate  the  transmission  of  his  right  to  property 
of  the  corporation  in  other  states  in  which  it  is  also  chartered;  and  the  value  of 
the  property  requiring  the  aid  of  our  laws  for  its  transmission  must,  in  such  case 
at  least,  be  taken  as  the  measure  of  the  tax  called  for  by  our  statute.  Gardiner  v. 
Carter,  74  N.  H.  507,  510,  69  A.  939. 

*'The  Boston  and  Albany  Railroad  Company  is  a  consolidation  formed  by 
the  merger  of  one  or  more  New  York  corporations  and  one  Massachusetts  cor- 
poration. The  merger  was  authorized  and  the  said  consolidated  corporation 
duly  and  separately  created  and  organized  under  the  laws  of  each  state.  It 
was,  so  to  speak,  incorporated  in  duplicate.  There  is  but  a  single  issue  of  capital 
stock,  representing  all  of  the  property  of  the  consolidated  and  dual  organization. 


§212.]  PROPERTY   BEYOND  THE  JURISDICTION.  171 

Of  the  track  mileage  about  five-sixths  is  in  Massachusetts  and  one-sixth  in  New 
York.  The  principal  offices,  including  the  stock  transfer  office,  are  situated  in 
Boston  and  there  also  are  regularly  held  the  meetings  of  its  stockholders  and 
directors.  The  deceased  was  a  resident  of  the  state  of  Connecticut  and  owned 
four  hundred  and  twenty-six  shares  of  the  capital  stock,  the  value  of  which  for 
the  purposes  of  the  transfer  tax  was  fixed  at  the  full  market  value  of  $252.50 
per  share  of  the  par  value  of  $100. 

"If  the  courts  of  New  York  hold  that  this  stock  is  assessable  at  its  full  value 
in  New  York,  then  the  courts  of  Massachusetts  should  also  hold  that  it  is  assess- 
able for  its  full  value  in  Massachusetts,  which  would  lead  to  great  injustice 
as  double  taxation.  Double  taxation  is  one  which  the  courts  should  avoid  when- 
ever it  is  possible  within  reason  to  do  so.  (Matter  of  James,  144  N.  Y.  6,  11.) 
It  is  never  to  be  presumed.  Sometimes  tax  laws  have  that  efi^ect,  but  if  they  do 
it  is  because  the  legislature  has  unmistakably  so  enacted.  All  presumptions  are 
against  such  an  imposition.     (Tennessee  v.  Whitworth,  117  U.  S.  129.) 

"I  see  nothing  in  the  statute  which  prevents  us  from  paying  decent  regard  to 
the  principles  of  interstate  comity  and  from  adopting  a  policy  which  will  enable 
each  state  fairly  to  enforce  its  own  laws  without  oppression  to  the  subject.  This 
result  will  be  attained  by  regarding  the  New  York  corporation  as  owning  the 
property  situate  in  New  York  and  the  Massachusetts  corporation  as  owning 
that  situate  in  Massachusetts,  and  each  as  owning  a  share  of  any  property  situate 
outside  of  either  state  or  moving  to  and  fro  between  the  two  states,  and  assess- 
ing decedent's  stock  upon  that  theory.  That  is  the  obvious  basis  for  a  valuation 
if  we  are  to  leave  any  room  for  the  Massachusetts  corporation  and  for  a  taxation 
by  that  state  similar  in  principle  to  our  own  without  double  taxation."  Per 
Hiscock,  J.,  in  In  re  Cooley,  186  N.  Y.  220,  228,  78  N.  E.  939,  10  L.  R.  A.  N.  S. 
1010,  reversing  113  N.  Y.  App.  Div.  388,  98  N.  Y.  Suppl.  1006. 

Un  re  Cooley,  186  N.  Y.  220,  232,  78  N.  E.  939,  10  L.  R.  A.  N.  S.  1010,  revers- 
ing 113  N.  Y.  App.  Div.  388.  In  re  Thayer,  58  Misc.  117,  110  N.  Y.  Suppl. 
751  (including  branch  lines). 

"It  may  be  difficult  to  ascertain  the  exact  value  of  the  plaintiff's  right  in  the 
property  of  the  local  corporation;  but  if  the  tax  is  assessed  upon  such  a  percent- 
age of  the  value  of  the  stock  as  the  amount  of  trackage  within  the  state  bears 
to  the  total  trackage  in  the  several  states  of  its  incorporation,  the  practical  diffi- 
culty may  be  obviated ;  and  it  does  not  appear  that  the  requirements  of  the  statute 
would  not  be  met."  Per  Bingham,  J.,  in  Gardiner  v.  Carter,  74  N.  H.  507,  510, 
69  A.  939. 


CHAPTER  XXX, 


SITUS  OF  GHOSES  IN  ACTION. 

§  213.  In  General. 

§  214.  Bank  Deposits. 

§  215.  Bonds. 

§  216.  Claim  against  Estate  of  Another. 

§  217.  Contract  to  Sell  Land. 

§  218.  Insurance. 

§  219.  Mortgages  on  Real  Estate. 

§  220.  Partnership  Interests. 

§  221.  Interest  in  Real  Estate  Trust  Association. 

Sec.  213.    In  General. 

Choses  in  action  have  their  situs  for  purposes  of  the  inheritance 
tax  at  the  domicile  of  the  creditor  ^  and  not  at  that  of  the  debtor ,2 
or  where  it  has  a  place  of  business.^  The  fact  that  in  the  inventory 
the  debtor  is  described  as  a  banker  who  does  business  in  New  York 
cannot  vary  the  result,  where  no  pass  book  or  voucher  was  ever 
delivered,  and  it  does  not  appear  that  the  decedent  ever  drew  checks 
upon  the  account  or  that  it  was  to  be  repaid  otherwise  than  upon 
oral  demand.^ 

The  choses  in  action  of  a  resident  are  taxable  at  his  domicile 
though  physically  out  of  the  state.  Promissory  notes,  bonds  and 
mortgages  belonging  to  a  resident  of  New  York,  which  at  the  time 
of  the  testator's  death  were  in  the  hands  of  his  agent  in  Michigan, 
are  taxable  under  the  statute  of  1885,  chapter  483,  as  amended  by 
the  statute  of  1891,  chapter  215,^  although  the  tax  has  been  held 
in  some  cases  as  dependent  on  the  physical  location  of  the 
securities.^ 

^  Intangible  choses  inaction  held  by  a  non-resident  in  her  possession  at  the  date 
of  her  death  in  New  Hampshire,  where  she  resided,  are  not  taxable  under  the 
Iowa  collateral  inheritance  tax  where  the  debtor  was  a  resident  of  Iowa.  The 
court  holds  that  the  situs  of  the  choses  in  action  attaches  to  the  owner,  that  any 
debt  has  its  situs  at  the  residence  of  the  creditor.  The  court  remarks  that 
Bridges  v.  Griffin,  33  Ga.  113,  is  the  only  case  it  has  been  able  to  find  which  holds 
that  the  residence  of  the  debtor  fixes  the  situs  of  the  property.  Gilbertson  v. 
Oliver,  129  Iowa  568,  105  N.  W.  1002,  4  L.  R.  A.  N.  S.  953.  See,  however.  In  re 
Joyslin,  76  Vt.  88,  56  A.  281.  Rights  in  certain  unsigned  bonds,  see  ante,  s, 
199,  n.  3. 


I 


§213.]  SITUS  OF  CHOSES  IN  ACTION  173 

^Citizens  Bank  v.  Sharp,  53  Md.  521.  Kintzing  v.  Hutchinson,  Fed.  Cas. 
7834.     Allen  v.  Philadelphia  Sav.  Fund  Soc,  Fed.  Cas.  No.  234. 

The  essential  fact  which  alone  permitted  the  imposition  of  an  inheritance 
tax  at  the  domicile  of  the  debtor  in  certain  cases  was  the  fact  that  the  creditor 
in  each  one  of  them  was  under  the  necessity  of  going  to  the  domicile  of  his  debtor 
for  protection  and  collection  of  his  claim,  and  this  appeared  in  Blackstone  v. 
Miller,  188  U.  S.  189.  In  re  Houdayer,  150  N.  Y.  37.  In  re  Clinch,  180  N.  Y.  300. 
In  re  Gordon,  186  N.  Y.  471,  474,  79  N.  E.  722,  10  L.  R.  A.  N.  S.  1089,  affirming 
114  N.  Y.  App.  Div.  202,  99  N.  Y.  Suppl.  630. 

The  court  notes  the  contention  of  the  state  treasurer  that  because  debts  owned 
by  a  non-resident  against  a  resident  of  Massachusetts  can  only  be  enforced  by 
the  aid  of  Massachusetts'  courts  it  ought  to  hold  they  are  property  within  the 
jurisdiction  of  the  state;  but  the  court  does  not  decide  this  contention.  Kinney 
V.  Stevens,  207  Mass.  368,  93  N.  E.  586. 

The  contrary  result  has  been  reached  in  Vermont.  The  testator,  a  resident 
of  Vermont,  died,  leaving  debts  due  to  her  from  non-residents  of  Vermont;  and 
the  court  holds  that  these  debts  are  not  to  be  included  in  fixing  the  amount  of 
the  estate  subject  to  an  inheritance  tax  under  Vermont  statute,  1896,  c.  46. 
The  act  applies  to  "all  property  within  the  jurisdiction  of  this  state."  The  court 
remarks  that  this  must  mean  within  its  probate  jurisdiction  and  that  therefore 
the  debts  were  not  within  the  jurisdiction,  for  immediately  upon  the  death  of  the 
creditor  they  became  assets  in  the  jurisdiction  where  the  debtor  resided.  This 
is  well  settled  in  Vermont.  Furthermore,  the  statute  applies  only  to  property 
which  "passed  by  will  or  by  the  intestate  laws  of  this  state."  And  the  court 
remarks  that  this  property  did  not  pass  by  virtue  of  the  Vermont  law  at  all, 
or  that  law  had  no  force  in  the  domicile  of  the  debtors;  it  passed  by  force  and  virtue 
of  the  law  of  those  jurisdictions.  The  court  remarks  that  it  is  aware  that  other 
courts  have  reached  an  opposite  conclusion  and  cites  Frothingham  v.  Shaw,  175 
Mass.  59,  State  v.  Dalrymple,  70  Md.  294,  17  A.  82,  3  L.  R.  A.  372.  In  re  Swift, 
137  N.  Y.  77,  64  Hun  639,  32  N.  E.  1096,  18  L.  R.  A.  709,  19  N.  Y.  Suppl.  292. 
In  re  Joyslin,  76  Vt.  88,  56  A.  281. 

After  the  decision  in  In  re  Joyslin  (76  Vt.  88,  56  A.  281)  the  legislature  passed 
Vermont  statute  of  1904,  c.  30,  which  changed  the  phraseology  of  the  earlier 
act,  which  included  only  property  which  passed  by  will,  or  by  the  intestate 
laws  of  the  state,  to  include  also  property  which  shall  pass  by  "the  decree  of  the 
court  of  this  state."  Where  the  record  does  not  show  that  any  administration 
was  had  in  the  foreign  jurisdiction  and  that  the  several  sums  due  from  foreign 
debtors  were  collected  by  the  administrator  appointed  in  Vermont,  and  the  pro- 
ceeds brought  here,  where  they  formed  a  part  of  the  assets  which  passed  by  the 
final  decree  of  the  probate  court,  such  assets  are  subject  to  tax. 

It  was  argued  that  in  Vermont  statute  1904,  c.  30,  s.  81,  the  word  "persons" 
in  the  phrase  "shall  also  apply  to  all  persons  who  deceased  prior  to  the  enact- 
ment thereof,"  had  reference  to  those  who  received  the  property,  not  those  from 
whom  it  passes.  But  the  court  refused  to  follow  this  contention,  as  it  would  lead 
to  an  absurd  result.  In  view  of  the  settled  law  that  the  inheritance  tax  is  not 
a  tax  on  property,  but  on  the  transmission  of  property,  it  can  make  no  difference 
with  the  tax  whether  the  legatee  or  distributee  be  alive  or  dead.  In  re  Howard, 
80  Vt.  489,  495,  68  A.  513. 

3/»  re  Horn,  39  Misc.  Rep.  133,  78  N.  Y.  Suppl.  979. 


174  INHERITANCE  TAX  LAW.  [§  214 

4  In  re  Bentley,  31  Misc.  Rep.  651,  66  N.  Y.  Suppl.  95. 

6  In  re  Corning,  3  Misc.  Rep.  160,  51  N.  Y.  St.  265,  23  N.  Y.  Suppl.  285. 

«  See  post,  s.  199.     In  re  Speers,  4  Ohio  N.  P.  238,  6  Low.  D.  398. 

The  decedent,  a  resident  of  Connecticut,  died  owning  certain  promissory 
notes  which  were  in  a  safe  deposit  box  in  the  city  of  New  York.  With  two 
exceptions  the  notes  were  made  by  non-residents  of  the  state  of  New  York  and 
payment  of  all  of  them  was  secured  by  property  outside  of  the  state.  The  court 
holds  that  they  are  subject  to  taxation,  relying  upon  In  re  Wall,  105  N.  Y.  App. 
Div.  643,  94  N.  Y.  Suppl.  1166,  and  In  re  Whiting,  150  N.  Y.  27,  44  N.  E.715, 
34  L.  R.  A.  232,  55  Am.  St.  Rep.  640.  The  court  remarks  that  two  of  the  notes 
are  made  by  residents  of  New  York  and  says  that  it  is  possible  that  they  should  be 
treated  differently,  but  that  it  does  not  seem  to  the  court  that  the  residence  of 
the  debtor  can  change  the  character  of  property  or  determine  whether  it  is  liable 
to  an  inheritance  tax.  In  re  Tiffany,  143  N.  Y.  App.  Div.  327,  128  N.  Y.  Suppl. 
106. 


Sec.  214.    Bank  Deposits. 

A  deposit  in  a  bank  in  another  state  is  taxable  at  the  domicile 
of  the  depositor.^  Deposits  in  banks  may  be  also  taxable  at  th^ 
place  of  deposit,^  irrespective  of  the  physical  location  of  the  certifi- 
cates of  deposit  themselves,^  and  although  the  deposit  was  tem- 
porary, for  investment  only.*  Our  supreme  court  has  clearly 
expressed  the  theory  of  such  a  tax  in  the  following  language,  where 
an  Illinois  decedent  left  funds  in  a  New  York  trust  company:  — 

"If  the  transfer  of  the  deposit  necessarily  depends  upon  and 
involves  the  law  of  New  York  for  its  exercise,  or  in  other  words, 
if  the  transfer  is  subject  to  the  power  of  the  state  of  New  York, 
then  New  York  may  subject  the  transfer  to  a  tax.  .  .  .  But  it  is 
plain  that  the  transfer  does  depend  upon  the  law  of  New  York, 
not  because  of  any  theoretical  speculation  concerning  the  where- 
abouts of  the  debt,  but  because  of  the  practical  fact  of  its  power 
over  the  person  of  the  debtor."  "What  gives  the  debt  validity? 
Nothing  but  the  fact  that  the  law  of  the  place  where  the  debtor 
is  will  make  him  pay.  It  does  not  matter  that  the  law  would  not 
need  to  be  invoked  in  the  particular  case.  Most  of  us  do  not  com- 
mit crimes,  yet  we  nevertheless  are  subject  to  the  criminal  law, 
and  it  affords  one  of  the  motives  for  our  conduct.  So  again,  what 
enables  any  other  than  the  very  creditor  in  proper  person  to  collect 
the  debt?  The  law  of  the  same  place.  To  test  it,  suppose  that 
New  York  should  turn  back  the  current  of  legislation  and  extend 
to  debts  the  rule  still  applied  to  slander,  that  actio  personalis  moritur 
cum  persona,  and  should  provide  that  all  debts  hereafter  con- 


§214.]  SITUS  OF  CHOSES  IN  ACTION.  175 

tracted  in  New  York  and  payable  there  should  be  extinguished  by 
the  death  of  either  party.  Leaving  constitutional  considerations 
on  one  side,  it  is  plain  that  the  right  of  the  foreign  creditor  would  be 
gone.  Power  over  the  person  of  the  debtor  confers  jurisdiction, 
we  repeat.  And  this  being  so,  we  perceive  no  better  reason  for 
denying  the  right  of  New  York  to  impose  a  succession  tax  on  debts 
owed  by  its  citizens  than  upon  tangible  chattels  found  within  the 
state  at  the  time  of  the  death.  The  maxim,  mohilia  sequunter  per- 
sonam, has  no  more  truth  in  the  one  case  than  in  the  other.  When 
logic  and  the  policy  of  a  state  conflict  with  a  fiction  due  to  historical 
tradition,  the  fiction  must  give  way."  ^ 

1  Mann  v.  Carter,  74  N.  H.  345,  68  N.  E.  130  (savings  bank). 

2  People  V.  Griffith,  245  111.  532,  543,  92  N.  E.  313.  In  re  Houdayer,  150  N.  Y. 
37.  In  re  Burr,  16  Misc.  Rep.  89,  74  N.  Y.  St.  490,  38  N.  Y.  Suppl.  811  (savings 
bank  deposit).  In  re  Speers,  4  Ohio  N.  P.  238,  6  Low.  D.  398.  Contra,  Gilbert- 
son  V.  Oliver,  129  Iowa  568,  105  N.  W.  1002,  4  L.  R.  A.  N.  S.  953. 

Money  deposited  by  a  non-resident  in  a  New  York  trust  company  is  property 
within  the  state  subject  to  the  inheritance  tax,  although  mingled  with  the  funds 
of  an  estate  he  represented  as  trustee.  "If  he  had  deposited  in  specie,  to  be 
returned  in  specie,  there  can  be  no  doubt  that  the  money  would  be  property  in 
this  state  subject  to  taxation.  But,  instead,  he  did  as  business  men  generally 
do,  deposited  his  money  in  the  usual  way,  knowing  that,  not  the  same,  but  the 
equivalent,  would  be  returned  to  him  upon  demand.  While  the  relation  of 
debtor  and  creditor  technically  existed,  practically  he  had  his  money  in  the  bank 
and. could  come  and  get  it  when  he  wanted  it.  It  was  an  investment  in  this  state 
subject  to  attachment  by  creditors.  If  not  voluntarily  repaid,  he  could  compel 
payment  through  the  courts  of  this  state.  The  depositary  was  a  resident  corpor- 
ation, and  the  receiving  and  retaining  of  the  money  were  corporate  acts  in  this 
state.  Its  repayment  would  be  a  corporate  act  in  this  state.  Every  right  spring- 
ing from  the  deposit  was  created  by  the  laws  of  this  state.  Every  act  out  of 
which  those  rights  arose  was  done  in  this  state.  In  order  to  enforce  those 
rights,  it  was  necessary  for  him  to  come  into  this  state.  Conceding  that  the 
deposit  was  a  debt,  conceding  that  it  was  intangible,  still  it  was  property  in  this 
state  for  all  practical  purposes,  and  in  every  reasonable  sense  within  the  meaning  of 
the  transfer  tax  act. 

"While  distribution  of  the  fund  belongs  to  the  state  where  the  decedent  was 
domiciled,  as  such  distribution  cannot  be  made  until  his  administrator  has  come 
into  this  state  to  get  the  fund,  possibly,  after  resorting  to  the  courts  for  aid  in 
reducing  it  to  possession,  the  fund  has  a  situs  here,  because  it  is  subject  to  our  laws. 
A  reasonable  test  in  all  cases,  as  it  seems  to  me,  is  this:  Where  the  right,  whatever 
it  may  be,  has  a  money  value  and  can  be  owned  and  transferred,  but  cannot  be 
enforced  or  converted  into  money  against  the  will  of  the  person  owning  the  right 
without  coming  into  this  state,  it  is  property  within  this  state  for  the  purposes  of 
a  succession  tax.  Thus  the  right  in  question  is  property,  because  it  is  capable 
of  being  owned  and  transferred.  It  is  within  this  state,  because  the  owner 
must  come  here  to  get  it.     It  is  subject  to  taxation,  because  it  is  under  the  con- 


176  INHERITANCE  TAX  LAW.  [§215. 

trol  of  our  laws.  It  has  a  money  value,  because  it  is  virtually  money,  or  can  be 
converted  into  money  upon  demand.  It  is  subject  to  a  transfer  tax,  because  the 
passing,  by  gift  or  inheritance,  of  'all  property,  or  interest  therein,  whether 
within  or  without  this  state,  over  which  this  state  has  any  jurisdiction  for  the 
purposes  of  taxation,'  comes  within  the  expressed  intention  of  the  legislature." 
Per  Vann,  J.,  in  In  re  Houdayer,  150  N.  Y.  37,  40,  44  N.  E.  718,  34  L.  R.  A.  235, 
55  Am.  St.  Rep.  642,  reversing  3  N.  Y.  App.  Div.  474,  38  N.  Y.  Suppl.  323. 
(All  the  justicesdid  not  agree  with  the  reasoning  given  by  Vann,  J.,  but  they  were 
"of  the  opinion  that  a  deposit  of  money  in  a  bank  although  technically  a  debt  is 
still  money  for  all  practical  purposes  and  as  such  is  taxable  under  the  transfer 
tax  act.") 

3  In  re  Hewitt,  181  N.  Y.  547. 

^  A  deposit  in  a  trust  company  by  a  non-resident  in  this  state  for  nearly  two 
months  before  the  date  of  the  death  of  the  testator  is  subject  to  tax  notwith- 
standing the  contention  that  the  deposit  was  here  temporarily  for  the  purpose 
of  investment  only.     In  re  Myers,  129  N.  Y.  Suppl.  194. 

The  testator  was  a  resident  of  Montana  and  died  November  12,  1900,  owing 
a  debt  against  a  resident  of  New  York  city.  The  testator  had  previously  loaned 
money  to  a  resident  of  New  York  who  gave  a  check  during  the  last  illness  of  the 
testator  to  the  testator's  secretary  in  payment  of  the  loan.  The  secretary  de- 
posited this  in  a  New  York  bank  in  a  special  account  to  the  credit  of  the  testa- 
tor. The  court  holds  that  this  account  is  subject  to  the  New  York  transfer 
tax  although  it  has  also  paid  a  tax  in  Montana.  The  court  relies  on  the  case  of 
Blackstone  v.  Miller,  188  U.  S.  189,  23  S.  Ct.  277,  47  L.  Ed.  439.  In  re  Daly, 
182  N.  Y.  524, 74  N.  E.  1116,  affirming  100  N.  Y.  App.  Div.  373, 91  N.  Y.  Suppl.  858. 

Where  a  deposit  is  made  in  a  trust  company  where  it  remams  fourteen  months 
while  the  owner  is  seeking  new  investment  a  finding  is  justified  that  the  property 
was  not  "in  transitu"  in  such  a  sense  as  to  withdraw  it  from  the  power  of  .the 
state.  Blackstone  v.  Miller,  188  U.  S.  189,  203,  23  S.  Ct.  277,  47  L.  Ed.  439, 
affirming  171  N.  Y.  682,  69  N.  Y.  App.  Div.  127. 

^Per  Holmes,  J.,  in  Blackstone  v.  Miller,  \^^  U.  S.  189,  23  S.  Ct.  277,47  L.  Ed. 
439.  In  re  Blackstone,  171  N.  Y.  682,  affirming  69  N.  Y.  App.  Div.  127,  74  N.  Y. 
Suppl.  508,  reversing  72  N.  Y.  Suppl.  59. 

This  language  was  quoted  as  controlling  the  court  in  In  re  Rogers,  149  Mich. 
305,  112  N.  W.  931,  11  L.  R.  A.  N.  S.  1134,  14  Detroit  Leg.  N.  444,  119  Am. 
St.  Rep.  677. 

Sec.  215.     Bonds. 

Bonds  have  the  same  situs  as  the  domicile  of  the  owner. ^  So 
bonds  of  domestic  corporations  held  by  non-residents  are  not 
taxable  2  unless  actually  situated  within  the  state  at  the  death  of 
the  testator.^ 

^Appeal  ofOrcutt,  97  Pa.  St.  179. 

2/«  re  Bronson,  150  N.  Y.  1.  In  re  Whiting,  150  N.  Y.  27.  In  re  Morgan, 
150  N.  Y.  35.  In  re  Del  Busto,  6  Pa.  Co.  Ct.  289. 

The  bonds  of  a  domestic  corporation  held  outside  the  state  by  non-residents 
do  not  represent  "property  within  the  state"  in  any  conceivable  sense.     The 


216.] 


SITUS  OF  CHOSES  IN  ACTION. 


177 


property  they  represented  consisted  in  the  debt  of  their  maker  and  that  species 
of  property  is  a  chose  in  action  belonging  to  the  owner  and  inseparable  from  his 
personalty.  In  re  Bronson,  150  N.  Y.  1,  8,  44  N.  E.  707,  34  L.  R.  A.  238,  55  Am. 
St.  Rep.  632,  modifying  1  N.  Y.  App.  Div.  546,  37  N.  Y.  Suppl.  476. 

^People  V.  Griffith,  245  111.  532,  543,  92  N.  E.  313. 

A  distinction  has  been  made  between  tangible  and  intangible  personal 
property,  holding  that  intangible  property  has  no  situs  other  than  the  owner's 
domicile,  and  hence  that  bonds  cannot  be  taxed  in  Pennsylvania  simply  because 
they  were  kept  there.  In  re  Orcutt,  97  Pa.  St.  179.  Contra,  In  re  Whiting, 
150  N.  Y.  27,  31,  44  N.  E.  715,  34  L.  R.  A.  232,  55  Am.  St.  Rep.  640,  modifying 
2  N.  Y.  App.  Div.  590,  38  N.  Y.  Suppl.  131.  In  re  Schermerhorn,  50  Misc.  233, 
100  N.  Y.  Suppl.  480. 


Sec.  216.    Claim  against  Estate  of  Another. 

Where  a  non-resident  legatee  dies  before  the  settlement  of  an 
unsettled  general  bequest  to  him,  a  tax  may  be  assessed  by  the 
state  of  the  original  decedent,  as  a  claim  of  this  character  is  not 
ttoo  intangible  for  taxation  in  the  state  of  the  debtor  estate.^  But 
where  the  personal  estate  of  a  resident  of  New  York  consisted 
entirely  of  her  distributive  share  in  the  estate  of  a  deceased  sister 
who  resided  in  Ohio,  but  no  part  of  this  estate  had  come  into  the 
possession  of  the  testatrix  prior  to  her  death,  but  consisted  of  money 
sent  directly  from  the  trustee  of  the  estate  of  the  deceased  sister 
I  to  the  executor  of  the  New  York  testator  for  the  purposes  of  dis- 
'tribution,  that  portion  of  the  personal  estate  is  not  liable  to 
taxation  in  New  York.^ 

So  the  mere  fact  that  securities  were  in  a  state  is  no  reason  for 
laying  a  tax  on  the  estate  of  the  legatee,^  but  where  the  original 
I  decedent  was  also  a  resident  of  the  same  state,  a  tax  may  be  laid 
so  far  as  the  property  passes  to  persons  liable  to  tax  in  that  state.* 

^  The  testator  was  a  citizen  of  France  and  died  before  the  payment  to  him  of 
his  share  in  his  father's  estate,  the  father  being  a  resident  of  New  York  and  his 

;  will  being  admitted  to  probate  in  this  state.  Subsequently,  distribution  was  had 
and  the  executor  of  the  son  appointed  in  New  York  received  certain  securities 
in  satisfaction  of  his  share  of  the  father's  estate.     It  was  contended  that  at  the 

[time  of  the  death  of  the  son  his  interest  in  his  father's  estate  was  a  mere  chose  in 
iction,  the  situs  of  which  was  not  this  state  but  at  the  son's  domicile  in  France, 

Ithat  hence  that  was  not  property  within  the  state  and  subject  to  our  inheritance 

;  laws.    The  court  holds  that  it  cannot  concede  that  a  claim  due  a  non-resident  from 

[a  resident  of  this  state  is  not  property  within  this  state  subject  to  the  imposition 
of  the  transfer  tax.     The  court  refuses  to  follow  In  re  Phipps,  143  N.  Y.  641, 

1 77  Hun  325,  and  says  that  that  case  has  been  overruled  in  effect  by  In  re  Black- 
stone,  171  N.  Y.  682,  affirmed  in  Blackstone  v.  Miller,  188  U.  S.  189.     Under 

fthe  doctrine  of  the  Blackstone  case  the  interest  of  the  son  in  his  father's  estate 


178  INHERITANCE  TAX  LAW.  [§216. 

was  subject  to  the  inheritance  tax  imposed  by  the  laws  of  this  state,  as  it  was 
a  claim  due  a  non-resident  from  a  resident  of  this  state.  In  re  Clinch,  180  N.  Y. 
300,  73  N.  E.  35,  affirming  99  N.  Y.  App.  Div.  298,  90  N.  Y.  Suppl.  923,  44  Misc. 
190,  89  N.  Y.  Suppl.  802.  The  testator  died  in  1891  leaving  the  residue  to  a  non- 
resident. The  residuary  legatee  died  in  1892.  The  New  York  transfer  tax  authori- 
ties fixed  the  amount  of  her  estate  subject  to  tax,  including  the  residuary  legacy  to 
the  non-resident,  and  the  tax  was  paid.  The  legacy  to  the  non-resident  was  never 
paid  to  him  nor  was  it  in  a  condition  to  be  paid,  as  he  died  while  the  testator's 
estate  was  unsettled.  By  his  will  he  gave  his  estate  to  his  widow.  The  court 
notices  the  doctrine  as  to  the  situs  of  tangible  personal  property,  but  says  that  a 
mere  chose  in  action  has  never  yet  been  given  the  attribute  of  tangibility  and  this 
was  all  that  the  residuary  legatee  had  at  the  time  of  his  death.  He  had  a  right  to 
claim  the  amount  of  money  which  his  share  of  the  residuary  estate  would  result  in 
and  nothing  more.  He  had  no  right  in  any  particular  piece  of  property  or  any  par- 
ticular sum  of  money.  The  court  holds,  therefore,  that  no  tax  should  have  been 
laid  upon  this  legacy,  as  the  statute  was  intended  to  cover  only  tangible  prop- 
erty kept  within  this  state  by  the  decedent,  and  that  property  which  is  tran- 
siently here,  as  upon  the  person  or  in  the  baggage  of  a  man  suddenly  dying  within 
this  state,  was  never  intended  to  be  covered  by  the  provisions  of  the  act.  In  re 
Phipps,  143  N.  Y.  641,  37  N.  E.  823,  affirming  77  Hun  325,  28  N.  Y.  Suppl.  330. 

2  7w  re  Thomas,  3  Misc.  Rep.  388,  24  N.  Y.  Suppl.  713.  In  In  re  Milliken, 
206  Pa.  St.  149,  55  A.  853,  however,  the  tax  was  assessed  under  the  law  of  the 
domicile  of  the  original  legatee. 

3  Where  the  husband  and  wife  are  both  residents  of  New  Jersey  and  the  hus- 
band dies  leaving  in  a  safe  deposit  box  in  New  York  certain  securities,  and  cash 
on  deposit  in  a  New  York  bank,  and  bequeathing  by  will  all  of  his  property  to  his 
wife,  before  the  will  was  admitted  to  probate  the  wife  died,  leaving  a  last  will 
and  testament  by  which  she  left  certain  legacies.  After  the  death  of  the  wife 
the  will  of  her  husband  was  admitted  to  probate  by  a  New  Jersey  court  and 
subsequently  her  will  was  also  admitted  to  probate  by  this  court.  Subsequently 
the  executor  of  the  husband  removed  his  securities  to  New  Jersey  and  paid  to  the 
executor  of  the  wife  various  sums  of  money  in  payment  of  her  legacy.  The  court 
finds  that  although  the  property  of  the  husband  was  actually  in  the  state  of  New 
York  at  his  death,  still  the  claim  of  the  wife  against  this  estate  was  never  property 
within  the  state  of  New  York,  as  the  right  that  the  wife  had  in  her  husband's 
estate  was  not  a  right  to  the  particular  personal  property  which  he  owned,  but 
a  right  to  the  balance  of  the  proceeds  of  his  property  after  the  payment  of  debts 
and  expenses  of  administration.  And  that  right  at  her  death  was  solely  a  claim 
against  his  executor  and  was  not  therefore  property  within  the  state  of  New 
York  at  the  death  of  the  wife.  In  re  Lord,  186  N.  Y.  549,  79  N.  E.  1110,  affirm- 
ing  111  N.  Y.  App.  Div.  152,  97  N.  Y.  Suppl.  553. 

Where  the  intestate  who  lived  in  Oklahoma  died  immediately  after  his  sister 
who  lived  in  Pennsylvania  and  no  administration  was  taken  out  in  Oklahoma 
but  administration  was  taken  out  in  Pennsylvania  where  the  only  known  creditor 
was,  and  where  the  fund  was  paid  by  the  administrator  of  the  sister  directly 
to  the  administrator  of  the  intestate  in  Pennsylvania,  the  fund  was  never  out 
of  the  state  and  had  a  situs  in  Pennsylvania  and  not  at  the  domicile  of  the  decedent, 
and  is  therefore  subject  to  the  Pennsylvania  collateral  inheritance  tax.     In  re 


§§217-218.]  SITUS  OF  CHOSES  IN  ACTION.  179 

Weaver  (Orph.  Ct.),  4  Pa.  Dist.  R.  260.     (This  decision  is  accounted  for  by  the 
Pennsylvania  doctrine  that  the  inheritance  tax  is  a  property  tax. — Ed.) 

*  Where  a  resident  of  California  died  shortly  after  the  death  of  his  brother 
who  resided  in  Maryland  and  the  estate  of  the  Californian  is  entitled  to  certain 
securities  and  other  property  from  the  estate  of  the  resident  of  Maryland,  this 
property,  so  far  as  it  went  to  collaterals,  was  subject  to  tax.  The  court  in  this 
case  did  not  need  to  consider  and  did  not  consider  the  question  of  the  division  of 
the  property  as  to  whether  the  particular  property  in  Maryland  actually  went  to 
a  collateral  or  to  a  direct  descendant,  as  in  this  case  the  will  gave  the  whole  of 
the  personal  property  to  a  collateral,  so  that  the  property  in  question  was  clearly 
subject  to  the  tax.    State  v.  Dalrymple,  70  Md.  294,  17  A.  82,  3  L.  R.  A.  372. 

Sec.  217.    Contracts  to  Sell  Land. 

Contracts  to  sell  land  may  be  taxable  where  the  land  is.^  A 
right  to  receive  the  purchase  price  under  a  contract  to  sell  land, 
however,  is  a  debt,  and  taxable  only  at  the  home  of  the  vendor.^ 

^  Where  the  testator  was  domiciled  and  resided  in  New  York  at  her  death  and 
owned  certain  land  in  Michigan  and  had  made  a  contract  to  sell  this  land  but 
the  title  remained  in  the  testator  at  her  death,  these  land  contracts  were  taxable 
to  the  estate  of  the  decedent  as  personal  property  under  the  inheritance  tax  law 
of  Mich.  1899,  c.  188.  In  re  Stanton,  142  Mich.  491,  105  N.  W.  1122,  12  Detroit 
Leg.  N.  829. 

2  Dodge  County  v.  Burns,  (Neb.  1911,)  131  N.  W.  922. 

Sec.  218.    Insurance. 

Interests  under  an  insurance  policy  on  the  life  of  a  non-resident 
are  not  taxable  at  the  domicile  of  the  corporation  which  issues  the 
policy,^  where  the  corporation  has  property  sufficient  to  pay  the 
policy  in  the  state  of  the  insured  and  has  there  appointed  an  attor- 
ney to  receive  service,  where  the  policy  has  always  been  kept  within 
the  state  of  the  insured,  the  insured  dies  there,  executors  were 
appointed  there  and  premiums  were  paid  there.^  Taxes  cannot  be 
based  on  the  mere  fact  that  the  policies  themselves  are  located 
in  the  state,^  although  issued  by  a  local  company.* 

^In  re  Abbett,  29  Misc.  Rep.  567,  61  N.  Y.  Suppl.  1067.  See  further,  ante, 
s.  107. 

"In  conclusion  we  might  say  that  we  are  unable  to  contemplate  with  a  confi- 
dence born  of  great  optimism  the  results  which  would  follow  from  the  adoption 
and  enforcement  of  the  doctrine  urged  by  appellant.  If  the  contract  in  this  case 
is  subject  to  the  imposition  of  a  transfer  tax,  then  any  contract  of  insurance 
issued  to  a  non-resident,  passing  to  and  held  by  his  non-resident  representatives 
or  assigns,  and  being  administered  and  enforceable  in  a  foreign  jurisdiction, 
whether  in  the  state  of  Texas  or  California,  or  in  some  foreign  country,  would 
afford  the  basis  of  taxation  in  this  state,  provided  only  the  policy  was  issued  by 


180  INHERITANCE  TAX  LAW.  l§  219. 

a  New  York  corporation  and  access  could  be  obtained  by  the  tax  collector  to 
its  proceeds.  No  distance  of  domicile  of  the  assured  and  his  transferees  or  bene- 
ficiaries, and  no  completeness  of  foreign  jurisdiction  over  administration  and 
enforcement,  and  no  lack  of  anticipation  of  such  a  result  upon  the  part  of  the 
assured,  would  be  a  bar  to  the  attempted  application  of  the  taxing  power.  It 
requires  no  great  imaginative  processes  to  picture  the  limits  and  the  disapproval 
and  friction  to  which  this  theory  would  lead  if  logically  carried  to  its  full  length. 
It  was  undoubtedly  the  intent  of  the  legislature  that  the  statute  under  con- 
sideration should  be  liberally  construed  to  the  end  of  taxing  the  transfer  of  all 
property  which  fairly  and  reasonably  could  be  regarded  as  subject  to  the  same, 
and  this  court  has  unequivocally  placed  itself  upon  record  in  favor  of  construing 
the  statute  in  the  light  of  such  intent.  But  the  proposition  now  propounded,  if 
adopted,  would  lead  far  beyond  any  point  which  has  thus  far  been  reached,  and 
we  do  not  believe  that  it  would  be  wise  or  practicable  to  adopt  it.  We  can 
scarcely  believe  that  the  various  states  and  countries  which  have  so  carefully 
and  positively  protected  their  citizens  holding  policies  of  insurance  issued  by 
foreign  corporations  from  the  burden  and  annoyance  of  being  compelled  to  go 
to  distant  forums  for  the  purpose  of  enforcing  their  contracts,  would  permit 
them  to  be  subjected  to  a  species  of  taxation  based  upon  an  assumed  necessity 
for  resort  to  foreign  courts  which  has  thus  been  obviated.  We  believe  that  if 
the  policy  being  urged  upon  us  were  adopted,  the  great  business  of  insurance  now 
being  conducted  by  corporations  chartered  and  under  the  protection  of  the 
state  of  New  York  would  be  subjected  to  new  and  unexpected  embarrassment." 
Per  Hiscock,  J.,  in  In  re  Gordon,  186  N.  Y.  471,  483,  79  N.  E.  722,  10  L.  R.  A. 
N.  S.  1089,  affirming  114  N.  Y.  App.  Div.  202,  99  N.  Y.  Suppl.  630. 

2  The  court  holds  that  this  is  sufficient  to  distinguish  the  case  from  Blackstone  v. 
Miller,  188  U.  S.  189.  The  court  says  that  in  all  cases  where  the  tax  has  been 
imposed  at  the  domicile  of  the  debtor,  the  creditor  has  been  forced  of  necessity 
to  go  to  that  domicile  for  the  collection  of  his  tax,  but  as  that  fact  did  not  appear  in 
this  case  it  would  be  unreasonable  to  tax  the  proceeds  of  this  policy  in  New  York. 
In  re  Gordon,  186  N.  Y.  471,  474,  79  N.  E.  722,  10  L.  R.  A.  N.  S.  1089,  affirm- 
ing 114  N.  Y.  App.  Div.  202,  99  N.  Y.  Suppl.  630. 

Un  re  Gibbs,  60  Misc.  645, 113  N.  Y.  Suppl.  939. 

^  A  policy  of  insurance  cannot  have  of  itself  a  situs.  It  is  nothing  more  than 
written  evidence  of  a  contract  to  pay  a  sum  on  conditions  to  be  performed.  In 
re  Horn,  39  Misc.  Rep.  133,  78  N.  Y.  Suppl.  979. 


Sec.  219.    Mortgages  on  Real  Estate. 

A  good  example  of  the  different  grounds  of  taxation  is  found  in 
the  case  of  mortgages  or  other  liens  on  real  estate  where  the  Hen- 
holder  dies  owning  a  mortgage  or  other  lien  on  land  in  another  juris- 
diction. Here  the  succession  may  be  taxable  either  at  the  home  of 
the  mortgagee,^  or  in  the  jurisdiction  where  the  land  lies,^  although 
the  note  and  mortgage  is  actually  in  the  possession  of  the  mort- 
gagee at  his  domicile.^ 


§219.1  SITUS  OF  CHOSES  IN  ACTION.  181 

It  has  even  been  contended  by  counsel  that  the  state  where  the 
note  and  mortgage  are  kept  may  tax  their  succession,  although  the 
domicile  of  the  mortgagee  and  situs  of  the  land  are  elsewhere.'* 

^Frothinghamv.  Shaw,  175  Mass.  59,  78  Am.  St.  Rep.  475.  {Callahan  v.  Wood- 
bridge,  171  Mass.  595,  is  distinguished,  as  there  testator's  domicile  was  in  New 
York  and  it  does  not  appear  that  the  note  and  mortgage  were  in  Massachusetts.) 
In  re  Stanton  (Orph.  Ct.),  3  Pa.  Dist.  R.  371,  34  Wkly.  Notes  Cas.  391. 

2  In  re  Merriam,  147  Mich.  630,9  L.  R.  A.  N.  S.  1104,  111  N.  W.  196, 14  Detroit 
Leg.  N.  6,  118  Am.  St.  Rep.  561. 

Mich.  St.  1903,  c.  195,  amending  s.  21  of  the  Mich.  St.  1899,  c.  188,  by  eHminat- 
ing  from  s.  21  the  words  "over  which  this  state  has  any  jurisdiction  for  the 
purposes  of  taxation,"  has  no  effect  to  narrow  the  provisions  of  the  statute  as 
to  the  taxation  of  the  personal  property  of  non-residents.  The  court  for  that 
reason  follows  In  re  Merriam,  147  Mich.  630,  111  N.  W.  196,  9  L.  R.  A.  N.  S. 
1104,  14  Detroit  Leg.  N.  6,  cited  under  the  earlier  act.  In  re  Rogers,  149  Mich. 
305,  112  N.  W.  931,  11  L.  R.  A.  N.  S.  1134,  14  Detroit  Leg.  N.  444,  119  Am.  St. 
Rep.  677.     See  Blackstone  v.  Miller,  188  U.  S.  189. 

Reason  for  Rule.  Where  the  testator  was  a  mortgagee  of  land  in  Michigan 
and  lived  in  New  York  the  court  remarks  that  he  could  not  preserve  his  lien 
without  complying  with  the  registry  law  of  Michigan;  that  the  debts  secured 
cannot  be  collected  without  the  aid  of  the  laws  of  Michigan;  that  the  estate  of 
the  testator  cannot  be  properly  administered  or  closed  without  ancillary  letters 
of  administration  obtained  under  the  laws  of  Michigan;  and  therefore  it  is 
subject  to  an  inheritance  tax  in  Michigan.  In  re  Rogers,  149  Mich.  305,  112 
N.  W.  931,  11  L.  R.  A.  N.  S.  1134,  14  Detroit  Leg.  N.  444. 

The  New  York  Rule.  Bonds  owned  by  a  non-resident  secured  by  mortgages 
on  land  in  New  York  are  not  subject  to  tax  in  New  York.  In  re  Bronson,  150 
N.  Y.  1,  44  N.  E.  707,  34  L.  R.  A.  238,  55  Am.  St.  Rep.  632.  In  re  Fearing, 
200  N.  Y.  340,  93  N.  E.  956,  affirming  123  N.  Y.  Suppl.  396.  In  re  Preston, 
75  N.  Y.  App.  Div.  250,  78  N.  Y.  Suppl.  91,  affirming  37  Misc.  236,  75  N.  Y. 
Suppl.  251.     See,  however,  In  re  Clark,  29  N.  Y.  St.  650,  9  N.  Y.  Suppl.  444, 

Con.  Surr.  183.  See  also  Gilhertson  v.  Oliver,  129  Iowa  568,  4  L.  R.  A.  N.  S. 
)53. 

The  Massachusetts  Mortgage.  The  testator  was  a  resident  of  New  Hamp- 
shire and  the  court  holds  that  certain  promissory  notes  belonging  to  him  secured 
by  mortgage  on  real  estate  in  Massachusetts  are  subject  to  tax  in  Massachu- 
setts. The  court  notes  that  in  Massachusetts  the  mortgagee  takes  not  merely 
a  lien  upon  the  land,  but  he  holds  the  legal  title  subject  to  the  right  of  redemp- 
tion and  that  the  interest  of  the  mortgagee  is  subject  to  taxation  under  the 
Massachusetts  statute;  that  while  for  general  purposes  the  interest  of  the 
mortgagee  is  treated  as  personal  property  it  has  a  local  situs  and  carries  with  it 
[ownership  of  the  land  until  it  is  redeemed  by  the  payment  of  the  debt.  The 
[court  holds,  therefore,  that  these  notes  and  mortgages  are  property  within 
[the  jurisdiction  of  Massachusetts  within  the  meaning  of  the  Massachusetts 
'statute  of  1909,  chapter  527,  section  one,  although  they  were  held  by  the  testator 
at  his  domicile  in  New  Hampshire  at  the  time  of  his  death.  Kinney  v.  Stevens, 
207  Mass.  368,  93  N.  E.  586. 


182  INHERITANCE  TAX  LAW.  [§§220-221. 

3  In  re  Merriam,  147  Mich.  630,  9  L.  R.  A.  N.  S.  1104,  111  N.  W.  196, 14  Detroit 
Leg.  N.  6,  118  Am.  St.  Rep.  561.  The  court  distinguishes  the  ease  at  bar  from 
the  Matter  ofBronson,  150  N.  Y.  1,  wKich  held  that  bonds  and  certificates  of  stock 
in  a  New  York  corporation  owned  by  and  in  possession  of  a  non-resident,  at 
his  domicile  out  of  the  state,  at  the  time  of  his  death,  were  not  subject  to  taxa- 
tion. In  the  case  at  bar  there  was  a  credit  secured  by  a  mortgage  on  the 
lands  in  Michigan  and  the  evidence  of  indebtedness,  namely  the  mortgage  was  in 
Michigan.    The  court  refuses  to  follow  Matter  of  Preston,  75  N.  Y.  App.  Div.  250. 

*  Callahan  v.  Woodbridge,  171  Mass.  595,  599  51  N.  E.  176  (where  the  court 
did  not  pass  on  the  question).  Cases  like  Blackstone  v.  Miller,  188  U.  S.  189,  23 
S.  Ct.  277,  47  L.  Ed.  439,  would  seem  to  lend  countenance  to  this  view. 

Sec.  220.    Partnership  Interests. 

Under  the  Pennsylvania  doctrine  that  the  inheritance  tax  is  a 
tax  on  property,  it  is  held  that  the  interest  of  a  non-resident  partner 
in  a  partnership  doing  business  in  Pennsylvania  is  subject  to  tax 
there. 

In  re  Small,  151  Pa.  St.  1,  15,  25  A.  23,  30  Wkly.  Notes  Cas.  521.  In  re  Small 
11  Pa.  Co.  Ct.  1. 

Sec.  221.    Interest  in  Real  Estate  Trust  Association. 

A  note  of  a  real  estate  trust  association  may  be  such  an  equitable 
interest  in  the  real  estate  as  to  be  taxable  in  the  state  where  the 
land  lies. 

Kinney  v.  Stevens,  207  Mass.  368,  371,  93  N.  E.  586. 


) 


CHAPTER  XXXI. 


BENEFICIAL  INTERESTS  TAXED. 

§  222.  All  Interests  Embraced  Unless  Specifically  Exempted. 

§223.  "To  any  Person"  May  Include  Several. 

§  224.  Assignment  by  Legatee. 

§  225.  Disclaimer. 

§  226.  Intestacy. 

§  227.  What  is  a  Life  Estate. 

§  228.  What  Life  Estates  Taxable. 

§  229.  Principal  or  Income  of  Life  Estates. 

§  230.  Annuities. 

§  231.  Remainders. 

§  232.  Vested  Remainders. 

§  233.  Contingent  Remainders. 

§  234.  Defeasible  or  Unascertainable  Interests. 

§  235.  Interests  under  Trusts. 

§  236.  Bequest  to  Creditor. 

§  237.  Bequest  to  Debtor. 

§  238 .  Direction  to  Fulfill  Prior  Obligation  of  Decedent. 

Sec.  222.    All  Interests  Embraced  unless  Specially  Exempted. 

The  inheritance  taxes  usually  embrace  every  kind  of  interest 
in  the  estate  of  a  decedent. 

Att.  Gen.  v.   Pierce,  59  N.  C.  240. 

The  terms  of  the  Pennsylvania  statute  of  1826  were  comprehensive  enough  to 
include  every  interest  which  could  pass,  whether  in  possession  or  remainder. 
Commonwealth  v.  Smith,  20  Pa.  St.  (8  Harris)  100. 

Sec.  223.     "To  any  Person"  may  Include  Several. 

The  words  in  the  Iowa  inheritance  tax  law  of  1896  provide  a  tax 
on  property  which  shall  pass  "to  any  person."  The  phrase  "to 
any  person"  does  net  necessarily  mean  one  person  only,  but  will 
include  more  than  one  when  that  is  required  to  give  the  statute 
the  effect  it  was  intended  to  have. 

McGhee  v.  State,  105  Iowa  9,  74  N.  W.  695. 

Sec.  224.    Assignment  by  Legatee. 

An  assignment  by  the  beneficiary  cannot  affect  the  tax. 
Harrison  v.  Johnston,  109  Tenn.  245,  70  S.  W.  414,  417. 


184  INHERITANCE  TAX  LAW.  [§§225-227. 

The  succession  tax  cannot  be  fixed  at  the  rate  as  in  the  case  of  a  bequest  to  the 
assignee  but  must  be  fixed  at  the  rate  as  in  the  case  of  a  bequest  to  the  original 
legatee,  as  the  assignee  did  not  take  through  the  will.  In  re  Cook,  187  N.  Y.  253, 
259,  79  N.  E.  991,  reversing  114  N.  Y.  App.  Div.  718,  99  N.  Y.  Suppl.  1049. 

Where  collateral  remaindermen  assigned  to  a  lineal  life  tenant  the  court  was 
divided  on  the  question  as  to  who  should  pay  the  collateral  inheritance  tax.  The 
majority  is  of  opinion  that  the  whole  of  it  should  be  paid  by  the  life  tenant,  on 
the  ground  that  the  life  tenant  and  remainder  by  virtue  of  these  transfers  became 
vested  in  the  same  person,  and  there  was  a  merger  of  the  two  estates  into  one 
fee  simple  estate  in  her  and  that  she  is  taxable  upon  the  value  of  the  remainder 
which  entered  into  the  merger.  Harrison  v.  Johnston,  109  Tenn.  245,  70  S.  W. 
414,  417. 

Embezzlement  by  Executor.  Where  one  of  the  executors  previous  to  the 
death  of  the  testator  had  so  invested  the  testator's  property  that  it  was  worthless 
and  then  on  his  death  destroyed  his  will,  one  of  the  legatees  by  threats  of  criminal 
prosecution  obtained  payment  of  her  legacy  from  the  executor,  at  the  same  time 
assigning  the  legacy  and  all  her  interest  in  the  same  to  the  executor.  The  legacy 
was  paid  with  the  individual  property  of  the  executor.  The  legacy  was  two 
thousand  dollars  and  the  total  assets  of  the  estate  of  the  testator  amounted  to 
less  than  eight  hundred  dollars.  The  court  holds  that  no  transfer  tax  can  be 
levied  on  this  legacy,  as  the  legatee  never  received  any  property  from  the  estate 
and  has  in  fact  assigned  all  her  rights  against  the  estate.  In  re  Weed,  10  Misc. 
Rep.  628,  32  N.  Y.  Suppl.  777.     See  further,  ante,  s.  147. 

Sec.  225.    Disclaimer. 

Disclaimer  by  the  beneficiaries  may  prevent  the  imposition  of  a 
tax  on  them. 
In  re  Stone,  132  Iowa  136,  109  N.  W.  455.     See  further,  however,  ante,  s.  153. 

Sec.  226.    Intestacy. 

Where  property  passes  by  intestacy  the  interests  of  the  heirs 
may  be  in  part  subject  to  tax  and  in  part  not. 
Dow  V.  Abbott,  197  Mass.  283,  288,  84  N.  E.  96. 

Sec.  227.    What  is  a  Life  Interest. 

Life  interests  have  been  created  by  a  bequest  over  of  "that 
may  remain, "^  by  a  bequest  of  income  during  the  Hfe  of  the  benefi- 
ciary, or  so  long  as  she  shall  remain  unmarried,^  or  until  her  mar- 
riage or  death  unmarried,^  or  where  a  fee  was  not  created  under 
the  rule  in  Shelley's  case."* 

1  In  re  Cager,  111  N.  Y.  343,  19  N.  Y.  St.  497,  18  N.  E.  866,  affirming  46  Hun 
657. 

2  In  re  Wolf,  48  Ohio  Wkly.  L.  Bui.  211. 

3  In  re  Plum,  37  Misc.  Rep.  466,  75  N.  Y.  Suppl.  940. 

4  In  re  Belcher,  211  Pa.  St.  615,  61  A.  252. 


§§228-229.]  BENEFICIAL  INTERESTS  TAXED.  185 

Sec.  228.    What  Life  Estates  Taxable. 

The  life  tenant  is  subject  to  tax  as  a  legatee,^  except  possibly 
in  case  of  a  contingent  life  estate.^  Under  the  Illinois  statute  of 
1895  the  life  estate  is  exempt  only  when  the  remainder  following  its 
expiration  is  to  the  collateral  heir  or  a  stranger.^ 

■  ^  In  re  Wolf,  48  Ohio  Wkly.  L.  Bui.  211.  Fitzgerald  v.  Rhode  Island  Hospital 
Trust  Co.,  24  R.  I.  59,  52  Atl.  814  (under  the  federal  statute  of  1898).  See  In  re 
Cager,  HI  N.  Y.  343,  19  N.  Y.  St  497,  18  N.  E.  866,  affirming  46  Hun  657. 

Where  a  testator  died  in  December,  1901,  bequeathing  certain  property  in 
trust  to  pay  the  income  to  the  son  for  life,  the  life  estate  of  the  son  became  vested 
on  the  death  of  the  testator  and  was  therefore  subject  to  the  inheritance  tax. 
Westhus  V.  St.  Louis  Union  Trust  Co.,  164  Fed.  795,  90  C.  C.  A.  441,  168  Fed. 
617. 

When  the  testator  gives  the  beneficial  use  of  his  property  for  a  limited  time  to 
one  person,  after  which  the  corpus oithe  estate  goes  to  another,  it  would  not  be 
claimed  that  the  right  of  each  legatee  is  not  subject  to  taxation.  The  fact  that 
both  bequests  are  to  the  same  individual  should  not  change  the  result.  To  hold 
otherwise  would  defeat  the  entire  purpose  of  the  statute,  which  can  only  be  given 
effect  by  insisting  that  when  the  amount  actually  paid  exceeds  the  exemption  a 
tax  based  on  that  amount  is  then  due.  State  v.  Probate  Court,  112  Minn.  279,  128 
N.  W.  18,  20. 

2  Where  a  devise  is  made  to  two  for  life  and  to  the  survivor  of  them,  the  re- 
mainder to  the  surviving  children  of  M.  and  remainder  in  fee  to  the  children  of 
A.  and  W.  if  the  latter  have  issue,  the  life  estates  of  the  first  takers  are  alone  tax- 
able since  it  is  impossible  to  tell  which  of  the  children  of  M.  will  take  the  second 
life  estate;  nor  can  it  be  known  into  what  number  of  shares  the  estate  in  remainder 
will  be  divided.    In  re  Eldridge,  29  Misc.  Rep.  734,  62  N.  Y.  Suppl.  1026. 

3  Ayers  v.  Chicago  Title  &  Trust  Co.,  187  111.42,  56,  58  N.  E.  318. 
[Appraisal  of  life  estates,  see  post,  ss.  343-345.] 

Sec.  229.     Principal  or  Income  of  Life  Estates. 

Taxes  on  life  interests  may  be  chargeable  against  the  principal,^ 
or  against  the  income,^  payable  only  as  the  income  is  paid.^  This 
is  so  although  the  legacy  was  intended  for  the  maintenance  of  the 
life  tenant  who  had  and  has  no  other  means  of  support,  and 
although  the  tax  was  paid  by  the  executor  before  he  transferred 
the  fund  to  the  trustee.^  The  life  tenant,  although  exempt  from 
taxation,  has  no  redress  where  his  income  is  reduced  by  the  deduc- 
tion of  the  tax  from  the  principal.^ 

^Minot  V.  Winthrop,  162  Mass.  113,  125,  38  N.  E.  512,  26  L.  R.  A.  259.  In 
re  Bass,  57  Misc.  531,  109  N.  Y.  Suppl.  1084. 

Where  personal  property  was  given  to  a  life  tenant  the  succession  taxes  as- 
sessed against  the  net  value  of  the  property  as  a  whole  are  chargeable  to  princi- 
pal.   Bishop  V.  Bishop,  81  Conn.  509,  71  A.  583. 


186  INHERITANCE  TAX  LAW.  [§230. 

*  State  V.  Probate  Court,  100  Minn.  192,  196,  197,  110  N.  W.  865.  In  re  John- 
son, 6  Dem.  Surr.  146. 

Succession  duties  under  the  United  States  inheritance  tax  of  1864  on  life  tenants 
fall  on  the  income  of  the  fund  even  where  the  property  is  left  by  will  in  trust  "to 
receive  and  collect  the  income  and  after  deducting  all  needful  and  proper  costs, 
charges  and  expenses,  to  pay  the  residue  of  said  income"  to  the  cestui  for  life. 
The  court  holds  that  the  costs,  charges  and  expenses  spoken  of  by  the  will,  which 
was  drafted  before  the  passage  of  the  inheritance  tax,  are  such  as  are  incidental 
to  the  management  of  the  trust  property,  and  the  receipt,  collection  and  disburse- 
ment of  the  income  cannot  in  any  sense  include  the  payment  of  the  tax  by  law 
imposed  upon  the  life  tenants  and  beneficial  interests  in  the  property.  Sohier  v. 
Eldredge,   103   Mass.    345. 

3  State  v.  Probate  Court,  100  Minn.  192,  110  N.  W.  865.  State  v.  Probate  Court, 
112  Minn.  279,  128  N.  W.  18,  20. 

A  recent  Minnesota  will  provided  that  if  a  certain  grandson,  E.  B.,  survived 
the  testator  his  estate  should  go  to  trustees  for  the  grandson,  the  principal  to  be 
paid  the  grandson  in  instalments  if  he  should  reach  various  ages;  and  if  he  failed 
to  reach  the  age  designated  the  trustees  should  pay  the  balance  in  their  hands 
to  certain  persons  and  charitable  institutions  designated  in  the  will.  The  pay- 
ment of  income  is  limited  in  any  event  to  a  given  number  of  years;  hence,  the 
legacy  has  none  of  the  elements  of  a  life  estate,  and  the  present  value  of  the  right 
to  receive  the  income  for  a  limited  number  of  years  cannot  be  ascertained,  for  the 
value  depends  upon  the  contingency  of  his  living  until  the  limitation  expires. 
It  follows,  therefore,  that  a  tax  on  the  income  will  accrue  and  become  payable 
as  the  time  arrives  for  the  payment  to  the  beneficiary  and  that  it  is  the  duty  of  the 
trustee  to  deduct  the  tax  from  the  amount  of  any  instalment  of  income  to  which 
he  becomes  entitled  and  pay  the  amount  thereof  to  the  proper  officer.  State  v. 
Probate  Court,  100  Minn.  192,  196,  197,  110  N.  W.  865. 

4  In  re  Christian,  2  Pa.  Co.  Ct.  91,  18  Wkly.  Notes  Cas.  88. 

^  Mass.  St.  1891,  c.  425,  s.  1,  provides  that  the  tax  shall  be  deducted  from  the 
principal  sum  and  paid  over  to  the  treasurer.  Where  ten  thousand  dollars  is 
given  in  trust  for  a  life  tenant,  who  is  exempt  from  taxation,  and  the  tax  diminishes 
the  principal  below  ten  thousand  dollars  and  reduces  the  income  proportionately, 
there  is  no  warrant  for  taking  any  part  of  the  principal  of  the  trust  fund  or  of  the 
estate  generally  to  make  up  the  loss  of  the  life  tenant.  Minot  v.  Winthrop,  162 
Mass.  113,  38  N.  E.  512,  26  L.  R.  A.  259. 


Sec.  230.    Annuities. 

Annuities  are  commonly  subject  to  the  inheritance  tax,^  and 
the  tax  may  be  collected  out  of  the  first  payment  though  the  tax 
exhausts  that  payment;^  but  where  the  amount  of  the  annuity  is 
contingent,  the  tax  should  be  paid  on  each  payment  as  it  is  made.^ 

1  In  re  Hutchison,  105  N.  Y.  App.  Div.  487,  94  N.  Y.  Suppl.  354. 

The  testator  provided  that  the  trustee  under  a  trust  created  by  him  should 
pay  from  the  trust,  including  accumulations  of  income  as  well  as  the  corpus,  at  the 
rate  of  $14,000  per  year  to  certain  persons  named;  and  the  court  holds  that  this 
is  a  bequest  of  an  annuity  and  is  so  taxable,  and  not  as  a  bequest  of  income  under 


» 


§  231.]  BENEFICIAL  INTERESTS  TAXED.  187 

the  statute  of  1898,  section  29.  Peck  v.  Kinney,  128  Fed.  313,  reversed  143  Fed. 
76,  74  C.  C.  A.  270. 

Annuity  for  Care.  The  direction  by  will  that  certain  persons  shall  receive 
$75  per  month  for  caring  for  the  brother  of  the  testatrix  is  subject  to  a  tax  at  the 
rate  of  five  per  cent.    In  re  Eaton,  55  Misc.  472,  106  N.  Y.  Suppl.  682. 

Conditional  Annuity.  A  bequest  of  an  annuity  to  a  church  on  the  condition 
of  ringing  the  bell  for  one  hour  on  a  certain  day  annually,  is  subject  to  the  col- 
lateral inheritance  tax.    In  re  Gilpin,  14  Pa.  Co.  Ct.  122,  3  Pa.  Dist.  R.  711. 

Annuity  Ceasing  on  Testator's  Death.  Where  the  testator  sells  a  promis- 
sory note  of  doubtful  value  on  condition  the  buyer  would  pay  him  interest  as 
long  as  the  testator  lives,  this  is  not  subject  to  the  inheritance  tax.  In  re  Gar- 
man,  3  Pa.  Co.  Ct.  550. 

^Minot  V.  Winthrop,  162  Mass.  113,  126,  26  L.  R.  A.  259. 

2  Where  the  will  gives  an  annuity  of  three  hundred  dollars  to  be  paid  out 
of  the  income  or  out  of  the  principal  if  necessary,  the  inheritance  tax  should  not 
be  assessed  upon  the  whole  sum,  as  the  bequest  is  contingent  upon  the  legatee 
living  long  enough  to  exhaust  it  all.  Therefore,  the  tax  is  to  be  assessed  only 
upon  the  annual  payments  as  they  fall  due.  In  re  Crompton,  10  Pa.  Co.  Ct.  443, 
48  Leg.  Int.  452,  29  Wkly.  Notes  Cas.  36. 

Where  the  will  directed  the  executors  to  purchase  bonds  of  such  an  amount 
that  the  interest  would  be  sufficient  to  pay  the  wife  eight  thousand  dollars  a 
year  the  court  says  that  this  is  not  an  annuity  the  present  value  of  which  can 
be  fixed.  Here  the  legacy  grows  out  of  the  estate  each  quarter  and  on  the  failure 
of  sufficient  interest  part  of  the  principal  may  be  taken,  but  even  that  part  ad- 
heres to  the  estate,  grows  out  of  it  and  cannot  be  separated  from  it.  The  estate 
is  therefore  a  trust  fund  in  the  hands  of  the  executors  for  the  payment  of  the 
quarterly  instalments  of  her  legacy.  It  is  the  case  of  trustee  and  beneficiary, 
and  not  debtor  and  creditor.  It  is  therefore  clear  that  until  received  by  the  widow 
each  quarter  the  legacy  remains  merged  in  the  estate  as  a  part  thereof,  that  the 
taxes  paid  by  the  estate  are  all  that  can  be  lawfully  exacted,  and  that  she  cannot 
be  taxed  on  any  part  of  her  legacy  until  after  its  receipt  by  her.  Chisholm  v. 
Shields,  67  Ohio  St.  374,  66  N.  E.  93. 

[Annuities,  see  further,  post,  ss.  306,  342.] 

Sec.  231.    Remainders. 

Remainder  interests  are  commonly  subject  to  tax^  although  not 
expressly  covered  by  the  statute.^  The  remainder  interest  is  not 
subject  to  a  separate  tax  as  an  interest  under  the  estate  of  the 
|life  tenant.*  If  a  remainder  vests  as  intestate  estate  it  is  taxable 
only  if  it  passes  to  a  taxable  heir.*  Remainders  whether  vested  or 
contingent  are  "estates  in  expectation"  within  the  Illinois  statute.^ 

1  Ayers  v.  Chicago  Title  &  Trust  Co.,  187  111.  42,  55,  58  N.  E.  318  (remainder  to 
lineals).  Billings  v.  People,  189  111.  472,  59  L.  R.  A.  807.  State  v.  Probate  Court, 
100  Minn.  192,  198,  110  N.  W.  865  (distribution  only  after  paying  tax).  Appeal 
of  Commonwealth,  127  Pa.  St.  435,  439,  17  A.  1094. 

The  New  York  decisions  are  not  of  value  in  construing  the  Illinois  statute  as 
to  the  taxation  of  remainder  interests.     "One  of  the  main  differences  between 


i 


188  INHERITANCE  TAX  LAW.  [§§232-233. 

the  Illinois  act  and  the  New  York  act  is  that  the  former  taxes  all  successions  ex- 
cepting life  estates  and  terms  for  years  mentioned  in  s.  2,  while  the  latter  taxes 
only  successions  to  collaterals  or  strangers  in  blood."  In  re  Kingman,  220  111. 
563,  77  N.  E.  135.     See  further,  post,  ss.  346,  347,  383. 

^Attorney  General  v.  Pierce,  59  N.  C.  240. 

=  /«  re  Whitney,  124  N.  Y.  Suppl.  909. 

^Dow  V.  Ahhott,  197  Mass.  283,  286. 

^Ayers  v.  Chicago  Title  &  Trust  Co.,  187  111.  42,  58  N.  E.  318. 

Sec.  232.    Vested  Remainders. 

Vested  remainders  are  almost  universally  taxable. 

In  re  Vinot,  7  N.  Y.  Suppl.  517.  Title  Guarantee  &  Trust  Co.  v.  Ward,  164  Fed. 
459.  Chouteau  v.  Allen,  95  C.  C.  A.  582,  170  Fed.  412,  relying  upon  Westhus  v. 
Union  Trust  Co,,  164  Fed.  795,  168  Fed.  617.  In  re  Sherman,  30  Misc.  Rep. 
547,  63  N.  Y.  Supp.  957. 

Sec.  233.    Contingent  Remainders. 

Contingent  remainders  may  be  and  are  commonly  subject  to 
taxation  under  state  statutes,^  even  when  arising  by  appointment 
after  the  death  of  the  testator.^  Contingent  interests  under  the 
early  New  York  statutes  were  not  presently  taxable  until  they 
had  vested,^  but  were  made  taxable  as  of  the  death  of  the  testator 
by  the  act  of  1899.*  The  federal  tax  of  1898  left  them  free  of  tax 
entirely.^ 

^ State  V.  Pahst,  139  Wis.  661,  589,  121  N.  W.  351. 

Vested  and  Contingent  Interests.  The  language  in  Ayers  v.  Chicago  Title 
&  Trust  Co.,  187  111.  42,  58  N.  E.  318,  to  the  effect  that  whether  or  not  the  re- 
mainders were  vested  or  contingent  was  not  material,  is  only  dictum  and  the  court 
declines  to  follow  it  in  People  v.  McCormick,  208  111.  437,  445,  70  N.  E.  350,  64 
L.  R.  A.  775. 

See  further,  ss.  300,  335,  346,  383. 

^Howe  V.  Howe,  179  Mass.  546,  551,  55  L.  R.  A.  626. 

3/»  re  Lefever,  5  Dem.  Surr.  (N.  Y.)  184.  In  re  Clark,  1  Con.  Surr.  431,  22 
N.  Y.  St.  354, 5  N.  Y.  Suppl.  199.  In  re  Clarke,  39  Misc.  Rep.  73,  78  N.  Y.  Suppl. 
869.  In  re  Roosevelt,  143  N.  Y.  120,  38  N.  E.  281,  25  L.  R.  A.  695,  affirming  27 
N.  Y.  Suppl.  741,  76  Hun  257.  In  re  Hoffman,  143  N.  Y.  327,  38  N.  E.  311, 
modifying  76  Hun  399,  5  Misc.  439. 

Where  a  remainder  in  a  trust  estate  was  given  to  such  persons  named  as  might 
be  living  at  the  successive  termination  of  each  trust  these  remainders  are  not 
liable  to  taxation  until  the  termination  of  each  trust,  as  it  cannot  until  then  be 
determined  whether  the  trust  fund  would  pass  to  persons  exempt  from  taxation 
or  to  persons  taxable.  The  court  distinguishes  the  Matter  of  Stewart,  131  N.  Y. 
277,  which  case  does  decide  that  contingent  interests  although  vesting  in  pos- 
session at  a  future  day  may  be  at  once  valued  and  assessed.  And  the  court  says 
that  it  may  possibly  be  that  where  the  only  contingency  of  the  future  is  upon 
which  of  the  several  named  persons  or  classes  of  persons,  all  of  whom  are  liable 


§  234.]  BENEFICIAL  INTERESTS  TAXED.  189 

to  taxation,  the  beneficial  interest  will  ultimately  devolve,  the  appraisal  and 
assessment  need  not  be  postponed.  Yet  where  the  contingency  touches  the 
taxable  character  of  the  succession,  where  it  is  only  in  the  chance  of  uncertain 
events  that  the  beneficial  interests  will  finally  alight  where  they  will  be  taxable 
at  all,  a  delay  until  the  contingency  is  solved  is  both  just  and  necessary. 

Where  remainders  in  trust  estates  were  left  to  such  of  certain  persons  named 
as  might  survive  the  termination  of  the  trust  estates  and  one  of  these  persons 
named  died  before  the  termination  of  the  trust  estate,  his  estate  was  not  subject 
to  taxation.  He  never  took  anything  beneficial  under  the  will  and  his  estate 
can  take  nothing.  It  was  never  intended  by  the  law  to  tax  a  theory  having  no  real 
substance  behind  it.  What  passed  was  rather  a  theoretical  possibility  than  a 
tangible  reality.  In  re  Curtis,  142  N.  Y.  219,  36  N.  E.  887,  affirming  73  Hun 
185,  56  N.  Y.  St.  113,  25  N.  Y.  Suppl.  909. 

4  In  re  Post,  85  N.  Y.  App.  Div.  611,  82  N.  Y.  Suppl.  1079,  affirming  40  N.  Y. 
Suppl.  1144,  64  N.  Y.  Suppl.  369.  Matter  of  Vanderhilt,  172  N.  Y.  69,  64  N.  E. 
782.  Matter  ofBrez,  172  N.  Y.  609,  64  N.  E.  958.  In  re  Tracy,  179  N.  Y.  501, 
508,  72  N.  E.  519,  reversing  87  N.  Y.  App.  Div.  215.  In  re  Le  Brun,  39  Misc. 
Rep.  516,  80  N.  Y.  Suppl.  486.  In  re  Burgess,  130  N.  Y.  Suppl.  686  (tax  at 
highest  rate  possible  in  view  of  possible  contingencies).  Contra,  In  re  Howell,  34 
Misc.  Rep.  432,  69  N.  Y.  Suppl.  1016. 

5  Vanderhilt  v.  Eidman,  196  U.  S.  480,  501,  25  S.  Ct.  331,  49  L.  Ed.  563,  138 
Fed.  1006,  70  C.  C.  A.  683,  reversing  121  Fed.  590.  Herold  v.  Shanley,  146  Fed. 
20,  76  C.  C.  A.  478,  affirming  141  Fed.  423  (after  death  or  marriage  of  another). 
Heberton  v.  McClain,  135  Fed.  226.  Brown  v.  Kinney,  128  Fed.  310,  reversed 
137  Fed.  1018. 

The  Spanish  War  revenue  statute  of  1898  did  not  impose  duties  upon  legacies 
which  were  vested  merely  within  the  technical  meaning  of  that  term,  but  only 
upon  legacies  which  were  vested  in  actual  possession  and  enjoyment.  Fidelity 
Trust  Co.  v.   United  States,  45  Ct.  CI.  362.  (U.  S.  Ct.  CI.  1910.) 

Sec.  234.     Defeasible  or  Unascertainable  Interests. 

Defeasible  interests  are  subject  to  tax  as  soon  as  the  interest  of 
the  beneficiary  can  be  determined,^  but  the  tax  must  be  post- 
poned where  the  interests  are  not  presently  ascertainable.^ 

^  State  V.  Probate  Court,  112  Minn.  279,  128  N.  W.  18,  20  (tax  payable  when 
beneficiary  takes  possession).  Where  a  will  provides  that  beneficiaries  may  take 
property  and  its  income  subject  to  annual  payments  to  the  widow  unless  she 
exercise  an  option  to  take  a  portion  of  the  estate  in  lieu  thereof,  and  to  similar 
payments  for  the  support  of  the  child  during  minority,  there  is  nothing  in  these 
conditions  which  postpones  their  right  to  the  property  or  income  thereof  from 
the  time  of  death.  The  law  provides  means  of  calculating  the  value  of  the  inter- 
est of  the  widow  and  the  child  and  hence  the  fair  market  value  of  the  remainder 
of  the  estate  and  the  other  interests  was  ascertainable.  State  v.  Pabst,  139  Wis. 
661,  588,  121  N.  W.  351. 

2  When  the  basis  of  the  tax,  the  rate  and  the  exemption  if  any  cannot  be  fixed, 
the  tax  itself  cannot  be  fixed.  No  other  course  is  left  open  in  the  practical  ad- 
ministration of  the  statute  than  to  postpone  the  assessing  and  collecting  of  the 


190  INHERITANCE  TAX  LAW.  [  §  235 

tax  upon  such  remote  contingent  interests  as  are  incapable  of  valuation  and  as 
to  which  the  rate  and  the  exemptions  cannot  be  determined.  People  v.  McCor- 
mick,  208  111.  437,  70  N.  E.  350,  64  L.  R.  A.  775. 

Where  the  testator  devised  to  her  brother  the  use  of  her  personal  property  with 
the  right  to  use  as  much  of  the  principal  as  was  necessary  for  his  maintenance, 
no  transfer  tax  can  be  assessed  upon  the  remainder,  as  it  is  impracticable  to  ap- 
praise it  until  it  is  known  what  property  will  pass  in  remainder.  In  re  Babcock, 
81  N.  Y.  App.  Div.  645,  81  N.  Y.  Suppl.  1117,  affirming  37  Misc.  Rep.  445,  75 
N.  Y.  Suppl.  926. 

See  further,  post,  ss.  300,  335,  382,  383. 

Sec.  235.     Interests  under  Trusts. 

Interests  under  a  trust  deed  which  has  become  absolute  during 
the  grantor's  Hfe  are  not  taxable  on  his  death.^  In  considering 
the  taxation  of  interests  in  trust,  the  relationship  to  the  testator 
of  the  cestui  and  not  of  the  trustee  is  the  test  ,2  although  the  tax 
itself  may  be  assessed  against  the  trustee.^  Where  the  law  pro- 
vides that  if  the  legacy  or  property  be  not  in  money  it  shall  be 
collected  from  the  persons  entitled,  interests  under  a  trust  fund 
must  be  collected  from  the  cestuis  themselves.* 

1  In  re  Pierce,  132  N.  Y.  App.  Div.  465,  116  N.  Y.  Suppl.  816,  reversing  60 
Mich.  25,  112  N.  Y.  Suppl.  594.  See  In  re  Ogsbury,  7  N.  Y.  App.  Div.  71,  39 
N.  Y.  Suppl.  978.     See  further,  ante,  s.  98. 

2  Where  a  legacy  is  given  to  the  husband  of  the  daughter  evidently  as  trustee 
for  the  use  of  his  children,  it  is  not  liable  to  a  collateral  inheritance  tax.  In  re 
Morris  (Orph.  Ct.),  1  Pa.  Dist.  R.  818. 

Where  an  executor  without  authority  purchases  land  in  her  own  name  the 
property  is  impressed  with  a  trust  in  favor  of  the  remaindermen,  and  on  her  death 
no  inheritance  tax  should  be  levied,  as  the  fact  that  she  took  title  in  her  own  name 
did  not  make  the  property  hers.  In  re  Wheeler,  115  N.  Y.  App.  Div.  616,  100 
N.  Y.  Suppl.  1044. 

3  Tyson  v.  State,  28  Md.  577. 

A  legacy  to  an  executor  individually  under  a  contract  with  him  to  use  the  money 
for  another  creates  a  valid  trust  within  the  exemptions  of  the  statute  and  the 
executor  would  therefore  not  be  liable  for  the  tax.  In  re  Farley,  15  N.  Y.  St. 
Rep.  727. 

*  Where  a  trust  fund  is  left  for  the  benefit  of  one  person  for  life  with  remainder 
to  another,  what  is  transferred  to  the  life  tenant  and  to  the  remaindermen  is 
simply  a  right  to  receive  a  certain  sum  of  money  and  none  of  the  property  or  es- 
tate left  by  the  testator.  Each  gets  a  right  under  the  will  from  which  there  can 
be  no  deduction.  Collection  of  a  tax  on  these  interests  must  therefore  be  made 
from  the  beneficiaries  themselves.  In  re  Hoyt,  37  Misc.  Rep.  720,  76  N.  Y.  Suppl. 
504,  citing  In  re  McMahon,28  Misc.  Rep.  697,  60  N.  Y.  Suppl.  64.  In  re  Clark, 
1  Con.  Surr.  431,  5  N.  Y.  Suppl.  199. 


§§23fr-238.]  BENEFICIAL  INTERESTS  TAXED.  191 

Sec.  236.    Bequest  to  Creditor. 

A  bequest  to  a  creditor  of  the  decedent  is  exempt  from  the 
inheritance  tax  up  to  the  amount  of  the  debt. 

In  re  Quin  (1880),  13  Phila.  (Pa.)  340. 

Where  a  bequest  is  made  to  the  foreman  of  the  testator  of  four  thousand  dollars 
on  condition  he  should  accept  it  in  full  of  all  claims,  and  it  appeared  that  the 
amount  of  the  legatee's  claim  for  services  was  in  excess  of  the  sum  bequeathed, 
the  legacy  is  not  a  gift  and  is  not  subject  to  the  inheritance  tax.  In  re  Underhill, 
20  N.  Y.  Suppl.  134,  2  Con.  Surr.  262. 

The  testator  by  his  will  gave  to  H.  all  money  which  might  become  due  and  pay- 
able at  his  decease,  on  account  of  his  membership  in  a  certain  masonic  aid  asso- 
ciation. The  testator  had  taken  out  this  membership  to  secure  an  indebtedness 
to  H.  The  court  holds  that  while  H.  may  be  entitled  to  receive  money  by  virtue 
of  the  will  he  does  not  get  it  as  a  gift  but  as  payment  of  a  debt,  and  the  words 
used  accomplish  no  more  than  the  usual  general  direction  in  wills  to  pay  debts 
and  funeral  expenses.     In  re  Rogers,  10  N.  Y.  Suppl.  22,  2  Con.  Surr.  198. 

As  to  consideration,  see  ante,  Chapter  XX. 

Sec.  237.    Bequest  to  Debtor. 

A  bequest  to  a  debtor  of  the  testator  is  properly  taxable. 

In  re  Wood,  40  Misc.  Rep,  155,  81  N.  Y.  Suppl.  511,  holding  that  a  bequest  of 
a  debt  is  "property,"  Ky.  St.  1906,  c.  22,  makes  no  exception  in  favor  of 
legatees  who  may  be  indebted  to  the  estate.  Leavell  v.  Arnold,  131  Ky.  426,  115 
S.  W.  232. 

Where  a  bequest  of  the  residue  of  an  estate  includes  a  note  made  by  the  resid- 
uary legatee,  the  legatee  must  either  accept  the  benefit  provided  by  the  will  under 
the  condition  of  assuming  with  it  the  burden  imposed  by  law,  or  he  may  reject 
it.  If  he  elects  to  reject  the  legacy  the  legacy  would  go  as  in  case  of  intestacy. 
In  that  event  the  next  of  kin  could  sue  upon  the  note.  The  tax  should  properly 
include  the  value  of  this  note.  In  re  Tuigg,  15  N.  Y.  Suppl.  548,  2  Con.  Surr. 
633,  following  Tyson's  Appeal,  10  Pa.  St.  220. 

Where  the  testator  was  the  holder  of  certain  debenture  bonds  of  a  corporation 
and  bequeathed  these  bonds  to  the  corporation,  it  was  contended  that  no  assess- 
ment could  be  made  upon  this  legacy,  as  such  a  gift  only  released  to  a  debtor  evi- 
dences of  his  debt  held  by  his  creditor.  The  court  replies,  however,  that  the 
debenture  bonds  in  question  were  the  property  of  the  testator  and  that  when 
he  bequeathed  them  to  the  corporation  the  property  passed  from  him  to  it;  that 
it  might  cancel  the  bonds  or  it  might  properly  transfer  them  to  any  one  who  might 
be  willing  to  pay  their  value  and  that  the  tax  was  properly  imposed  upon  them. 
In  re  Rothschild,  72  N,  J.  Eq.  425,  65  A.  1118,  affirming  71  N.  J.  Eq.  210. 

See  further,  post,  s.  340. 

Sec.  238.    Direction  to  Fulfill  Prior  Obligation  of  Decedent. 

A  direction  in  a  will  as  to  the  carrying  out  of  an  obligation  of  the 
testator  does  not  constitute  a  gift  by  will  subject  to  taxation. 


192  INHERITANCE  TAX  LAW.  [§238. 

A  husband  signed  an  agreement  to  pay  an  annuity  through  a  trustee  to  the 
wife,  and  by  his  will  he  created  a  trust  in  his  executors  to  continue  the  annuity  in 
case  she  refused  a  gross  sum  allowed  her  in  the  will.  The  court  holds  that  this 
direction  as  to  the  trust  in  the  will  is  not  taxable,  as  it  is  no  transfer  and  confers 
no  benefit  upon  the  widow.  It  is  simply  a  direction  of  the  testator  as  to  the  man- 
ner in  which  his  estate  shall  be  administered.  In  re  Daniell,  40  Misc.  Rep.  329, 
81  N.  Y.  Suppl.  1033. 


CHAPTER   XXXII. 


EXEMPTIONS  IN   GENERAL. 

§239.  Validity. 

§  240.  Validity  of  Tax  on  Whole  Estate  which  Exceeds  the  Exemption. 

§  241.  Construction. 

§  242.  No  Implied  Exemptions. 

§  243.  Whether  Based  on  Estates  of  Beneficiaries  or  of  Decedents. 

§244.  Whether  Calculated  on  Whole  Estate  or  on  Portion   within 

State. 

§  245.  Real  as  well  as  Personal  Property  Considered. 

§  246.  Amounts  Reckoned  without  Deduction  for  Tax  or  Expenses. 

§  247.  Amounts  Reckoned  with  Discount  for  Delay  in  Payment. 

§248.  When  Legacy  Payable  in  Instalments. 

§  249.  In  Case  of  Progressive  Rates. 

§  250.  Effect  of  General  Tax  Exemptions. 

§  251.  Of  Persons  Exempt  under  General  Law. 

§  252.  Testing  Status  of  Corporation . — When  Exempt  by  General  Law. 

§  253.  Exemption  of  Property  Otherwise  Taxed. 

§  254.  Interests  under  Powers. 

§  255.  Remainder  may  be  Liable  Although  Prior  Estate  Exempt. 

§256.  "Persons"  Includes  Corporations. 

§257.  Foreign  Corporations. 

§  258.  Gift  to  Foreign  Corporation  for  Domestic  Use. 

§  259.  Corporation  Chartered  in  more  than  one  State. 

§  260.  Effect  of  Use  Made  of  Funds. 

§  261.  Special  Exemptions. 

Sec.  239.    Validity. 

Exemptions/  although  Hberal  in  amount,  have  been  almost 
universally  upheld  as  within  the  legislative  power  to  classify  the 
subjects  of  taxation ,2  although  the  exemption  is  greater  to  one  class 
than  to  another,^  as  there  is  as  much  authority  to  make  exemptions 
from  this  tax  as  from  any  other.^  The  fact  that  the  expense  of 
administering  small  estates  is  proportionally  greater  than  large 
ones  has  often  been  considered.^  Exemptions  have  been  upset  as 
violating  the  rule  of  uniformity,  however,  under  the  peculiar 
wording  of  certain  constitutions.^ 

i/«  re  Wilmerding,  117  Cal.  281,  49  P.  181.    Booth  v.  Commonwealth,  130  Ky. 
88,  113  S.  W.  61  ($500).    Thompson  v.  Kidder,  74  N.  H.  89,  97,  65  A.  392.    State 


194  INHERITANCE  TAX  LAW.  [§239. 

V.  Guilbert,  70  Ohio  St.  229,  255,  71  N.  E.  636.  State  v.  Alston,  94  Tenn.  674 
($250).  In  re  Hickok,  78  Vt.  259,  265,  62  A.  724  ($2,100).  Magoun  v.  Illinois 
Trust  &  Savings  Bank,  170  U.  S.  283,  287. 

Reason  for  Rule.  It  was  contended  that  the  Ohio  act  was  not  uniform  in  that 
it  exempts  from  its  operation  all  inheritances  which  do  not  exceed  $3,000  in 
value  and  imposes  a  burden  on  such  as  are  above  that  sum.  The  court  says: 
"We  think  there  are  two  answers  to  this  objection.  The  person  who  inherits 
six  thousand  dollars  has  three  thousand  exempt;  the  person  who  inherits  three 
thousand  dollars  has  three  thousand  dollars  exempt.  They  are  on  a  perfect 
equality  in  that  regard.  The  same  reasoning  applies  where  it  happens  that 
the  smaller  inheritance  falls  below  three  thousand  dollars.  As  well  might  it 
be  urged  that  the  law  which  exempts  from  execution  homesteads  of  the  heads 
of  families  of  one  thousand  dollars  in  value  is  invalid  on  the  ground  of  inequality 
of  privilege  because  one  debtor's  homestead  may  not  reach  one  thousand  dollars 
in  value  while  that  of  another  may.  It  is  to  be  borne  in  mind  that  the  act  does 
not  create  a  classification  of  persons  for  the  purpose  of  imposing  a  tax  on  that 
class.  It  is  not  a  tax  on  persons  at  all.  If  it  is  felt  more  by  some  than  by  others 
this  is  owing  merely  to  the  fact  of  the  difTering  circumstances  which  surround 
the  different  persons.  No  person,  nor  no  set  of  persons,  is  selected  arbitrarily 
or  otherwise  for  the  imposition  of  burdens  or  for  relieving  of  burdens."  Further- 
more, the  court  holds  that  as  the  tax  is  an  excise  tax  and  the  authority  to 
impose  the  tax  is  conferred  by  the  general  grant  of  legislative  power,  the  selection 
of  the  subjects  on  which  the  tax  will  be  imposed  must  be  within  the  legislative 
competency.  To  say  that  the  mere  fact  of  inclusion  in  the  one  case  and  exclu- 
sion in  the  other  constitutes  a  reason  for  holding  the  law  invalid,  is  to  say  that 
no  excise  tax  can  be  lawfully  levied  upon  any  privilege  until  all  privileges  on 
which  it  would  be  possible  to  lay  such  tax  have  been  included  within  its  terms. 
If  this  proposition  were  established  it  is  difficult  to  say  why  it  would  not  invali- 
date all  the  excise  laws  of  the  state,  many  of  which  have  been  subjected  to 
judicial  scrutiny  and  have  been  sustained.  State  v.  Guilbert,  70  Ohio  St.  229,  250, 
71  N.  E.  636. 

An  exemption  of  the  estates  taken  by  inheritance  valued  at  less  than  $500  is 
constitutional.  "As  this  tax  is  not  upon  property,  but  upon  the  right  of  suc- 
cession, the  constitutional  provision  that  all  property  shall  be  taxed  according 
to  its  value  is  inapplicable.  The  right  of  the  legislature  to  impose  an  excise 
tax  includes  the  right  to  select  the  subjects  upon  which  it  shall  be  imposed." 
There  is  no  constitutional  requirement  that  it  shall  be  imposed  upon  every 
inheritance  and  the  judgment  of  the  legislature  in  that  respect  is  not  open  to 
review  by  the  courts.  It  may  have  considered  that  the  expense  of  valuation  of 
an  estate  less  than  $500  rendered  the  exemption  wise.  In  re  Wilmerding's 
Estate,  117  Cal.  281,  49  P.  181. 

•^Succession  of  Frigalo,  123  La.  Ann.  71,  48  S.  652  ($10,000).  Minotv.  Win- 
throp,  162  Mass.  113,  123,  26  L.  R.  A.  259  ($10,000).  Gelsthorpe  v.  Furnell,  20 
Mont.  299,  51  P.  267,  39  L.  R.  A.  170  ($7,500).  Thompson  v.  Kidder,  74  N.  H. 
89,  97,  65  A.  392.  Black  v.  State,  113  Wis.  205,  218,  89  N.  W.  522,  90  Am.  St. 
Rep.  853  ($10,000).  Magoun  v.  Illinois  Trust  &  Savings  Bank,  170  U.  S.  283, 
18  Sup.  Ct.  594,  42  L.  Ed.  1037.     See  further,  s.  62,  n.  2. 

A  Legislative  Function.  Although  it  is  true  that  the  amount  of  the  exemp- 
tion is  greater  in  the  Illinois  law  than  in  any  other,  the  right  to  exempt  cannot 


§  240.]  EXEMPTIONS  IN  GENERAL.  195 

depend  on  that  as  that  is  a  legislative  and  not  a  judicial  function.  Magoun  v. 
Illinois  Trust  &  Savings  Bank,  170  U.  S.  283,  298,  300,  18  Sup.  Ct.  594,  42  L. 
Ed.  1037. 

estate  V.  Clark,  30  Wash.  439,  71  P.  20,  23  ($10,000  to  lineals).  See,  also, 
cases  cited  under  two  preceding  notes.  Contra,  Drew  v.  Tifft,  79  Minn.  175,  81 
N.  W.  839,  47  L.  R.  A.  525,  79  Am.  St.  Rep.  446  ($10,000  to  lineals  and  $5,000 
to  collaterals  void  under  the  wording  of  the  Minnesota  constitution  that  the 
tax  is  to  be  laid  on  inheritances  above  a  fixed  and  specified  sum). 

4  Union  Trust  Co.  v.  Durfee,  125  Mich.  487, 84  N.  W.  1101, 7  Detroit  Leg.  N.  597. 

^Minot  v.  Winthrop,  162  Mass.  113,  124,  26  L.  R.  A.  259  (Lathrop,  J.,  dis- 
senting).   State  v.  Alston,  94  Tenn.  674,  30  S.  W.  750,  28  L.  R.  A.  178. 

^State  V.  Gorman,  40  Minn.  232,  41  N.  W.  948,  2  L.  R.  A.  701.  (Here  the 
statute  purported  to  exact  arbitrary  probate  fees,  and  the  court  regarded  an 
exemption  of  $2,000  as  without  justification  under  the  equality  requirements  of 
the  state  constitution.)  Drew  v.  Tifft,  79  Minn.  175,  81  N.  W.  839,  47  L.  R.  A. 
525,  79  Am.  St.  Rep.  446.  ($10,000  to  lineals  and  $5,000  to  collaterals  void 
under  the  wording  of  the  Minnesota  constitution  that  the  tax  is  to  be  laid  on 
inheritances  above  a  fixed  and  specified  sum.)  State  v.  Ferris,  53  Ohio  St.  314, 
41  N.  E.  579,  30  L.  R.  A.  218.  In  re  Cope,  191  Pa.  St.  1,  43  A.  79,  29  Pittsb. 
Leg.  J.  N.  S.  379,  45  L.  R.  A.  316,  71  Am.  St.  Rep.  749,  44  Wkly.  Notes  Cas.  89. 
(This  decision  is  based  on  the  peculiar  Pennsylvania  theory  that  the  inheritance 
tax  is  a  property  tax  and  is  not  of  assistance  in  other  jurisdictions.) 

[Retroactive  law  as  affecting  exemptions,  see  ante,  ss.  79,  88.] 

Sec.  240.    Validity  of  Tax  on  Whole  Estate  which  Exceeds  the 
Exemption. 

The  tax  is  commonly  held  vaHd,  although  imposed  on  the  whole 
inheritance,  where  it  exceeds  the  exemption,^  although  the  contrary 
result  has  been  reached  on  the  ground  that  the  tax  was  not  uniform 
unless  confined  to  the  excess  above  the  exemption .^ 

^  Appeal  of  Nettleton,  76  Conn.  235,  241,  56  A.  565  (holding exemption  arbitrary 
and  unreasonable  but  valid).  Gilbertson  v.  McAuley,  117  Iowa  522,  91  N.  W.  788. 
In  re  Fox,  154  Mich.  5.  State  v.  District  Court,  41  Mont.  357,  109  P.  438,  440. 
In  re  Sherwell,  125  N.  Y.  376,  26  N.  E.  464,  affirming  12  N.  Y.  Suppl.  200,  re- 
versing 11  N.  Y.  Suppl.  897.  In  re  McKennan,  25  S.  D.  369,  126  N.  W.  611, 
616,  reversed  on  rehearing  130  N.  W.  33.  State  v.  Alston,  94  Tenn.  674,  30 
S.  W.  750,  28  L.  R.  A.  178. 

2  Drew  V.  Tifft,  79  Minn.  175,  81  N.  W.  839,  47  L.  R.  A.  525,  79  Am.  St.  Rep. 
446.  State  v.  Bazille,  87  Minn.  500,  92  N.  W.  415,  94  Am.  St.  Rep.  718.  State 
V.  Ferris,  53  Ohio  St.  314,  41  N.  E.  579,  30  L.  R.  A.  218.  SeeBeals  v.  State,  139 
Wis.  544,  554,  121  N.  W.  347.  State  v.  Handlin,  (Ark.  1911,)  139  S.  W.  1112  (up- 
holding law  exempting  portion  of  bequest  above  $50,000).    See  further,  s.  62,  n.  6. 

Doctrine  Stated.  The  right  or  privilege  of  receiving  or  succeeding  to  property 
is  valuable  in  proportion  to  the  value  of  the  property  received.  It  cannot  be 
consistently  said  that  the  right  to  receive  twenty  thousand  dollars  is  of  no  value, 
and  that  the  right  to  receive  twenty  thousand  and  one  dollars  is  of  the  value 
of  two  hundred  dollars  and  one  cent. 


196  INHERITANCE  TAX  LAW.  [§241. 

Again,  he  who  uses  the  right  or  privilege  of  receiving  property  of  the  value  of 
twenty  thousand  and  one  dollars  and  pays  therefor  a  tax  of  two  hundred 
dollars  and  one  cent,  is  not  equally  benefited  for  the  tax  paid  as  he  who  uses 
the  same  right  or  privilege  of  receiving  property  of  the  value  of  twenty  thousand 
dollars  without  paying  any  tax  whatever  for  the  use  of  such  right.  State  v. 
Ferris,  53  Ohio  St.  314,  41  N.  E.  579,  30  L.  R.  A.  218. 

Sec.  241.    Construction. 

It  is  often  said  that  exemptions  should  be  strictly  construed,' 
especially  against  an  exemption  yielding  absurd  results,^  but  we 
believe  the  true  rule  is  that,  as  the  inheritance  tax  is  a  special  tax, 
the  intention  to  impose  it  in  any  case  must  be  clearly  expressed 
and  words  of  exception  should  be  liberally  construed.^  Charitable 
bequests,  however,  should  be  upheld  and  given  effect  whenever 
possible,  and  the  fact  that  the  statute  may  exempt  these  bequests 
from  the  payment  of  the  inheritance  tax  is  no  reason  for  departing 
from  or  modifying  this  ancient  rule  of  construction  favoring  charit- 
able gifts.*  Exemptions  should  be  given  the  same  construction  as 
similar  language  in  general  tax  laws.^  Exemptions,  like  other  tax 
laws,  are  prospectively  construed.^ 

Un  re  Bull's  Estate,  153  Cal.  715,  96  P.  366.  State  v.  N.  Y.  Meeting  of  Friends, 
61  N.  J.  Eq.  620,  48  A.  227.  In  re  Vineland  Historical  and  Antiquarian  Society, 
66  N.  J.  Eq.  291,  56  A.  1039.  In  re  Stewart,  131  N.  Y.  274,  281,  30  N.  E.  184, 
14  L.  R.  A.  836.  In  re  Davis,  98  N.  Y.  App.  Div.  546,  90  N.  Y.  Suppl.  244. 
Barringer  v.  Cowan,  55  N.  C.  436.  In  re  Hickok,  78  Vt.  259,  62  A.  724.  See 
further,  ante,  s.  32. 

* 'Exemption  is  a  matter  of  grace  on  the  part  of  the  legislature  and  cannot 
be  claimed  beyond  the  extent  to  which  a  law-making  body  has  seen  fit  to  allow 
it."    In  re  Timken's  Estate,  158  Cal.  51,  109  P.  608. 

2/»  re  Bull,  153  Cal.  715,  96  P.  366. 

3/»  re  Mergentime,  195  N.  Y.  572,  88  N.  E.  1125,  affirming  129  N.  Y.  App. 
Div.  367,  113  N.  Y.  Suppl.  948.  Matter  of  Enston,  113  N.  Y.  174,  21  N.  E.  87, 
3  L.  R.  A.  464.  Matter  of  Fayerweather,  143  N.  Y.  114,  38  N.  E.  278.  Matter  of 
Harbeck,  161  N.  Y.  211,  55  N.  E.  850. 

"It  is  an  old  familiar  rule  of  the  English  courts,  applicable  to  all  forms 
of  taxation,  and  particularly  special  taxes,  that  the  sovereign  is  bound  to  express 
its  intention  to  tax  in  clear  and  unambiguous  language,  and  that  a  liberal  con- 
struction be  given  to  words  of  exception  confining  the  operation  of  duty,  .  .  . 
though  the  rule  regarding  exemptions  from  general  laws  imposing  taxes  may  be 
different."  Per  Brown,  J.,  in  Eidman  v.  Martinez,  184  U.  S.  578,  583,  22  Sup. 
Ct.  515,  46  L.  Ed.  697,  where  the  court  quotes  as  sustaining  its  doctrine  In  re 
Howell,  147  Pa.  St.  164,  23  A.  403.  In  re  Cager,  111  N.  Y.  343,  18  N.  E.  866. 
KnowUon  v.  Moore,  178  U.  S.  41,  20  Sup.  Ct.  747,  44  L.  Ed.  969. 

^In  re  Graves,  242  111.  23,  89  N.  E.  672,  34  A.  S.  R.  302. 


§  242.]  EXEMPTIONS  IN  GENERAL.  197 

Charity.  The  exemption  clause  in  the  Iowa  inheritance  statute  is  to  be 
liberally  construed  to  permit  the  benevolent  purpose  of  the  exemption.  Morrow 
V.  Smith,  145  Iowa  514, 124  N.  W.  316.    In  reSpangler,  148  Iowa  333, 127  N.  W.  625. 

Un  re  Balleis,  144  N.  Y.  132,  134,  38  N.  E.  1007,  affirming  78  Hun  275. 

^Sherrill  v.  Christ  Church,  121  N.  Y.  701,  703,  25  N.  E.  50,  reversing  In  re 
Van  Kleeck,  55  Hun  472.  Contra,  Roman  Catholic  Church  v.  Niks,  86  Hun  221, 
33  N.  Y.  Suppl.  243.  See  In  re  Vanderbilt,  68  N.  Y.  App.  Div.  27,  74  N.  Y. 
Suppl.  450,  citing  In  re  Huntington,  168  N.  Y.  399,  61  N.  E.  643. 

Sec.  242.     No  Implied  Exemptions. 

Where  the  law  imposes  the  tax  in  general  terms,  only  those  plainly 
exempt  from  it  are  excluded  from  its  provisions.^  So  it  has  been 
held  that  a  'Vidow"  of  a  son  does  not  include  a  former  wife  of  a 
son  who  had  married  again  ;2  that  an  exemption  of  nephews  and 
nieces  does  not  cover  grandnieces,^  or  the  nephews  and  nieces  of  the 
husband  or  wife  of  the  decedent.*  So  brothers-in-law  and  sisters- 
in-law,^  or  a  step-sister,6  have  been  held  liable  to  tax  where  not 
specifically  named  as  exempt,  although  half-brothers  have  been 
held  exempt.^ 

^A  grandmother  is  liable  to  pay  the  tax,  although  the  act  is  called  a  collateral 
inheritance  law,  as  she  is  not  named  as  exempt.  McDowell  v.  Addams,  45  Pa.  St. 
(9  Wright)  430.  A  husband  claimed  that  a  deduction  should  be  made  from  the 
estate  of  his  wife  of  the  exemptions  enumerated  in  the  New  York  statute  of  things 
which  he  would  have  been  entitled  to  had  they  existed,  but  as  they  did  not  exist 
he  was  nevertheless  entitled  to  receive  their  assumed  cash  value  in  lieu  of  them, 
and  that  accordingly  such  value  is  no  part  of  the  estate  to  be  transferred  under  the 
will  and  subject  to  the  tax.  The  court  decides  that  no  such  exemption  should  be 
allowed,  as  the  tax  law  itself  makes  no  provision  for  the  deduction  from  the 
taxable  estate  of  the  value  of  articles  which  would  have  been  exempted  for  the 
use  of  husband  or  wife  had  such  articles  existed,  but  which  do  not  in  fact  exist. 
In  re  Libolt,  102  N.  Y.  App.  Div.  29,  92  N.  Y.  Suppl.  175. 

"^Commonwealth  v.  Powell,  51  Pa.  St.  (1  P.  F.  Smith)  438. 

^In  re  Bates,  7  Ohio  N.  P.  625,  5  Ohio  S.  &  C.  P.  Dec.  547.  In  re  Simon, 
7  Ohio  N.  P.  667,  39  Wkly.  L.  Bui.  369. 

*/«  re  Bates,  7  Ohio  N.  P.  625,  5  Ohio  S.  &  C.  P.  Dec.  547.  In  re  Wolf,  48 
Ohio  Wkly.  L.  Bui.  211. 

^  In  re  Thomson,  48  Ohio  Wkly.  L.  Bui.  212.  Estate  of  McDermott,  48  Ohio  Wkly. 
L.  Bui.  211. 

Bequest  Back  to  Family  of  Original  Owner.  Where  the  husband  dies 
leaving  his  property  to  his  wife  absolutely  and  on  her  death  the  property  goes 
back  to  the  brothers  and  sisters  of  the  deceased  husband  the  inheritance  tax  is 
to  be  collected,  as  it  is  a  transfer  of  property  to  brothers-in-law  and  sisters-in- 
law  of  the  testator.  In  re  Stephenson,  48  Ohio  Wkly.  L.  Bui.  212.  In  re  McDer- 
mott, 48  Ohio  Wkly.  L.  Bui.  211. 

«/»  re  Thomson,  48  Ohio  Wkly.  L.  Bui.  212. 

Un  re  Ormsby,  7  Ohio  N.  P.  542,  5  Ohio  S.  &  C.  P.  Dec.  553. 


198  INHERITANCE  TAX  LAW.  [§243. 

Sec.  243.    Whether  Based  on  Estates  of  Beneficiaries  or  of 
Decedents. 

Exemptions  of  minimum  amounts  apply  to  the  whole  estate  under 
some  statu tes,i  which  method  of  reckoning  exemptions  is  valid .^ 
although  exemptions  may  be  graded  according  to  the  size  of  the 
estates  of  each  beneficiary.^ 

^McGhee  v.  State,  105  Iowa  9,  74  N.  W.  695.  Heriott  v.  Bacon,  110  Iowa  342,  81 
N.  W.  701.  The  court  distinguishes  State  v.  Hamlin,  86  Me.  495,  30  A.  76, 
25  L.  R.  A.  632,  41  Am.  St.  Rep.  569n,  as  in  that  state  other  provisions  of  the 
statute  unequivocably  indicate  the  opposite  result.  Callahan  v.  Woodhridge,  171 
Mass.  595,  599,  51  N.  E.  176.  State  v.  District  Court,  41  Mont.  357,  109  P. 
438,  440.  In  re  Hoffman,  143  N.  Y.  327,  38  N.  E.  311,  modifying  76  Hun  399, 
5  Misc.  439  (St.  1892).  In  re  Corbett,  171  N.  Y.  516,  64  N.  E.  209,  affirming 
55  N.  Y.  App.  Div.  124.  In  re  Costello,  189  N.  Y.  288,  292,  82  N.  E.  139,  modify- 
ing 117  N.  Y.  App.  Div.  807,  103  N.  Y.  Suppl.  6.  In  re  Miller,  5  Dem.  Surr. 
(N.  Y.)  132,  45  Hun  244.  In  re  Taylor,  6  Misc.  Rep.  277,  27  N.  Y.  Suppl.  232. 
In  re  Flynn,  30  N.  Y.  Suppl.  388.  In  re  Hall,  88  Hun  68,  68  N.  Y.  St.  Rep. 
538,  34  N.  Y.  Suppl.  616.  In  re  Birdsall,  22  Misc.  Rep.  180,  49  N.  Y.  Suppl. 
450,  2  Gibbons  293,  following  In  re  Hoffman,  143  N.  Y.  327,  38  N.  E.  311.  In  re 
De  Graaf,  24  Misc.  Rep.  147,  53  N.  Y.  Suppl.  591,  2  Gibbons  516.  In  re  Curtis, 
31  Misc.  Rep.  83,  64  N.  Y.  Suppl.  574  (March,  1900).  In  re  Rosendahl,  40 
Misc.  Rep.  542,  82  N.  Y.  Suppl.  992.  (The  court  remarks  that  the  cases  of  In  re 
Bliss,  6  N.  Y.  App.  Div.  192,  39  N.  Y.  Suppl.  875,  and  In  re  Conklin,  39  Misc. 
Rep.  771,  80  N.  Y.  Suppl.  1124,  have  been  reversed  in  In  re  Corbett,  171  N.  Y. 
516,  64  N.  E.  209,  affirming  55  N.  Y.  App.  Div.  124,  67  N.  Y.  Suppl.  46.)  In  re 
Garland,  88  N.  Y.  App.  Div.  386,  84  N.  Y.  Suppl.  630,  reversing  40  Misc.  579, 
■  82  N.  Y.  Suppl.  989.  In  re  McMurray,  96  N.  Y.  App.  Div.  128,  89  N.  Y.  Suppl. 
71.  In  re  Mock,  113  N.  Y.  App.  Div.  913,  100  N.  Y.  Suppl.  1130,  reversing 
49  Misc.  283,  99  N.  Y.  Suppl.  236,  on  the  authority  of  In  re  Corbett,  171  N.  Y. 
516,  64  N.  E.  209.  In  re  Mason,  69  Misc.  280,  126  N.  Y.  Suppl.  998.  Contra, 
overruled,  In  re  Skillman,  66  N.  Y.  St.  Rep.  140,  10  Misc.  Rep.  642,  32  N.  Y. 
Suppl.  780.  In  re  Mixter  (1891),  28  Wkly.  Notes  Cas.  (Pa.)  182,  8  Lane.  L. 
Rev.  256.  Commonwealth  v.  Boyle,  2  Del.  Co.  Rep.  (Pa.)  335.  In  re  Howell, 
10  Pa.  Co.  Ct.  232.  In  re  Mixter,  10  Pa.  Co.  Ct.  409.  Dixon  v.  Ricketts,  26 
Utah  215,  72  P.  947.  Black  v.  State.  113  Wis.  205,  213,  89  N.  W.  522,  90  Am. 
St.  Rep.  853.     See  further,  ante,  s.  68. 

The  New  York  statute  of  1892  altered  the  pre-existing  law  and  was  followed 
in  the  act  of  1896.  In  re  Costello,  189  N.  Y.  288,  82  N.  E.  139,  modifying  117 
N.  Y.  App.  Div.  807,  103  N.  Y.  Suppl.  6. 

^Minot  V.  Winthrop,  162  Mass.  113,  23,  124.  State  w.  Alston,  94  Tenn.  674, 
682.  Stellwagen  v.  Durfee,  130  Mich.  166,  173,  89  N.  W.  728,  8  Detroit  Leg.  N. 
1204. 

The  fact  that  the  burden  of  the  tax  falls  on  persons  who  are  legatees  in 
estates  exceeding  $10,000,  or  more,  under  Conn.  Gen.  Sts.  1902,  ss.  2367-2377, 
is  not  material  to  its  validity.  The  court  notices  the  claim  that  this  incidental 
inequality  in  the  operation  of  the  tax  is  an  arbitrary  distinction,  but  the  court 
says  that  taxation  is  necessarily  arbitrary;   that  the  arbitrary  selection  essential 


§  244.]  EXEMPTIONS  IN  GENERAL.  199 

to  taxation  is  controlled  by  the  legislative  and  not  by  judicial  discretion.  The 
Connecticut  constitution  did  not  require  that  the  tax  should  be  uniform  or  equal 
and  the  fact  that  the  stress  of  the  tax  may  fall  on  some  more  than  others  does 
not  render  it  void.  And  this  is  due  to  the  mere  accident  of  changing  circum- 
stances. The  law  is  simply  and  purely  an  imposition  of  an  indirect  tax  or  duty 
and  it  is  within  the  field  where  the  legislature  has  absolute  discretion.  Appeal 
of  Nettleton,  76  Conn.  235,  241,  56  A.  565.  Contra,  State  v.  Ferris,  53  Ohio  St. 
314,  41  N.  E.  579,  30  L.  R.  A.  218;  9  Ohio  Cir.  Ct.  298.  Black  v.  State,  113  Wis. 
205,  89  N.  W.  522. 

^In  re  Wilmerding's  Estate,  117  Cal.  281,  49  P.  181.  People  v.  Koenig,  37 
Colo.  283,  85  P.  1129.  Booth  v.  Commonwealth,  130  Ky.  88,  113  S.  W.  61. 
Succession  of  Abadie,  118  La.  Ann.  708,  43  S.  306.  State  v.  Hamlin,  86  Me.  495, 
508,  30  A.  76,  41  Am.  St.  Rep.  569,  25  L.  R.  A.  632.  Stellwagen  v.  Durfee,  130 
Mich.  166,  89  N.  W.  728,  8  Detroit  Leg.  N.  1204  Neilson  v.  Russell,  76  N.  J.  L. 
655,  71  A.  286,  reversing  76  N.  J.  L.  27,  69  A.  476.  In  re  Cager,  111  N.  Y. 
343,  347,  19  N.  Y.  St.  497,  18  N.  E.  866,  affirming  46  Hun  657  (St.  1885,  c. 
483).  In  re  Howe,  112  N.  Y.  100,  19  N.  E.  513,2  L.  R.  A.  825,  affirming  48 
Hun  235.  In  re  Smith,  5  Dem.  Surr.  (N.  Y.)  90.  In  re  Hopkins,  6  Dem.  Sum  1. 
In  re  McCready,  6  Dem.  Surr.  292.  McVean  v.  Sheldon,  48  Hun  163.  In  re 
Thomson,  48  Ohio  Wkly.  L.  Bui.  212.  Knowlton  v.  Moore,  178  U.  S.  41,  69, 
20  S.  Ct.  747,  44  L.  Ed.  969.  Contra,  and  overruled,  22  Opinions  of  the  Attorney 
General,  298  (January  5,  1899). 

The  United  States  statute  of  1898  imposes  the  duty  on  the  particular 
legacies  or  distributive  shares  and  not  on  the  whole  personal  estate.  This  appears 
by  the  title  which  describes  as  subject  to  taxation  "legacies  and  distributive 
shares  of  personal  property,"  and  also  appears  by  the  opening  words  of  section  29 
describing  the  tax  as  being  upon  "any  interest  which  may  have  been  transferred 
by,"  etc.  The  provisions  for  collection  of  the  tax  conjtained  in  section  30  of  the 
act  confirm  the  construction  that  the  passing  of  each  legacy  or  distributive  share 
and  not  the  entire  personal  estate  forms  the  subject  of  the  tax.  Knowlton  v. 
Moore,  178  U.  S.  41,  67,  20  S.  Ct.  747,  44  L.  Ed.  969. 

The  fact  that  the  executor  or  administrator  is  required  by  the  statute 
to  pay  the  tax  does  not  make  it  a  tax  against  the  estate  of  testator  or  decedent. 
"Where  it  is  that  the  tax  is  upon  the  succession,  it  is  computed,  not  on  the 
aggregate  valuation  of  the  whole  estate  of  a  decedent  considered  as  a  unit  for 
taxation,  but  on  the  value  of  the  separate  units  into  which  it  is  divided."  State 
V.  Switzler,  143  Mo.  287,  45  S.  W.  245,  quoted  with  approval  in  Booth  v.  Common- 
wealth, 130  Ky.  88,  113  S.  W.  61. 

Sec.  244.    Whether  Calculated  on  Whole  Estate  or  on  Por- 
tion within  State. 

Exemptions  should  in  Massachusetts  be  calculated  only  on  the 
portion  within  the  state  of  the  estate  of  a  non-resident,  according 
to  a  recent  decision  which  reverses  the  practice  of  the  taxing  au- 
thorities. The  court  holds  in  substance  that,  in  determining  the 
question  whether  a  legatee  is  exempt  under  Massachusetts  law  as 
receiving  less  than  one  thousand  dollars,  only  payments  made  from 


200  INHERITANCE  TAX  LAW.  [§245. 

Massachusetts  property  are  to  be  considered.  So  where  anon- 
resident  dies  leaving  some  property  in  Massachusetts,  a  legatee 
who  receives  over  $5,000  from  the  executor  from  the  property  out- 
side the  state  and  less  than  $1,000  from  the  Massachusetts  prop- 
erty is  not  taxable  in  Massachusetts  under  the  act  of  1909,  which 
deals  only  with  property  within  the  state. 

Attorney  General  v.  Barney,  211  Mass.  134,  97  N.  E.  750. 

The  following  assessment  of  an  estate  of  a  resident  of  Massachusetts  who  died 
in  October,  1911,  illustrates  the  Connecticut  practice:  — 

DESCRIPTION  OF  THE   PROPERTY  TAXED. 
10  shares  New  York,  New  Haven  &  Hartford  R.  R.  Co.,  133 $1,330.00 

Estate  in  Connecticut $1,330.00 

Total  estate  of  decedent 94,315.95 

Lineal:  — 

Taxable  bequests,  gross    $1,330.00 

Exemption  allowed  resident  estates  of  Connecticut  passing  entirely 

to  lineal  beneficiaries  is 10,000.00 

Net  exemption  to  which  this  estate  is  entitled  is  that  proportion  of 
the  above  exemption  which  the  estate  in  Connecticut  bears  to 
the  whole  estate,  1330/94315,  or  1.41  per  cent 141.00 

Taxable  estate,  net $1,189.00 

Tax  rate    .01 


$11.89 

I  find  the  amount  of  the  Tax  due  the  State  of  Connecticut,  from  the  above 
estate  is  eleven  and  89/100  Dollars  ($11.89),  which  is  payable  to  the  treasurer 
of  this  state. 

(Signed)  WM.  H.  CORBIN, 

Tax  Commissioner. 
Hartford,  Conn.,  February  10,  1912. 


Sec.  245.     Real  as  well  as  Personal  Property  Considered. 

The  exemption  under  the  New  York  statutes  should  be  fixed  by 
the  total  amount  of  real  and  personal  property  combined,  and 
depends  on  the  statutory  definition  of  "property"  in  the  act. 

In  re  Fisher,  96  N.  Y.  App.  Div.  133,  89  N.  Y.  Suppl.  102.  In  re  Hallock,  42 
Misc.  Rep.  473,  87  N.  Y.  Suppl.  255. 


§§246-249.]  EXEMPTIONS  IN  GENERAL.  201 

Sec.  246.    Amounts  Reckoned  without  Deduction  for  Tax 
or  Expenses. 

The  exemptions  may  be  calculated  on  the  amounts  at  the  testa- 
tor's death  and  not  after  deducting  the  inheritance  tax  ^  or  expenses 
of  administration. 2 

^The  tax  is  payable  upon  the  value  of  the  legacy  less  the  exemption,  and  the 
amount  of  the  tax  is  not  to  be  deducted  from  the  legacy  and  the  tax  computed 
upon  the  balance.  In  re  Hooper,  6  Low.  D.  560,  4  Ohio  N.  P.  186  (decided  in 
1897). 

2  Callahan  v.  Woodbridge,  171  Mass.  595,  599,  51  N  E.  176  (under  Mass.  St. 
1891,  c.  425,  s.  1,  holding  that  expenses  of  administration  are  not  to  be  con- 
sidered in  determining  whether  the  value  of  the  whole  estate  is  above  the  exemp- 
tion although  for  determining  on  what  amount  the  tax  is  to  be  computed  expenses 
must  be  deducted.)     See,  however,  post,  Cb.pter  XLI. 

Sec.  247.    Amounts  Reckoned  with  Discount  for  Delay  in 
Payment. 

Bequests  of  five  hundred  dollars  each  to  several  charitable  insti- 
tutions are  exempt,  as  they  are  payable  at  the  end  of  a  year  from 
the  date  of  the  appointment  of  the  executors,  and  the  cash  value 
therefore  is  less  than  five  hundred  dollars. 

In  re  Underhill,  20  N.  Y.  Suppl.  134,  2  Con.  Surr.  262,  following  In  re  Peck, 
9  N.  Y.  Suppl.  465,  24  Abb.  N.  Cas.  365,  2  Con.  Surr.  201.  Contra,  In  re  Bird, 
32  N.  Y.  St.  899,  11  N.  Y.  Suppl.  895,  2  Con.  Surr.  376. 

Sec.  248.    When  Legacy  Payable  in  Instalments. 

Where  a  will  provides  for  the  creation  of  a  trust  estate  and  the 
payment  of  the  principal  to  him  in  instalments  as  he  reaches  cer- 
tain designated  ages,  there  is  but  one  legacy  to  him  and  but  one 
exemption.  Where  the  exemption  has  already  been  deducted  from 
the  first  instalment  of  the  residue  of  the  estate,  which  has  already 
been  paid  to  him,  there  can  be  no  further  exemption  as  to  him. 

State  V.  Probate  Court,  100  Minn.  192,  197.  110  N.  W.  865. 
State  V.  Probate  Court,  112  Minn.  279.  128  N.  W.  18,  20. 


Sec.  249.  In  Case  of  Progressive  Rates. 

Where  a  progressive  rate  exists  the  exemption  should  be  deducted 
from  the  first  amount  subject  to  the  primary  rate  in  each  distributive 
share  rather  than  from  the  distributive  share  as  a  whole. 

State  V.  Probate  Court,  112  Minn.  279,  128  N.  W.  18,  20.  The  entire  amount  of 
each  share  whether  exempt  or  not  is  considered  for  the  purpose  of  fixing  the  rate 


202  INHERITANCE  TAX  LAW.  [§250. 

of  taxation.  The  exemption  is  to  be  deducted  from  the  first  amount  subject  to 
tax  and  the  tax  fixed  on  that  first  amount  less  the  exemptions.  In  re  Timken's 
Estate,  158  Cal.  51,  109  P.  608, 

"If  the  statute  exempted  $20,000  (or  any  other  sum)  of  every  estate  from 
taxation,"  said  this  court,  "it  would,  in  our  judgment,  be  equal  and  valid,  even 
in  imposing  a  graded  tax,  as  it  does."  State  v.  Ferris,  9  Ohio  Cir.  Ct.  298,  which 
language  really  explains  the  decision  on  appeal  in  State  v.  Ferris,  53  Ohio  St.  314. 

Sec.  250.    Effect  of  General  Tax  Exemptions. 

Neither  general  property  exemptions  from  taxation  ^  nor  con- 
stitutional limitations  on  exemptions  ^  control  inheritance  taxes. 

'^ Booth  V.  Commonwealth,  130  Ky.  88,  113  S.  W.  61.  Succession  of  Kohn,  115 
La.  Ann.  71,  38  S.  898.  In  re  Stanton,  142  Mich.  491,  105  N.  W.  1122, 12  Detroit 
Leg.  N.  829.  In  re  Knoedler,  140  N.  Y.  377,  35  N.  E.  601,  affirming  68  Hun  150. 
Matter  of  Whiting,  150  N.  Y.  27,  34  L.  R.  A.  232,  55  Am.  St.  Rep.  640.  In  re 
Forrester,  58  Hun  611,  12  N.  Y.  Suppl.  774.  In  re  Kucielski,  144  N.  Y.  App. 
Div.  100,  128  N.  Y.  Suppl.  768.  In  re  Finnen,  196  Pa.  St.  72,  46  A.  269.  Miller 
V.  Commonwealth,  27  Gratt.  (Va.)  110,  118.  See,  however.  In  re  Kimberly, 
27  N.  Y.  App.  Div.  470,  50  N.  Y.  Suppl.  586. 

The  tax  imposed  by  N.  Y.  St.  1896,  c.  908,  is  a  tax  on  the  right  of  succession 
and  not  on  property;  and  therefore  it  is  immaterial  that  the  trust  fund  passing 
by  will  is  invested  in  bonds  of  the  state  of  New  York  or  incorporated  companies 
liable  to  taxation  on  their  own  capital.  In  re  Dows,  167  N.  Y.  227,  230,  60  N.  E. 
439,  52  L.  R.  A.  433,  88  Am.  St.  Rep.  508,  affirming  60  N.  Y.  App.  Div.  630 
(affirmed  sub  nomine,  Orr  v.  Gilman,  183  U.  S.  278,  22  S.  Ct.213,  46  L.  Ed.  196). 

"There  are  three  reasons  for  holding  that  the  legislature  intended  the  tax 
to  be  measured  by  property  which  it  is  within  the  power  of  the  state  to  tax, 
and  not  by  property  which  state  policy  has  selected  for  purposes  of  general 
taxation.  One  reason  is  that  the  statute  is  adopted,  together  with  a  judicial 
interpretation  of  the  language  above  quoted,  from  the  state  of  New  York. 
Stellwagen  v.  Wayne  Probate  Judge,  130  Mich.  166.  And,  as  interpreted  by  the 
courts  of  New  York,  the  design  of  the  legislature  to  tax  the  transfer  of  everything 
which  it  has  the  power  to  tax  is  found  in  the  act.  Matter  of  Whiting,  150  N.  Y. 
27,  34  L.  R.  A.  232,  55  Am.  St.  Rep.  640.  Matter  of  Houdayer,  150  N.  Y.  37, 
55  Am.  St.  Rep.  642,  34  L.  R.  A.  235.  Matter  of  Sherman,  153  N.  Y.  1.  Matter  of 
Hellman,  174  N.  Y.  254,  95  Am.  St.  Rep.  582.  See,  also,  Blackstone  v.  Miller, 
188  U.  S.  189;  Plummer  v.  Coler,  178  U.  S.  115.  The  second  reason  is  that  a 
policy  of  general  taxation,  which  recognizes,  to  some  extent  at  least,  the  rule 
of  universal  succession  and  the  theory  ot  taxation  of  personal  property,  gener- 
ally, at  the  domicile  of  the  owner,  is  not  logically  controlling  of  the  interpretation 
of  a  statute  imposing  a  tax  upon  a  right  of  succession  or  upon  a  transfer  of 
property  which  can  only  be  tangible  and  enforceable  —  be  made  effective  —  in 
the  jurisdiction,  and  by  virtue  of  the  laws  and  institutions,  of  the  situs  of  the 
property.  A  third  reason  is  that,  as  a  tax  upon  succession  or  transfer,  uniformity 
of  operation  and  an  equal  measure  of  the  tax  to  the  property  of  residents  and 
non-residents  can  be,  with  no  other  construction,  secured.  There  is  property 
situated  within  the  state,  belonging  to  non-residents,  which  the  state  does  not 
tax,  generally  {Village  of  Howell  v.  Gordon,  127  Mich.  517;  Baars  v.  City  of  Grand 


§251.]  EXEMPTIONS  IN  GENERAL.  203 

Rapids,  129  Mich.  672),  though  it  might  tax  it  (Catlin  v.  Hull,  21  Vt.  152; 
New  Orleans  v.  Stempel,  175  U.  S.  309).  Property  of  the  same  class  owned  by 
residents  is  taxed,  generally."  Per  Ostrander,  J,,  in  In  re  Stanton,  142  Mich. 
491,  105  N.  W.  1122,  12  Detroit  Leg.  N.  829. 

"It  is  very  plainly  shown  in  Plummer  v.  Coler,  178  U.  S.  115,  that  property 
which  is  not  taxable  as  such  may  constitutionally  be  considered  under  a  statute 
in  fixing  the  amount  of  an  excise  tax."  Per  Knowlton,  C.  J.,  in  Kingsbury  v. 
Chapin,  196  Mass.  533,  537,  82  N.  E.  700. 

2  State  V.  Henderson,  160  Mo.  190,  217,60  S.  W.  1093.  State  v.  Gmlbert,70  Ohio 
St.  229,  253,  overruling  on  this  point  State  v.  Ferris,  53  Ohio  St.  314,  41  N.  E. 
579,  30  L.  R.  A.  218.  In  re  McKennan,  S.  D.  1911, 126  N.  W.  611,  615,  reversed 
on  other  grounds  on  rehearing,  130  N.  W.  33. 

The  Pennsylvania  Rule.  The  Pennsylvania  constitution  expressly  authorizes 
the  legislature  to  exempt  from  taxation  four  specified  classes  or  kinds  of  property. 
"This  specific  delegation  of  authority  to  exempt  impliedly  prohibits  express  exemp- 
tion from  taxation  of  any  other  property,  but  to  place  this  matter  beyond  the 
reach  of  doubt,  it  is  expressly  ordained  in  section  2,  that  'all  laws  exempting 
property  from  taxation  other  than  the  property  above  enumerated  shall  be  void.' 
These  limitations  on  the  power  of  the  legislature  mean  something.  They  are 
plainly  intended  to  secure,  as  far  as  possible,  uniformity  and  relative  equality 
of  taxation,  by  prohibiting  generally  the  exemption  of  a  certain  part  of  any 
recognized  class  of  property,  and  subjecting  the  residue  to  a  tax  that  should 
be  borne  uniformly  by  the  entire  class,  and  by  guarding  against  any  other  device 
that  necessarily  or  intentionally  infringes  on  the  established  rules  of  uniformity 
and  relative  equality  which,  as  we  have  seen,  underlie  every  just  system  of 
taxation.  In  any  view  that  can  reasonably  be  taken  of  these  limitations,  it  must 
be  manifest  to  any  reflecting  mind  that  the  act  in  question  offends  against  them 
by  undertaking  to  wholly  exempt  from  taxation  the  personal  property  of  a 
very  large  percentage  of  decedents'  estates,  and  impose  increased  and  unequal 
burdens  on  the  residue  of  the  same  class  of  property."  Per  Sterrett,  C.  J.,  in 
In  re  Cope,  191  Pa.  St.  1,  21,  43  A.  79,  29  Pittsb.  Leg.  J.  N.  S.  379,  45  L.  R.  A. 
316,  71  Am.  St.  Rep.  749,  44  Wkly.  Notes  Cas.  89.  (This  decision  is  based  on  the 
peculiar  doctrine  that  the  inheritance  tax  is  a  property  tax.) 

Sec.  251.    Of  Persons  Exempt  under  General  Law. 

Exempting  beneficiaries  which  are  by  law  exempt  from  taxation 
is  confined  to  beneficiaries  exempt  under  local  law,^  but  may  include 
societies  exempt  under  general  law  as  well  as  under  a  special  exemp- 
tion ,2  and  has  been  held  void  under  a  constitution  requiring  a  tax 
on  all  inheritances  above  a  fixed  and  certain  sum.* 

1  Minot  v.  Winthrop,  162  Mass.  113,  126,  26  L.  R.  A.  259.  Catlin  v.  Trinity 
College  Trustees,  113  N.  Y.  133,  142,  22  N.  Y.  St.  189,  20  N.  E.  864,  3  L.  R.  A. 
206,  affirming  49  Hun  278,  17  N.  Y.  St.  707,  1  N.  Y.  Suppl.  808. 

The  United  States  is  not  exempt  as  a  domestic  corporation.  In  re  Merriam, 
141  N.  Y.  479, 484, 36  N.  E.  505,  affirmed  in  United  States  v.  Perkins,  163  U.  S.  625. 

2  In  re  Miller,  5  Dem.  Surr.  (N.  Y.)  132,  45  Hun  244. 

3  Drew  V.  Tifft,  79  Minn.  175, 81  N.  W.  839, 47  L.  R.  A.  525, 79  Am.  St.  Rep.  446. 


204  INHERITANCE  TAX  LAW.  [§252. 

Sec.  252.    Testing  Status  of  Corporation.  —  When  Exempt 
by  General  Law. 

The  status  of  a  corporation  as  subject  to  the  inheritance  tax 
should  be  decided  entirely  by  its  charter  and  the  law  governing  it, 
and  evidence  to  show  what  business  it  actually  does  is  inadmissible 
in  New  York.^  But  in  New  Jersey  it  is  not  enough  that  it  is 
incorporated  under  an  act  for  an  exempt  purpose,  or  avows  itself 
to  be  organized  for  that  purpose.  An  institution  claiming  exemp- 
tions must  disclose  the  objects  to  which  it  is  bound  to  devote  its 
property .2  Where  a  corporation  is  organized  under  a  statute 
which  permits  incorporation  for  various  objects,  some  of  which 
would  render  it  exempt  from  taxation,  the  obvious  test  of  exemption 
is  not  incorporation  under  an  act  permitting  incorporation  for 
objects  that  would  exempt,  but  incorporation  for  objects  that 
entitle  to  exemption.  The  corporation  is  not  exempt  unless  it  is 
actually  incorporated  for  objects  which  entitle  it  to  be  exempt.^ 

The  exemption  under  the  New  York  statute  of  1885,  of  charitable 
corporations  which  are  exempt  by  law,  is  not  confined  to  corporations 
the  property  of  which  is  completely  exempt,  but  may  apply  to  a  cor- 
poration which  is  exempt  from  taxation  up  to  a  certain  valuation  in 
its  property,  as  it  is  assumed  that  the  corporation  will  not  exceed  its 
corporate  powers  and  take  more  property  than  is  authorized.^ 

An  exemption  of  charitable  and  religious  societies,  the  property 
of  which  is  by  law  exempt,  does  not  require  that  the  exemption  shall 
only  apply  when  the  association  holds  all  its  property  free  from 
yearly  taxation.  The  sole  test  suggested  by  the  statute  is  to  as- 
certain whether  the  legatee  is  a  charitable,  educational  or  religious 
society  whose  property,  when  used  exclusively  in  carrying  out  the 
purposes  of  the  association,  is  evempt  from  taxation.  It  is  the 
character  of  the  institution  and  the  purposes  it  was  organized  to 
accomplish  and  its  liability  or  non-liability  to  taxation  for  property 
devoted  to  those  purposes  that  determine  whether  it  falls  within 
or  without  the  exception  provided  in  the  inheritance  tax  law.^  Under 
the  same  provision  in  Massachusetts  it  appeared  that  under  the 
Massachusetts  statutes  there  was  no  general  exemption  from  taxa- 
tion of  property  given  such  societies,  but  certain  property  of  reli- 
gious associations,  houses  of  worship  and  pews  and  furniture  are 
exempt  from  taxation.  Under  them  the  personal  and  real  property 
of  a  religious  society  is  taxable  even  though  the  income  is  used  to 
support  religious  worship.  The  commonwealth  contended  that 
the  exemption  clause  in  the  inheritance  tax  statute  should  be  con- 


§253.]  EXEMPTIONS  IN  GENERAL.  205 

strued  to  provide  that  property  passing  to  charitable,  educational 
or  religious  societies  is  to  be  exempt  to  the  extent  to  which  the 
property  of  such  societies  or  institutions  is  exempt  by  general  laws. 
But  the  court  finds  that  the  test  should  depend  upon  the  question 
whether  the  institution  is  one  whose  property  is  generally  exempt 
from  taxation.  In  the  case  at  bar  the  property  was  bequeathed 
for  a  parsonage,  and  parsonages  are  not  exempt  from  taxation.  But 
the  court  holds  that  this  is  an  accident,  that  houses  of  religious 
worship  are  the  principal  property  held  by  religious  societies,  and 
that  therefore  a  devise  to  a  religious  society  is  a  devise  to  a  society 
whose  property  is  generally  exempt  from  taxation  and  is  not  sub- 
ject to  an  inheritance  tax.®  The  New  York  court  reached  the  op- 
posite result,  holding  that  exemption  of  any  building  used  by  a 
church  for  public  worship  did  not  constitute  a  general  exemption 
of  the  church  from  taxation  within  the  meaning  of  the  collateral 
inheritance  act,  and  therefore  the  church  is  not  exempt  from  taxa- 
tion upon  a  legacy  of  "ten  thousand  dollars  towards  the  building 
of  a  new  church."^ 

1  In  re  White,  118  N.  Y.  App.  Div.  809,  103  N.  Y.  Suppl.  688. 

2  In  re  Vineland  Historical  and  Antiquarian  Society,  66  N.  J.  Eq.  291,  56  A.  1039. 
3/«  re  Rothschild,  72  N.  J.  Eq.  425,  65  A.  1118,  affirming  71  N.  J.  Eq.  210 
*  In  re  Vassar,  127  N.  Y.  1,  12,  27  N.  E.  394,  reversing  58  Hun  378,  12  N.  Y. 

Suppl.  203. 

'Carter  v.  Whitcomb,  74  N.  H.  482,  485,  69  A.  779. 

^First  Universalist  Society  v.  Bradford,  185  Mass.  310,  70  N.  E.  204. 

'Sherrill  v.  Christ  Church  121  N.  Y.  701,  702,  25  N.  E.  50,  reversing  In  re  Van 
Kleeck,  55  Hun  472. 

Sec.  253.    Exemption  of  Property  otherwise  Taxed. 

Under  the  Louisiana  act  the  inheritance  tax  is  not  to  be  enforced 
when  the  property  donated  or  inherited  shall  have  borne  its  just 
proportion  of  taxes  prior  to  the  death  of  the  decedent.  The  court 
holds  that  "the  values  which  are  liable  to  the  inheritance  tax  are 
to  be  arrived  at  by  deducting  from  the  total  value  of  the  estate  the 
aggregate  amount  of  the  debts  and  special  legacy,  and  then  sub- 
tracting from  the  remainder  the  value  of  the  property  shown  to 
have  previously  borne  its  just  proportion  of  tax,  this  second  remainder 
to  be  divided  in  parts  representing  respectively  the  taxable  inherit- 
ances'* of  the  descendants.^ 

Where  payment  of  the  debts  absorbed  the  whole  amount  of  the 
proceeds  of  the  personal  property  and  the  balance  due  had  to  be 
made  from  the  proceeds  of  the  realty  exempt,  as  it  had  paid  general 


206  INHERITANCE  TAX  LAW.  [§§  254r-255. 

tax  to  satisfy  the  legacies,  the  court  holds  that  there  can  be  no 
question.  The  legacy  from  funds  that  are  not  proceeds  of  property 
exempt  owes  a  tax.  But  where  there  is  an  exemption,  the  fact  of  a 
sale  or  other  disposition  made  necessary  to  the  discharge  of  the 
legacy  does  not  forfeit  the  exemption.  The  character  of  the  prop- 
erty was  fixed  at  the  date  of  the  death  of  the  testator  and  the 
inheritance  tax  is  due  on  a  legacy  not  paid  from  the  proceeds  of 
exempt  property,  but  it  is  not  due  on  a  legacy  necessarily  paid  from 
the  proceeds  of  exempt  property  under  La.  St.  1906,  c.  109,  p.  173.^ 
If  the  law-maker  had  intended  to  include  property  exempt  from 
taxation  he  would  have  said  so.  Non-taxable  bonds  cannot  be 
said  to  have  borne  their  just  proportion  of  taxation,  as  they  are 
exempt  from  such  a  burden.  The  law-maker  evidently  referred 
to  property  subject  to  assessment  and  taxation  on  which  taxes  had 
been  paid  prior  to  the  time  of  the  devolution  of  the  inheritance. 
Exemption  from  taxation  is  strictly  construed  and  cannot  be  read 
into  a  statute  by  inference  or  implication ;  therefore  state  and  mu- 
nicipal bonds  exempt  from  taxation  are  subject  to  the  inheritance 
tax.  The  court  relies  on  Plummer  v.  Coler,  178  U.  S.  115,  20  S.  Ct. 
829,  44  L.  Ed.  998.^ 

^Succession  of  Abadie,  118  La.  Ann.  708,  43  S.  306. 
2  Succession  of  Becker,  118  La.  Ann.  1056,  43  S.  701. 
^Succession  of  Kohn,  115  La.  Ann.  71,  38  S.  898. 

Sec.  254.     Interests  under  Powers. 

Under  a  statute  taxing  transfers  under  the  exercise  of  a  power 
the  exemption  is  reckoned  on  the  transfer  as  passing  from  the  donee 
of  the  power. 

In  re  Seaver,  63  N.  Y.  App.  Div.  283,  71  N.  Y.  Suppl.  544.  See  further, 
ante,  s.  139  et  seg. 

Sec.  255.     Remainder  may  be  Liable  though  Prior  Estate 
Exempt. 

A  remainder  to  collateral  kindred  whose  property  or  estates  are 
declared  to  be  liable  for  taxes  is  subject  to  taxes  although  the  prior 
estate  is  exempt.  Each  recipient  must  stand  upon  his  or  her  own 
relationship  to  the  person  from  whom  the  property  comes  without 
reference  to  the  liability  or  non-liability  of  the  person  taking  the 
property  before  or  after  him. 

Bailey  v.  Drane,  96  Tenn.  (12  Pickle)  16,  33  S.  W.  573.  See  In  re  Cager,  111 
N.  Y.  343,  347,  19  N.  Y.  St.  497,  18  N.  E.  866,  affirming  46  Hun  657. 


§§256-257.1  EXEMPTIONS  IN  GENERAL.  207 

Sec.  256.     **Persons"  Includes  Corporations. 

The  word  "person"  in  an  inheritance  statute  includes  corporations. 

The  omission  in  the  Virginia  statute  of  1867,  c.  64,  s.  3,  of  the  words 
"bodies  politic  and  corporate"  and  of  the  words  "to  any  other  use  than  to  and 
for  the  use  of  the  father,"  etc.,  cannot  be  taken  as  an  indication  of  an  intention 
of  the  legislature  to  exempt  corporations  from  this  tax.  If  the  word  "person" 
in  the  act  embraces  corporations,  then  these  words  were  useless  and  unneces- 
sary and  were  properly  omitted,  and  the  court  finds  that  "person"  here  covers 
corporations.     Miller  v.  Commonwealth,  27  Gratt.  (Va.)  110,  116. 

Sec.  257.    Foreign  Corporations. 

It  is  the  general  rule  in  this  country  that  exemptions  to  charitable^ 
or  religious  2  corporations  are  confined  to  domestic  corporations, 
although  the  foreign  corporation  may  have  a  limited  right  to  hold 
property  in  the  state.^  A  bequest  to  Bowdoin  College,  a  Maine 
institution,  is  not  exempt  from  the  Massachusetts  inheritance  tax, 
although  Bowdoin  College  was  a  corporation  created  by  Massa- 
chusetts by  the  statute  of  1794  before  Maine  was  separated  from 
Massachusetts.  The  court  holds  that  nevertheless  after  the  separa- 
tion it  ceased  to  be  an  institution  incorporated  within  the  state  of 
Massachusetts  within  the  meaning  of  the  Massachusetts  statute, 
and  therefore  it  is  subject  to  tax.'^ 

1  People  V.  Western  Seamen's  Friend  Society,  87  111.  246.  In  re  Speed,  216  111. 
23,  74  N.  E.  809,  108  Am.  St.  Rep.  189,  affirmed  203  U.  S.  553,  27  S.  Ct.  171,  51 
L.  Ed.  314.  In  re  Crawford,  148  Iowa  60,  126  N.  W.  774.  Minot  v.  Winthrop, 
162  Mass.  113,  26  L.  R.  A.  259.  Alfred  University  v.  Hancock,  69  N.  J.  Eq.  470, 
46  A.  178.  In  re  Rothschild,  72  N.  J.  Eq.  425,  65  A.  1118,  affirming  71  N.  J.  Eq. 
210.  In  re  Gopsill  (N.  J.  Prerog.),  77  A.  793.  In  re  McCoskey,  1  N.  Y.  Suppl. 
782,  22  Abb.  N.  Cas.  20,  6  Dem.  Surr.  438.  Catlin  v.  Trinity,  113  N.  Y.  133,  3 
L.  R.  A.  206n.  In  re  Prime,  136  N.  Y.  347,  362,  32  N.  E.  1091,  18  L.  R.  A.  713, 
affirming  64  Hun  50.  Humphreys  v.  State,  70  Ohio  St.  67,  101  Am.  St.  888,  70 
N.  E.  907,  65  L.  R.  A.  776,  affirming  13  Low.  D.  168,  1  C.  C.  N.  S.  1,  14  Cir.  D. 
238  (although  the  foreign  charitable  corporations  have  agencies  in  Ohio). 

^  Minot  V.  Winthrop,  162  Mass.  113,  126,  21  L.  R.  A.  259.  In  re  Balleis,  144 
N.  Y.  132,  38  N.  E.  1007,  affirming  78  Hun  275.  In  re  Smith,  77  Hun  134,  28 
N.  Y.  Suppl.  476.  In  re  Taylor,  80  Hun  589,  30  N.  Y.  Suppl.  582.  In  re  Fayer- 
weather,  30  N.  Y.  Suppl.  273,  31  Abb.  N.  Cas.  287.     See  ante,  s.  60. 

2  The  American  Baptist  Publication  Society  was  empowered  by  the  New  York 
statute  to  take  and  hold  property  in  New  York  state,  but  the  court  holds  that  this 
right  alone  does  not  relieve  the  respondent  from  taxation.  In  re  Wolfe,  23  Misc. 
Rep.  439,  52  N.  Y.  Suppl.  415,  2  Gibbons  446. 

The  fact  that  a  foreign  charitable  corporation  was  given  a  limited  privilege  of 
taking  and  holding  real  and  personal  property  in  New  York  did  not  relieve  that 
corporation  from  a  tax  on  a  legacy  due  it;  that  was  an  enabling  statute  merely. 
The  corporation  remained  a  foreign  corporation  as  before,  but  possessing  in  this 


208  INHERITANCE  TAX  LAW.  [§§258-260. 

state  a  privilege  granted  by  that  statute.    In  re  Prime,  136  N.  Y.  347,  363,  32 
N.  E.  1091,  18  L.  R.  A.  713,  affirming  64  Hun  50. 

4  Batt  V.  Stevens,  209  Mass.  319.  The  court  follows  Rice  v.  Bradford,  180  Mass. 
645. 

Sec.  258.    Gift  to  Foreign  Corporation  for  Domestic  Use. 

Although  a  gift  is  made  nominally  to  a  charitable  corporation 
organized  under  the  laws  of  another  state,  still  where  the  gift  is  not 
to  or  for  the  corporation  itself,  and  where  the  corporation  is  given 
no  power  or  authority  to  take  it  out  of  the  jurisdiction  of  the  state 
or  to  expend  it  for  any  other  than  the  local  purposes  mentioned  in 
the  will,  it  is  exempt  from  the  inheritance  tax.  The  court  distin- 
guishes between  a  gift  made  generally  to  or  for  a  charitable  society 
organized  in  another  state  and  a  gift  made  to  aid  the  work  of  a 
strictly  local  charity  with  which  the  foreign  society  may  be  asso- 
ciated. The  court  regards  it  as  a  trust  in  which  the  existence  of  the 
trustee  is  not  material. 

In  re  Crawford,  148  Iowa  60,  126  N.  W.  774. 

Sec  259.    Corporation  Chartered  in  More  than  one  State. 

A  corporation  incorporated  in  more  than  one  state  may  for  the 
purpose  of  exemptions  be  treated  as  a  domestic  corporation  in  each 
state. 

Where  one  charitable  corporation  has  only  a  single  entity  but  is  incorporated 
in  three  states  theoretically  it  must  be  said  that  there  is  a  distinct  entity  in  each 
of  three  states,  but  the  substance  is  the  same  in  all.  It  has  a  single  body  possess- 
ing the  franchises  and  privileges  of  a  domestic  corporation  in  three  states.  To 
say  that  the  bequest  is  to  a  foreign  corporation  merely  because  the  testatrix 
named  the  place  where  its  principal  office  is  located  as  Boston,  Massachusetts, 
is  to  substitute  form  for  substance.  In  re  Lyon,  141  N.  Y.  App.  Div.  34, 128  N.  Y. 
Suppl.  1004. 

See  further,  ante,  s.  212. 

Sec.  260.    Effect  of  Use  Made  of  Funds. 

The  common  rule  is  that  an  exemption  to  charitable  corporations 
includes  any  domestic  corporation  although  the  corporation  had 
a  right  to  spend  its  money  outside  the  state.^  The  courts  have 
attempted  in  some  cases  to  look  beyond  this  rule  and  allow  exemp- 
tions only  where  it  appeared  that  the  domestic  beneficiary  was  to 
expend  the  funds  received  within  the  state.^  The  New  Jersey  stat- 
ute on  the  other  hand  refuses  the  exemption  to  certain  institutions 
which  confine  their  activities  within  state  lines. ^ 


§260.1  EXEMPTIONS  IN  GENERAL.  209 

Under  the  New  Hampshire  statute  of  1905,  as  amended  in  1907, 
if  the  gift  is  absolute  it  is  the  use  made  of  the  property  or  fund  con- 
stituting the  gift  that  determines  the  exemption,  but  if  it  is  in  trust 
it  is  the  use  made  of  the  income  or  beneficial  interest  that  governs, 
for  in  such  case  it  is  that  property  or  interest  alone  which  comes  into 
the  hands  of  the  donee  for  use.  And  so  where  bonds  are  given  to 
churches  as  trustees,  the  question  is  not  whether  the  bonds  should 
be  exempt  from  tax,  but  whether  their  income  in  the  hands  of  the 
beneficiaries  should  be  exempt.* 

^Balch  V.  Shaw,  174  Mass.  144  (under  the  act  of  1891). 

2  The  court  holds  that  a  legacy  to  trustees  for  the  purpose  of  establishing  a  cer- 
tain Latin  school  in  a  foreign  country  is  not  exempt  from  taxation  under  the  stat- 
ute of  1906,  chapter  436.  The  fact  that  the  will  authorized  the  trustees  to  form 
a  corporation  to  administer  the  fund  and  that  the  trustees  did  form  a  Massachu- 
setts corporation  does  not  alter  the  case,  as  the  fund  vested  in  the  trustees  on  the 
death  of  the  testator,  and  there  was  no  requirement  that  a  corporation  should  be 
formed.  The  gift  took  effect  absolutely  in  the  trustees  on  the  death  of  the 
testator.  Pierce  v.  Stevens,  205  Mass.  219,  91  N.  E.  319.  The  court  distinguishes 
the  case  of  Batch  v.  Shaw,  174  Mass.  144,  where  there  was  no  gift  to  anyone  until 
the  corporation  was  formed. 

A  legacy  to  the  New  Hampshire  Baptist  convention  was  not  subject  to  the 
inheritance  tax.  The  convention  is  authorized  by  its  charter  to  receive  and  hold 
donations  and  use  the  same  for  "the  purpose  of  promoting  foreign  and  domestic 
missions  and  the  education  of  indigent  and  pious  young  men  for  the  gospel  minis- 
try and  any  other  religious  charities  which  they  may  deem  proper."  The  convention 
had  always  confined  its  work  to  this  state  and  purposes  to  ask  the  legislature  to 
amend  its  charter  so  as  to  prevent  its  use  of  funds  outside  the  state.  In  view 
of  these  facts  it  seems  clear  that  the  charity  is  of  substantial  benefit  to  the  people 
of  New  Hampshire  and  is  therefore  exempt  from  taxation.  Carter  v.  Story, 
(N.  H.  1911,)  78  A.  1072. 

The  Home  Missionary  Society  was  not  entitled  to  an  exemption  under  the 
New  Hampshire  statute  of  1905,  as  it  devoted  substantially  all  its  funds  to  the 
support  of  charities  outside  of  New  Hampshire.  The  question  was  whether  its 
charity  was  of  such  a  character  and  so  administered  as  to  be  of  any  substantial 
benefit  or  advantage  to  the  pjeople  of  New  Hampshire,  and  this  was  a  question 
of  fact  to  be  determined  upon  competent  evidence.  Carter  v.  Whitcomh,  74  N.  H. 
482,  491,  69  A.  779. 

The  Woman's  Foreign  Missionary  Society,  the  principal  object  of  which 
is  the  "evangelization  of  heathen  women,"  is  not  a  public  charity  even  though 
there  may  be  heathen  women  in  New  Hampshire,  as  it  was  found  that  none  of  the 
funds  of  the  society  could  be  used  within  the  state  of  New  Hampshire.  "The 
expenditure  of  large  sums  of  money  for  the  enlightenment  upon  religious  subjects 
of  the  natives  of  the  Antipodes  evidently  was  not  one  of  the  objects  the  legislature 
intended  to  encourage,  when  in  1895  the  property  of  charitable  associations  'de- 
voted exclusively  to  the  uses  and  purposes  of  public  charity'  was  exempted  from  tax- 
ation, or  when  in  1905  legacies  to  such  associations  'in  this  state'  were  exempted 
from  the  inheritance  tax."    Carter  v.  Whitcomh,  74  N.  H.  482,  489,  69  A.  779. 


210  INHERITANCE  TAX  LAW.  [§261. 

3 The  New  York  Yearly  Meeting  of  Friends  is  the  general  governing  body 
of  the  society  of  Friends  and  has  primary  control  over  the  missionary  purposes 
and  general  benefactions  of  such  minor  bodies  as  act  by  its  authority.  Funds 
are  set  apart  for  the  work  among  the  Indians  and  for  the  benefit  of  former  slaves 
in  the  south.  It  has  missions  in  Mexico,  North  Carolina,  Palestine  and  Japan 
and  China.  Its  membership  is  not  confined  to  the  state  of  New  York.  It  has 
meetings  organized  in  Vermont  and  in  Canada,  and  membership  in  these  meetings 
is  not  confined  to  state  lines.  The  court  holds  that  there  is  no  difference  between 
the  methods  of  these  meetings  and  the  methods  of  the  boards  of  home  and  for- 
eign missions  of  the  various  religious  organizations.  Therefore,  the  society  of 
Friends  comes  clearly  within  the  statutory  exemption.  State  v.  N.  Y.  Meeting 
of  Friends,  61  N.  J.  Eq.  620,  48  A.  227. 

The  Union  for  Ministerial  Education,  whose  purpose  is  to  assist  in  educat- 
ing for  the  ministry  suitable  men,  is  a  religious  institution;  so  the  Baptist  Edu- 
cation Society,  the  object  of  which  is  to  furnish  the  means  for  instruction  to 
young  of  personal  piety,  who  have  a  call  to  the  ministry;  and  the  American 
Baptist  Home  Missionary  Society,  whose  object  is  to  promote  the  preaching 
of  the  gospel  in  North  America,  are  all  religious  institutions.  As  the  first  two 
are  not  limited  to  students  of  any  particular  locality,  they  are  certainly  not  local 
in  their  nature  and  the  board  of  missions  is  clearly  of  a  general  purpose  also. 
Therefore,  all  three  of  these  institutions  are  exempt  from  payment  of  the  collateral 
inheritance  tax.     In  re  Jones,  (N.  J.  1907,)  67  A.  1035,  affirmed  70  A.  1101. 

^Carter  v.  Eaton,  75  N.  H.  560,  78  Atl.  643. 

Sec.  261.     Special  Exemptions. 

Special  exemptions  of  individual  bequests  from  inheritance 
taxation  have  been  sometimes  passed  in  this  country,^  and  upheld 
where  uniformity  of  taxation  is  not  required  }  A  general  inheritance 
tax  exemption  may  supersede  special  exemptions.^ 

1  Mass.  St.  1908,  p.  840.  Pa.  St.  1855,  c.  47,  specially  exempts  a  certain  legacy 
to  an  orphan  asylum  from  the  payment  of  the  inheritance  tax.  Pa.  St.  1873, 
c.  290.     Va.  St.  1897-98,  c.  562. 

^Commonwealth  v.  Henderson,  172  Pa.  St.  135. 

3/»  re  Huntington,  168  N.  Y.  399,  408,  61  N.  E.  643,  affirming  62  N.  Y.  App. 
Div.  96. 


CHAPTER  XXXIII. 


EXEMPTIONS  FOR  GOVERNMENTAL  PURPOSES. 

§  262.  Federal  Taxation  of  Bequest  to  State  or  Municipality. 

§  263.  State  Taxation  of  Bequest  to  United  States. 

§  264.  Government  Bonds. 

§  265.  Municipal  Corporations  or  Public  Institutions. 

§  266.  To  Town  in  another  State. 

§  267.  Funds  in  Hands  of  Court  in  Trust. 

Sec.    262.       Federal    Taxation    of    Bequest    to    State     or 
Municipality. 

The  federal  congress  has  the  power  to  impose  a  succession  tax 
upon  a  bequest  to  a  municipal  corporation  of  a  state  for  a  cor- 
porate and  public  purpose,  and  U.  S.  Stat.  June  13,  1898,  as 
amended  March  2,  1901,  exercises  this  authority.^ 

As  congress  has  the  power  to  tax  successions  and  the  states  have 
the  same  power,  and  such  power  of  the  states  extends  to  bequests 
to  the  United  States,  it  follows  that  congress  has  the  same  power 
to  tax  the  transrriission  of  property  by  legacy  to  states  or  their 
municipalities  and  that  the  exercise  of  that  power  in  neither  case 
conflicts  with  the  proposition  that  neither  the  federal  nor  the 
state  government  can  tax  the  property  or  agencies  of  the  other, 
since  the  taxes  imposed  are  not  upon  the  property  but  upon  the 
right  to  succeed  to  property .^ 

^Snyder  v.  Bettman,  190  U.  S.  249,  23  S.  Ct.  803,  47  L.  Ed.  1035,  Fuller,  White 
and  Peckham,  JJ.,  dissenting. 

^Snyder  v.  Bettman,  190  U.  S.  249,  23  S.  Ct.  803,  47  L.  Ed.  1035. 

Sec.  263.    State  Taxation  of  Bequest  to  United  States. 

The  state  can  tax  a  bequest  or  devise  to  the  United  States. 

In  re  Murphy,  4  Misc.  Rep.  230,  25  N.  Y.  Suppl.  107.  In  re  Cullum,  5  Misc. 
Rep.  173,  25  N.  Y.  Suppl.  699. 

A  legacy  to  the  United  States  is  subject  to  the  inheritance  tax.  "This  tax, 
in  effect,  limits  the  power  of  testamentary  disposition,  and  legatees  and  devisees 
take  their  bequests  and  devises  subject  to  this  tax  imposed  upon  the  succession 
of  property.  This  view  eliminates  from  the  case  the  point  urged  by  the  appel- 
lant that  to  collect  this  tax  would  be  in  violation  of  the  well-established  rule  that 


212  INHERITANCE  TAX  LAW.  [§264. 

the  state  cannot  tax  the  property  of  the  United  States.  Assuming  this  legacy 
vested  in  the  United  States  at  the  moment  of  testator's  death,  yet  in  contem- 
plation of  law  the  tax  was  fixed  on  the  succession  at  the  same  instant  of  time. 
This  is  not  a  tax  imposed  by  the  state  on  the  property  of  the  United  States,  The 
property  that  vests  in  the  United  States  under  this  will  is  the  net  amount  of  its 
legacy  after  the  succession  tax  is  paid."  Per  Bartlett,  J.,  in  In  re  Merriara, 
141  N.  Y.  479,  484,  36  N.  E.  505. 

N.  Y.  St.  1885,  c.  483,  as  amended  by  St.  1891,  c.  215,  exempted  from  the 
inheritance  tax  societies,  corporations  and  institutions  now  exempted  by  law 
from  taxation,  and  the  court  holds  that  the  United  States  is  not  a  corporation 
exempt  by  law  from  taxation.  It  is  a  settled  doctrine  of  New  York  that  exemp- 
tion from  taxation  is  granted  only  to  domestic  corporations  and  this  doctrine  is 
applied  to  their  inheritance  tax  law  in  the  Matter  of  Prime,  136  N,  Y.  347.  The 
legislature  intended  to  allow  an  exemption  only  in  favor  of  such  corporations  as 
it  had  itself  created  and  which  might  reasonably  be  supposed  to  be  the  special 
objects  of  its  solicitude  and  bounty.  We  think  it  was  not  intended  to  apply 
the  exemption  to  a  purely  political  or  governmental  corporation  like  the  United 
States.  United  States  v.  Perkins,  163  U.  S.  625,  16  Sup.  Ct.  1073,  41  L.  Ed. 
287,  affirming  In  re  Merriam,  141  N.  Y.  479,  36  N.  E.  505. 

Sec.  264.    Government  Bonds. 

Under  the  prevailing  theory  that  tjie  inheritance  tax  is  a  burden 
on  the  succession  and  not  on  the  property  the  tax  may  be  levied, 
although  the  funds  of  the  estate  may  be  invested  in  government 
bonds  of  various  kinds.  Thus  United  States  bonds  may  be  tax- 
able under  a  state  tax,^  or  under  the  federal  tax.^  State  and 
municipal  bonds  are  also  taxable  under  state  law.^  Such  taxation 
does  not  constitute  a  breach  of  the  obligation  of  the  contract  of 
exemption  in  the  bonds  under  the  federal  constitution.'' 

!/«  re  Howard,  5  Dem.  Surr.  (N.  Y.)  483.  In  re  Carver,  4  Misc.  Rep.  592, 
25  N.  Y.  Suppl.  991.  In  re  Sherman,  153  N.  Y.  1,  4,  46  N.  E.  1032,  affirming 
15  N.  Y.  App.  Div.  628.  Strode  v.  Commonwealth,  52  Pa.  St.  181.  Clymer  v. 
Commonwealth,  52  Pa.  St.  181,  186.  Plummer  v.  Coler,  178  U.  S,  115.  Succession 
of  Levy,  115  La.  378,  39  S.  37,  affirmed  Cahen  v.  Brewster,  203  U.  S.  552,  27  S. 
Ct.  174,  51  L.  Ed.  310,  following  the  case  of  Plummer  v.  Cokr,  178  U.  S.  115, 
20  S.  Ct.  829,  44  L.  Ed.  998.     Wallace  v.  Myers,  38  Fed.  184,  4  L.  R.  A.  171. 

The  court  after  an  exhaustive  review  of  the  state  and  federal  authorities  con- 
cludes as  follows:  "We  think  the  conclusion,  fairly  to  be  drawn  from  the  state 
and  federal  cases,  is,  that  the  right  to  take  property  by  will  or  descent  is  derived 
from  and  regulated  by  municipal  law;  that,  in  assessing  a  tax  upon  such  right 
or  privilege,  the  state  may  lawfully  measure  or  fix  the  amount  of  the  tax  by 
referring  to  the  value  of  the  property  passing;  and  that  the  incidental  fact 
that  such  property  is  composed,  in  whole  or  in  part,  of  federal  securities,  does 
not  invalidate  the  tax  or  the  law  under  which  it  is  imposed."  The  court  dis- 
cusses the  question  of  the  evils  resulting  from  a  state  tax  on  the  transfer  of 
United  States  securities  and  finds  that  those  evils  are  insignificant.     The  court 

.  >•  . . 


5  264.]       EXEMPTIONS  FOR  GOVERNMENTAL  PURPOSES.  213 

finds  that  the  tax  is  not  upon  the  United  States  but  upon  the  right  to  transmit 
the  securities,  and  should  be  paid,  as  the  charges  of  administration  are  paid  out 
of  the  securities.     Plummer  v.  Coler,  178  U.  S.  115,  138. 

"The  mistake  of  the  learned  counsel  for  the  plaintiff  in  error  consists,  we 
conceive,  in  treating  this  as  a  tax  of  the  government  bonds,  when  it  is  really  a 
tax  upon  a  decedent's  estate,  dying  without  lineal  heirs.  And  it  does  not  help 
the  argument,  that  the  bulk  of  the  estate  is  made  up  of  these  bonds;  for  that 
estate  passed  into  the  hands  of  the  executor  for  administration,  and  is  taxed 
in  his  hands  as  an  estate.  The  law  takes  every  decedent's  estate  into  custody, 
and  administers  it  for  the  benefit  of  creditors,  legatees,  devisees  and  heirs,  and 
delivers  the  residue  that  remains,  after  discharging  all  obligations,  to  the  dis- 
tributees entitled  to  receive  it.  One  of  the  legal  obligations  to  which  every  estate 
that  is  to  go  to  collateral  kindred  is  subject,  is  this  five  per  cent  duty  to  the 
commonwealth.  And  it  is  not  until  this  work  of  administration  is  performed, 
that  the  right  of  succession  attaches.  The  distributees  may,  indeed,  consent  to 
accept  certain  goods  and  chattels  in  specie  without  conversion,  as  is  frequently 
done  in  settlement  of  estates;  but  such  arrangement  in  no  case  affects  the  theory 
of  the  law,  that  the  estate  is  first  to  be  administered  and  then  enjoyed.  Now 
this  five  per  cent  tax  is  one  of  the  conditions  of  administration,  and  to  deny  the 
right  of  the  state  to  impose  it,  is  to  deny  the  right  of  the  state  to  regulate  the 
administration  of  decedents'  goods.  If  an  estate  consist  wholly  of  federal  bonds 
and  is  indebted,  conversion  of  them  into  money  is  necessary  to  pay  the  debts; 
and  nobody  would  doubt  that  the  sum  that  remained  after  payment  of  debts 
would  be  subject  to  a  deduction  of  five  per  cent  for  the  use  of  the  state.  But 
suppose  the  federal  bonds  be  used  to  pay  the  only  indebtedness  that  exists,  and 
a  residue  of  estate  remains  for  distributees,  is  it  not  to  pay  the  collateral  inherit- 
ance tax?  Clearly  it  must,  though  it  may  be  less  than  the  aggregate  of  the  bonds. 
The  act  operates  on  the  residue  of  the  estate  after  paying  debts  and  charges,  and, 
theoretically,  that  residue  is  always  a  balance  in  money.  The  administration 
account  always  exhibits  a  balance  in  cash,  not  in  specific  goods,  whether  bonds 
or  horses;  and  though  an  heir  may  take  bonds  or  horses  as  cash,  the  account 
must  show,  and  always  does  show,  a  cash  balance.  That  is  the  fund  taxed  by 
this  law,  and  not  the  bonds  or  other  chattels  which  may  have  produced  the  fund. 
Therefore,  neither  the  prohibitory  clause  of  the  Act  of  Congress  of  1862,  nor 
any  of  the  principles  of  decision  against  state  authority  to  tax  that  which  federal 
authority  has  exempted  from  taxation,  have  any  application  here.  The  federal 
government  has  not  prohibited  the  states  from  prescribing  rules  of  inheritance 
and  succession  to  estates  of  decedents,  and  it  would  be  a  grevious  mistake  of 
legislative  and  judicial  authority  to  apply  it  with  such  effect."  Per  Woodward, 
C.  J.,  in  Strode  v.  Commonwealth,  52  Pa.  St.  181  (2  P.  F.  Smith). 

The  New  York  statute  of  1892  did  not  include  government  bonds  as  its 
language  confined  it  to  property  over  which  the  state  has  jurisdiction  for 
purposes  of  taxation.  In  re  Purdy,  24  Misc.  Rep.  301,  53  N.  Y.  Suppl.  735 ,  2 
Gibbons  527.  In  re  Coogan,  27  Misc.  Rep.  563,  59  N.  Y.  Suppl.  111.  In  re 
Sherman,  153  N.  Y.  1,  5,  46  N.  E.  1032,  affirming  15  N.  Y.  App.  Div.  628. 

2  The  exempting  clauses  in  the  statutes  and  on  the  face  of  the  bonds  do 
not  mean  that  a  state  or  the  United  States  may  not  tax  inheritances  and  legacies, 
regardless  of  the  character  of  the  property  of  which  they  are  composed.  "That 
some  of  the  holders  of  United  States  bonds  may  have  paid  franchise  taxes  to  the 


214  INHERITANCE  TAX  LAW.  [§26 

states,  and  others  may  have  paid  state  or  federal  inheritance  and  legacy  taxes, 
has  nothing  to  do  with  the  contract  between  the  United  States  and  the  bond- 
holders. The  United  States  will  have  complied  with  their  contract  when  they 
pay  to  the  original  holders  of  their  bonds,  or  to  their  assigns,  the  interest  when 
due,  in  full,  and  the  principal,  when  due,  in  full,"  Per  Shiras,  J.,  in  Murdoch 
V.  Ward,  178  U.  S.  139,  148,  20  S.  Ct.  775,  44  L.  Ed.  1009. 

^Succession  of  Kohn,  115  La.  Ann.  71,  38  S.  898.  In  re  Dows,  167  N.  Y.  227, 
60  N.  E.  439,  52  L.  R.  A.  433,  88  Am.  St.  Rep.  508,  affirming  60  N.  Y.  App. 
Div.  630  (affirmed  suh  nomine,  Orr  v.  Gilman,  183  U.  S.  278,  22  S.  Ct.  213,  46 
L.  Ed.  196). 

Wrr  v.  Gilman,  183  U.  S.  278,  22  S.  Ct.  213,  46  L.  Ed.  196. 


Sec.  265.    Municipal  Corporations  or  Public  Institutions. 

The  tax  may  be  imposed  on  gifts  for  public  purposes.  The 
inheritance  tax  is  not  levied  upon  the  fund  but  upon  its  trans- 
mission, and  hence  the  argument  that  it  is  against  the  policy  of 
the  law  to  levy  a  tax  upon  a  fund  devised  for  a  public  school  has 
no  bearing  upon  the  case  at  bar,  for  the  reason  that  this  fund  does 
not  become  a  fund  devoted  to  the  maintenance  of  a  school  until 
the  law  relative  to  its  transmission  has  been  complied  with.  The 
tax  must  be  paid  before  the  fund  in  question  can  become  the  prop- 
erty of  the  school  or  be  devoted  to  educational  purposes,^  though 
an  exemption  may  be  implied  to  gifts  to  public  institutions  ^  or 
municipal  corporations.^ 

"-Leavell  v.  Arnold,  131  Ky.  426,  115  S.  W.  232. 

2/m  re  Harris,  38  Ohio  Wkly.  L.  Bui.  281  (Smithsonian  Institute). 

An  implied  exemption  from  taxation  under  Col.  St.  1902,  c.  3,  should  be 
allowed  to  state  institutions,  as  laying  a  tax  upon  them  would  in  the  end  pro- 
duce no  net  revenue.  And  bequests  to  a  state  and  county  for  a  hospital  and  to 
the  regent  of  the  state  university  for  an  auditorium  are  not  subject  to  the  state 
inheritance  tax.     In  re  Macky,  46  Colo.  79,  102  P.  1075. 

3  Under  N.  Y.  St.  1887,  c,  713,  s.  1,  the  exemption  of  "societies,  corporations 
and  institutions  now  exempted  by  law  from  taxation,"  was  not  intended  to  apply 
to  bequests  to  municipal  corporations.  The  property  of  municipal  corporations 
are  never  included  in  the  terms  of  any  law  providing  for  the  imposition  of  a  tax, 
not  because  it  is  exempt,  but  for  the  reason  that  in  the  nature  of  things  it  never 
was  and  never  can  be  taxable,  as  this  would  be  a  tax  by  the  government  upon 
itself  and  utterly  useless.  Exemption  implies  that  the  person  or  corporation 
to  which  it  applies  is  or  would  otherwise  be  taxable.  To  include  public  property 
which  is  not  and  in  the  nature  of  things  cannot  be  taxable  at  all  within  the 
terms  of  an  exemption  act,  would  be  to  do  a  vain  and  useless  thing  which  cannot 
be  imputed  to  the  legislature.  There  is  no  sound  distinction  between  this  case 
and  that  of  a  bequest  to  the  United  States  in  which  we  held  that  the  gift  was 
subject  to  the  tax.  In  re  Hamilton,  148  N.  Y.  310,  314,  42  N.  E.  717,  affirming 
90  Hun  608.    See  In  re  Thrall,  157  N.  Y.  46,  51  N.  E.  413,  holding  that  as  the 


266-267.]  EXEMPTIONS  FOR  GOVERNMENTAL  PURPOSES.         215 

property  of  a  municipal  corporation  was  exempt  a  bequest  to  a  municipal  cor- 
)ration  for  a  public  library  is  exempt. 

266.    To  Town  in  another  State. 

The  testator  made  a  bequest  to  a  town  in  New  Hampshire  of 
le  residue  of  her  property  as  a  perpetual  fund  in  trust,  the  income 
be  expended  in  aid  of  the  worthy  poor  of  American  parentage 
ddents  of  the  town.  The  testator  died  November  23,  1908,  and 
le  court  holds  that  the  Massachusetts  statute  of  1909,  c.  527, 
:tion  1,  providing  that  the  exemption  of  gifts  to  charitable  pur- 
)ses  shall  be  an  exemption  of  gifts  to  "charities  to  be  carried  out 
ithin  this  commonwealth,"  and  that  the  exemption  of  bequests 
a  "state  or  town  for  public  purposes"  shall  be  an  exemption 
"a  city  or  town  within  this  commonwealth  for  public  purposes," 
Is  merely  declaratory  of  previous  statutes.  The  court  notes  that 
le  charitable  exemption  has  always  been  confined  in  Massachu- 
Jtts  to  towns  of  Massachusetts  and  finds  in  the  history  of  the 
statutes  which  it  discusses  no  reason  to  think  that  this  policy  had 
ever  been  altered. 

Davis  V.  Stevens,  208  Mass.  343,  94  N.  E.  556. 

Sec.  267.    Fund  in  Hands  of  Court  in  Trust. 

A  bequest  in  trust  for  charitable  purpose  is  not  exempt  simply 
because  it  is  in  the  hands  of  the  court. 

The  court  reverses  the  order  of  the  surrogate  to  the  effect  that  where  a  devise 
in  trust  for  the  purpose  of  founding  a  home  for  the  aged  was  made,  the  trust 
to  last  during  two  lives  only,  the  fund  after  the  end  of  the  trust  was  in  the 
hands  of  the  supreme  court  and  therefore  exempt  from  taxation.  The  appel- 
late division  remarks  that  the  fund  is  not  a  gift  to  the  state  and  does  not  become 
the  property  of  the  state;  that  the  omission  of  the  testator  to  supply  a  trustee 
after  the  two  lives  is  supplied  by  the  legislative  intervention,  but  that  does  not 
alter  the  character  of  the  gift,  nor  give  any  control  over  it  for  any  purpose 
beyond  that  outlined  by  the  will.  Knight  v.  Stevens,  72  N.  Y.  Suppl.  815,  revers- 
ing In  re  Graves,  70  N.  Y.  Suppl.  727. 


CHAPTER  XXXIV. 


EXEMPTIONS  FOR  RELIGIOUS  OR 
CHARITABLE  PURPOSES. 

§  268.  Almshouse. 

§  269.  Art  Museum. 

§  270.  Bishop. 

§  271.  Charities. 

§  272.  To  County  for  Charitable  Purposes. 

§  273.  Churches  and  Dependent  Societies. 

§  274.  Prevention  of  Cruelty. 

§  275.  Drinking  Fountain  and  Monument  to  Horse. 

§  276.  Educational.  —  University. 

§  277.  Historical  and  Antiquarian  Society, 

§  278.  Homes. 

§  279.  Hospital. 

§  280.  **Institutions." 

§  281.  Libraries. 

§  282.  Masons. 

§  283.  Missionary  Societies. 

§  284.  Temperance  Societies. 

§  285.  Women's  Relief  Corps. 

§  286.  Young  Men's  Christian  Association. 

§  287.  Trust  for  Charity. 

Sec.  268.    Almshouse. 

An  almshouse  may  be  any  home  which  is  absolutely  free. 

Institutions  to  be  exempt  as  an  almshouse  must  be  absolutely  free  and  all 
benefits  must  be  given  gratuitously.  In  re  Vanderbilt,  10  N.  Y.  Suppl.  239, 
2  Con.  Surr.  319. 

An  institution  for  the  blind  which  does  not  receive  pay  from  patients  under 
any  circumstances  is  exempt  as  an  almshouse.  In  re  Underbill,  20  N.  Y.  Suppl. 
134,  2  Con.  Surr.  262. 

Sec.  269.    Art  Museum. 

An  art  museum  may  be  subject  to  tax,^  or  may  be  exempt  as  an 
educational  institution. ^ 

1/m  re  Vanderbilt,  10  N.  Y.  Suppl.  239,  2  Con.  Surr.  319.  In  re  Wolfe,  15 
N.  Y.  Suppl.  539,  2  Con.  Surr.  600,  reversed,  137  N.  Y.  205. 


§§  270-271.]       RELIGIOUS  OR  CHARITABLE  PURPOSES.  217 

2/w  re  Mergentime,  195  N.  Y.  572,  88  N.  E.  1125,  affirming  129  N.  Y.  App. 
Div.  367,  113  N.  Y.  Suppl.  948. 

Sec.  270.    Bishop. 

A  New  York  exemption  of  property  devised  to  a  bishop  covers  a 
bequest  to  an  archbishop  or  cardinal  archbishop  in  his  official 
capacity,^  or  to  a  bishop  who  is  at  the  death  of  the  testator  a  non- 
resident.2 

^The  clear  intent  and  object  of  the  law  was  to  exempt  the  property  held  by 
religious  corporations  whether  held  in  the  name  of  the  corporation  itself  or  in 
the  name  of  one  of  the  religious  heads  of  the  church  or  denomination.  In  re 
Kelly,  29  Misc.  Rep.  169,  60  N.  Y.  Suppl.  1005. 

2  The  testator  died  in  1896  leaving  a  legacy  "to  Bishop  William  Taylor,  or 
his  living  successor,  to  be  used  in  his  African  mission  work."  Bishop  Taylor 
died  before  the  testator  and  his  living  successor  was  a  resident  of  New  Jersey. 
It  was  argued  that  the  bishop  took  this  in  his  official  capacity  and  that  it  was 
therefore  subject  to  taxation  as  a  charitable  gift  to  a  non-resident.  But  the 
court  holds  that  the  office  of  bishop  is  not  a  state  office  and  that  the  bishop  is 
not  a  corporation  sole.  The  state  does  not  recognize  the  existence  of  any  eccle- 
siastical office  the  result  of  which  is  to  give  to  the  holders  of  it  the  right  of  per- 
petual succession,  or  any  other  rights  similar  to  those  which  are  enjoyed  by 
corporations.  The  designation  of  a  person  as  a  bishop  is  a  mere  descriptio  per- 
sonce.  Therefore  this  legacy  is  exempt  from  taxation  under  the  statute  of  1892 
exempting  from  the  tax  legacies  to  "any  person  who  is  a  bishop,  or  to  any 
religious  corporation."  In  re  Palmer,  158  N.  Y.  669,  52  N.  E.  1125,  affirming 
33  N.  Y.  App.  Div.  307. 

Sec.  271.    Charities. 

Charitable  organizations  are  not  exempt  from  the  inheritance 
tax  unless  specifically  so  designated,^  but  have  been  usually  spe- 
cially named  as  exempt.^  The  courts  in  determining  whether  or 
not  a  gift  is  charitable  will  not  look  to  the  motives  of  the  donor 
but  rather  to  the  nature  of  the  gift  and  the  object  which  will  be 
attained  by  it.^ 

^Leavell  v.  Arnold,  131  Ky.  426,  115  S.  W.  232.  In  re  Jones,  50  Hun  603, 
2  N.  Y.  Suppl.  671,  22  Abb.  N.  Cas.  50,  1  Con.  Surr.  125.  See  In  re  Bates,  7 
Ohio  N.  P.  625,  5  Ohio  S.  &  C.  P.  Dec.  547.  In  re  Simon,  7  Ohio  N.  P.  667, 
39  Wkly.  L.  Bui.  369.  A  special  exemption  of  the  property  of  Cooper  Union 
is  not  sufficient  to  save  it  from  taxation.  In  re  Kucielski,  128  N.  Y.  Suppl.  768. 

^Succession  of  Levy,  115  La.  378,  39  S.  37,  affirmed  Cahen  v.  Brewster,  203  U.  S. 
552,  27  S.  Ct.  174,  51  L.  Ed.  310. 

The  Craig  Colony  for  Epileptics  organized  to  treat  a  class  of  unfortunates  is 
charitable  and  therefore  exempt  from  taxation,  though  its  patients  work  on  its 
lands  to  grow  food  or  to  produce  things  sold  by  the  state  to  purchase  necessaries. 
In  re  Moore,  66  Misc.  116,  122  N.  Y,  Suppl.  828,  affirmed  128  N.  Y.  Suppl.  1135. 


218  INHERITANCE  TAX  LAW.  [§§272-273. 

The  New  York  Association  for  Improving  the  Condition  of  the  Poor,  which 
is  a  pure  charity  making  no  charge  whatever,  is  exempt  from  taxation.  In  re 
Lenox,  9  N.  Y.  Suppl.  895. 

The  Church  Charity  Foundation  on  Long  Island,  all  of  whose  property  is 
used  for  the  maintenance  of  aged  and  indigent  persons  and  orphans  and  other 
children,  is  exempt  from  taxation  in  its  personal  property  under  the  statute  of 
1895.     In  re  Hunter,  11  N.  Y.  St.  Rep.  704. 

The  Children's  Aid  Society  is  exempt.  In  re  Huntington,  70  N.  Y.  Suppl. 
853,  modifying  70  N.  Y.  Suppl.  429. 

3  In  re  Graves,  242  111.  23,  89  N.  E.  672,  134  Am.  St.  R.  302. 


Sec.  272.    To  County  for  Charitable  Purposes. 

A  gift  to  public  officers  as  trustees  to  carry  out  a  charitable 
purpose  may  be  exempt  as  a  charitable  gift. 

In  re  Spangler,  148  Iowa  333,  127  N.  W.  625. 

Sec.  273.    Churches  and  Dependent  Societies. 

Churches,^  or  bequests  for  the  benefit  of  churches,^  or  societies 
connected  with  churches,^  are  commonly  exempt  from  taxation, 
as  are  generally  bequests  for  religious  uses."* 

^Congregational  and  Baptist  churches  are  religious  societies  and  public 
charitable  associations  or  societies  within  the  meaning  of  the  New  Hampshire 
law.     Carter  v.  Eaton,  75  N.  H.  560,  78  Atl.  643. 

Grace  Church  is  not  exempt  from  taxation,  as  its  benefits  and  privileges  are 
not  free  to  all.  In  re  Wolfe,  15  N.  Y.  Suppl.  539,  2  Con.  Surr.  600,  reversed 
137,  205. 

2  Where  a  legacy  was  made  to  a  church  of  three  thousand  dollars,  the  income 
of  which  was  to  be  used  for  the  benefit  of  the  church,  as  the  church  holds  the 
principal  fund  as  trustee  and  can  only  use  the  income,  and  since  the  income 
can  only  be  used  for  church  purposes,  it  follows  that  the  legacy  is  not  subject 
to  the  inheritance  tax.  Carter  v.  Story,  (N.  H.  1911,)  78  A.  1072,  citing  Carter 
v.  Eaton,  75  N.  H.  560,  78  A.  643. 

'  In  re  Lyon,  128  N.  Y.  Suppl.  1004.  The  Church  Foundation  is  exempt 
under  the  statute  of  1885.  Church  Charity  Foundation  v.  People,  6  Dem.  Surr. 
(N.  Y.)  154. 

A  gift  to  the  American  Bible  Society  is  subject  to  the  inheritance  tax  in  force 
in  1890.     In  re  Lenox,  9  N.  Y.  Suppl.  895. 

The  American  Baptist  Publication  Society,  organized  for  the  purpose  of  pro- 
moting evangelical  religion  by  means  of  the  Bible,  printing  press,  colportage, 
Sunday  schools  and  other  appropriate  ways,  is  not  a  "charitable"  corporation, 
as  a  person  or  corporation  seeking  to  advance  the  cause  of  religion  only  cannot 
be  said  to  be  engaged  in  a  charitable  work  in  the  ordinary  sense  in  which  that 
term  is  used.     In  re  McCormick,  127  N.  Y.  Suppl.  493. 

Societies  connected  with  the  Methodist  church  for  religious,  educational  and 
philanthropic  purposes  are  charitable,  and  the  fact  that  they  may  more  directly 


§§274-276.]     RELIGIOUS  OR  CHARITABLE  PURPOSES.  219 

benefit  their  members  than  those  who  are  not  members  does  not  deprive  them 
of  their  public  character.  They  are  therefore  exempt  from  taxation.  Carter 
V.  Whitcomb,  74  N.  H.  482,  69  A.  779. 

*The  Young  Men's  Christian  Association  is  not  a  reUgious  corporation.  In  re 
Fay,  37  Misc.  532,  76  N.  Y.  Suppl.  62.  Young  Men's  Christian  Association  v. 
New  York,  113  N.  Y.  187,  21  N.  E.  86.  See,  however,  Little  v.  Newburyport,  210 
Mass.  414,  96  N.  E.  1032. 

Sec.  274.    Prevention  of  Cruelty. 

A  society  for  the  prevention  of  cruelty  to  children  may  be  in- 
cluded in  societies  organized  for  the  enforcement  of  laws  relating 
to  children,^  while  a  society  for  the  prevention  of  cruelty  to  animals 
is  not  a  charitable  corporation,  as  its  work  is  confined  to  animals 
and  not  to  human  beings.^ 

^In  re  Moses,  123  N.  Y.  Suppl.  443,  modifying  and  affirming  60  Misc.  637, 
113  N.  Y.  Suppl.  930. 
Un  re  Keith,  5  N.  Y.  Suppl.  201,  1  Con.  Sum  370. 

Sec.  275.    Drinking  Fountain  and  Monument  to  Horse. 

The  court  holds  that  a  certain  gift  to  the  public  authorities  for 
the  erection  of  a  drinking  fountain  or  drinking  basin  for  horses, 
and  in  connection  therewith  a  bronze  statue  of  a  certain  horse 
together  with  a  record  of  his  performances,  is  exempt  from  the 
inheritance  tax  as  a  charitable  gift. 

In  re  Graves,  242  111.  23,  89  N.  E.  672,  134  Am.  St.  R.  302  (as  the  court  looks  to 
the  nature  of  the  gift  and  the  object  to  be  accomplished  rather  than  the  motives 
of  the  donor). 

Sec.  276.    Educational.  —  University. 

Gifts  for  educational  purposes  are  commonly  exempt.^  A  library 
may  be  properly  classed  as  an  educational  institution.^  A  university 
may  be  found  a  charitable  institution,^  but  not  a  religious  institu- 
tion, even  though  it  has  a  theological  department  as  an  adjunct 
of  its  principal  departments,  which  are  purely  secular.'* 

^  In  re  Arnot,  130  N.  Y.  Suppl.  197,  devise  to  corporation  to  be  formed  for  art 
class  and  reference  library  for  public  is  exempt  as  "educational."  The  statute 
of  1900,  chapter  382,  made  a  change  in  the  law  and  under  it  a  corporation  or- 
ganized exclusively  for  educational  purposes  is  no  longer  exempt  from  the  inherit- 
ance tax.    In  re  Crouse,  34  Misc.  670,  70  N.  Y.  Suppl.  731. 

The  Young  Men's  Christian  Association  was  treated  as  "educational"  in 
In  re  Moses,  123  N.  Y.  Suppl.  443,  60  Misc.  637,  113  N.  Y.  Suppl.  930. 

^  Essex  V.  Brooks,  164  Mass.  79,  83,  41  N.  E.  119.  In  re  Francis,  189  N.  Y. 
554,  82  N.  E.  1126,  affirming  121  N.  Y.  App.  Div.  129,  105  N.  Y.  Suppl.  643. 


220  INHERITANCE  TAX  LAW.  [§277. 

^Alfred  University  is  a  school  of  learning,  having  an  academic,  collegiate  and 
a  theological  department,  which  is  a  corporation  and  has  no  capital  stock  and 
pays  no  dividends  and  is  primarily  supported  by  funds  derived  from  public 
and  private  charity  together  with  tuition  fees.  Whatever  is  received  is  devoted 
to  the  object  of  sustaining  the  institution  and  increasing  its  benefits  to  the 
public  by  extending  and  improving  its  accommodations  and  diminishing  its 
expenses.  A  gift  to  such  an  institution  is  a  bequest  to  a  charitable  institution, 
and  all  gifts  for  the  promotion  of  education  are  charitable  in  a  legal  sense  where 
the  elements  of  private  gain  are  wanting  and  where  the  scheme  is  in  part  sup- 
ported by  public  or  private  contributions.  Alfred  University  v.  Hancock,  69 
N.  J.  Eq.  470,  46  A.  178. 

^If  the  theological  department  is  to  be  regarded  as  religious,  the  two  others 
are  purely  secular.  An  institution  of  such  blended  secular  and  religious  qualities 
can  in  no  sense  be  classed  as  a  religious  institution.  Alfred  University  v.  Han- 
cock, 69  N.  J.  Eq.  470,  46  A.  178. 

Sec.  277.    Historical  and  Antiquarian  Society. 

The  Vineland  Historical  and  Antiquarian  Society  is  not  a  charit- 
able institution  within  the  meaning  of  the  language  used  in  sec- 
tion 1  of  the  New  Jersey  act  of  1894.  This  society  was  organized 
under  the  statute  of  1875  to  incorporate  societies  "for  the  promo- 
tion of  learning."  Gifts  for  educational  purposes  are  gifts  to  valid 
charitable  uses  in  New  Jersey.  But  it  is  not  enough  to  say  that 
the  institution  was  incorporated  under  the  act  for  the  promotion 
of  learning  or  avows  itself  to  be  organized  for  the  purpose  of  pro- 
moting learning.  An  institution  claiming  exemption  on  the  ground 
of  its  educational  character  must  disclose  the  objects  to  which  it  is 
bound  to  devote  its  property.  It  must  appear  that  the  objects 
disclosed  have  some  educational  value  and  that  the  benefits  and 
advantages  of  the  Institution  in  respect  to  such  objects  are  open 
to  the  general  public,  or  at  least  to  such  persons  as  may  seek  them. 
The  society  in  question,  however,  has  for  its  object  to  collect  and 
preserve  historical  and  current  accounts  of  events  and  other  matters 
connected  with  the  interests  of  Vineland ;  and  the  court  finds  that 
the  society  has  failed  to  show  that  such  a  collection  is  of  educa- 
tional value.  "Such  a  collection  would  not  resemble  a  library,  but 
rather  a  museum."  It  also  appeared  that  the  legacy  given  to  the 
society  was  given  without  any  limitation  or  condition  and  therefore 
imposed  no  duty  on  the  society  except  that  which  may  be  inferred 
from  the  terms  contained  in  the  organization  of  the  society  as  a 
corporation.  The  mere  fact,  therefore,  that  the  society  now  opens 
its  collection  to  the  public  would  not  bind  the  society  to  continue 
to  do  so. 


278-280.]     RELIGIOUS  OR  CHARITABLE  PURPOSES.  221 

In  re  Vineland  Historical  and  Antiquarian  Society,  66  N.  J.  Eq.  291,  56  A. 


lec.  278.    Homes. 
Homes  ^  for  children,  ^  or  for  the  aged,  may  be  free  of  taxation ' 
[though  an  entrance  fee  is  charged,'^  and  inmates  are  required  to 
irn  over  all  their  property  to  the  home  on  admission,^  but  not  if 
ley  charge  board.® 

*  Under  the  statute  of  1900,  chapter  382,  the  property  of  the  American  Female 
fuardian  Society  and  the  Home  for  the  Friendless,  and  the  New  York  Society 
for  the  Relief  of  the  Ruptured  and  Crippled,  is  not  exempt  from  the  transfer 
tax.    In  re  Huntington,  70  N.  Y.  Suppl.  853,  modifying  70  N.  Y.  Suppl.  429. 

2/«  re  Higgins,  55  Misc.  175,  106  N.  Y.  Suppl.  465. 

The  Wartburg  Orphan  Farm  School  is  exempt  from  taxation  under  general 
law  in  New  York  as  a  "house  of  industry"  and  is  therefore  exempt  from  the 
collateral  inheritance  tax  of  1887.  In  re  Herr,  57  Hun  591,  10  N.  Y.  Suppl.  680, 
affirming  55  Hun  167,  7  N.  Y.  Suppl.  852. 

^In  re  Graves,  171  N.  Y.  40,  63  N.  E.  787,  reversing  66  N.  Y.  App.  Div.  267, 
34  Misc.  677,  70  N.  Y.  Suppl.  727  (corporation  to  be  organized). 

*In  re  Vassar,  127  N.  Y.  1,  14,  27  N.  E.  394,  reversing  58  Hun  378,  12  N.  Y. 
Suppl.  203. 

^Carter  v.  Whitcomb,  74  N.  H.  482,  488,  69  A.  779. 

The  Baptist  Home  Society  of  New  York  requires  a  payment  of  an  admission 
fee  of  a  thousand  dollars  and  that  all  those  who  enter  shall  make  a  will  in  its 
favor;  and  it  is  therefore  not  an  almshouse  and  so  is  not  exempt  under  the  New 
York  statute.    In  re  Keech,  57  Hun  588,  11  N.  Y.  Suppl.  265. 

«/n  re  Lenox,  9  N.  Y.  Suppl.  895. 


I 


Sec.  279.    Hospitals. 

Hospitals  are  commonly  exempt. 

In  re  Huntington,  70  N.  Y.  Suppl.  853,  modifying  70  N.  Y.  Suppl.  429. 
;  Under  the  statute  of  1905,  chapter  368,  section  221,  a  bequest  to  a  corporation 
rganized  to  carry  on  a  general  city  hospital  is  exempt  from  taxation.     In  re 
Higgins,  55  Misc.  175,  106  N.  Y.  Suppl.  465. 

The  St.  John's  Riverside  Hospital  is  a  charitable  institution  whose  object  is 
the  maintenance  and  support  of  a  hospital  for  indigent  patients  and  as  such  is 
an  almshouse  and  so  exempt  under  New  York  law  from  the  inheritance  tax. 
In  re  Curtis,  25  N.  Y.  St.  1028,  7  N.  Y.  Suppl.  207,  1  Con.  Sum  471. 

Contra,  In  re  Howell,  34  Misc.  Rep.  40,  69  N.  Y.  Suppl.  505,  under  St.  1900, 
c.  382. 

Sec.  280.     ^^Institution.*' 

A  gift  to  a  trust  company  in  trust  for  "needy  aged  men  and 
women"  is  not  exempt,  as  such  a  trust  cannot  by  the  broadest 
latitude  be  called  an  "institution."    Very  likely  the  "institution" 


222  INHERITANCE  TAX  LAW.  [§§281-284. 

need  not  be  incorporated,  but  it  is  contemplated  as  an  owner  of 
property,  not  as  property. 

Hooper  v.  Shaw,  176  Mass.  190,  57  N.  E.  361. 

Sec.  281.    Libraries. 

Public  libraries  may  be  exempt. 

Essex  V.Brooks,  164  Mass.  79,  83,  41  N.  E.  119,  as  an  educational  or  charitable 
corporation.  In  re  Higgins,  55  Misc.  175,  106  N.  Y.  Suppl.  465.  See  In  re 
Francis,  189  N.  Y.  554,  82  N.  E.  1126,  affirming  121  N.  Y.  App.  Div.  129,  105 
N.  Y.  Suppl.  643,  holding  a  library  association  to  be  educational. 

The  Young  Men's  Christian  Association  was  treated  under  its  charter 
as  a  public  library  in  In  re  Howell,  34  Misc.  40,  69  N.  Y.  Suppl.  505. 

Under  the  New  York  statute  of  1896  there  was  a  material  change  in  the 
exemption  law  as  to  the  property  of  public  corporations.  The  statute  renders 
all  property  in  the  state  taxable  unless  exempt  from  taxation  by  law,  and  in  the 
next  section  specifies  property  of  a  municipal  corporation  as  exempt.  Therefore 
a  bequest  to  a  municipal  corporation  for  a  public  library  is  exempt  from  the 
transfer  tax  under  the  New  York  statute  of  1896.  In  re  Thrall,  157  N.  Y.  46, 
51  N.  E.  411. 

Sec.  282.    Masons. 

A  masonic  lodge,  a  part  of  the  activities  of  which  is  engaged 
in  helping  the  families  of  members  who  become  in  want,  is  exempt 
as  a  charitable  institution. 

Morrow  v.  Smith,  145  Iowa  514,  124  N.  W.  316. 

Sec.  283.    Missionary  Societies. 

Both  home^  and  foreign  ^  missionary  societies  have  been  denied 
exemption  where  they  expended  their  funds  largely  outside  the 
state,  but  have  been  exempt  where  their  funds  are  expended  in 
the  state.^ 

^Carter  v.  WhUcomb,  74  N.  H.  482,  491,  69  A.  779.  In  re  Board  of  Home 
Missions,  11  N.  Y.  Suppl.  311.  In  re  White,  118  N.  Y.  App.  Div.  809,  103  N.  Y. 
Suppl.  688.    In  re  Kavanagh,  6  N.  Y.  Suppl.  669. 

^Carter  v.  WhUcomb,  74  N.  H.  482,  489,  69  A.  779.  In  re  Board  of  Foreign 
Missions,  58  Hun  116,  33  N.  Y.  St.  789,  11  N.  Y.  Suppl.  310. 

Un  re  Prall,  78  N.  Y.  App.  Div.  301,  79  N.  Y.  Suppl.  971. 

Sec.  284.    Temperance  Societies. 

The  Woman's  Christian  Temperance  Union  falls  within  the  class 
of  benevolent  educational  charitable  corporations  intended  to  be 
exempt. 


§§285-287.]      RELIGIOUS  OR  CHARITABLE  PURPOSES.  223 

In  re  Moore,  66  Misc.  116,  122  N.  Y.  Suppl.  828.  In  re  Field,  71  Misc.  396, 
130  N.  Y.  Suppl.  195. 

Sec.  285.    Woman's  Relief  Corps. 

The  Woman's  Relief  Corps  is  a  public  charity  exempt  from  the 
inheritance  tax  in  New  Hampshire  although  its  benefits  are  bestowed 
only  upon  those  who  have  been  soldiers,  or  upon  their  families,  to 
the  exclusion  of  all  others. 

Carter  v.  Whitcomh,  74  N.  H.  482,  489,  69  A.  779. 

Sec.  286.     Young  Men's  Christian  Association. 

The  Young  Men's  Christian  Association  may  be  exempt  as  a 
charitable  or  religious  corporation,^  although  it  receives  compensa- 
tion from  those  able  to  pay ,2  or  may  be  treated  as  educational,' 
or  as  a  public  library.* 

^Little  V.  Newburyport,  210  Mass.  414,  96  N.  E.  1032. 

Not  Religious.  The  Brooklyn  Young  Men's  Christian  Association  is  not  a 
religious  corporation,  as  it  is  not  formed  primarily  for  religious  purposes  and 
has  no  distinct  form  of  worship  or  method  of  discipline,  and  the  mere  fact  it 
has  been  formed  for  a  good  and  worthy  object  in  which  incidentally  there  will 
be  some  religious  exercises  involved,  does  not  make  it  a  religious  corporation. 
In  re  Fay,  37  Misc.  Rep.  532,  76  N.  Y.  Suppl.  62.  Young  Men's  Christian  Asso- 
ciation V.  New  York,  113  N.  Y.  187,  21  N.  E.  86.  In  re  Vanderbilt,  10  N.  Y. 
Suppl.  239,  2  Con.  Sum  319. 

^Carter  v.  Whitcomh,  74  N.  H.  482,  488,  69  A.  779  (also  the  woman's  auxiliary). 

^In  re  Moses,  123  N.  Y.  Suppl.  443,  modifying  and  affirming  60  Misc.  637, 
113  N.  Y.  Suppl.  930. 

*/w  re  Howell,  34  Misc.  Rep.  40,  69  N.  Y.  Suppl.  505. 

Sec.  287.    Trust  for  Charity. 

Where  the  testator  makes  a  direct  bequest  in  absolute  form 
and  where  it  appears  that  a  valid  parole  trust  was  created  enforce- 
able in  equity  in  favor  of  certain  religious  corporations  which  were 
of  a  class  exempt  under  the  statute,  the  bequest  itself  is  exempt 
from  taxation.^  However,  a  bequest  to  trustees  for  the  purpose 
of  founding  a  "Home  for  the  Aged"  is  not  exempt  from  taxation, 
as  the  exemptions  in  the  statutes  are  confined  to  corporations  or 
institutions  having  a  definite  organization. ^ 

^In  re  Murphy,  4  Misc.  Rep.  230,  25  N.  Y.  Suppl.  107. 

2  Knight  v.  Stevens,  66  N.  Y.  App.  Div.  267,  72  N.  Y.  Suppl.  815,  reversing 
In  re  Graves,  70  N.  Y.  Suppl.  727. 


CHAPTER  XXXV. 


RATES. 

§  288.  What  Law  Governs. 

§  289.  Reckoned  by  Beneficial  Interests  rather  than  by  Estate. 

§  290.  Remainder  or  Contingent  Interests. 

§  291.  Computation  of  Progressive  Rates. 

§  292.  Primary  and  Secondary  Rates  as  Applied  to  Income. 

Sec.  288.     What  Law  Governs. 

The  rate  is  fixed  by  the  law  in  force  at  the  death  of  the  testator' 
and  may  remain  in  force  under  general  law  notwithstanding  the 
failure  of  the  legislature  to  fix  the  rate  in  its  annual  tax  law.^ 

i/»  re  Stanford's  Estate,  126  Cal.  112,  58  P.  462,  45  L.  R.  A.  788.  Trippet  v. 
State,  149  Cal.  526,  86  P.  1084,  8  L.  R.  A.  (N.  S.)  1210.  In  re  Woodard's  Estate, 
153  Cal.  39,  94  P.  242.     See  further,  ante,  s.  19. 

^Eyre  v.  Jacob,  14  Gratt.  (Va.)  422,  439,  73  Am.  Dec.  367. 

Sec.  289.    Reckoned  by  Beneficial  Interests  rather  than  by 
Estate. 

The  rate  of  tax  is  usually  determined  by  the  size  of  the  beneficial 
interest  rather  than  of  the  estate. 

In  re  Vanderbilt,  172  N.  Y.  69,  73,  64  N.  E.  782,  modifying  68  N.  Y.  App. 
Div.  27,  74  N.  Y.  Suppl.  450,  under  St.  1899,  c.  76.  Knowlton  v.  Moore,  178 
U.  S.  41,  71,  20  S.  Ct.  747,  44  L.  Ed.  969.     Cf.  also,  s.  68. 

The  court  points  out  the  gross  inequalities  which  would  result  from  a 
construction  of  the  United  States  statute  of  1898  that  the  rate  of  tax  is  deter- 
mined by  the  size  of  the  estate  rather  than  the  size  of  the  legacy.  The  result 
would  be  that  two  persons  receiving  the  same  legacy  from  estates  of  different 
sizes  would  pay  a  different  tax,  and  the  court  is  bound  to  avoid  a  construction 
which  would  occasion  great  inequality  and  injustice  if  possible.  Knowlton  v. 
Moore,  178  U.  S.  41,  76,  20  S.  Ct.  747,  44  L.  Ed.  969. 

Sec.  290.    Remainder  or  Contingent  Interests. 

The  tax  upon  the  life  estate  added  to  the  estate  in  remainder 
need  not  necessarily  equal  exactly  the  tax  on  the  principal.^  The 
rate  in  case  of  a  contingent  uncertain  interest  should  be  the  lowest 
possible.^ 

1  In  re  Christian,  2  Pa.  Co.  Ct.  91,  18  Wkly.  Notes  Cas.  88. 
^  State  V.  Pabst,  139  Wis.  561,  589,  121  N.  W.  351. 


§  291.1  RATES.  225 

The  court  suggests  to  the  legislature  that  N.  Y.  St.  1899,  c.  76,  providing 
for  the  present  appraisal  and  taxation  of  remainders  at  the  highest  possible 
rate  causes  an  inequality  which  is  an  injustice  on  life  estates.  The  tax  on  the 
remainders  being  paid  out  of  the  corpus  of  the  estate  diminishes  the  income  of 
the  life  tenant  by  the  interest  on  the  amount  of  the  tax;  and  if  it  is  desired 
to  make  taxes  on  remainders  payable  immediately  it  would  be  fairer  to  the  life 
tenant  to  have  the  tax  assessed  at  the  lowest  rate  on  any  succession  provided  for 
by  the  will.  In  case  the  remainder  eventually  vesting  should  prove  taxable  at  a 
higher  rate  then  such  increased  tax  should  be  payable  at  the  time  of  its  enjoyment. 
The  court  remarks  that  its  experience  is  that  in  the  majority  of  cases  the  lowest 
rate  of  tax  usually  proves  the  final  rate,  and  where  the  state  imposes  in  the  first 
instance  a  higher  rate  of  tax  it  becomes  obligated  to  repay  the  excess  after  a 
lifetime  at  six  per  cent  interest,  while  it  could  borrow  money  at  half  that  rate. 
In  re  Brez,  172  N.  Y.  609,  611,  64  N.  E.  958,  reversing  69  N.  Y.  App.  Div.  619. 

Sec.  291.    Computation  of  Progressive  Rates. 

In  the  case  of  a  progressive  tax  primary  rates  may  be  levied  on 
the  lowest  sum  named  and  the  secondary  rates  on  the  excess  only  ^ 
above  the  exemption. ^ 

^The  court  holds  that  if  the  estate  is  over  $25,000  the  statute  does  not  mean 
that  the  first  $25,000  is  exempt  but  that  the  "primary  rates"  were  to  be  com- 
puted in  all  cases  and  that  the  tax  is  not  merely  upon  the  excess  over  $25,000. 
In  re  Bull's  Estate,  153  Cal.  715,  96  P.  366. 

N.  Y.  St.  1896,  s.  221,  as  amended  by  the  statute  of  1900,  c.  706,  provides  for 
a  graduated  tax,  and  it  was  claimed  that  the  secondary  rates  are  to  be  calcu- 
lated upon  so  much  of  the  transfer  as  exceed  the  amounts  taxable  at  a  lower 
rate.  The  court  considers  that  the  words  "property"  and  "interest"  are  by 
their  context  confined  to  the  interest  which  passed  to  the  individuals.  On  a 
grammatical  construction  of  the  statute  in  consideration  of  its  language  the  court 
holds  that  the  words  "Up  to  and  including  the  sum  of"  relate  to  the  excess  over 
the  amount  subject  to  the  previous  rate  of  taxation,  and  should  be  read  as  if 
the  words  in  question  were  "upon  all  amounts  of  legacy  which  shall  be  in  excess  of 
said  $25,000."  The  amounts  of  each  class  are  reckoned  beginning  with  the  amount  of 
the  next  lower  class  and  not  by  considering  the  amount  of  the  whole  estate  in  ques- 
tion.    In  re  Jourdan,  70  Misc.  159, 128  N.  Y.  Suppl.  728.      See  further,  ante,  s.  66. 

"The  tax  must  be  computed  in  all  cases  upon  the  true  value  of  the  inheritance 
above  an  exemption  of  ten  thousand  dollars;  but  when  such  valuation  is  less 
than  fifty  thousand  dollars  the  tax  rate  is  one  and  one-half  per  cent  thereof; 
but  when  such  valuation  is  fifty  thousand  dollars  or  over  and  less  than  one 
hundred  thousand  dollars  the  rate  is  three  per  cent;  when  such  valuation  is 
one  hundred  thousand  dollars  or  over  the  rate  is  five  per  cent;  and  a  tax  on  a 
legacy  of  the  total  value  of  fifty-eight  thousand  dollars  should  be  at  the  rate 
of  one  and  one-half  per  cent.  It  is  clear  from  State  v.  Bazille,  97  Minn.  11,  106 
N.  W.  93,  6  L.  R.  A.  N.  S.  732,  that  it  was  the  intention  to  hold  in  that  case 
that  a  tax  was  laid  upon  all  inheritances  less  than  fifty  thousand  dollars  in  value 
above  the  exemption  at  the  rate  of  only  one  and  one-half  per  cent.  State  v. 
Probate  Court,  111  Minn.  297,  126  N.  W.  1070. 

[Validity  of  progressive  rates,  see  ante,  c.  XIV.] 


226  INHERITANCE  TAX  LAW.  [§  292. 

Sec.   292.     Primary  and   Secondary   Rates   as  Applied    to 
Income. 

Where  payments  of  income  are  provided  for  by  will  the  rate  of 
taxation  will  not  be  increased  from  the  primary  to  the  secondary 
rate  under  the  Minnesota  act  of  1905  until  the  value  of  the  right 
acquired  by  the  life  tenant  exceeds,  exclusive  of  the  statutory 
exemptions,  fifty  thousand  dollars,  and  in  like  manner  the  rate  can- 
not be  increased  to  five  per  cent  until  such  value  exclusive  of  the 
exemption  exceeds  one  hundred  thousand  dollars. 

State  V.  Probate  Court,  112  Minn.  279,  128  N.  W.  18,  22. 


w 


CHAPTER  XXXVI. 


INTEREST  AND  PENALTIES. 

§  293.  What  Law  Governs. 

§294.  In  Absence  of  Express  Provision. — Discount. 

§  295.  From  What  Date  Computed. 

§  296.  Excuses  for  Delay. 

§  297.  Pendency  of  Litigation. 

§  298.  Liabilities  of  Executor  or  Administrator. 

Sec.  293.    What  Law  Governs. 

Interest  and  penalties  are  governed  by  the  law  in  force  at  the 
testator's  death. ^  Penalties  for  failure  to  pay  a  general  tax  do 
not  apply  to  the  inheritance  tax.^ 

Un  re  Milne,  76  Hun  328,  27  N.  Y.  Suppl.  727. 

The  decedent  died  in  November,  1890,  and  contest  arose  over  the  probate  of 
the  will  which  was  decided  in  March,  1891.  The  question  arose  whether  interest 
on  the  amount  of  the  tax  due  should  be  charged  from  the  date  of  the  death  of 
the  decedent  or  from  a  date  eighteen  months  subsequent  thereto.  N.  Y.  St. 
1892,  c.  399,  s.  4,  does  not  apply  to  this  case,  as  when  the  decedent  died  the 
law  of  1887  applied,  and  under  its  provisions  the  executors  would  have  a  right 
to  ask  that  the  interest  charged  against  them  for  delayed  payment  of  the  tax 
should  be  six  per  cent  from  the  date  of  eighteen  months  after  the  death  of  the 
decedent.  The  repealing  act  of  1892  altered  this  provision  but  at  the  same  time 
saved  the  right  which  in  the  meaning  of  the  statute  had  either  accrued  or  was 
accruing  at  the  time  of  its  passage.  This  provision  of  the  fifth  section  of  the  act 
of  1887  may  well  be  called  a  "right"  within  the  meaning  of  the  act  of  1892. 
It  was  something  which  gave  to  the  parties  the  absolute  right  to  have  the  interest 
charged  at  a  certain  percentage  and  from  a  certain  date,  upon  the  fact  appearing 
which  the  statute  provided  for;  and  the  saving  feature  of  the  repealing  act  of 
the  statute  of  1892  applies  to  it.    In  re  Fayerweather,  143  N.  Y.  114,  38  N.  E.  278. 

^Wright  V.  Blakeslee,  101  U.  S.  174,  178,  25  L.  Ed.  1048,  Fed.  Cas.  18073,  13 
Blat.  421,  reversed. 

Sec.  294.    In  Absence  of  Express  Provision.  —  Discount. 

Interest  may  not  be  chargeable  unless  expressly  provided  for. 

Succession  of  Kohn,  115  La.  Ann.  71,  38  S.  898. 

Discount.  The  proviso  of  Col.  St.  1902,  c.  3,  s.  23,  that  if  the  tax  is  paid 
within  six  months  no  interest  shall  be  charged  and  that  a  discount  of  five  per 
cent  shall  be  allowed  does  not  have  the  effect  of  rendering  the  interest  charged 
a  penalty  but  it  is  only  the  usual  inducement  held  out  to  make  those  interested 


228  INHERITANCE  TAX  LAW.  [§§295-296. 

in  estates  pay  their  taxes  promptly  and  cannot  be  considered  as  fixing  a  time 
when  the  tax  becomes  delinquent,  after  which  a  penalty  is  imposed  for  non- 
payment.    People  V.  Rice,  40  Colo.  508,  91  P.  33. 

Sec.  295.  From  What  Date  Computed] 

Interest  and  penalties  may  run  from  the  period  provided  by  law 
for  the  settlement  of  the  estate,^  or  from  the  death  of  the  testator 
in  case  of  a  vested  remainder ,2  but  from  the  death  of  the  life  tenant 
in  case  of  a  contingent  remainder.^ 

i/w  re  Banks,  5  Pa.  Co.  Ct.  614. 

Effect  of  Delay.  Where  the  Massachusetts  statute  provides  that  the  tax 
shall  be  payable  at  the  expiration  of  two  years  after  the  date  of  giving  bond 
with  interest  from  that  date,  interest  should  be  computed  according  to  that  rule, 
although  a  part  of  the  estate  was  given  in  remainder  or  the  dispositions  of  the 
will  were  modified  by  an  agreement  that  was  entered  into.  The  whole  estate 
was  liable  to  the  tax  and  there  was  nothing  to  affect  the  time  when  it  was  pay- 
able.   Bradford  v.  Storey,  189  Mass.  104,  75  N.  E.  256. 

2Penn.  St.  1850,  P.  L.  170,  provided  that  taxes  on  remaindermen  which  were 
payable  before  the  passage  of  the  statute  at  the  death  of  the  decedent  might 
be  postponed  until  they  come  into  actual  possession,  and  relieved  them  from 
the  penalty,  but  not  from  the  interest.  Appeal  of  Commonwealth,  127  Pa.  St. 
435,  438,  17  A.  1004.     See  also  Comm.  v.  Smith,  20  Pa.  St.  (8  Harris)  100. 

Where  the  testator  died  in  1835,  leaving  a  life  estate  and  a  vested  remainder, 
the  remainder  was  then  liable  to  a  collateral  inheritance  tax  upon  its  clear  value, 
after  deducting  all  previous  estates.  After  the  acts  of  1850  and  1855  the  tax 
could  not  be  collected  by  the  state  until  the  actual  enjoyment  of  the  estate,  but 
it  continued  a  lien  and  should  now  be  appraised  at  its  value  in  1835,  firsu  de- 
ducting the  value  of  the  life  estate.  Interest  at  the  rate  of  six  per  cent  is  charge- 
able upon  the  appraised  value  from  1835  to  the  vesting  of  the  estate  in  possession 
and  must  be  paid  by  the  persons  now  entitled  to  the  estate.  Appeal  of  James, 
2  Del.  Co.  Rep.  (Pa.)  164. 

'  Where  a  will  left  property  to  a  life  tenant  and  on  her  death  to  her  children 
who  might  be  living  at  the  time  of  her  death,  it  was  not  certain  until  that  time 
whether  the  property  would  be  subject  to  an  inheritance  or  transfer  tax,  or 
whether  the  remainderman  would  ever  be  entitled  to  the  possession  of  the 
property  and  thus  become  liable  to  be  taxed.  Until  that  time  no  tax  accrued. 
Therefore  interest  at  six  per  cent  should  be  charged  only  from  the  death  of  the 
life  tenant.  In  re  Davis,  149  N.  Y.  539,  548,  44  N.  E.  185,  affirming  91  Hun  53. 
See,  however,  under  N.  Y.  St.  1899,  c.  76,  ante,  s.  290. 

Sec.  296.    Excuses  for  Delay. 

The  scarcity  of  funds  to  pay  the  tax,^  or  ignorance  of  the  law,  will 
not  affect  the  running  of  interest, ^  although  unavoidable  delay' 
or  uncertainty  as  to  liability  may  prevent  the  imposition  of  inter- 
est or  penalties.* 


INTEREST  AND  PENALTIES.  229 

'he  court  refused  to  enforce  a  penalty  of  eight  per  cent  where 
no  proceedings  had  been  taken  to  enforce  the  tax  on  account  of 
the  general  feeling  that  the  law  was  unconstitutional.  Under  the 
inheritance  law  a  penalty  of  eight  per  cent  is  collectible  in  case  of 
non-payment  within  a  year  of  the  death  of  the  testatrix;  but  the 
court  refused  to  impose  the  penalty  on  the  ground  that  it  was 
unjust  where  there  had  been  no  effort  made  to  enforce  the  law. 
As  the  direct  inheritance  tax  was  declared  unconstitutional  it  was 
supposed  that  the  collateral  inheritance  tax  would  meet  the  same  fate. 
When  the  collateral  inheritance  tax  was  finally  declared  valid  the 
court  holds  that  the  executors  were  not  negligent  in  failing  to  pay 
the  tax  before  the  decision  of  the  court,  and  that  there  was  no 
basis  for  the  imposition  of  a  penalty.^ 

1  Under  Tenn.  St.  1893,  c.  174,  s.  3,  the  tax  bears  interest  from  the  date  when 
it  is  payable,  one  year  from  the  death  of  the  decedent,  notwithstanding  the 
pendency  of  litigation,  the  scarcity  of  funds  and  other  causes.  Shelton  v.  Camp- 
hell,  109  Tenn.  690,  72  S.  W.  112. 

2/w  re  Piatt,  8  Misc.  Rep.  144,  29  N.  Y.  Suppl.  396. 

^"Unavoidable  delay"  may  be  a  misnomer  of  the  trustee  named  in  the  will 
which  was  not  discovered  for  some  time.     In  re  Banks,  5  Pa.  Co.  Ct.  614. 

The  burden  of  showing  that  such  unavoidable  cause  of  delay  in  settling 
any  estate  exists  is  on  the  estate.  People  v.  Prout,  53  Hun  541,  6  N.  Y.  Suppl. 
457. 

*  Under  Wisconsin  statute  the  penalty  of  ten  per  cent  should  not  be  imposed 
for  a  three  years'  delay  when  it  was  uncertain  during  that  time  whether  or  not 
the  transfer  by  a  deed  of  gift  was  subject  to  taxation,  as  to  the  amount  of  stock 
included  in  it,  and  the  value  of  the  stock  transferred.  State  v.  Pahst,  139  Wis. 
561,  595,  121  N.  W.  351. 

Un  re  Bates,  7  Ohio  N.  P.  625,  5  Ohio  S.  &  C.  P.  Dec.  547. 

Sec.  297.    Pendency  of  Litigation. 

The  pendency  of  litigation  does  not  of  itself  postpone  the  begin- 
ning of  the  running  of  interest,^  but  may  have  this  effect  by  statute  ^ 
covering  an  "unavoidable  cause  of  delay."  ^ 

^People  v.  Rice,  40  Colo.  508,  91  P.  33.  In  re  Stewart,  131  N.  Y.  274,  285» 
30  N.  E.  184,  14  L.  R.  A.  836,  under  the  act  of  1885. 

Under  the  Pennsylvania  statutes  it  was  the  duty  of  the  executors  to  estimate 
the  amount  of  personal  estate  involved  in  difficulties  which  could  not  be  settled 
and  pay  the  collateral  inheritance  tax  on  the  balance.  For  failure  to  do  so  they 
are  chargeable  with  interest  at  the  rate  of  twelve  per  cent  per  annum  from  a 
year  after  the  death  of  the  testator.  Appeal  of  Commonwealth,  34  Pa.  St.  (10 
Casey)  204. 

The  fact  that  proceedings  are  pending  to  test  the  validity  of  the  will  cannot 
postpone  the  maturity  of  the  tax  when  it  appears  that  in  either  event,  testacy 


I 


230  INHERITANCE  TAX  LAW.  [§298. 

or  intestacy,  the  tax  will  be  payable  at  the  same  rate  as  in  the  present  case, 
and  interest  is  chargeable  from  one  year  after  the  testator's  death,  Shelton  v. 
Campbell,  109  Tenn.  690,  72  S.  W.  112. 

2  7«  re  Prout,  22  N.  Y.  St.  Rep.  334,  3  N.  Y.  Suppl.  834  (penalty  and  not 
interest).  In  re  Bolton,  35  Misc.  Rep.  688,  72  N.  Y.  Suppl.  430.  In  re  Miller, 
182  Pa.  St.  157,  161,  37  A.  1000. 

"Litigation'*  as  set  forth  in  the  statute  of  1887  as  the  cause  of  delaying  the 
penalty  for  non-payment  of  the  inheritance  tax  must  be  such  that  the  amount 
of  tax  due  cannot  be  definitely  ascertained  until  its  determination  as  between 
the  estate  and  adverse  parties.    In  re  Small,  12  Pa.  Co.  Ct.  226, 

Where  Legatees  Died  and  no  Representative  was  Appointed.  The 
legatee  should  be  relieved  from  the  payment  of  interest  at  ten  per  cent  for  the 
period  covered  by  the  contest  of  the  wills  of  two  heirs  at  law  of  the  decedent, 
pending  which  contest  the  estates  of  these  heirs  had  no  legal  representative, 
under  N.  Y.  St.  1885,  c.  483,  s.  5.    In  re  Prout,  3  N.  Y.  Suppl,  831. 

'  Litigation  among  distributees  of  an  estate  to  determine  their  respective  shares 
is  '*an  unavoidable  cause  of  delay  at  settling  the  estate."  In  re  Moore,  90  Hun 
162,  35  N.  Y.  Suppl.  782. 

Sec.  298.    Liabilities  of  Executor  or  Administrator. 

The  executor  is  personally  liable  for  excess  interest  after  the 
time  allowed  by  law  to  settle  the  estate.^  The  penalty  should  be 
charged  to  the  administrator .^ 

^  The  court  holds  that  the  executor  is  not  bound  to  pay  the  tax  until  the  expira- 
tion of  the  year  allowed  him  by  law  with  which  to  settle  the  estate.  He  is  en- 
titled to  know  the  amount  payable  for  the  payment  of  legacies  after  the  debts 
are  paid  and  to  have  a  reasonable  time  thereafter  before  he  pays  the  tax  and  the 
legacies.  The  court  holds,  therefore,  that  the  executor  should  be  allowed  in  his 
account  for  the  principal  of  the  tax  he  has  paid  together  with  interest  collected 
thereon  under  the  statute  for  one  year;  and  that  as  he  is  bound  to  pay  this 
tax  on  the  legacies  at  the  expiration  of  the  year  he  cannot  be  allowed  any  interest 
he  has  paid  thereon  after  that  period.  The  executor  is  personally  chargeable 
with  the  whole  penalty  and  is  not  entitled  to  be  allowed  in  the  accounting  for 
the  excess  interest  or  penalty.     Wyckoff  v.  0'  Neil,  72  N.  J.   Eq.  880,  67  A.  32. 

The  executor  should  not  be  charged  with  five  per  cent  interest  upon  the 
amount  of  the  transfer  tax  upon  the  estate  upon  the  ground  that  he  should  have 
had  the  tax  assessed  and  paid  within  six  months  after  the  death  of  the  testator, 
where  the  testator  died  October  10,  1896,  and  probate  was  issued  February  3, 
1897,  and  the  tax  was  assessed  May  27,  1897,  In  re  Sudds,  32  Misc.  Rep.  182, 
66  N,  Y,  Suppl,  231.  .,- 

2/w  re  Palmer,  2  Del.  Co.  Rep.  (Pa.)  180.  I 


CHAPTER  XXXVII. 


WHEN  TAX  ACCRUES. 

§  299.  At  Death  of  Testator. 

§  300.  On  Future  Interests. 

§  301.  Merger  of  Remainder. 

§  302.  Interest  in  Estate  of  Another. 

Sec.  299.    At  Death  of  Testator. 

Inheritance  taxes  almost  universally  accrue  at  the  death  of  the 
testator/  even  in  case  of  gifts  causa  mortis,'^  although  the  legacies 
are  payable  only  after  a  statutory  period  for  settling  the  estate,' 
which  period  may  operate  to  postpone  the  payment  of  the 
inheritance  tax.^  Liability  may,  however,  depend  on  demand  for 
the  tax.^ 

^Estate  of  Sanford,  126  Cal.  112,  58  P.  462,  45  L.  R.  A.  788.  In  re  Martin's 
Estate,  153  Cal.  225,  94  P.  1053.  In  re  Bowen's  Estate,  Cal.  1908,  94  P.  1055. 
Ayers  v.  Chicago  Title  &  Trust  Co.,  187  111.  42,  58  N.  E.  318.  In  re  Wells,  142 
Iowa  255,  120  N.  W.  713.  Succession  of  Becker,  118  La.  Ann.  1056,  43  S.  701. 
Appeal  of  Mellon,  114  Pa.  St.  564,  570,  8  A.  183.  In  re  Williamson,  153  Pa. 
St.  508,  521,  26  A.  246,  32  Wkly.  Notes  Cas.  93.  In  re  Line,  155  Pa.  St.  378, 
385,  26  A.  728,  32  Wkly.  Notes  Cas.  376. 

Reason  for  Rule.  "Man's  dominion  over  his  property  ceases  at  his  death, 
wherefore  in  all  civilized  countries  the  state  provides  how  he  may  devolve  it  to 
others  at  his  death  and  what  shall  become  of  it  when  he  dies  intestate.  The 
right  so  given  either  to  devolve  or  to  succeed  to  property  is  subject  to  the  power 
of  the  state  to  tax,  and  generally  is  taxed.  To  use  a  homely  simile  it  may  be 
likened  to  the  taking  of  toll  from  the  grist  that  is  sent  to  the  mill,  arid  aside  from 
considerations  of  convenience  it  is  immaterial  whether  the  whole  toll  be  taken 
as  soon  as  the  grist  is  received  or  proportionately  as  the  flour  is  delivered.  But 
while  the  tax  has  been  likened  to  the  toll  that  is  taken  for  the  grinding  of  a  grist, 
it  must  not  be  overlooked  that  it  is  the  right  to  devolve  or  to  succeed  to  property 
that  is  taxed,  and  that  an  additional  exaction  might  be  made  as  is  done  in  some 
states  for  the  service  in  passing  the  property,  sometimes,  as  in  England,  called 
probate  duties.  So  that  the  right  of  the  state  to  and  the  liability  of  the  suc- 
cessor for  the  tax  generally  arises  uppn  the  death  of  the  owner  of  the  property  and 
is  not  dependent  upon  the  right  of  succession  ripening  into  possession  or  enjoy- 
ment, and  the  fact,  if  it  be  a  fact,  that  the  state  may  have,  by  measuring  the 
amount  of  the  tax  by  the  value  of  the  property  succeeded  to,  made  it  imprac- 
ticable or  difficult  to  collect  the  tax  until  the  right  has  ripened  into  possession, 
does  not  change  the  subject  of  the  tax,  but  merely  postpones  its  collection," 
Per  Summers,  J.,  in  Eury  v.  State,  72  Ohio  St.  448,  74  N.  E.  650. 


232  INHERITANCE  TAX  LAW.  [§300. 

Mere  Postponement.  Where  a  title  to  a  certain  farm  vested  in  the  devisee 
and  no  estate  for  life  or  years  intervened  but  he  was  to  have  the  use  of  the  farm 
for  ten  years  and  at  the  expiration  of  ten  years  to  have  the  farm  in  fee,  and  where 
certain  legacies  with  interest  were  to  be  paid  to  the  legatees  after  the  expiration 
of  ten  years,  the  time  of  the  payment  of  the  legacies  only  was  postponed;  and 
hence,  neither  the  .devise  nor  the  bequests  come  within  section  3  of  the  Pennsyl- 
vania statute  of  1887,  so  as  to  postpone  the  payment  of  the  collateral  inheritance 
tax.  In  re  Dalrymple,  215  Pa.  St.  367,  373,  64  A.  554.  See  State  v.  Probate 
Court,  100  Minn.  192,  110  N.  W.  865.  State  v.  Probate  Court,  101  Minn.  485,  112 
N.  W.  878. 

The  words  *'on  his  settlement"  referring  to  payment  of  tax  do  not  refer  to 
a  final  settlement  of  the  estate,  but  its  settlement  so  far  as  the  legatee  or  distribu- 
tee is  concerned,  out  of  whose  legacy  or  share  the  tax  is  to  be  retained,  and  the 
tax  on  each  should  be  paid  as  soon  as  this  legacy  itself  was  paid.  Attorney 
General  v.  Allen,  59  N.  C.  144.  The  same  construction  was  given  to  the  federal 
act  of  1898  in  Fidelity  Trust  Co.  v.  United  States,  45  Ct.  CI.  362. 

2  In  re  Masury,  159  N.  Y.  532,  53  N.  E.  1127,  affirming  28  N.  Y.  App.  Div.  580. 

3  May  V.  Slack,  Fed.  Cas.  9336. 

4  Commonwealth  v.  Gaulbert,  134  Ky.  157,  119  S.  W.  779. 

^  United  States  v.  Pennsylvania  Co.,  27  Fed.  539  (under  the  federal  act  of  1866.) 

Sec.  300.    On  Future  Interests. 

Statutes  usually  postpone  the  tax  on  future  interests  until  they 
come  into  possession,  as  in  case  of  remainders,^  or  it  may  be  left 
for  the  remaindermen  to  elect  not  to  pay  until  they  come  into  pos- 
session .^  So  the  tax  may  be  levied  when  the  beneficiaries  come 
into  possession  in  case  of  contingent  interests,^  annuities,^  or  inter- 
ests not  immediately  ascertainable.^ 

1  Ayers  v.  Chicago  Title  &  Trust  Co.,  187  111.  42,  58  N.  E.  318  (remainders  to 
collaterals,  strangers  and  the  body  politic).  Dow  v.  Abbott,  197  Mass.  283,  288. 
Appeal  of  James,  2  Del.  Co.  Rep.  (Pa.)  164  (by  election  of  future  beneficiaries 
under  St.  1850,  c.  170).  In  re  Wharton  (1881),  14  Phila.  (Pa.)  279.  In  re  Von 
Storch,  7  Pa.  Dist.  R.  204.  In  re  Budd.,  12  Pa.  Co.  Ct.  476  (provided  security 
given  under  St.  1887).  Bailey  v.  Drane,  96  Tenn.  (12  Pickle)  16,  33  S.  W.  573. 
In  re  Coxe,  181  Pa.  St.  369,  37  A.  517.  Hellman  v.  United  States  (15  Blatch. 
131),  Fed.  Cas.  6341,  affirming  Fed.  Cas.  15,  343.  Clapp  v.  Mason,  94 
U.  S.  589.     Vanderbilt  v.  Eidman,  196  U.  S.  480,  25  S.  Ct.  331,  49  L.  Ed.  563. 

Sections  29  and  30  of  United  States  statute  of  1898  do  not  impose  any  tax 
upon  a  vested  future  interest  before  the  period  when  possession  or  enjoyment 
had  attached.  The  practice  under  the  act  of  1898  was  to  tax  only  beneficial 
interests  where  the  right  to  possess  or  enjoy  had  accrued.  It  was  thought  that 
the  amendment  of  March  2,  1901,  31  Stat.  946,  changed  this  situation.  The 
amendments  which  the  tax  officials  decided  made  vested  interests  subject  to 
taxation  were  that  the  tax  or  duty  should  be  due  and  payable  within  one  year 
after  the  death  of  the  decedent,  and  that  the  executor,  administrator  or  trustee 
should  make  the  return  of  the  estate  in  his  control  within  thirty  days  after  taking 
charge.     The  court  holds,  however,  that  these  amendments  did  not  justify 


300.]  WHEN  TAX  ACCRUES.  233 

lis  construction  that  Congress  intended  to  cause  death  duties  to  become  due 
nthin  one  year  as  to  legacies  and  distributive  shares  which  were  not  capable 
rf  being  immediately  possessed  or  enjoyed,  and  were  therefore  not  subject  to 
-ixation  under  the  original  act.  Vanderbilt  v.  Eidman,  196  U.  S.  480  498  25 
Ct.  331,  49  L.  Ed.  563. 

•Where  the  remaindermen  do  not  or  cannot  (as  where  they  are  uncertain) 

ike  an  election  not  to  pay  the  tax  until  they  come  into  actual  enjoyment  as 

rovided  by  the  statute,  the  tax  must  be  paid  at  once.     Furthermore,  where 

lere  is  no  provision  for  the  remainder  going  to  collateral  relatives,  a  stranger 

[o  the  blood  or  to  a  corporation,  there  is  no  one  to  make  an  election  and  the  tax 

p  the  remainder  becomes  due  under  the  statute.     Ayers  v.  Chicago  Title  &  Trust 

?.,  187  111.  42,  58  N.  E.  318. 

'In  re  Wallace,  4  N.  Y.  Suppl.  465.     In  re  Westcott,  11  Misc.  Rep.  589,  33 

[.  Y.  Suppl.  426,  following  In  re  Hoffman,  143  N.  Y.  327,  38  N.  E.  311.     In  re 

lum,  37  Misc.  Rep.  466,  75  N.  Y.  Suppl.  940.     In  re  Hooper,  6  Low  D.  560,  4 

^hio  N.  P.  186.    Bailey  v.  Drane,  96  Tenn.  (12  Pickle)  16,  33  S.  W.  573. 

The  New  York  act  of  1899  made  future  interests  presently  taxable.     In  re 

luber,  86  N.  Y.  App.  Div.  458,  83  N.  Y.  Suppl.  769,  where  property  is  left  in 

rust  on  the  death  of  the  life  tenant  to  a  daughter  for  life  and  on  her  death  to  her 

sue.     Miller  v.  Tracy,  93  N.  Y.  App.  Div.  27,  86  N.  Y.  Suppl.  1024,  considering 

le  effect  of  the  amendment  of  1901.     In  re  Runcie,  36  Misc.  Rep.  607,  73  N.  Y. 

Juppl.  1120,  where  the  remaindermen  are  known. 

The  tax  under  the  act  of  1899  is  not  required  to  be  paid  by  the  conditional 

insferee,  as  it  is  to  be  paid  out  of  the  property  transferred,  so  that  whoever 

ly  ultimately  take  the  property  takes  that  which  remains  after  the  payment 

the  tax;  it  therefore  contemplates  defeasible  transfers  as  well  as  absolute 

insfers.     In  re  Vanderbilt,  172  N.  Y.  69,  72,  64  N.  E.  782,  modifying  68  N.  Y. 

Lpp.  Div.  27,  74  N.  Y.  Suppl.  450.     In  re  Brez,  172  N.  Y.  609,  64  N.  E.  958, 

jversing  69  N.  Y.  App.  Div.  619. 

^Disston  V.  McClain,  147  Fed.  114,  77  C.  C.  A.  340,  reversing  143  Fed.  191. 

^In  re  Millward,  6  Misc.  425,  27  N.  Y.  Suppl.  286  (income  of  estate  to  widow 

for  life  but  in  case  of  remarriage  then  use  of  one-half  only).  In  re  Simon,  7  Ohio 

\.  P.  667,  39  Wkly.  L.  Bui.  369  (remainders  after  life  estate  with  power  of  using 

)rincipal). 

If  the  remaindermen  are  not  ascertainable  that  is  no  reason  why  the 

should  be  collected  from  the  life  tenant  who  is  exempt.     The  only  effect  of 

Buch  condition  would  be  that  the  tax  would  not  be  presently  collectible  at  all, 

ind  the  commonwealth  would  have  to  depend  on  its  lien  on  the  real  estate,  and  its 

^laim  on  the  executors  when  they  make  distribution.     In  re  Coxe,  181  Pa.  St. 

59,  378,  37  A.  517. 

Where  a  future  estate  depends  on  such  possibilities  as  the  marriage  or  having 
lildren  of  life  tenants  it  is  a  mere  possible  interest  which  could  not  have  a  market 
ilue;  and  the  courts  in  order  to  enforce  immediate  collection  of  the  tax  cannot 
change  the  tax  from  one  on  succession  to  one  on  property.  No  other  course 
is  left  open  in  the  practical  administration  of  the  statute  than  to  postpone  the 
assessing  and  collecting  of  tax  upon  such  remote  contingent  interests  as  are 
incapable  of  valuation  and  as  to  which  the  rate  and  the  exceptions  cannot  be 
determined.    Billings  v.  People,  189  111.  472,  59  L.  R.  A.  807. 


234  INHERITANCE  TAX  LAW.  [§§301-302. 


Life  Estate  in  Remainder.  Where  a  testator  gives  to  his  wife  for  life  and 
on  her  death  the  life  estate  to  G.,  the  estate  to  G.  comes  within  the  statutory 
definition  of  a  vested  remainder,  but  it  is  very  different  from  a  case  where  the 
will  gives  a  life  estate  to  A.  and  the  remainder  to  B.  and  his  heirs.  At  the  pres- 
ent time  G.  has  no  estate  that  she  could  sell  to  any  one  at  any  price  and  there- 
fore the  inheritance  tax  must  be  postponed  until  the  death  of  the  life  tenant. 
In  re  Westcott,  11  Misc.  Rep.  589,  33  N.  Y.  Suppl.  426. 

Sec.  301.     Merger  of  Remainder. 

Where  the  title  to  a  succession  has  been  accelerated  by  the 
extinction  of  prior  interests  by  agreement  of  parties,^  or  by  convey- 
ance,^ the  tax  is  payable  upon  the  whole. 

^Brune  v.  Smith,  Fed.  Cas.  2053. 

2  Two  remaindermen  after  a  life  interest  to  the  wife  of  the  testator  conveyed 
their  interests  to  the  wife,  but  the  court  holds  that  a  conveyance  by  these  two 
parties  does  not  withdraw  the  estate  from  the  operation  of  the  collateral  inheritance 
tax  law  and  defeat  its  collection.  It  was  claimed  that  by  the  conveyance  the 
estate  of  the  wife  became  merged  into  a  fee  and  that  therefore  there  was  nothing 
left  for  the  remainders.  The  only  question  remaining  is  whether  in  view  of  the 
transfer  made  the  period  for  the  collection  of  the  tax  has  been  accelerated  so 
as  to  make  it  collectible  at  once  and  if  so  from  whom  shall  it  be  collected  and  upon 
what  basis.  The  statute  provides  that  the  remainder  is  taxable  only  when 
it  comes  into  possession  and  beneficial  enjoyment.  The  court  concludes  that  when 
the  life  tenant  became  the  owner  of  the  remainder  interests  in  the  property  the 
two  estates  thereby  merged  into  one  and  the  remainder  vested  in  possession  to 
all  intents  and  purposes  and  for  all  beneficial  uses,  and  she  might  at  once  dispose 
of  the  whole  estate  in  fee.  She  became  thus  entitled  to  the  possession  as  fee  simple 
owner  of  the  estate  and  the  beneficial  use  of  it  as  a  whole,  and  by  virtue  of  these 
transactions  a  tax  upon  the  remainder  interest  became  at  once  payable  and  upon 
an  assessment  at  its  value  at  that  time.  The  state  as  the  effect  of  the  trans- 
actions between  the  parties  became  at  once  entitled  to  an  inheritance  tax  upon 
the  full  value  of  the  remainder  interest  as  fixed  by  the  appraisement.  Harrison  v. 
Johnston,  109  Tenn.  245,  70  S.  W.  414,  417. 

Sec.  302.     Interest  in  Estate  of  Another. 

The  interest  of  the  decedent  in  the  estate  of  another  is  pres- 
ently taxable  although  the  net  amount  due  thereunder  is  not  yet 
fixed.  The  right  of  the  decedent  to  the  net  amount  was  irrevo- 
cably fixed  at  his  death,  when  he  was  in  constructive  possession 
of  the  property. 

In  re  Milliken,  206  Pa.  St.  149,  55  A.  853.  See  In  re  Clinch,  180  N.  Y.  300 
73  N.  E.  35,  affirming  99  N.  Y.  App.  Div.  298,  90  N.  Y.  Suppl.  923,  44  Misc.  190 
89  N.  Y.  Suppl.  802. 


CHAPTER  XXXVI I L 


PERSONS  LIABLE. 

§  303.  Under  Direction  of  Will,  or  of  Court. 

304.  Order  of  Probate  Court  as  Protection. 

305.  Aliens.  —  Strangers. 
[$  306.  Annuity. 

|§307.  Annuity  to  Executor. 

f§308.  Corporation  to  be  Created. 

[§309.  As  between  Life  Tenant  and  Remainderman. 

§  310.  Where  no  Next  of  Kin  are  Known. 

§311.  Lineal  Descendants. 

[§312.  Descendants  of  Collaterals. 

f§313.  Children  of  Deceased  Beneficiary. 

^§  314.  Stepchildren. 

§315.  Where  Relative  was  Both  Nephew  and  Stepson. 

§316.  Son-  or  Daughter-in-law. 

§317.  Executors  or  Beneficiaries. 

§318.  Payments  of  Tax  Should  Appear  in  Executor's  Account. 

§  319.  Adoption. 

§320.  Mutually  Acknowledged  Relation  of  Parent. 

§321.  Bastards.  —  Effect  of  Legitimization. 

§322.  Loss  of  Tax  Paid  Unnecessarily  Falls  on  Residue. 


Sec.  303.    Under  Direction  of  Will,  or  of  Court. 

Whether  inheritance  taxes  are  a  charge  against  the  estate  or 
are  to  be  deducted  from  the  several  legacies  is  a  question  of  the 
testator's  intention,  as  expressed  in  his  will.^  The  will  may  direct 
the  executors  to  pay  all  legacies  out  of  the  estate .^  but  not  unless 
clear  reference  to  the  inheritance  tax  is  made,^  and  such  direction 
cannot  affect  the  tax  on  the  residue  by  causing  the  tax  on  prior 
legacies  to  be  deducted  before  its  appraisal.^  A  testator  may  direct 
that  the  tax  on  a  particular  legacy  shall  be  paid  out  of  his  estate; 
nevertheless,  in  reality  the  tax  is  still  paid  out  of  the  legacy,  the 
effect  of  the  direction  of  the  testator  being  merely  to  increase  the 
legacy  by  the  amount  of  the  tax.^  The  provision  in  a  will  that 
the  collateral  inheritance  tax  shall  be  paid  out  of  the  residue  but  not 
out  of  the  pecuniary  legacies  is  not  restricted  to  the  legacies  then 
given,  but  includes  legacies  given  in  a  subsequent  codicil.* 


236  INHERITANCE  TAX  LAW.  ,  [§  303 

Where  a  decree  of  distribution  orders  a  deduction  only  of  "the 
amount  of  the  inheritance  tax  as  required  by  law,"  and  does  not 
fix  the  amount  of  such  tax  nor  expressly  adjudicate  that  any  tax 
should  be  deducted  but  leaves  the  matter  dependent  upon  whether 
or  not  the  law  requires  any  inheritance  tax,  the  distributees  are 
entitled  to  the  entire  residue  of  the  estate  under  that  decree  where 
no  inheritance  tax  could  be  collected.^ 

1  Kingsbury  v.  Bazeley,  75  N.  H.  13,  70  A.  916. 

2  To  Individuals.  Where  the  will  directs  the  executors  to  pay  taxes  that  may 
become  due  upon  any  legacies  "given  by  this  will  to  individuals"  this  language 
has  no  reference  to  legacies  given  to  individuals  in  trust  for  establishing  a  charity. 
Kingsbury  v.  Bazeley,  75  N.  H.  13,  70  A.  916. 

Money  Includes  Annuity.  Where  the  will  provides  that  all  bequests  of 
"money"  shall  be  paid  without  deduction  for  the  inheritance  tax,  this  included 
an  annuity  payable  by  a  devisee  out  of  the  rents  of  the  land.  As  the  annuity 
is  a  bequest  in  money  not  subject  to  a  deduction  for  the  tax,  the  burden  falls 
on  the  residuary  estate,  even  though  the  bequest  was  payable  out  of  rents  coming 
from  a  particular  source.    In  re  Lea,  194  Pa.  St.  524,  45  A.  337. 

Charge  of  Tax  Subsequently  Enacted.  Where  the  testator's  will  was  drawn 
in  1895,  and  she  died  in  1900  and  directed  the  "collateral  inheritance  tax"  to  be 
paid  by  the  executor  out  of  the  corpus  of  the  estate,  this  did  not  charge  the 
estate  with  the  federal  inheritance  tax  of  1898.  There  was  a  clear  disposition 
to  charge  the  corpus  of  the  estate  with  the  collateral  inheritance  tax  only,  which 
was  at  that  time  the  only  legacy  tax  in  existence.  In  re  Baker,  21  Pa.  Super. 
Ct.  536. 

2  A  will  provided  that  the  executors  were  authorized  and  empowered  to  pay 
any  or  all  of  ihe  legacies  within  one  year  after  the  decease  of  the  testator  "with- 
out any  rebate  or  deduction  whatever."  The  will  was  executed  in  1884,  and 
the  court  holds  that  this  clause  can  hardly  have  been  intended  to  apply  to  a 
succession  or  legacy  tax  although  it  was  reaffirmed  by  a  codicil  executed  after 
the  passage  of  the  statute.  Apart  from  this  the  court  holds  that  the  words 
used  would  not  have  the  effect  of  entitling  the  legatee  to  the  legacy  free  of  tax 
even  if  the  will  had  been  executed  after  the  passage  of  the  inheritance  tax.  The 
tax  is  paid  on  account  of  the  legatee  and  in  legal  effect  is  precisely  the  same  as 
if  the  legacy  was  to  be  paid  over  to  the  legatee  intact  and  then  the  tax  was  to  be 
collected  from  him.  Strictly  speaking,  therefore,  the  tax  is  not  a  "rebate  or 
deduction"  from  the  legacy.  The  tax  is  not  a  tax  upon  the  estate  or  legacy 
devised  or  bequeathed,  but  is  a  tax  imposed  upon  the  legatee  for  the  privilege 
of  succeeding  to  the  property.  It  is  merely  for  the  convenience  of  the  state  to 
ensure  certainty  of  collection  of  the  duties  cast  upon  the  executors  of  paying 
the  tax.    Jackson  v.  Tailer,  41  Misc.  Rep.  36,  83  N.  Y.  Suppl.  567. 

A  direction  in  a  will  that  an  annuitant  "is  to  receive  not  less  than 
$1,500  a  year"  is  not  of  itself  enough  to  show  an  intention  to  place  the  burden 
of  the  tax  on  the  general  estate  and  relieve  the  annuitant  from  the  inheritance 
tax.    In  re  Holbrook,  3  Pa.  Co.  Ct.  265,  20  Wkly.  Notes  Gas.  69. 

*  In  re  Swift,  137  N.  Y.  77,  87,  32  N.  E.  1096,  18  L.  R.  A.  709,  64  Hun  639, 
16  N.  Y.  Suppl.  193,  19  N.  Y.  Suppl.  292. 


I 


§§304-306.1  PERSONS  LIABLE.  237 


1 


Un  re  Gihon,  169  N.  Y.  443,  447,  612  N.  E.  561,  modifying  64  N.  Y.  App 

iv.  504,  72  N.  Y.  Suppl.  1104. 

*/w  re  Cummings,  12  Pa.  Co.  Ct.  45. 

7  Wirringer  v.  Morgan,  12  Cal.  App.  26,  106  P.  425. 

[Validity  of  classification  by  relationship,  see  ante,  s.  62.] 


Sec.  304.    Order  of  Probate  Court  as  Protection. 

A  decree  of  distribution  by  the  probate  court  ordering  distribu- 
tion without  allowance  for  the  inheritance  tax  is  in  general  no 
protection  to  the  executor  who  acts  under  it,^  and  neither  is  an 
allowance  by  the  court  of  accounts  omitting  provision  for  the  tax.- 

The  court  holds  that  where  executors  have  paid  a  legacy  in  good 
faith,  relying  upon  a  void  order  of  the  surrogate,  they  are  per- 
sonally liable.  If  the  surrogate  had  no  jurisdiction,  then  it  is  diffi- 
cult to  see  how  such  decree  could  be  a  protection  for  anybody  for 
anything  done  in  pursuance  thereof.^ 

1  Att.  Gen.  v.  Rafferty,  209  Mass.  321,  95  N.  E.  747,  the  court  assuming  that 
the  decrees  were  properly  entered  and  that  the  probate  court  had  jurisdiction 
and  that  the  administrator  acted  in  good  faith.  In  re  Hacket,  14  Misc.  282,  35 
N.  Y.  Suppl.  1051. 

^Att.  Gen.  v.  Stone,  209  Mass.  186,  95  N.  E.  395. 

3/n  re  Wolfe,  21  N.  Y.  Suppl.  522,  reversing  15  N.  Y.  Suppl.  539. 

Sec.  305.    Aliens.  —  Strangers. 

The  Louisiana  tax  upon  foreign  heirs  was  sustained  as  a  regu- 
lation of  inheritance  and  the  court  says  that  as  every  stat  e  or 
nation  may  refuse  to  allow  an  alien  to  take  either  real  or  personal 
property,  it  follows  that  when  it  grants  the  privilege  it  may  annex 
to  the  grant  any  conditions  which  it  supposes  to  be  required  by  its 
interests  or  policy.^  The  term  "strangers"  in  the  tax  act  means 
"all  other  persons"  not  included  in  a  previous  list  of  beneficiaries. 
So  it  may  include  a  widow  under  a  statute  naming  only  descend- 
ants or  collaterals.^ 

1  Scholey  v.  Rew,  23  Wall.  331.     See  ante,  s.  61. 

California  and  Louisiana  formerly  had  a  tax  on  foreign  heirs  alone,  and  Iowa 
now  discriminates  heavily  against  non-resident  aliens  as  collateral  heirs  or 
legatees.    A  similar  Washington  statute  was  repealed  in  1911. 

^Succession  of  Baker,  (La.  1911,)  55  So.  714. 

Sec.  306.    Annuity. 

Where  a  residuary  estate  was  given  in  trust  to  pay  an  annuity,  the 
court  holds  that  the  intention  was  that  the  annuitant  should  receive 


238  '        INHERITANCE  TAX  LAW.  [§§307-309. 

the  clear  annual  sum  named  in  the  annuity  and  therefore  the  tax 
must  fall  upon  the  residue. 

In  re  Bispham,  6  Pa.  Co.  Ct.  459.     See  further,  ss.  303,  n.  2,  342. 

Sec.  307.    Annuity  to  Executor. 

The  will  provided  that  the  executor  and  trustee  should  be  paid 
from  his  estate  the  sum  of  $1,500  annually,  together  with  the 
commissions  allowed  by  law,  as  long  as  he  should  act  as  executor, 
and  the  court  holds  under  the  New  York  statute  of  1896,  that 
this  annuity  is  subject  to  the  transfer  tax. 

In  re  Huber,  86  N.  Y.  App.  Div.  458,  83  N.  Y.  Suppl.  769. 

Sec.  308.    Corporation  to  be  Created. 

Where  a  non-resident  left  an  interest  in  an  estate  to  a  corpora- 
tion to  be  created,  and  no  such  corporation  has  ever  been  created, 
no  tax  can  be  levied  upon  the  gift,  as  no  interest  can  pass  to  a  body 
corporate  which  has  no  existence. 

In  re  Chesebrough,  34  Misc.  Rep.  365,  69  N.  Y.  Suppl.  848.  See,  however. 
In  re  Arnot,  130  N.  Y.  Suppl.  197,  where  devise  to  corporation  to  be  created 
was  held  exempt. 

[Tax  on  institution,  see  ante,  s.  280.] 

Sec.  309.    As  between  Life  Tenant  and  Remainderman. 

Each  legatee  of  income  should  in  Pennsylvania  pay  the  tax  from 
his  share  unless  otherwise  expressly  directed.^  lender  the  New 
York  statutes  it  is  the  duty  of  the  executors  and  trustees  to  ascer- 
tain the  value  of  the  respective  life  estates  and  estates  in  remainder, 
and  having  done  this  they  should  compute  the  transfer  tax  and  pay 
the  same  out  of  the  property  transferred.  The  result  is  that  the 
life  tenant  loses  during  the  continuance  of  his  estate  the  interest 
upon  the  corpus  of  the  trust  so  paid  out,  and  eventually  the  re- 
mainderman receives  his  estate  diminished  by  the  amount  of  said 
payment.  The  court  is  not  concerned  with  the  question  of  whether 
this  works  out  justice  as  between  the  life  tenant  and  the  remainder- 
man. The  legislative  intention  is  clear  that  the  transfer  tax  shall 
be  paid  out  of  the  corpus  of  the  trust  estate  and  not  out  of  the 
income.  The  court  remarks  that  In  re  Vanderbilt,  172  N.  Y.  69, 
dealt  only  with  the  contingent  remainder  and  is  therefore  not 
strictly  in  point  but  that  the  principle  announced  therein  is  neces- 
sarily involved  in  life  estates  created  by  trusts.^ 


310-313.]  PERSONS  LIABLE,  239 

1  In  re  Brown,  208  Pa.  St.  161,  57  A.  360.  The  direction  in  a  will  "after  deduct- 
ig  any  and  all  necessary  expenses  to  divide  the  said  net  income  in  equal  shares 

long"  certain  persons  results  in  deducting  the  inheritance  taxes  from  the 
ross  income,  after  which  the  net  income  is  to  be  divided  in  equal  shares  among 
le  life  tenants.     See  ante,  s.  229. 

"In  re  Tracy,  179  N.  Y.  501,  509,  72  N.  E.  519,  reversing  87  N.  Y.  App.  Div. 
{15. 

\ec,  310.    Where  no  Next  of  Kin  are  Known. 

The  decedent  died  in  New  York  a  native  of  Sweden,  and  inquiry 
failed  to  disclose  his  family  or  next  of  kin.  The  court  holds  that 
m  his  death  his  personal  property  vested  in  a  public  administrator, 

rho  was  appointed,  and  his  next  of  kin  were  entitled  to  the  prop- 
erty upon  proving  their  relationship.  No  such  person  has  appeared, 
ind  no  such  person  has  been  found  to  be  in  existence.     There  is 

le  presumption,  however,  that  he  left  next  of  kin,  but  there  is  no 
>resumption  that  he  left  a  widow  or  descendants.     It  is  presumed, 

lerefore,  that  the  property  vested  in  the  next  of  kin  of  the  deceased 
ind  is  therefore  taxable  under  section  220  of  the  New  York  tax 
[aw,  and  as  it  does  not  appear  that  it  is  exempt  under  section  221 
)f  the  tax  law,  the  tax  imposed  by  sub-division  6  of  section  220 
tpplies,  and  it  is  taxable  at  the  rate  of  five  per  cent. 

In  re  Lind,  132  N.  Y.  App.  Div.  321,  117  N.  Y.  Suppl.  49. 

Sec.  311.    Lineal  Descendants. 

J5  In  the  New  York  statute  of  1885  the  words  "lineal  descendants" 
are  restricted  to  descendants  of  the  testator  and  do  not  extend  to 
collateral  heirs. 

In  re  Smith,  5  Dem.  Surr.  (N.  Y.)  90. 

;ec.  312.    Descendants  of  Collaterals. 

Under  the  New  York  statute  of  1885  descendants  of  brothers 
and  sisters  are  not  intended  to  be  exempt  from  the  tax. 
In  re  Miller,  5  Dem.  Surr.  (N.  Y.)  132,  45  Hun  244. 

Jec.  313.    Children  of  Deceased  Beneficiary. 

Where  the  statute  provides  that  where  a  devisee  dies  before  the 
testator  his  heirs  inherit  directly  from  the  testator,  then  the  prop- 
ferty  does  not  go  to  the  children  of  the  devisee  as  though  he  had 
Isurvived  the  testator,  and  therefore  the  property  passes  directly 
'from  the  decedent  to  the  persons  who  are  determined  to  be  his 


240  INHERITANCE  TAX  LAW.  [§§  314-316. 

heirs  by  the  appUcation  of  these  rules  construing  the  statute. 
Therefore  where  a  testator  dies  devising  property  to  his  mother, 
who  died  before  the  testator,  leaving  as  heirs  a  brother  and  sister 
of  decedent,  the  succession  to  these  heirs  is  subject  to  a  collateral 
inheritance  tax. 

In  re  Hulett,  121  Iowa  423,  96  N.  W.  952,  relying  on  Suydam  v.  Voorhees,  58 
N.  J.  Eq.  157,  43  A.  4. 

Sec.  314.     Stepchildren. 

Legacies  to  stepsons  may  be  taxable  when  not  specifically 
exempted.^  Two  stepdaughters  of  the  testatrix  had  always  been 
recognized  and  treated  like  her  own  children.  But  the  fact  that 
the  father  is  still  living  prevents  them  from  being  recognized  as 
children  and  given  an  exemption.^ 

1  In  re  Hooper,  6  Low.  D.  560,  4  Ohio  N.  P.  186. 
2/n  re  Stebbins,  52  Misc.  438,  103  N.  Y.  Suppl.  563. 
[Exemption  of  stepchildren  is  valid,  see  ante,  s.  62,  n.  3.1 

Sec.  315.    Where  Relative  was  Both  Nephew  and  Stepson. 

The  will  of  one  who  died  October  13,  1907,  provided  that  her 
property  should  go  to  "relatives  of  my  full  blood  only  who  would  be 
entitled  to  receive  my  personal  estate  in  case  of  my  death  un- 
married and  intestate."  The  contestant  was  the  son  of  a  deceased 
sister  of  the  testatrix.  After  the  death  of  his  mother  his  father 
and  the  testatrix  had  intermarried  and  the  question  was  whether 
he  took  as  a  nephew  or  a  stepson.  The  court  holds  that  if  he  had 
been  included  by  name  there  would  be  no  doubt  that  he  would 
be  taxable  as  a  stepchild.  As  a  stepchild  he  could  not  take  under 
the  statute  and  the  will  expressly  provides  that  the  property  shall 
go  to  the  relatives  of  full  blood  only,  and  therefore  the  respondent 
takes  as  a  nephew  as  one  of  the  class  as  though  he  took  under  the 
statute  of  distribution.  The  court  says  the  transfer  to  the  respon- 
dent was  not  made  because  of  his  relationship  as  a  stepson  but  as  a 
nephew  and  for  the  purposes  of  this  case  he  must  be  treated  solely 
as  a  nephew. 

In  re  Linkletter,  134  N.  Y.  App.  Div.  300,  118  N.  Y.  Suppl.  878. 

Sec.  316.    Son-  or  Daughter-in-Law. 

A  legacy  to  a  son-in-law  may  be  subject  to  the  inheritance  tax 
on  the  ground  that  he  is  not  a  blood  relation.^     The  husband  of  a 


§  317.1  PERSONS  LIABLE.  241 

daughter  may  be  treated  as  such  although  the  daughter  died  before 
the  decedent,^  or  even  though  the  widower  has  married  again 
before  the  death  of  the  testator,^  while  the  widow  of  a  son  may 
include  the  widow  of  a  deceased  adopted  son.^ 

1  King  V.  Kidman,  128  Fed.  815. 

^In  re  McGarvey,  6  Dem.  Sum  145. 

3/»  re  Ray,  13  Misc.  Rep.  480,  35  N.  Y.  Suopl.  481. 

4  In  re  Duryea,  128  N.  Y.  App.  Div.  205,  112  N.  Y.  Suppl.  611.  Contra,  In  re 
Fisch,  34  Misc.  146,  69  N.  Y.  Suppl.  493. 

Sec.  317.    Executors  or  Beneficiaries. 

The  inheritance  tax  may  by  statute  be  charged  to  the  executors,^ 
or  to  the  beneficiaries.^ 

^7»  re  Jones,  5  Dem.  Surr.  (N.  Y.)  30  (liability  enforced  by  refusal  to  allow 
executor  credit  on  his  account).  United  States  v.  Allen,  9  Ben.  154,  Fed.  Cas. 
14,  430  (U.  S.  St.  1862,  ss.  Ill  and  112). 

The  executors  are  liable  for  a  tax  on  a  legacy  to  one  of  them.  State  v.  Brevard, 
62  N.  C.  141. 

Penalty.  An  executor  who  neglects  to  pay  an  award  on  a  collateral  inherit- 
ance tax  is  personally  liable  for  the  penalty  incurred.  In  re  Allen,  9  Pa.  Co.  Ct. 
328. 

The  direction  to  the  administrator  to  pay  the  duty  implies  that  it  is  to  be 
paid  from  the  property  or  from  the  proceeds  of  the  property  of  the  decedent 
not  applied  to  the  satisfaction  of  the  debts  and  administration  expenses.  Appeal 
of  Hopkins,  77  Conn.  644,  60  A.  657. 

[Liability  of  executors  under  transfer  in  contemplation  of  death,  see  ante,  s.  130.1 

"^Succession  of  Pargoud,  13  La.  Ann.  367.  Wilhelmi  v.  Wade,  65  Mo.  39.  In  re 
Gihon,  169  N.  Y.  443,  447,  62  N.  E.  561,  modifying  64  N.  Y.  App.  Div.  504, 
72  N.  Y.  Suppl.  1104.  In  re  Thomson,  12  Phila.  (Pa.)  36.  (1878.)  In  re  Lotz- 
gesell,  62  Wash.  352,  113  Pac.  1105.  United  States  v.  Tappan,  10  Ben.  284, 
Fed.  Cas.  16,  431  (payable  by  successor  himself  and  not  by  his  trustee  if  he  have 
one).  United  States  v.  Trucks,  27  Fed.  541.  United  States  v.  Kelley,  27  Fed. 
542  (suit  against  individual  in  possession).  See  United  States  v.  Pennsylvania 
Co.,  27  Fed.  539.  U.  S.  St.  1864  cancels  that  of  1862  and  created  no  personal 
liability  on  the  part  of  the  legatee. 

U.  S.  St.  1862  (12  U.  S.  St.  at  Large,  c.  119,  s.  112)  was  superseded  by  U.  S. 
St.  June  30, 1864,  which  omitted  from  the  statute  of  1862  the  words  "to  be  allowed 
for  such  payment  by  the  person  or  persons  entitled  to  the  beneficial  interest  in 
respect  of  which  such  tax  or  duty  was  paid."  The  statute  of  1866  provides  that 
any  tax  paid  "shall  be  deducted  from  the  particular  legacy  or  distributive  share 
on  account  of  which  the  same  is  charged."  Under  the  statute  of  1864,  notwith- 
standing the  omission  of  the  language  above  quoted,  the  duties  paid  in  respect 
of  any  particular  legacies  are  as  between  the  executors  and  the  legatees  in  the 
settlement  of  the  estate  to  be  deducted  from  the  legacies  in  respect  of  which  they 
have  been  paid,  or  charged  to  the  legatees  respectively  who  are  entitled  to  such 
legacies,  and  the  amendment  of  1866  was  simply  declaratory  to  avoid  any  doubt. 
Goddard  v.  Goddard,  9  R.  I.  293,  297  (U.  S.  St.  1864). 


242  INHERITANCE  TAX  LAW.  [§§318-319. 

Specific  Legatee.  The  United  States  inheritance  tax  of  1864  should  be 
charged  to  a  specific  legatee  and  in  case  the  executor  finds  it  difficult  to  deduct 
the  same  out  of  such  a  legacy  the  law  would  doubtless  afford  an  adequate  remedy. 
Coddard  v.  Goddard,  9  R.  I.  293,  298. 

Sec.  318.    Payments  of  Tax  Should  Appear  in  Executor's 
Account. 

It  was  suggested  by  the  lower  court  that  the  amount  of  the  in- 
heritance tax  paid  did  not  enter  into  the  executor's  account,  as 
the  amount  of  the  tax  on  each  legacy  should  be  deducted  from  the 
legacy  itself  in  settlement  with  the  legatee.  The  court  of  appeals 
holds,  however,  that  the  executor  should  show  in  his  account  every 
payment  made  by  him  as  executor.  The  distribution  of  these 
payments  among  the  various  legatees  is  a  matter  of  subsequent 
arrangement  between  him  and  them  when  he  comes  to  pay  the 
legacies.  In  settling  his  account  it  would  be  better,  doubtless,  if 
the  accountant  should  distribute  the  sum  total  of  the  inheritance 
taxes,  showing  just  how  much  was  chargeable  against  each  legacy. 
But  the  failure  to  so  distribute  is  no  reason  for  disallowing  the 
payment  of  the  item  in  the  account. 

Wyckoff  V.  0'  Neil,  72  N.  J.  Eq.  880,  67  A.  32. 

[Allowance  of  account  no  protection  to  executor  who  has  failed  to  pay  tax, 
see  ante,  s.  304.] 

Sec.  319.    Adoption. 

A  mere  adoption  will  not  give  the  adopted  child  the  exemptions 
of  legitimate  issue, ^  though  adoption  with  all  the  privileges  of  a  son 
might  be  sufficient. ^  Adoption  proceedings  are  strictly  construed,-^ 
but  need  not  occur  under  domestic  law.''  Adopted  children  may 
be  taxed  as  descendants,^  and  the  descendants  of  adopted  children 
treated  as  descendants  of  the  adopting  father.® 

^Commonwealth  v.  Nancrede,  32  Pa.  St.  (8  Casey)  389  (adopted  son  a  col- 
lateral relacive).  Kerr  v.  Goldsborough,  150  Fed.  289,  80  C.  C.  A.  157  (adopted 
child  not  a  lineal  issue). 

The  word  "children"  does  not  cover  adopted  children.  In  re  Miller,  110  N.  Y. 
216,  222,  18  N.  E.  139,  affirming  47  Hun  394. 

Where  a  statute  was  passed  decreeing  that  a  certain  child  should  be  capable 
of  inheriting  as  if  born  in  lawful  wedlock  and  was  not  related  to  the  adopting 
parents,  his  estate  was  subject  to  a  collateral  inheritance  tax.  Tharp  v.  Com- 
monwealth, 58  Pa.  St.  (8  P.  F.  Smith)  500,  following  Commonwealth  v.  Nancrede, 
32  Pa.  St.  (8  Casey)  389.    Comm.  v.  Stump,  3  P.  F.  Smith  132,  is  only  a  dictum. 

Where  a  statute  was  passed  authorizing  one  to  adopt  his  illegitimate  child 
to  make  him  his  heir,  the  court  holds  that  this  is  simply  an  act  of  adoption  and 


i 


§  320.]  PERSONS  LIABLE.  243 

not  an  act  of  legitimation.  "That  a  legacy  given  to  an  adopted  child  who  stands 
in  the  place  of  an  heir  would  be  subject  to  this  tax  is  too  plain  for  argument. 
The  reason  is  that  he  is  not  a  lineal  descendant  born  in  lawful  wedlock.  He 
has  not  the  blood."  Per  curiam,  in  Commonwealth  v.  Ferguson,  137  Pa.  St.  595, 
601,  20  A.  870,  10  L.  R.  A.  210. 

An  act  of  the  legislature  declaring  an  illegitimate  son  to  be  the  lawful  heir  and 
adopted  son  of  his  father,  is  an  act  of  adoption  and  not  of  legitimation  and 
does  not  exempt  the  estate  passing  from  the  father  to  such  adopted  son  from 
the  collateral  inheritance  tax.    In  re  Prinvince  (Orph.  Ct.),  4  Pa.  Dist.  R.  591. 

2  A  statute  giving  one  "the  rights,  powers  and  privileges"  of  a  son  clearly 
exempted  him  from  the  payment  of  a  collateral  inheritance  tax,  especially  where 
the  statute  further  expressly  provides  that  the  adopted  son  shall  be  subject  only 
to  such  tax  as  would  be  payable  if  he  were  the  son  of  the  adopting  father.  Com- 
monwealth V.  Henderson,  172  Pa.  St.  135,  33  A.  368,  37  Wkly.  Notes  Cas.  344. 

3  Where  certain  adoption  proceedings  did  not  comply  with  the  statute,  it  was 
urged  that  the  attempt  to  adopt  should  be  considered  equitably  as  though  it 
had  been  properly  consummated.  But  the  court  replies  that  the  proceeding  for 
the  collection  of  an  inheritance  tax  is  not  in  equity  and  that  one  cannot  be  made 
an  heir  of  another  by  any  such  considerations.  Lamb  v.  Morrow,  140  Iowa  89, 
117  N.  W.  1118,  18  L.  R.  A.  N.  S.  226. 

'In  re  Butler,  58  Hun  400,  34  N.  Y.  St.  189,  12  N.  Y.  Suppl.  201  (under  the 
act  of  1887). 

^La.  St.  1906  laid  taxes  on  four  classes  of  persons:  ascendants,  descendants, 
collaterals  and  strangers.  Adopted  children  are  not  related  by  blood,  so  that  they 
are  neither  ascendants  nor  collaterals.  On  the  other  hand,  as  they  are  legal 
heirs  of  the  estate  they  are  not  strangers.  It  follows,  therefore,  that  they  must  be 
persons  who  by  law  are  given  the  status  of  descendants  if  subject  to  tax  at  all. 
Succession  of  Frigalo,  123  La.  Ann.  71,  48  S.  652. 

^Cal.  St.  of  1893,  c.  168,  exempted  from  taxation  any  child  legally  adopted 
and  any  lineal  descendant  of  the  decedent.  The  court  holds  that  a  child  of  an 
adopted  child  is  exempt  under  these  provisions,  as  he  takes  by  inheritance  as 
issue  of  the  adopted  father.    Estate  of  Winchester,  140  Cal.  468,  74  P.  10. 

The  court  holds  that  where  the  statute  gives  an  adopted  child  the  same  legal 
relation  to  the  foster  parent  as  to  a  child  of  his  body  and  that  the  relation  extends 
to  the  heirs  and  next  of  kin  of  the  child,  the  artificial  relation  was  given 
the  same  effect  as  the  actual  relation,  and  although  the  N.  Y.  St.  1896,  c.  908, 
s.  221,  does  not  mention  the  heirs  and  next  of  kin  of  adopted  children,  still  the 
natural  relation  and  the  statutory  relation  are  made  one  and  the  same  as  to  the 
devolution  of  property.  In  re  Cook,  187  N.  Y.  253,  261,  79  N.  E.  991,  reversing 
114  N.  Y.  App.  Div.  718,  99  N.  Y.  Suppl.  1049.     See,  however,  post,  s.  321,  n.  7. 

A  "widow  of  a  son"  includes  the  widow  of  a  deceased  adopted  son  of  the 
testator.  In  re  Duryea,  128  N.  Y.  App.  Div.  205,  112  N.  Y.  Suppl.  611.  Contra, 
In  re  Fisch,  34  Misc.  146,  69  N.  Y.  Suppl.  493. 

Sec.  320.    Mutually  Acknowledged  Relation  of  Parent. 

The  exemption  in  the  New  York  statute  where  the  mutually 
acknowledged  relation  of-  a  parent  appeared,  was  construed  as 
applicable  in  the  cases  cited,^  and  not  in  others.^     The  statute 


244  INHERITANCE  TAX  LAW.  [§320. 

may  apply  although  no  formal  adoption  ever  took  place ,^  and 
although  the  beneficiary  was  an  adult  at  the  inception  of  the 
relationship,*  and  it  is  not  confined  to  illegitimate  children,^  or  to 
persons  of  the  blood  of  the  decedent,^  although  the  exemption  will 
not  include  issue  of  the  child  .^  This  was  amended  in  1905  by 
restricting  it  to  cases  where  the  parents  of  the  child  were  dead.^ 
Rights  of  exemption  under  the  original  act  of  1887  were  saved  by 
later  statutes.^ 

1  In  re  Lane,  39  Misc.  Rep.  522,  80  N.  Y.  Suppl.  381. 

Where  a  legatee  was  an  orphan  and  had  lived  in  a  family  of  the  testator  since 
the  age  of  six  years,  and  was  always  treated  like  one  of  the  family,  she  is  one 
to  whom  the  testator  stood  in  the  mutually  acknowledged  relation  of  a  parent, 
although  she  was  designated  by  the  will  as  a  "friend"  and  not  a  "daughter." 
In  re  Wheeler,  1  Misc.  Rep.  450,  22  N.  Y.  Suppl.  1075. 

The  mutually  acknowledged  relation  of  parent  was  found  to  exist  where  the 
niece  when  twenty-two  years  old  had  gone  to  live  with  her  aunt,  was  a  member 
of  the  family  for  twenty-eight  years,  and  always  addressed  her  as  "Auntie"; 
and  where  during  her  residence  there  the  niece  married  and  with  her  husband 
continued  to  live  with  her  aunt,  the  testatrix,  who  supported  the  household. 
In  re  Spencer,  4  N.  Y.  Suppl.  395,  1  Con.  Surr.  208. 

The  fact  that  the  beneficiaries  were  taken  into  their  testator's  family  in  their 
infancy,  were  reared,  educated  and  provided  for  as  children,  were  called  by 
her  name  and  adopted  the  same,  and  were  treated  as  her  children,  and  that 
the  testatrix  spoke  of  and  to  them  as  her  daughters  and  furnished  them  on 
their  marriage  with  their  wedding  and  outfit  as  is  customary,  is  sufficient  to 
bring  them  within  the  words  of  the  statute.  In  re  Nichol,  91  Hun  134,  36  N.  Y. 
Suppl.  538. 

Stepdaughters  of  a  testatrix  who  had  lived  with  her  for  a  long  time  and  called 
her  "mother"  were  found  to  stand  in  the  mutually  acknowledged  relation  of 
parent,  while  another  stepdaughter  who  was  married  and  did  not  live  with  her 
did  not  come  within  that  class,  in  In  re  Capron,  30  N.  Y.  St.  948, 10  N.  Y.  Suppl.  23. 
"The  appellant,  from  his  earliest  recollection,  believed  the  testator  to  be  his 
father,  recognized  him  as  such,  and  knew  no  other,  and  the  man  took  him  to 
his  home  as  a  child  and  treated  him  in  all  respects  as  a  son.  Their  relations 
were  parental,  and  their  entire  conduct  was  a  mutual  acknowledgment  of  their 
relation.  The  child  was  taken  in  helpless  infancy,  with  no  expectation  of  com- 
pensation for  services.  He  was  treated  as  a  son,  and  was  obedient  to  his  foster 
father,  and  dependent  upon  him,  and  the  statute  requires  no  higher  proof  of 
mutual  acknowledgment.  The  word  'mutual'  in  this  statute  has  no  abstruse 
signification.  It  means  and  requires  'reciprocity  of  action,'  'co-relation,' 
and  'interdependence,'  and  finds  its  best  illustration  and  application  in  the  re- 
lation existing  between  parents  and  children,  which  are  always  mutual."  Per 
Dykman,  J.,  in  In  re  Butler,  5S  Hun  400,  34  N.  Y.  St.  189,  12  N.  Y.  Suppl.  201. 
The  court  sustains  the  finding  that  a  niece  stood  in  the  "mutually  acknowledged 
relationship  of  a  parent"  to  her  uncle  where  it  appears  that  she  had  been  in  her 
uncle's  family  for  thirteen  years  and  supported  by  him,  although  it  also  appears 
that  she  did  not  call  her  uncle  and  aunt  father  and  mother,  nor  did  they  call 


§  320.]  PERSONS  LIABLE.  245 

her  daughter.  It  was  also  objected  that  the  uncle  did  not  account  to  the  niece 
for  the  income  received  by  him  on  her  legacy  under  her  grandfather's  will.  It 
is  urged  that  this  shows  that  he  assumed  to  set  off  the  expense  of  her  support 
against  such  income.  Where  the  niece  had  been  thirteen  years  in  the  family  of 
her  uncle,  supported  wholly  at  his  expense  before  she  had  any  property  whatever, 
it  was  natural  that  after  the  legacy  had  become  payable  to  her  the  uncle  should 
think  it  wise  to  apply  that  income  to  give  her  greater  educational  advantages 
than  he  felt  himself  able  to  afford.  A  father  might  have  done  the  same,  even 
if  we  assume  that  without  authority  from  some  court  it  would  have  been  un- 
justified. In  re  Davis,  184  N.  Y.  299,  77  N.  E.  259,  reversing  98  N.  Y.  App. 
Div.  546,  90  N.  Y.  Suppl.  244. 

A  child  legally  adopted  under  the  laws  of  Massachusetts,  who  is  taken  into 
the  testator's  family  at  the  age  of  two,  is  treated  as  a  son  and  staid  in  the  family 
for  eleven  years,  until  the  testator's  death,  is  in  the  mutually  acknowledged 
relation  of  a  parent.  The  court  says  that  experience  teaches  us  hat  children 
of  three  years  recognize  their  parents  and  the  court  finds  no  difficulty  in  con- 
cluding that  the  appellant  recognized  the  testator  as  his  father,  and  that  the 
testator  recognized  him  as  an  adopted  son  for  more  than  ten  years.  In  re  Butler, 
58  Hun  400,  34  N.  Y.  St.  189,  12  N.  Y.  Suppl.  201. 

2  Where  a  maiden  aunt  is  in  possession  of  a  farm  as  a  housekeeper  as  tenant 
in  common  with  her  adult  nephews,  the  acknowledged  relation  of  parent  was 
not  found  in  In  re  Sweetland,  20  N.  Y.  Suppl.  310. 

The  mere  fact  that  a  transferee  is  described  in  a  will  as  "my  niece  and  adopted 
daughter"  does  not  exempt  her  from  the  inheritance  tax.  Further  evidence  of 
the  mutually  acknowledged  relation  of  a  parent  must  be  given.  In  re  Fisch, 
34  Misc.  146,  69  N.  Y.  Suppl.  493. 

Where  an  aunt,  a  wealthy  woman,  took  care  of  her  two  infant  nieces  and 
charged  them  out  of  their  estate  with  all  sorts  of  trivial  expenses,  the  court  finds 
that  the  mutually  acknowledged  relation  of  a  parent  and  child  did  not  exist  under 
the  statute  of  1892,  chapter  399.  In  re  Birdsall,  22  Misc.  Rep.  180,  49  N.  Y. 
Suppl.  450,  2  Gibbons  293. 

The  court  holds  that  the  mutually  acknowledged  relation  of  parent  did  not 
exist  where  children  lived  with  their  uncle  and  aunt,  and  always  referred  to 
them  as  uncle  and  aunt,  and  the  latter  referred  to  the  former  as  niece  and  the 
terms  father,  mother  or  daughter  were  never  used.  (The  court  relies  upon  In  re 
Davis,  98  N.  Y.  App.  Div.  546,  90  N.  Y.  Suppl.  244.)  In  re  Deutsch,  107  N.  Y. 
App.  Div.  192,  95  N.  Y.  Suppl.  65. 

The  mere  fact  that  the  testator  lived  with  his  sister  and  her  children  as  one 
family,  that  the  household  expenses  were  met  out  of  a  common  fund  to  which 
each  contributed,  and  that  the  sister  died,  and  from  that  time  one  of  the  children 
had  charge  of  the  household  affairs  and  they  continued  to  live  together  as  one 
family  down  to  the  death  of  the  testator,  and  that  the  testator  was  very  affec- 
tionate with  his  nieces,  is  not  enough  to  show  the  mutually  acknowledged  relation 
of  a  parent,  as  the  testator  did  not  take  them  into  his  family  and  support  and 
educate  and  maintain  them.  In  re  Moulton,  1 1  Misc.  Rep.  694, 33  N.  Y.  Suppl.  578. 

3/w  re  Stilwell,  34  N.  Y.  Suppl.  1123.  The  court  follows  In  re  Butler,  58  Hun 
400,  12  N.  Y.  Suppl.  201,  and  In  re  Spencer,  4  N.  Y.  Suppl.  395,  and  refuses  to 
follow  In  re  Hunt,  33  N.  Y.  Suppl.  256. 

"In  re  Beach,  154  N.  Y.  242,  249. 


246  INHERITANCE  TAX  LAW.  [§§321-322. 

6/»  re  Nichol,  91  Hun  134,  36  N.  Y.  Suppl.  538.  In  re  Beach,  154  N.  Y.  242, 
249.  Contra,  In  re  Hunt,  86  Hun  232,  33  N.  Y.  Suppl.  256.  See  other  cases 
supra,  note  1. 

8/»  re  Beach,  154  N.  Y.  242,  249. 

Un  re  Moore,  90  Hun  162,  35  N.  Y.  Suppl.  782.  In  re  Bird,  32  N.  Y.  St.  899, 
11  N.  Y.  Suppl.  895,  2  Con.  Surr.  376.  Compare,  however,  as  to  issue  of 
adopted  children,  ante,  s.  319,  n.  6. 

8/«  re  Wheeler,  115  N.  Y.  App.  Div.  616, 100  N.  Y.  Suppl.  1044.  In  re  Harder, 
124  N.  Y.  App.  Div.  77,  108  N.  Y.  Suppl.  154. 

»/«  re  Thomas,  3  Misc.  Rep.  388,  24  N.  Y.  Suppl.  713. 

Sec.  321.     Bastards.  —  Effect  of  Legitimization. 

The  words  "lineal  descendants  born  in  lawful  wedlock"  might 
under  some  circumstances  be  given  wide  meaning  to  cover  natural 
children.!  An  illegitimate  child  who  has  been  legitimated  may  thus 
become  entitled  to  the  exemptions  of  a  legitimate  child  ,2  although 
an  act  of  legitimating  passed  after  the  death  of  the  testator  could 
have  no  effect  on  the  inheritance  tax.^ 

1  In  re  Miller,  110  N.  Y.  216,  222,  18  N.  E.  139,  affirming  47  Hun  394. 

^Commonwealth  v.  Gilkerson,  18  Pa.  Super.  Ct.  516.  Commonwealth y.  Ferguson, 
137  Pa.  St.  595,  601,  20  A.  870,  10  L.  R.  A.  210,  qmere. 

Pa.  St.  1901,  P.  L.  639,  has  the  effect  of  legitimating  an  illegitimate  child 
as  to  its  mother  and  conferring  upon  such  child  every  right  and  privilege  enjoyed 
by  a  child  born  to  wedded  parents.  Therefore  an  illegitimate  child  need  not 
pay  a  collateral  inheritance  tax  on  the  property  he  takes  as  devisee  of  his  mother. 
Commonwealth  v.  Mackey,  222  Pa.  St.  613,  72  A.  250.  See,  however,  In  re  Wayne, 
2  Pa.  Co.  Ct.  93,  18  Wkly.  Notes  Cas.  10. 

^Comm.  V.  Stump,  53  Pa.  St.  132. 

Sec.  322.    Loss  of  Tax  Paid  Unnecessarily  Falls  on  Residue. 

Where  a  collateral  inheritance  tax  is  improperly  paid  on  land 
in  Pennsylvania  which  the  testator  directed  to  be  sold,  a  percentage^ 
of  the  tax  cannot  be  deducted  from  the  last  legacy  to  be  paid  as; 
such  legacy's  proportion  of  the  collateral  inheritance  tax  paid 
to  the  state,  simply  because  the  executors  were  appointed  in 
Pennsylvania  and  the  legatee  came  by  counsel  before  the  court 
and  asked  for  payment  in  full,  as  happened  in  In  re  Lewis,  203  Pa. 
St.  211.  The  residuary  legatees  having  permitted  the  tax  to  be 
paid  they  cannot  now  ask  that  a  portion  of  it  be  deducted  from  this 
legacy  to  their  relief.  They  ought  to  have  protected  themselves 
at  the  proper  time. 

In  re  Shoenberger,  221  Pa.  St.  112,  114,  118,  70  A.  579,  19  L.  R.  A.  N.  S.  290. 


*''^^ 


CHAPTER  XXXIX. 


INVENTORY. 

§323.     Necessity. 

§  324.     Of  Property  Outside  State. 

323.    Necessity. 

The  statutes  usually  compel  the  executor  to  file  an  inventory. 
Such  a  statute  confers  no  discretion  upon  the  executors  ^  and  the 
state  has  a  right  to  an  order  that  the  executor's  inventory  be  filed, 
and  a  judgment  rendered  in  the  absence  of  the  inventory  should 
be  reversed  even  though  it  is  claimed  that  the  state  obtained  all 
necessary  information  by  its  examination  of  witnesses.^  The  fact 
that  the  testator  in  his  will  directed  his  executors  not  to  make  any 
returns  of  his  property  cannot  be  permitted  to  have  the  effect  of 
nullifying  the  statute.^ 

^See  Hooper  v.  Bradford,  178  Mass.  95,  97,  59  N.  E.  678. 

2  Where  a  party  makes  a  motion  that  an  inventory  be  filed  in  a  tax  inheritance 
case  and  the  judge  says  that  he  will  take  the  motion  under  advisement,  but  does 
not  either  then  nor  afterward  make  an  order  for  the  inventory  but  hears  the 
case  and  enters  final  judgment  without  doing  so,  this  amounts  to  a  denial  of 
the  motion.     People  v.  Sholem,  244  111.  502,  91  N.  E.  704. 

Un  re  Morris,  138  N.  C.  259,  50  S.  E.  682. 

Sec.  324.     Of  Property  Outside  State. 

Under  the  Connecticut  act  of  1897  it  was  proper  for  the  probate 
court  to  order  the  administrator  to  file  an  inventory  and  appraisal, 
including  all  the  personal  property  wherever  situated,  although 
the  administrator  could  not  be  held  liable  upon  his  final  account 
for  the  value  of  personal  property  without  the  state  of  which  it  has 
been  impossible  for  him  to  procure  possession. 

Appeal  of  Bridgeport  Trust  Co.,  77  Conn.  657,  60  A.  662. 


I 


CHAPTER  XL. 


APPRAISAL. 

§  325.  By  what  Court. 

§  326.  Effect  of  General  Law. 

§  327.  Appointment  of  Appraisers. 

§  328.  Appointed  in  what  County. 

§  329.  When  Appointed. 

§  330.  Removal  of  Appraisers. 

§331.  Notice. 

§  332.  Construction  of  Will. 

§  333.  Each  Interest  Separately  Appraised.  —  Residue. 

§  334.  As  of  what  Date. 

§  335.  As  of  what  Date  Future  Interests  are  Appraised. 

§  336.  Reappraisal. 

§  337.  Test  of  Value. 

§  338.  Value  Received  by  Beneficiary  the  Test. 

§  339.  Rule  in  Absence  of  Specific  Provision. 

§  340.  Choses  in  Action.  —  Bequest  to  Debtor. 

§  341.  Inactive  Securities.  —  Good  Will. 

§342.  Annuities. 

§  343.  Life  Estates. 

§  344.  Statute  Providing  no  Method  for  Ascertaining  Value  of  Life 

Estate. 

§  345.  Death  of  Life  Tenant  before  Appraisal. 

§  346.  Remainders. 

§  347.  Remainder  after  Remarriage. 

§  348.  Power  to  Order  Production  of  Papers. 

§  349.  Appeal. 

§350.  Appraisal  has  no  Effect  on  Liability. 

Sec.  325.    By  what  Court. 

Where  the  statute  contains  no  express  direction  as  to  who  shall 
compute  the  tax  or  the  manner  of  computation,  the  duty  is  implied 
in  the  court  of  probate.  The  tax  should  be  computed  by  the 
jurisdiction  of  the  domicile  notwithstanding  ancillary  probate  may 
be  also  necessary  as  to  property  existing  outside  of  the  domicile.^ 
A  provision  that  the  controller  shall  countersign  receipts  for  taxes 
gives  him  no  authority  to  revise  its  amount.^ 

1  Appeal  of  Hopkins,  77  Conn.  644,  60  A.  657. 

^Becker  v.   Nye,  Cal.  App.  1908,  96  P.  333.  , 


§  §326-327.]  APPRAISAL.  249 

Sec.  326.     EfiEect  of  General  Law. 

Where  the  sections  of  the  inheritance  tax  law  on  appraisals  are 
vague  they  may  be  read  in  view  of  the  general  law. 
Commonwealth  v.  Gaulbert,  134  Ky.  157,  119  S.  W.  779. 

Sec.  327.    Appointment  of  Appraisers. 

The  appointment  may  be  made  upon  petition  of  an  interested 
party/  as  where  it  is  the  duty  of  the  executor  to  apply  for  an  ap- 
praisal ,2  by  a  state  officer  ^  or  by  the  court,*  or  without  petition  by 
the  court  of  its  own  motion,^  and  before  the  existence  of  claims 
against  the  estate  has  been  ascertained.®  The  appointment 
may  be  required  by  mandamus  in  a  proper  case.^  No  notice  of 
the  appointment  is  necessary  unless  the  statute  requires  it.^ 

^  Dixon  V.  Russell,  79  N.  J.  L.  490,  76  A.  982,  reversing  78  N.  J.  L.  296,  73 
A.  51. 

An  application  of  the  state  comptroller  upon  a  verified  petition  setting  forth 
every  fact  upon  which  the  jurisdiction  of  the  surrogate  to  act  depended,  made 
upon  the  information  and  belief,  is  a  proper  application  to  force  the  surrogate, 
to  appoint  appraisers.  Kelsey  v.  Church,  112  N.  Y.  App.  Div.  408,  98  N.  Y. 
Suppl.  535. 

Not  Judicial.  The  office  of  transfer  tax  appraiser  is  not  judicial  in  character 
within  the  civil  service  law.    Weeks  v.  Kraft,  129  N.  Y.  Suppl.  690. 

2  Frazer  v.  People,  3  N.  Y.  Suppl.  134,  6  Dem.  Surr.  174. 

3  N.  Y.  St.  1896,  c.  368,  a.  10,  ss.  229  and  234,  provide,  for  the  appointment  of 
tax  appraisers  and  tax  assistants  by  the  comptroller  of  the  state.  The  court 
holds  that  these  sections  invest  the  comptroller  with  absolute  power  of  appoint- 
ing and  removing  such  official.  The  transfer  tax  assistant,  however,  is  con- 
nected with  the  administration  of  the  surrogate's  office  and  the  statute  therefore 
plainly  provides  for  the  joint  action  of  both  officials  in  the  selection  and  control 
of  this  clerk.  The  surrogate's  power,  however,  is  limited  to  a  recommendation, 
and  if  the  recommendation  is  not  satisfactory  the  comptroller  is  not  compelled 
to  accept  it  and  make  the  appointment  and  the  position  remains  vacant.  Duell 
V.  Glynn,  191  N.  Y.  357,  84  N.  E.  282,  affirming  122  N.  Y.  App.  Div.  314,  56 
Misc.  41,  106  N.  Y.  Suppl.  716. 

^  The  court  refers  to  the  fact  that  the  practice  as  to  appraisal  throughout  the 
state  has  not  been  uniform,  some  judges  taking  the  inventory  and  appraisement 
as  the  basis,  while  others  cause  an  appraisement  to  be  made  under  the  inherit- 
ance tax  law  and  still  others  resort  to  both  methods.  Cal.  St.  1905,  c.  314,  s  5, 
provides  for  the  ascertainment  of  the  value  of  life  estates  and  future  estates 
by  the  appraiser  to  be  appointed  by  the  court,  and  the  court  of  appeals  expresses 
the  opinion  that  it  would  be  better  to  appoint  appraisers  in  all  cases.  Becker  v. 
Nye,  Cal.  App.  1908,  96  P.  333.  See,  however,  In  re  Sondheim,  66  N.  Y.  Suppl. 
726,  under  St  1900,  c.  658,  taking  away  the  power  of  the  surrogate  to  appoint 
appraisers. 

^  As  the  surrogate  may  of  his  own  motion  appoint  an  appraiser  without  peti- 
tion his  authority  is  not  limited  because  the  petition  is  presented  by  a  competent 


250  INHERITANCE  TAX  LAW.  [§§  32S-330. 

person  with  allegations  made  upon  information  and  belief.  In  re  O'Donohue, 
44  N.  Y.  App.  Div.  186,  60  N.  Y.  Suppl.  690. 

8/«  re  Westurn,  152  N.  Y.  93,  102,  46  N.  E.  315,  reversing  8  N.  Y.  App. 
Div.  59. 

'  Kelsey  v.  Church,  112  N.  Y.  App.  Div.  408,  98  N.  Y.  Suppl.  535. 

s/w  re  Belcher,  211  Pa.  St.  615,  619,  61  A.  252. 

Sec.  328.    Appointed  in  what  County. 

Appraisers  commonly  must  be  appointed  in  the  county  where 
the  decedent  resided  at  his  death, ^  although  appraisal  may  be  had 
where  the  larger  part  of  his  property  is  located. ^ 

^  Under  the  Pennsylvania  statute  of  1849,  c.  369,  s.  12,  appraisers  must  be 
appointed  by  the  register  of  the  county  in  which  letters  testamentary  are  issued; 
and  in  that  county  all  of  the  proceedings  should  be  had  to  enforce  the  payment 
of  the  tax  assessed,  and  so  real  estate  in  another  county  may  be  assessed  under 
these  proceedings.    Stinger  v.  Commonwealth  (2d),  26  Pa.  St.  (2  Casey)  429,  431. 

Un  re  Dalrymple,  215  Pa.  St.  367,  372,  64  A.  554. 

Sec.  329.    When  Appointed. 

Appraisal  should  be  made  promptly^  within  the  time  allowed  by 
law.2 

i/w  re  Kingman,  220  III.  563,  77  N.  E.  135. 

Where  the  real  estate  of  the  testator  consisted  almost  entirely  of  partnership 
property  used  in  the  prosecution  of  the  lumbering  and  tannery  business,  and 
where  the  actual  value  of  such  real  estate  is  dependent  largely  upon  the  manner 
in  which  it  is  controlled,  it  is  impracticable  to  ascertain  the  value  of  such  inter- 
ests at  present,  but  would  seem  to  be  a  very  proper  case  for  postponing  the 
assessment  and  collection  of  the  tax  to  which  the  same  might  be  subject  until 
the  parties  entitled  come  into  actual  possession  or  enjoyment  thereof.  In  re 
Wheeler,  1  Misc.  Rep.  450,  22  N.  Y.  Suppl.  1075. 

^The  inheritance  tax  section  in  regard  to  appraisal  of  property  should  be 
read  together  with  general  law  as  to  filing  of  an  appraisal,  and  the  court  there- 
fore finds  that  the  appraisal  required  under  the  inheritance  tax  law  with  the 
names  of  the  distributees  or  devisees  should  be  filed  within  ninety  days  after 
qualification  of  the  executor,  and  if  the  statement  is  not  filed  within  this  time 
the  county  court  may  upon  its  own  motion  or  upon  motion  of  any  party  inter- 
ested in  the  estate  take  such  proceeding  as  may  be  necessary  to  compel  a  state- 
ment to  be  filed,  and  after  it  has  been  filed  to  require  if  necessary  that  it  shall 
be  made  sufficiently  full  and  specific  to  furnish  such  information  as  will  enable 
the  county  court  to  ascert.ain  with  reasonable  certainty  the  character  and  value 
of  the  estate  and  the  beneficiaries  thereof.  Commonwealth  v.  Gaulbert,  134  Ky. 
157,  119  S.  W.  779. 

Sec.  330.    Removal  of  Appraisers. 

Appraisers  may  be  subject  to  removal  like  other  officials.  The 
New  York  act  of  1900,  chapter  658,  authorized  the  removal  of  a 


.§§  331-332.1 


APPRAISAL. 


251 


[state  transfer  tax  appraiser  by  the  state  comptroller  without 
hearing  and  although  there  were  no  charges  of  incompetency  or 
lisconduct  against  him. 

People  V.  Glynn,  128  N.  Y.  App.  Div.  257,  112  N.  Y.  Suppl.  695. 

;ec.  331.    Notice. 

Statutes  commonly  require  notice  of  appraisals  to  parties,  or  to 
\the  public  officials,^  and  where  no  notice  was  given  remainder  inter- 

)ts,  as  they  could  not  be  ascertained  at  the  time  of  the  appraisal,  it 

lay  not  be  binding  either  on  the  remaindermen  when  they  come 
jnto  possession,  or  on  the  state,^  and  appraisals  made  without  such 
lotice  are  defective.^  It  may  be  sufficient  that  notice  of  the 
ippraisal   was   given   without   notice   of   the   order   affirming   it.'* 

[otice  of  the  appointment  of  the  appraiser  and  of  the  time  and 
)lace  of  a  hearing  for  the  parties  on  appraisal  and  of  the  intended 

ling  of  the  appraisement  is  unnecessary  unless  the  statute  requires 
It,^  although  a  right  of  appeal  may  imply  notice.® 

Un  re  Fulton,  30  Misc.  Rep.  70,  62  N.  Y.  Suppl.  995.  In  re  Bolton,  35  Misc. 
^ep.  688,  72  N.  Y.  Suppl.  430.     As  to  notice  see  ante,  ss.  71,  72. 

?In  re  Naylor,  189  N.  Y.  556,  82  N.  E.  1129,  affirming  120  N.  Y.  App.  Div. 
f38,  105  N.  Y.  Suppl.  667. 

^It  appeared  that  no  notice  of  the  appraisement  was  given  to  an  heir  although 

condition  of  affairs  might  arise  in  which  she  would  be  personally  liable  for 
le  tax  and  could  be  compelled  to  pay  it  as  a  person  who  "had  received  the 
roperty  transferred."  The  district  attorney  claimed  that  the  tax  must  be 
lid  and  if  any  part  of  it  is  shown  to  be  illegal  it  might  be  refunded.  But  the 
)urt  holds  that  this  would  place  an  unjust  burden  upon  the  estate;  that  the 
)roceeding  is  fatally  defective  and  that  therefore  the  tax  assessed  cannot  be 
)llected.  The  court  set  aside  the  report  of  the  appraiser  and  allowed  an  appli- 
ition  to  be  made  for  a  new  appraisal.  In  re  Winter,  21  Misc.  Rep.  552,  48 
Y.  Suppl.  1097. 

*/«  re  Miller,  110  N.  Y.  216,  224,  18  N.  E.  139,  affirming  47  Hun  394. 

8/»  re  Belcher,  211  Pa.  St.  615,  619,  61  A.  252. 

'  In  the  appraisement  the  statute  gives  a  right  of  appeal  which  necessarily 
iplies  notice,  but  there  is  no  provision  for  a  hearing  except  in  the  orphan's 
)urt  upon  appeal;  and  hence  an  appeal  within  thirty  days  of  the  notice  of  the 
ling  of  the  appraisement  was  in  time.    In  re  Belcher,  211  Pa.  St.  615,  619,  61 

252. 


Jc.  332.    Construction  of  Will. 

In  proceedings  for  appraisal  under  the  transfer  tax  act  the  will 
lay  be  construed. 

In  re  Peters,  69  N.  Y.  App.  Div.  465,  74  N.  Y.  Suppl.  1028.     That  the  tax 
innot  be  assessed  on  proceedings  to  construe  the  will,  see  post,  s.  378. 


252  INHERITANCE  TAX  LAW.  [§§  333-334. 

Sec.  333.    Each  Interest  Separately  Appraised.  —  Residue. 

The  appraisal  should  value  each  interest  separately.^  It  is  the 
duty  of  an  appraiser  under  the  New  York  statute  of  1885  to  fix 
the  value  only  of  property  of  persons  taking  by  succession  from  the 
decedent,  and  the  appraisers  need  not  fix  the  value  of  the  whole 
estate  of  the  testator. ^  The  appraiser  should  show  the  value  of 
the  estate  received  by  each  residuary  legatee  under  the  will,  and 
in  doing  so  should  deduct  the  gifts  and  legacies  preceding  the 
residuary  clause  of  the  will.^ 

1  In  re  Burkhart,  25  Pa.  Super.  Ct.  514. 

Where  there  is  a  life  estate  and  remainder  and  the  executors  pay  the  tax  on 
the  whole  estate  on  the  death  of  the  testator,  there  is  no  requirement  that  the 
values  of  the  life  estate  and  remainders  respectively  shall  be  appraised  separately. 
In  re  De  Borbon,  211  Pa.  St.  623,  61  A.  244. 

^In  re  Jones,  5  Dem.  Surr.  (N.  Y.)  30. 

^Ayers  v.  Chicago  Title  &  Trust  Co.,  187  111.  42,  58  N.  E.  318. 

Sec.  334.    As  of  what  Date. 

It  is  the  nearly  universal  rule  that  property  must  be  appraised 
as  of  the  death  of  the  testator.^  The  appraisal  will  not  include 
income  received  after  the  testator's  death ,2  and  changes  of  value 
after  the  death  of  the  testator  are  immaterial  on  appraisal.^ 

^Hooper  v.  Bradford  178  Mass.  95,  59  N.  E.  678.  In  re  Vivanti,  138  N.  Y. 
App.  Div.  281,  122  N.  Y.  Suppl.  954,  reversing  63  Misc.  618,  118  N.  Y.  Suppl. 
680  (good  will). 

The  report  of  an  appraiser  is  defective  in  not  stating  the  value  of  the 
property  subject  to  tax  on  the  date  of  the  death  of  the  testator.  In  re  Earle,  74 
N.  Y.  App.  Div.  458,  77  N.  Y.  Suppl.  503,  affirming  71  N.  Y.  Suppl.  1038. 

As  the  inheritance  tax  is  a  tax  upon  succession  and  not  upon  property 
the  true  test  of  value  is  the  value  of  the  estate  at  the  time  of  the  transfer  of  title 
and  not  its  value  at  the  time  of  the  transfer  of  possession.  In  re  Davis,  149 
N.  Y.  539,  547,  44  N.  E.  185,  affirming  91  Hun  53. 

[Income  after  death  not  included,  see  ante^  s.  179.] 

2  Hooper  v.  Bradford,  178  Mass.  95,  59  N.  E.  678.  In  re  Vassar,  127  N.  Y.  1, 
827  N.  E.  394,  reversnig  58  Hun  378,  12  N.  Y.  Suppl.  203.     See  ante,  s.  179. 

3  In  re  Hartman,  70  N.  J.  Eq.  664,  668,  62  A.  560.  In  re  Vassar,  127  N.  Y.  1, 
8,  27  N.  E.  394,  reversing  58  Hun  378,  12  N.  Y.  Suppl.  203.  Comm.  v.  Smith,  20 
Pa.  St.  (8  Harris)  100.  Comm.  v.  Freedley,  21  Pa.  St.  (9  Harris)  33.  See,  how- 
ever, post,  s.  335,  n.  2,  3. 

A  sale  above  the  appraised  value  is  not  a  reason  for  increasing  the  appraisal 
as  this  should  be  treated  as  an  increase  in  value  after  the  death  of  the  decedent. 
In  re  Rice,  56  N.  Y.  App.  Div.  253,  68  N.  Y.  Suppl.  1147,  affirming  61  N.  Y. 
Suppl.  911.     In  re  Bruce,    59  N.  Y.  Suppl.  1083. 


§335.1  APPRAISAL.  253 

Sec.  335.    As  of  what  Date  Future  Interests  are  Appraised. 

Vested  remainders  are  to  be  appraised  on  their  value  at  the  tes- 
tator's death/  while  the  determination  of  the  value  of  future  uncer- 
tain interests  may  be  postponed  till  the  happening  of  the  event,^ 
when  the  appraisal  may  proceed  on  the  basis  of  the  full  value  of 
the  property  at  that  time.^ 

Un  re  Kingman,  220  III.  563,  565,  77  N.  E.  135.  Howe  v.  Howe,  179  Mass.  546, 
551,  55  L.  R.  A.  626.  Dow  v.  Abbott,  197  Mass.  283,  288,  84  N.  E.  96  (deducting 
value  of  life  interest).  In  re  Meyer,  83  N.  Y.  App.  Div.  381,  82  N.  Y.  Suppl. 
329.    In  re  Davis,  149  N.  Y.  539,  547,  44  N.  E.  185,  affirming  91  Hun  53. 

Under  111.  St.  1895,  p.  301,  s.  2,  "and  the  property  so  passing  shall  be  appraised 
immediately  after  the  death,"  the  words  "after  the  death"  referred  to  the  death 
of  the  testator  and  not  to  the  death  of  the  life  tenant.  Ayers  v.  Chicago  Title 
&  Trust  Co.,  187  111.  42,  58  N.  E.  318. 

The  present  value  of  vested  remainders  is  capable  of  ready  computation  by 
the  annuity  tables,  and  they  are  therefore  subject  to  present  taxation.  In  re 
Dows,  167  N.  Y.  227,  233,  60  N.  E.  439,  52  L.  R.  A.  433,  88  Am.  St.  Rep.  508, 
affirming  60  N.  Y.  App.  Div.  630  (affirmed  sub  nomine,  Orr  v.  Gilman,  183  U.  S. 
278,  22  S.  Ct.  213,  46  L.  Ed.  196). 

The  will  directed  the  executor  to  pay  all  the  collateral  inheritance  taxes  on  all 
the  devises,  bequests  and  legacies  "as  soon  after  my  decease  as  the  same  can 
conveniently  be  done."  Under  tKis  provision  the  executor  paid  the  tax  on  the 
entire  estate  at  its  valuation  at  that  time.  Subsequently,  the  life  tenant  having 
died,  the  state  claimed  the  tax  on  the  remainders  on  the  ground  that  it  was  not 
due  until  the  remainders  came  into  possession,  and  that  the  value  of  the  estate 
having  increased  in  the  meantime  the  tax  is  payable  on  its  present  value.  The 
court  says  that  Pennsylvania  statute  1887,  P.  L.  79,  section  3,  in  the  words 
"shall  not  be  payable"  means  only  "shall  not  be  demandable"  by  the  state,  as 
the  right  of  the  remaindermen  to  pay  sooner  is  expressly  given  in  the  proviso  to 
the  same  section;  and  that  the  tax  having  been  paid  on  the  value  at  the  death 
of  the  testator  no  further  tax  can  be  now  collected.  In  re  De  Borbon,  211  Pa. 
St.  623,  61  A.  244. 

The  Maryland  Rule.  Where  a  Maryland  testator  died  leaving  his  property 
in  trust  for  the  life  tenant  and  on  her  death  to  be  disposed  of  as  she  might  by 
will  direct,  and  the  life  tenant  did  leave  property  by  will,  the  inheritance  tax 
on  her  death  should  be  reckoned  on  the  value  of  the  property  at  that  time 
although  it  had  doubled  in  value  while  in  the  hands  of  the  trustees.  The  court 
holds  that  Md.  code,  a.  81,  s.  117,  provides  that  the  tax  is  imposed  upon  the 
clear  value  of  all  estates  at  the  time  of  transfer  or  receipt  by  the  collateral  bene- 
ficiary.   Fisher  v.  State,  106  Md.  104,  66  A.  661.     See,  however,  ante,  s.  334,  n.  3. 

2  People  V.  McCormick,  208  111.  437,  70  N.  E.  350,  64  L.  R.  A.  775.  Howe  v. 
Howe,  179  Mass.  546,  550,  55  L.  R.  A.  626.  In  re  Sloane,  154  N.  Y.  109,  47  N.  E. 
978,  19  N.  Y.  App.  Div.  411,  46  N.  Y.  Suppl.  264  (remainder  on  remarriage). 
In  re  Willing,  11  Phila.  119.  In  re  Kingman,  220  111.  563,  565,  77  N.  E.  135. 
See  ante,  ss.  233,  234. 

Where  the  will  left  all  the  property  to  the  wife  for  life  and  the  remainder  to 
an  infant,  and  where  it  appeared  that  the  infant's  estate  could  not  be  appraised 


254  INHERITANCE  TAX  LAW.  [§  336. 

at  the  present  time,  it  is  improper  to  appoint  a  special  guardian  for  the  infant. 
In  re  Post,  5  N.  Y.  App.  Div.  113,  38  N.  Y.  Suppl.  977. 

Report  and  Security.  Tenn.  St.  1893,  c.  189,  s.  3,  does  not  contemplate 
that  persons  holding  contingent  interests  shall  make  the  report  and  give  security 
within  the  year  from  the  death  of  the  decedent.  See  Harrison  v.  Johnston, 
109  Tenn.  245,  70  S.  W.  414. 

The  Wisconsin  statute  was  attacked  on  the  ground  that  it  attempted 
to  impose  a  tax  on  transfers  limited  to  vest  on  contingencies  which  may  never 
happen,  or  to  persons  not  in  being  or  ascertainable,  and  making  the  tax  due 
and  payable  forthwith  out  of  the  property  transferred,  by  compelling  parties 
to  pay  such  tax  on  defeasible  estates  which  they  may  never  own  and  in  con- 
templating the  payment  of  penalties  before  any  opportunity  is  offered  to  pay 
the  tax.  The  court  replies  that  the  law  does  not  operate  to  enforce  the  assess- 
ment and  payment  of  the  tax  on  interests  or  estates  not  vested,  or  on  those  whose 
value  cannot  be  ascertained  by  reason  of  the  uncertainties  of  contingencies. 
Payment  of  the  tax  on  such  transfers  is  expressly  postponed  until  the  beneficiary 
comes  into  the  actual  possession  or  enjoyment  thereof.  The  claim  that  the  pres- 
ent owners  of  defeasible  estates  are  compelled  to  pay  the  tax  on  the  whole  estate 
is  not  well  founded,  for  provision  is  made  for  reimbursing  them  should  it  happen 
that  such  estates  and  interests  should  be  abridged,  defeated  or  diminished. 
[Section  13,  subdivision  31.]    State  v.  Pabst,  139  Wis.  561,  587,  121  N.  W.  351. 

Change  of  Interest  on  Marriage.  It  is  claimed  that  it  was  impossible  to 
ascertain  the  value  of  an  estate  given  to  one 'until  she  marries  when  she  was  to 
have  a  different  interest,  as  no  one  could  say  how  long  she  would  remain  un- 
married. The  court,  however,  observes  that  when  a  particular  individual  claims 
an  exemption  from  burdens  which  the  law  imposes  upon  all  alike  and  bases  his 
claim  upon  provisions  of  the  statute  which  refer  exclusively  to  the  methods 
to  be  employed,  it  is  the  duty  of  the  court  to  construe  these  provisions  so  as  if 
possible  to  give  effect  to  the  statutory  intent.  That  thenefore  when  the  valua- 
tion takes  place  it  is  to  be  made  as  of  the  date  of  the  testator's  death.  The 
court  avoids  the  difficulty  by  deciding  that  the  probate  court  should  determine 
what  is  the  value  of  each  instalment  as  it  is  actually  paid  to  the  beneficiary.  From 
the  value  of  the  first  payments  should  be  deducted  the  exemption  of  ten  thousand 
dollars  and  the  tax  computed  upon  the  remainder.  This  avoids  a  possible  result 
that  che  custodians  of  the  estate  would  be  at  liberty  to  transfer  it  to  the  benefi- 
ciaries in  instalments  and  in  the  meanwhile  be  unable  to  collect  any  tax  whatever. 
State  V.  Probate  Court,  112  Minn.  279,  128  N.  W.  18,  20.  The  court  relies  some- 
what on  In  re  Millward,  6  Misc.  (N.  Y.)  425,  27  N.  Y.  Suppl.  286. 

3  In  re  Connoly,  38  Misc.  Rep.  533,  77  N.  Y.  Suppl.  1113.  In  re  Goelet,  78  N.  Y. 
Suppl.  47.     See,  however,  ante,  s.  334,  n.  3. 

Sec.  336.    Reappraisal. 

One  appraisal  exhausts  the  statutory  authority  for  an  appraisal,^ 
even  where  property  has  been  omitted  on  the  first  appraisal,^ 
except  for  express  statutory  authority  for  a  reappraisal,^  as  where 
property  is  omitted,'*  or  in  case  of  fraud  or  error, ^  or  in   case  of 


§  336.1  APPRAISAL.  255 

future^  or  unascertained  interests/   or  where  the  report  of    the 
original  appraiser  is  insufficient  to  enable  the  court  to  fix  the  tax.^ 

1  This  assessment  of  the  appraiser  is  final  and  it  does  not  admit  of  opening 
to  take  any  additions  to  the  clear  value  of  property  once  assessed.  That  property 
is  vested  in  the  heir  or  devisee  and  cannot  be  reassessed  for  the  purpose  either 
of  increasing  or  diminishing  the  value  assessed  by  the  appraiser.  Commonwealth 
V.  Freedley,  21  Pa.  St.  (9  Harris)  33. 

Un  re  Moneypenny,  181  Pa.  St.  309,  37  A.  589 

3  The  district  court  may  order  a  second  appraisement  of  the  property  where 
the  state  was  not  a  party  to  the  first  appraisement  and  on  showing  error  in 
proceedings  theretofore  had  to  correct  the  error  by  means  of  a  new  appraisement. 
McGhee  v.  State.  105  Iowa  9,  74  N.  W.  695. 

A  motion  may  be  made  to  remit  the  report  of  an  appraiser  back  to  the 
appraisers  before  the  court  has  acted  upon  it,  for  the  introduction  of  additional 
proof.    In  re  Kelly,  29  Misc.  Rep.  169,  60  N.  Y.  Suppl.  1005. 

*In  re  Smith,  23  N.  Y.  Suppl.  762  (property  withheld  from  the  notice  of  the 
appraiser). 

The  authoricy  to  a  surrogate  to  appoint  an  appraiser  "as  often  as  occasion 
may  require"  has  for  its  object  to  collect  the  tax  on  the  whole  taxable  estate; 
and  where  all  the  assets  have  been  appraised  and  the  tax  fixed  to  cover  any 
omission  by  additional  or  supplemental  appraisals  and  when  such  omissions  are 
discovered  upon  the  new  appraisal,  property  of  the  decedent  which  had  not 
been  appraised  at  the  previous  proceeding  was  properly  included.  But  the 
appraiser  has  no  authority  to  increase  the  appraisal  on  property  which  was 
included  in  the  former  appraisal,  even  though  the  executor  had  since  the  former 
appraisal  actually  received  for  such  property  respective  sums  for  which  they 
were  valued  in  the  new  appraisal.  The  court  treats  this  difference  as  an  increase 
in  value  subsequent  to  the  date  of  the  death  of  the  decedent.  In  re  Rice,  56 
N.  Y.  App.  Div.  253,  68  N.  Y.  Suppl.  1147,  affirming  61  N.  Y.  Suppl.  911. 

Where  property  was  brought  to  the  attention  of  the  appraisers  and 
is  not  included  in  the  appraisal  a  new  appraisal  under  section  230  is  not  author- 
ized on  the  ground  that  the  property  was  omitted  from  the  former  appraisal. 
In  re  Crerar,  56  N.  Y.  App.  Div.  479,  67  N.  Y.  Suppl.  795,  9  N.  Y.  Ann.  Cas.  101. 

^The  New  York  statute  of  1896  provides  for  a  reappraisal  if  an  appraisal  has 
been  fraudulently,  coUusively  or  erroneously  made.  Where  no  appraisal  is 
made  at  all  for  the  reason  that  both  appraiser  and  surrogate  took  the  view  which 
proved  to  be  mistaken,  that  the  bequest  was  not  subject  to  tax,  this  is  not  within 
the  statute  and  therefore  a  reappraisal  cannot  be  had  under  this  section.  In  re 
Niven,  29  Misc.  Rep.  550,  61  N.  Y.  Suppl.  956.  See  Morgan  v.  Warner,  162  N.  Y. 
612,  57  N.  E.  1118,  affirming  45  N.  Y.  App.  Div.  424.  Remedy  by  reappraisal 
in  case  of  fraud  is  not  exclusive,  but  compcroUer  may  appeal. 

Sale  above  Price  Fixed  on  Appraisal.  Reappraisements  will  not  be  ordered 
in  the  absence  of  evidence  of  mistake  or  fraud  simply  because  at  public  auction 
the  property  was  sold  for  a  price  exceeding  the  appraisal.  In  re  Bruce,  59  N.  Y. 
Suppl.  1083.  In  re  Rice,  56  N.  Y.  App.  Div.  253,  68  N.  Y.  Suppl.  1147,  affirm- 
ing 61  N.  Y.  Suppl.  911. 

^  State  v.  District  Court,  41  Mont.  357,  109  P.  438. 


256  INHERITANCE  TAX  LAW.  [§337. 

N.  J.  St.  1893,  c.  210,  s.  4,  provides  that  all  taxes  imposed  by  the  act  shall 
be  due  at  the  death  of  the  testator  unless  otherwise  provided  and  it  was  claimed 
that  the  necessary  effect  of  this  language  was  that  the  act  does  not  provide 
for  the  imposition  of  a  tax  which  cannot  be  determined  at  the  death  of  the 
testator.  But  this  contention  fails  to  take  account  of  the  phrase  in  this  fourth 
section  that  the  tax  imposed  by  the  act  shall  be  due  and  payable  at  the  death 
of  the  testator  unless  otherwise  provided  It  also  fails  to  take  account  of  the 
provision  of  section  13,  to  the  effect  that  m  order  to  fix  the  value  of  property 
subject  to  the  tax,  the  surrogate  or  register  of  the  prerogative  court  shall  "appoint 
an  appraiser  as  often  as  and  whenever  the  occasion  may  require."  The  court 
relies  on  similar  provisions  in  the  New  York  statute  as  construed  in  In  re  Stewart, 
131  N.  Y.  274.     Hoyt  v.  Hancock,  65  N.  J.  Eq.  688,  55  A.  1004. 

^  Where  the  widow  is  given  power  to  appropriate  the  residue  to  her  own  use 
for  life  with  the  remainder  over  of  the  surplus,  the  amount  of  it  and  the  tax 
upon  it  can  only  be  ascertained  after  her  death.  Appeal  of  Nieman,  131  Pa.  St. 
346,  351,  18  A.  900. 

The  testatrix  died  in  1891,  and  the  appraisal  was  had  then  under  the  existing 
law  of  the  interests  of  the  beneficiaries,  but  the  tax  on  the  interests  of  certain 
contingent  remainders  was  postponed,  as  it  was  not  then  known  and  could  not 
then  be  ascertained  to  whom  the  shares  would  ultimately  pass.  In  1902  the 
legatee  to  whom  the  property  was  given  when  she  became  thirty  years  of  age 
reached  that  age  and  the  application  was  made  to  fix  the  tax  on  her  share.  The 
court  holds  that  the  language  in  the  statute  of  1901,  chapter  173,  "where  the 
taxation  thereof  has  been  held  in  abeyance,"  clearly  makes  the  section  apply 
retroactively  and  that  therefore  the  appraisal  must  take  place  not  in  accordance 
with  the  valuation  of  1891,  but  that  a  new  appraisal  was  necessary.  In  re 
Hosack,  39  Misc.  Rep.  130,  78  N.  Y.  Suppl.  983. 

Where  an  appraiser  reports  that  remaindermen  were  indefinite  and  uncertain, 
and  that  the  tax  could  not  then  be  determined  and  this  report  is  confirmed  in 
1894,  the  court  has  no  power  to  appoint  another  appraiser  in  1898.  The  report 
was  the  final  determination  of  the  subject.  In  re  Lawrence,  96  N.  Y.  App.  Div. 
29,  88  N.  Y.  Suppl.  1028. 

8  Denver  v.  Watson,  (Colo.  1911,)  118  P.  979. 


Sec.  337.    Test  of  Value. 

The  appraisal  should  endeavor  to  fix  the  real  market  value  of 
the  property  rather  than  its  assessed  value, ^  and  on  this  issue  the 
appraisers  should  consider  the  current  market  quotations  under 
ordinary  conditions,^  without  considering  the  effect  on  the  market 
of  a  forced  sale  of  the  holdings  of  the  estate.^  They  may  consider 
the  net  income,*  together  with  other  proper  evidence,^  such  as  the 
agreement  of  the  owners,®  and  actual  sales,^  and  the  opinion  of  the 
executor,  but  not  declarations  of  the  testator.^  The  appraisal  of 
an  estate  must  be  based  on  some  definite  evidence  of  the  existence 
as  well  as  the  value  of  the  property.® 


li 


§  337.]  APPRAISAL.  257 

'  "Value,"  "appraised  value"  and  "actual  market  value"  means  in 
each  case  a  fair  market  value  and  not  the  assessed  value  of  the  property  fixed  for 
the  purpose  of  ordinary  taxation.     McGhee  v.  State,  105  Iowa  9,  74  N.  W.  695. 

^  "The  quotation  of  the  stock  exchange  may  be  temporarily  uncertain  and 
untrustworthy,  if  the  sales  thereon  are  suddenly  affected  for  speculative  pur- 
poses, or  by  the  forcing  upon  the  market  and  to  sale  of  large  blocks  of  stock  in 
an  extraordinary  manner,  with  no  explanation  of  such  action,  and  where  the 
purpose  of  it  is  left  to  the  conjecture  of  those  dealing  in  the  stocks;  but  such  quota- 
tions may  be  a  fair  and  safe  guide  when  they  are  taken  for  a  reasonable  period 
of  sales  made  in  the  usual  and  ordinary  course  of  business."  Per  Magruder,  J., 
in  Walker  v.  People,  192  111.  106,  112,  61  N.  E.  489. 

Practice.  There  is  an  elaborate  opinion  as  to  the  practice  on  appraisal  under 
the  New  York  statute  of  1887  in  In  re  Astor,  20  Abb.  N.  Cas.  405,  6  Dem.  Surr. 
402,  14  N.  Y.  St.  478,  2  N.  Y.  Suppl.  630. 

3  "Clear  market  value"  does  not  mean  the  selling  price  of  property  at  a  forced 
or  involuntary  sale  so  the  appraisal  may  be  made  at  the  price  at  which  small 
blocks  of  stock  held  by  the  estate  were  sold  at  or  about  the  date  of  the  death  of 
the  decedent,  and  the  appraiser  should  not  consider  the  fact  that  the  estate  held 
large  blocks  of  stock  which  if  all  forced  on  the  market  at  the  death  of  the  decedent 
would  have  depressed  the  market  price  of  the  stock.  Walker  v.  People,  192  111. 
106,  61  N.  E.  489. 

^In  re  Kaas,  5  Pa.  Co.  Ct.  583. 

^Appraisers  may  use  the  quotations  on  public  exchanges,  private  sales  of  such 
property,  testimony  as  to  the  actual  value  of  the  same  and  their  own  knowledge 
of  the  subject  matter.     Walker  v.  People,  192  111.  106,  61  N.  E  489. 

^  The  court  holds  that  there  was  no  authority  for  fixing  the  value  of  the  good 
will  in  a  business  at  the  amount  of  the  decedent's  share  of  the  profits  of  the 
business  for  the  year  immediately  preceding.  The  amount  fixed  by  the  agree- 
ment of  the  parties  at  the  time  must  determine  the  value.  What  is  to  be  deter- 
mined is  the  value  of  the  good  will  as  of  the  time  of  the  decedent's  death.  In  re 
Vivanti,  138  N.  Y.  App.  Div.  281,  122  N.  Y.  Suppl.  954,  reversing  63  Misc.  618, 
118  N.  Y.  Suppl.  680. 

^  It  appeared  that  the  devisee  of  real  property  had  sold  it  for  the  best  price 
that  she  could  obtain,  and  therefore  the  court  holds  it  unjust  to  fix  the  price  much 
larger  than  that  simply  on  account  of  the  evidence  of  a  real  estate  appraiser. 
In  re  Arnold,  114  N.  Y.  App.  Div.  244,  99  N.  Y.  Suppl.  740,  37  Civ.  Proc.  Rep. 
177. 

The  average  sales  of  stock  for  the  three  months  first  prior  to  the  decedent's 
death  is  a  proper  way  to  ascertain  the  value  of  the  stock  under  the  New  York 
statute  of  1891,  chap.  34,  sec.  1.  In  re  Crary,  31  Misc.  Rep.  72,  64  N.  Y.  Suppl. 
666.     See  also,  Walker  v.  People,  192  111.  106,  61  N.  E.  489. 

«  Morgan  v.  Warner,  162  N.  Y.  612,  57  N.  E.  1118,  affirming  45  N.  Y.  App.  Div. 
424. 

*The  testimony  of  one  hostile  witness  that  ten  years  before  the  death  of  the 
testator  he  was  shown  by  the  testator  a  box  containing  securities  which  the  testa- 
tor then  stated  amounted  to  $420,000,  and  that  five  years  prior  to  the  death  of 
*he  testator  the  witness  was  taken  to  a  safe  deposit  vault  and  shown  a  box  of 
securities  which  the  testator  stated  were  worth  $700,000,  which  the  witness  did 
not  handle,  estimate  or  count,  is  insufficient  as  a  basis  for  inheritance  tax  pro- 


258  INHERITANCE  TAX  LAW.  [§§338-340. 

ceedings.  In  addition  to  this,  accounts  with  brokers  and  with  a  national  bank 
showing  considerable  amounts  of  money  passing  through  the  account  are  insuffi- 
cient, especially  where  it  appears  that  the  testator  was  speculating  in  the  stock 
market.     In  re  Kennedy,  113  N.  Y.  App.  Div.  4,  99  N.  Y.  Suppl.  72. 

Sec.  338.    Value  Received  by  Beneficiary  the  Test. 

An  appraisement  should  not  be  made  on  the  basis  of  the  entire 
value  of  a  decedent's  property  at  the  time  of  his  death,  but  rather 
on  the  value  of  the  estate  received  by  each  person  under  the  will, 
in  those  states  where  the  tax  is  imposed  on  the  beneficiaries  rather 
than  on  the  estate. 

Ayers  v.  Chicago  Title  &  Trust  Co.,  187  111.  42,  58  N.  E.  318. 

Sec.  339.     Rule  in  the  Absence  of  Specific  Provision. 

Where  the  statute  makes  no  specific  provision  for  a  case  exactly 
like  the  one  in  question  the  values  can  be  ascertained  according 
to  the  method  pointed  out  for  similar  cases. 

Dow  V  Abbott,  197  Mass.  283,  288,  84  N.  E.  96. 

Sec.  340.    Choses  in  Action.  —  Bequest  to  Debtor. 

Claims  or  other  choses  in  action  must  be  appraised  at  their 
actual  market  value,  which  may  be  nothing  where  the  debtor  is 
worthless  and  the  testator  bequeaths  his  debt  to  him.^  So  a  worth- 
less claim  should  be  entirely  barred  from  consideration, ^  or  it  may 
be  excluded  from  immediate  appraisal  when  subject  to  genuine 
litigation.^  An  honest,  prudent  compromise  may  determine  its 
value.  Where  an  administrator  makes  an  honest  and  prudent 
compromise  of  a  claim  of  the  estate  against  another,  the  claim 
will  not  be  appraised  at  a  greater  value  than  the  compromise.^ 

^  Where  a  testator  held  notes  against  cei^tain  relatives  and  by  his  will  the  notes 
and  the  amounts  due  thereon  were  given  to  the  makers  of  the  notes,  and  the  direc- 
tors were  directed  to  cancel  and  surrender  the  notes  to  the  makers  without  pay- 
ment, the  court  holds  that  as  the  makers  of  the  notes  were  insolvent  it  is 
fair  to  appraise  the  legacy  as  valueless.  It  was  claimed  that  notwithstanding  t  he 
insolvency  of  the  makers  inasmuch  as  the  notes  were  given  as  legacies  to  the 
makers  themselves  they  should  be  assessed  &t  their  fair  value.  But  the  court 
holds  that  under  section  230  of  the  statute  "fair  market  value"  is  the  test.  No 
such  exception  of  cases  where  promissory  notes  are  given  to  their  makers  is 
made  by  the  statute.  Morgan  v.  Warner,  162  N.  Y.  612,  57  N.  E.  1118,  affirm- 
ing 45  N.  Y.  App.  Div.  424. 

Where  the  estate  has  a  claim  against  a  beneficiary,  but  of  a  less  amount  than 
the  beneficiary  is  entitled  to  under  the  will,  the  claim  should  be  appraised.  In 
re  Smith,  14  Misc.  Rep.  169,  35  N.  Y.  Suppl.  701.     See  further,  ante,  s.  340. 


§341.]  APPRAISAL.  259 

2  In  re  Manning,  169  N.  Y.  449,62  N.  E.  565,  affirming  59  N.  Y.  App.  Div.  624. 

3  In  re  Skinner,  106  N.  Y.  App.  Div.  217,  94  N.  Y.  Suppl.  144,  modifying  45 
Misc.  559,  92  N.  Y.  Suppl.  972. 

Where  the  administrator  had  brought  suit  on  a  note  made  payable  to  the 
intestate  which  the  maker  of  the  note  claimed  had  been  paid  and  litigation 
was  still  pending  at  the  time  of  the  appraisal,  it  was  the  duty  of  the  surrogate 
to  exclude  this  claim  from  the  valuation  at  the  time,  reserving  it  for  future  ap- 
praisal in  case  the  administrator  succeeded  in  collecting  it.  In  re  Westurn,  152 
N.  Y.  93,  103,  46  N.  E.  315,  reversing  8  N.  Y.  App.  Div.  59. 

4  In  re  Thomas,  39  Misc.  Rep.  223,  79  N.  Y.  Suppl.  571. 

Sec.  341.    Inactive  Securities.  —  Good  Will. 

Where  shares  of  stock  are  not  Hsted  upon  the  stock  exchange 
or  sold  in  the  open  market,  the  only  way  to  ascertain  their  value 
is  to  consider  the  property  they  represent  and  its  income/  or  sales 
of  the  stock  though  infrequent,^  or  expert  evidence.^  The  court 
approves  the  suggestion  that  the  proper  rule  for  ascertaining  the 
value  of  good  will  based  on  earnings  would  be  to  multiply  the  net 
earnings  by  a  certain  number  of  years,  depending  on  the  nature  of 
the  business,  and  where  a  net  profit  upon  a  comparatively  small 
capital  was  about  $26,000  per  annum,  and  it  was  not  a  business 
that  depended  upon  any  special  qualifications  in  the  decedent, 
the  court  estimates  the  value  at  about  three  times  the  annual  net 
profits.^ 

1  In  re  Jones,  172  N.  Y.  575,  586,  65  N.  E.  570,  60  L.  R.  A.  476,  reversing  69 
N.  Y.  App.  Div.  237,  74  N.  Y.  Suppl.  702  (joint  stock  association). 

Certain  stock  was  valued  at  $1,150  per  share  and  the  county  court  valued  it 
at  $1,408.45  per  share,  the  face  value  being  $1,000  per  share.  The  law  requires 
that  the  tax  should  be  assessed  on  the  clear  market  value  of  the  property.  It 
appeared  that  there  had  been  no  sales  of  the  stock  in  the  market,  but  that  the 
decedent  had  dealt  with  the  stock  on  the  basis  of  its  book  value,  and  the  transfers 
shown  were  apparently  made  in  reliance  on  the  book  value.  Evidence  was  intro- 
duced showing  the  dividends  declared  and  paid  for  a  period  of  years  before  the 
death  of  the  testator,  and  the  value  of  the  corporation  assets  during  that  time. 
In  the  deed  of  gift  the  decedent  declared  the  book  value  of  2,840  shares  of  stock 
to  be  four  million  dollars.  The  court  finds  that  the  facts  regarding  the  busi- 
ness of  the  corporation  and  its  property  furnish  a  basis  for  valuation,  and  are 
sufficient  to  sustain  the  conclusion  of  the  trial  court.  State  v.  Pabst,  139  Wis. 
561,  594,  121  N.  W.  351. 

Patent  Medicine  Company.  —  Trade  Secrets.  Where  stock  had  no  market 
value,  as  the  corporation  made  porous  plasters  and  medicines  dependent  on  cer- 
tain trade  secrets,  the  earning  power  of  the  corporation  is  competent  evidence 
of  its  value  and  is  to  be  considered  in  determining  the  valuation  to  be  placed 
upon  the  stock  for  the  purposes  of  taxation.  Where  it  is  impossible  for  an 
appraiser  to  ascertain  the  market  value  of  the  stock  of  a  corporation  by  reason 
|of  the  fact  that  there  is  none,  the  state  does  not  thereby  lose  the  tax  upon  the 


260  INHERITANCE  TAX  LAW.  [§342. 

transfer.  The  ownership  of  secret  receipts  is  not  tangible  and  is  to  some  extent 
of  uncertain  and  precarious  value,  dependent  upon  the  good  faith  of  those  who 
possess  the  secret.  Still  a  large  portion  of  their  value  lies  in  judicious  advertising 
and  in  the  name  under  which  they  have  sold,  and  therefore  these  secret  receipts 
are  properly  to  be  considered  in  estimating  the  value.  In  re  Brandreth,  28 
Misc.  Rep.  468,  59  N.  Y.  Suppl.  1092. 

2  In  re  Proctor,  41  Misc.  Rep.  79,  83  N.  Y.  Suppl.  643. 

Where  a  manufacturing  company  paid  eight  per  cent  dividends  during  the 
first  year  of  its  incorporation  its  stock  is  not  necessarily  worth  par  in  view  of  sales 
during  the  year  at  fifty  ($50)  dollars  a  share.  In  re  Smith,  71  N.  Y.  App.  Div, 
602,  76  N.  Y.  Suppl.  185. 

3/w  re  Curtice,  111  N.  Y.  App.  Div.  230,  97  N.  Y.  Suppl.  444,  affirmed  in 
185  N.  Y.  543,  77  N.  E.  1184. 

4  In  re  Keahon,  60  Misc.  508,  113  N.  Y.  Suppl.  926.     See  further,  ante,  s.  178. 


Sec.  342.    Annuities. 

A  definite  annuity  is  properly  valued  at  its  worth  at  the  testa- 
tor's death,  in  tlie  light  of  the  legatee's  probability  of  life  at  that 
time.^  Where  a  testator  directed  his  executors  and  trustees  to 
pay  over  to  his  sister  such  sums  as  with  the  income  of  her  own 
property  should  give  her  a  net  annual  income  of  $10,000,  the  court 
ruled  that  she  was  to  be  taxed  on  an  annuity  to  the  amount  of  the 
difference  between  $10,000  and  her  net  annual  income  at  the  death 
of  the  testator.  The  objection  was  made  that  the  sum  bequeathed 
was  neither  an  annuity  nor  a  life  estate,  as  it  was  of  an  uncertain 
amount  and  liable  to  fluctuate  from  year  to  year.  The  court 
takes  the  position  that  it  did  not  appear  how  great  the  fluctuations 
might  be  and  it  might  be  treated  as  an  annuity  of  $10,000  a  year 
subject  to  reduction,  so  that  the  value  of  the  interest  might  be 
treated  as  an  annuity  of  $10,000  a  year.^ 

1  Minot  V.  Winthrop,  162  Mass.  113,  126,  26  L.  R.  A.  259.  In  re  Rothschild, 
72  N.  J.  Eq.  425,  65  A.  1118,  71  N.  J.  Eq.  210,  affirming  71  N.  J.  Eq.  210.  See, 
however,  In  re  Hall,  36  Misc.  618,  73  N.  Y.  Suppl.  1124,  where  remainder  interest 
valued  by  deducting  value  of  annuity  actually  enjoyed  by  annuitant  who  lived 
longer  than  calculated  by  the  annuity  tables. 

A  tax  on  an  annuity  as  covered  in  section  230  of  the  New  York  statute  should 
be  ascertained  by  fixing  the  value  under  the  insurance  tables  and  then  computing 
the  amount  of  the  transfer  tax  thereon,  which  becomes  payable  forthwith  out 
of  the  fund  set  aside  for  creating  the  annuity.  The  method  of  returning  to  the 
estate  the  tax  so  paid  by  the  trustees  is  as  follows:  "Take  for  illustration  an  annui- 
tant whose  probable  duration  of  life  is  ten  years.  The  trustees  would  deduct  from 
each  annual  payment  as  made  one- tenth  of  the  tax  and  restore  it  to  the  residuary 
estate."  Where  the  death  of  the  annuitant  took  place  before  the  tax  had  been 
restored  to  the  estate  entirely,  any  portion  of  a  transfer  tax  not  restored  to  the 
estate  by  the  process  indicated  at  the  time  of  the  annuitant's  death  would  be  a 


§  343.]  APPRAISAL.  261 

loss  which  the  estate  must  sustain.  In  re  Tracy,  179  N.  Y.  501,  509,  72  N.  E. 
519,  reversing  87  N.  Y.  App.  Div.  215. 

The  personal  property  was  limited  on  the  life  of  the  testator's  widow  subject 
to  an  annuity  to  be  paid  to  his  sister.  It  was  claimed  that  from  the  life  estate 
should  be  deducted  the  actual  amount  of  principal  necessary  to  produce  annuities 
at  the  rate  of  five  per  cent  per  annum.  The  court,  however,  holds  that  the 
proper  method  is  to  treat  the  present  values  of  the  annuities  as  specific  legacies 
bequeathed  to  the  annuitants  deducted  from  the  residuary  personal  estate,  on  the 
theory  that  the  widow's  life  interest  is  limited  on  the  remainder  only.  In  effect 
her  interest  is  ascertained  to  be  the  present  value  of  the  life  estate  in  the  entire 
fund  less  the  present  value  of  the  annuities  charged  upon  such  fund.  In  re  Maresi, 
74  N.  Y.  App.  Div.  76,  77  N.  Y.  Suppl.  76. 

The  testator,  a  resident  of  Louisiana,  died  in  1902,  leaving  certain  property 
in  the  state  of  New  York.  The  will  gave  an  annuity  to  two  sisters  and  contained 
the  request  that  the  executors  should  arrange  for  these  annuities  "through  such 
life  insurance  companies  as  the  Mutual,  New  York  Life,  or  Equitable  Life,  all 
of  New  York."  The  executors  purchased  annuities  from  New  York  companies 
with  the  New  York  assets  of  the  testator.  The  court  holds  that  as  the  will 
contained  a  direction  to  purchase  annuities  from  one  of  the  insurance  companies 
mentioned  in  the  will,  the  amount  that  was  actually  expended  by  the  executors 
for  the  purchase  of  these  annuities  should  be  deducted  and  not  the  estimated 
value  of  the  annuities  as  determined  by  the  superintendent  of  insurance,  and 
therefore,  the  tax  on  the  residuary  bequest  should  be  based  on  the  amount  actually 
received  and  not  to  include  property  which  has  been  paid  out  by  the  executor 
for  the  benefit  of  others  in  pursuance  of  directions  contained  in  the  will.  In  re 
Hutchison,  105  N.  Y.  App.  Div.  487,  94  N.  Y.  Suppl.  354. 

2  Howe  V.  Howe,  179  Mass  546,  554,  61  N.  E.  225,  55  L.  R.  A.  626. 

[As  to  annuities,  see  further,  ante,  ss.  230,  306.] 


Sec.  343.    Life  Estates. 

Life  estates  must  be  reckoned  at  their  value  at  the  death  of  the 
testator,^  and  are  not  dependent  on  the  actual  length  of  life  of  the 
life  tenant.^  This  must  usually  be  done  by  annuity  tables.  The 
value  of  a  life  estate  may  be  determined  by  actuaries'  experience 
tables,^  or  like  annuities.^ 

^Ayers  v.  Chicago  Title  &  Trust  Co.,  187  111.  42,  58  N.  E.  318.  Dow  v.  Abbott 
197  Mass.  283,  84  N.  E.  96. 

2  Howe  V.  Howe,  179  Mass.  546,  550,  61  N.  E.  225,  55  L.  R.  A.  626. 

^In  re  Wolf,  48  Ohio  Wkly.  L.  Bui.  211. 

*Life  estates  for  the  purposes  of  the  tax  are  to  be  appraised  at  their  cash 
value  in  the  same  manner  as  annuities.  This  means  such  a  sum  that  if  invested 
and  put  at  interest  it  will  with  a  proportionate  part  taken  from  the  fund  yearly 
to  make  up  the  annuity,  yield  the  required  amount  of  it  annually,  the  whole  fund 
being  exhausted  during  the  expectancy  of  life  of  the  annuitant.  Citing  with 
approval  the  Case  of  Handley,  3  L.  L.  N.  9.    In  re  Von  Storch,  7  Pa.  Dist.  R.  204. 

[What  life  estates  taxable,  see  ante,  228.] 


262  INHERITANCE  TAX  LAW.  [§§344-346. 

Sec.  344.    Statute  Providing  no  Method  for  Ascertaining 
Value  of  Life  Estate. 

The  fact  that  the  statute  does  not  provide  any  method  for 
ascertaining  the  value  of  the  life  estate  is  not  material;  for  the 
court  may  in  the  absence  of  express  direction  adopt  some  practical 
way  for  ascertaining  its  value  —  for  example,  by  referring  to  life 
and  annuity  tables.^  Valuation  of  a  life  estate  under  the  New 
York  statute  of  1885  should  be  made  according  to  the  rules  of  the 
supreme  court  where  no  tables  are  specified  in  the  statute.^ 

^  State  V.  Probate  Court,  100  Minn.  192,  197,  110  N.  W.  865. 
2  In  re  Robertson,  5  Dem.  Surr.  (N.  Y.)  92. 

Sec.  345.    Death  of  Life  Tenant  before  AppraisaL 

The  fact  that  the  life  tenant  may  have  died  after  the  testator, 
though  before  the  appraisal,  will  not  affect  the  tax  upon  his  interest. 

In  re  Jones,  28  Misc.  Rep.  356,  59  N.  Y.  Suppl.  983.  Contra,  Kahn  v.  Herold 
147  Fed.  575,  affirmed  in  86  C.  C.  A.  598,  159  Fed.  608,  163  Fed.  947.  (Under 
U.  S.  St.  1898.)  See  In  re  Hall,  36  Misc.  618,  73  N.  Y.  Suppl.  1124,  where 
annuitant  lived  longer  than  estimated  the  remainderman  should  be  charged  only 
with  what  he  actually  got.     Cf.  cases  cited,  ante,  s.  342,  n.  1. 

Sec.  346.    Remainders. 

Remainders  should  be  valued  by  deducting  from  the  whole  estate 
the  value  of  the  primary  estate, ^  except  where  payment  is  postponed 
till  the  remainder  comes  into  possession,  when  the  remainder 
interest  may  be  chargeable  with  the  whole  tax  on  the  whole  estate  ^ 
at  the  time  the  remainderman  goes  into  possession.^ 

1  Howe  V.  Howe,  179  Mass.  546,  551,  55  L.  R.  A.  626.  Dow  v.  Abbott,  197  Mass. 
283,  288,  84  N.  E.  96.  In  re  Lange,  25  Misc.  Rep.  466,  55  N.  Y.  Suppl.  750. 
Appeal  of  Commonwealth,  127  Pa.  St.  435,  439,  17  A.  1094  (if  remaindermen 
elect  to  pay  in  anticipation  on  the  death  of  the  decedent). 

Under  111.  St.  (Kurd's  Sts.  1903,  p.  1576)  the  only  provision  for  deduction  of 
the  primary  estate  in  assessing  the  value  of  the  remainder  interest  is  in  s.  2  and 
that  where  the  remainder  goes  to  the  collateral  heirs,  to  a  stranger  to  the  blood, 
or  to  a  body  politic  or  corporate,  in  which  case  the  value  of  the  preceding  estate 
is  first  to  be  deducted  and  the  tax  extended  on  the  remainder  only.  In  re  King- 
man, 220  111.  563,  77  N.  E.  135. 

The  testator  gave  property  in  trust  to  pay  the  income  to  his  wife  for  life.  If 
the  income  was  insufficient  to  realize  $5,500  a  year  they  are  directed  to  use  the 
principal  to  make  up  that  amount.  The  widow  died  in  1900  and  the  appraiser, 
on  her  death,  appraised  her  interest  according  to  the  annuity  tables  as  of  the 
death  of  the  testator.  The  widow  actually  survived  longer  than  the  annuity 
tables  reckoned  and  the  court  holds  that  the  valuation  of  the  estate  in  remainder 


§§347-348.]  APPRAISAL.  263 

should  be  made  as  of  the  death  of  the  life  tenant,  as  it  would  be  unthinkable 
that  the  remainderman  might  receive  nothing  whatever  and  still  be  assessed 
with  a  tax.     In  re  Hall,  36  Misc.  Rep.  618,  73  N.  Y.  Suppl.  1124. 

^Appeal  of  Commonwealth,  127  Pa.  St.  435,  439,  17  A.  1094.  Cooper  v.  Com- 
monwealth, 5  Pa,  Co.  Ct.  271. 

3  In  re  Connoly,  38  Misc.  533,  77  N.  Y.  Suppl.  1113.  In  re  Goelet,  78  N.  Y. 
Suppl.  47. 

[See  further,  ante,  ss.  231-4.] 


Sec.  347.    Remainder  after  Remarriage. 

To  appraise  an  interest  after  the  death  or  remarriage  of  the 
widow,  mortuary  tables  should  not  be  used.  While  the  probabiUty 
of  death  may  be  estimated  from  these  tables,  there  are  no  statistics 
available  from  which  the  probability  of  remarriage  may  even  be  con- 
jectured.^ Where  a  life  estate  is  determinable  upon  the  remarriage 
of  the  life  tenant,  on  the  remarriage  of  the  life  tenant  the  appraiser 
should  deduct  from  the  principal  fund  the  value  of  the  estate  of 
the  widow  during  the  term  of  her  widowhood. ^ 

1  Herold  v.  Shanley,  146  Fed.  20,  76  C.  C.  A.  478,  affirming  141  Fed.  423  (N.J.). 

2  In  re  Sloane,  154  N.  Y.  109,  114,  47  N.  E.  978,  19  N.  Y.  App.  Div.  411,  46 
N.  Y.  Suppl.  264.  As  of  what  date  interests  on  remarriage  should  be  appraised 
see  ante,  s.  335,  n.  2. 

Sec.  348.    Power  to  Order  Production  of  Papers. 

The  court  may  have  by  law  authority  to  compel  the  parties  to 
furnish  information  to  the  appraisers,^  but  not  to  force  the  cor- 
porations in  which  he  was  a  stockholder  to  do  so.^ 

1  In  re  Maris,  14  Pa.  Co.  Ct.  171,  3  Pa.  Dist.  83. 

2  Wis.  St.  1903,  c.  44,  ss.  12  and  15,  does  not  give  to  the  county  court  the 
authority  to  order  the  corporation  in  which  the  decedent  was  a  stockholder  to 
produce  its  private  books,  papers  and  documents  for  inspection  to  enable  the 
court  to  determine  the  value  of  the  estate  of  the  decedent  and  the  amount  of  the 
tax  to  which  the  same  is  liable.  The  court  finds  that  such  supposed  entries  and 
statements  made  in  the  books,  papers  and  documents  of  the  corporation  by  its 
officers  or  agents  have  no  more  probative  force  as  evidence  in  court,  in  the  con- 
troversy between  the  executors  and  the  state  of  Wisconsin,  than  oral  declarations 
to  the  same  effect,  made  by  the  same  officers  and  agents  would  have  had.  Such 
entries  and  statements  were  obviously  mere  hearsay,  made  by  third  parties  with- 
out the  sanction  of  an  oath.  There  is  nothing  in  the  statute  authorizing  the  county 
court,  whether  acting  as  a  judicial  tribunal  or  as  an  appraiser,  to  compel  a  third 
party  to  produce  his  private  books,  papers  and  documents;  and  certainly  the 
county  court  has  no  such  power  in  the  absence  of  statutory  authority.  A  writ 
of  prohibition  against  the  proceedings  in  the  county  court  was  granted.  State  v. 
Carpenter,  129  Wis.  180,  108  N.  W.  641,  8  L.  R.  A.  N.  S.  788. 


264  INHERITANCE  TAX  LAW.  [§§349-350. 

Sec.  349.    Appeal.! 

Appraisal  is  usually  subject  to  appeal  by  any  party j'^  including  the 
state  itself,^  even  though  the  law  may  also  provide  a  remedy  by 
reappraisal.'*  A  right  of  appeal  necessarily  implies  notice  of  the 
appraisal  at  some  time.^ 

*  See  further,  proceedings  to  vacate  appraisal,  post,  s.  393.  As  to  appeal  from 
assessment,  see  post  s.  392. 

2  Comm.  V.  Freedley,  21  Pa.  St.  (9  Harris)  33. 

A  failure  to  appraise  can  be  corrected  only  by  appeal  and  not  by  a  proceeding 
to  set  aside  the  appraisal.     In  re  Smith,  14  Misc.  169,  35  N.  Y.  Suppl.  701. 
^Becker  v.  Nye,  8  Cal.  App.  Cal.  129,  96  P.  333. 

*  Morgan  v.  Warner,  162  N.  Y.  612,  57  N.  E.  1118,  affirming  45  N.  Y.  App. 
Div.  428  (remedy  by  reappraisal  in  case  of  fraud  is  not  exclusive  but  comptrollei 
may  appeal) . 

'In  re  Belcher,  211  Pa.  St.  615,  619,  61  A.  252. 

Sec.  350.    Appraisal  has  no  Effect  on  Liability. 

An  appraisal  has  for  its  object  simply  to  ascertain  the  value 
of  the  estate  and  not  to  determine  whether  the  estate  is  subject 
to  the  tax.  Where  the  estate  is  not  subject  to  be  assessed  with  the 
tax  the  entire  proceeding  is  a  nullity.  Therefore  the  appraisal, 
although  not  appealed  from,  is  not  final  on  the  question  of  the 
liability  to  tax. 

Stinger  v.  Commonwealth,  26  Pa.  St.  (2  Casey)  422,  426. 


CHAPTER  XLI. 


DEBTS  AND  EXPENSES. 

§  351.  Debts  of  Decedent. 

§  352.  Partnership  Debts. 

§  353.  Debts  Secured  by  Real  Estate. 

§  354.  Marshaling  Assets  to  Pay  Debts. 

355.  Taxes  on  Real  Estate. 

§  356.  Tax  Paid  Improperly. 

i§  357.  Stranger  Paying  Taxes  on  Land. 

|§  358.  Expenses  of  Administration. 

[§  359.  Executor's  Commissions  Increased  by  Increase  in    Value   of 

Estate. 

§  360.  Where  Will  Forbids  Commissions  to  Executors  or  Trustees. 

§  361.  Practice  where  Expenses  of  Settlement  Unknown. 

§  362.  Embezzlement  by  Executor. 

§  363.  Expenses  of  Executors  in  Defending  Will. 

§  364.  Expenses  of  Heirs  Setting  Aside  Will. 

§  365.  Action  to  Construe  Will. 

§  366.  Expenses  of  Resisting  Adverse  Claim. 

§  367.  Controversy  among  Distributees. 

§  368.  Broker's  Commissions. 

§  369.  Trustee's  Commissions. 

§  370.  Subrogation  of  Creditors. 

§  371.  Federal  Inheritance  Tax. 

§372.  Foreign  Inheritance  Taxes. 

^§  373.  Funeral  Expenses. 

;§  374.  Cemetery  Lot  and  Tomb. 

375.  Care  of  Cemetery  Lots. 

^§  376.  Masses. 


I 


351.    Debts  of  Decedent. 

The  appraisal  for  purposes  of  the  tax  should  consider  the  debts 
the  decedent/  and  claims  in  litigation  should  be  considered. ^ 

^Succession  of  Levy,  115  La.  378,  39  S.  37,  affirmed  Cahen  v.  Brewster,  203  U.  S- 
552,  27  S.  Ct.  174,  51  L.  Ed.  310.  In  re  Westurn,  152  N.  Y.  93,  100,  46  N.  E. 
315,  reversing  8  N.  Y.  App.  Div.  59  (under  the  act  of  1892).  In  re  Wormser,  36 
Misc.  Rep.  434,  73  N.  Y.  Suppl.  748.  Appeal  of  Orcutt,  97  Pa.  St.  179.  In  re 
Line,  155  Pa.  St.  378,  391,  26  A.  728,  32  Wkly.  Notes  Gas.  376.  Shelton  v. 
Campbell,  109  Tenn.  690,  72  S.  W.  112.  Contra,  In  re  Ludlow,  4  Misc.  Rep.  594, 
25  N.  Y.  Suppl.  989  (under  the  act  of  1892).  In  re  Millward,  6  Misc.  Rep.  425, 
27  N.  Y.  Suppl.  286.     S^e  Becker  v.  Nye,  8  Cal.  App.  Cal.  129,  96  P.  333,  qucBre. 


266  INHERITANCE  TAX  LAW.  [§§  352-353. 

The  surrogate  may  deduct  from  the  value  of  the  estate  the  amount  of  debts 
owing  by  the  decedent.     In  re  Millward,  6  Misc.  Rep.  425,  27  N.  Y.  Suppl.  286. 

Real  Estate.  Where  the  land  of  the  decedent  passes  to  lineal  descendants 
for  life  and  at  their  death  to  collateral  heirs,  although  the  real  estate  descends 
intact  to  the  collateral  heirs,  the  tax  must  be  assessed  upon  the  valuation  of  the 
real  estate  after  deducting  the  debts  owing  by  the  decedent  at  the  time  of  his 
death.     Appeal  of  Commonwealth,  127  Pa.  St.  435,  440,  17  A.  1004. 

Comtnunity  Property.  Where  the  deceased  bequeathed  to  her  husband 
all  her  property  which  consisted  entirely  of  her  share  of  the  community  prop- 
erty, the  debts  of  the  succession  should  be  deducted  in  fixing  the  amount  of  the 
tax  on  inheritances.     Succession  of  May,  120  La.  692,  45  S.  551. 

Disbursements  which  it  is  admitted  were  made  by  the  executor  for 
debts  must  be  allowed  by  the  appraiser  and  it  is  error  for  him  to  reduce  these 
amounts  arbitrarily.     In  re  Dimon,  82  N.  Y.  App.  Div.  107,  81  N.  Y.  Suppl.  428. 

2  A  claim  in  litigation  should  be  referred  to  the  appraiser  to  take  evidence 
and  report  what  if  any  rebate  or  deduction  from  the  tax  imposed  should  be  made 
because  of  the  claim.     In  re  Morgan,  36  Misc.  753,  74  N.  Y.  Suppl.  478. 

It  was  proper  to  withhold  half  the  sum  claimed  by  a  claimant  against  the 
estate  from  appraisal  and  taxation.  But  it  is  better  practice  that  the  order 
determining  the  tax  should  contain  an  appropriate  recital  to  the  effect  that  the 
determination  of  the  taxability  of  the  sum  claimed  is  suspended  until  the  disposi- 
tion of  litigation.     In  re  Wormser,  28  Misc.  608,  59  N.  Y.  Suppl.  1088. 

Sec.  352.    Partnership  Debts.  ■ 

Partnership  debts  discharged  with  firm  assets  are  not  deducted 
from  the  assets  of  the  decedent  for  the  purposes  of  the  tax. 
Memphis  Trust  Co.  v.  Speed,  114  Tenn.  677,  88  S.  W.  321. 


Sec.  353.    Debts  Secured  by  Real  Estate. 

Where  real  estate  is  subject  to  mortgage,  only  the  equity  of  re- 
demption above  the  mortgage  should  be  appraised,^  even  though  the 
tax  is  laid  on  real  estate  of  a  non-resident  and  it  is  claimed  that  the 
doctrine  of  equitable  conversion  and  exoneration  should  be  applied 
to  relieve  the  land  from  the  encumbrance  of  the  mortgage,  and 
that  the  executors  should  bring  the  proceeds  of  the  personal  estate 
from  the  domicile  and  apply  it  to  payment  of  the  debt  so  as  to  leave 
the  land  free  from  encumbrance.^  So  in  appraising  the  residuary 
personal  property  the  principal  of  a  bond  not  due,  signed  by  the 
decedent  and  secured  by  a  mortgage  upon  his  real  estate,  should 
not  be  deducted  before  estimating  the  taxable  value  of  the  bequests.' 
The  opposite  rule  seems  to  prevail  in  Michigan  and  Pennsylvania.* 

1  In  re  Sutton,  3  N.  Y.  App.  Div.  208,  212,  149  N.  Y.  618.  In  re  Skinner, 
106  N,  Y.  App.  Div.  217,  94  N.  Y.  Suppl.  144.  See,  also,  In  re  Strong,  17  N.  J. 
Law.  J.  234. 


i 


§  354.]  DEBTS  AND  EXPENSES.  267 

2  The  court  holds  that  the  answer  to  this  contention  is  that  the  rights  and 
obligations  of  all  parties  are  to  be  determined  as  of  the  time  of  the  death  of  the 
decedent.  Furthermore,  the  law  of  equitable  conversion  ought  not  to  be  in- 
voked merely  to  subject  to  property  taxation,  especially  when  the  question 
is  one  of  jurisdiction  between  different  states.  McCurdy  v.  McCurdy,  197  Mass. 
248,  83  N.  E.  881. 

3  In  re  Maresi,  74  N.  Y.  App.  Div.  76,  77  N.  Y.  Suppl.  76. 

4  The  court  points  out  the  distinction  which  exists  between  New  York  and  Mich- 
igan as  to  the  law  for  the  distribution  of  estates.  It  finds  that  it  is  the  law  in 
Michigan  that  the  net  personal  estate  for  distribution  consists  of  the  personal 
property  after  the  payment  of  debts  and  expenses,  including  the  debts  secured  by 
mortgage  on  real  estate,  while  by  the  New  York  statute  the  heir  or  devisee 
taking  real  estate  is  bound  to  satisfy  and  discharge  any  mortgage  upon  it  out 
of  his  own  property.  Hence  in  Michigan  a  debt  secured  by  mortgage  on  real 
estate  should  be  deducted  from  the  valuation  of  the  personal  property.  In  re 
Fox,  159  Mich.  420, 124  N.  W.  60,  16  Detroit  Leg.  N.  943  (McAlvay,  J.,  dissent- 
ing), reversing  154  Mich.  5,  117  N.  W.  558,  15  Detroit  Leg.  N.  675. 

Mich.  St.  1903,  c.  195,  s.  17,  prescribes  the  form  of  the  order  to  be  followed  by 
the  probate  judge,  which  indicates  that  debts  secured  by  mortgage  are  to  be 
deducted  from  real  property.  This  form  was  evidently  copied  from  the  New 
York  Statute  but  can  hardly  be  held  in  and  of  itself  to  establish  a  rule  for  fixing 
the  amount  of  the  inheritance  tax  where  land  of  the  testator  is  subject  to  mort- 
gage. That  is  done  by  other  provisions  of  the  statute  which  render  the  form 
inserted  inapplicable.  In  re  Fox,  159  Mich.  420,  124  N.  W.  60,  16  Detroit  Leg. 
N.  943.     See  Handlers  Estate,  181  Pa.  St.  339. 

Sec.  354.    Marshaling  Assets  to  Pay  Debts. 

In  appraising  the  local  assets  of  a  non-resident  decedent  a  per- 
centage of  the  total  indebtedness  apportioned  to  the  value  of  the 
local  assets  as  compared  with  the  total  assets  should  be  deducted. 
Where  nine  per  cent  of  the  total  personal  estate  of  a  non-resident 
was  in  the  state  of  New  York,  it  is  proper  for  the  New  York  surro- 
gate's court  to  deduct  nine  per  cent  of  the  debts  and  expenses  of 
the  estate  and  the  balance  is  the  net  assets  within  the  state  of 
New  York.^  So  the  deduction  to  be  made  for  debts  owing  to 
non-resident  creditors,  mortuary  expenses,  commissions  on  property 
without  the  state,  and  other  administration  expenses  in  respect  to 
such  property,  should  be  in  proportion  which  the  net  New  York 
estate,  after  all  deductions  are  made  for  debts  owing  to  resident 
creditors,  New  York  commissions  and  New  York  administration 
expenses,  bears  to  the  entire  or  gross  estate  wherever  situated.^ 
The  property  of  a  non-resident  located  within  the  state  is  not  sub- 
ject to  taxation  when  it  appears  that  his  indebtedness  to  creditors 
who  are  residents  of  the  state  is  in  excess  of  the  value  of  the  testa- 
tor's property  within  the  state.     The  fact  that  to  release  the  debts 


268  INHERITANCE  TAX  LAW.  [§355. 

the  executor  brought  money  of  the  decedent  from  out  of  the  state 
and  paid  the  debts  so  that  the  securities  in  the  state  could  be  trans- 
mitted to  be  administered  at  the  residence  of  the  decedent,  cannot 
make  any  difference  as  to  what  actually  was  transferred  upon 
which  the  tax  was  imposed.^ 

Where  the  estate  of  the  testator  consisted  of  real  and  personal 
property  in  Illinois  and  real  estate  outside  the  state  and  a  large 
indebtedness,  the  lower  court  held  erroneously  that  in  order  to 
ascertain  the  amount  on  which  to  compute  the  tax  the  value  of 
the  personal  property  should  be  deducted  from  the  total  indebted- 
ness of  the  estate  and  the  remaining  indebtedness  should  be  appor- 
tioned upon  all  the  real  estate  both  foreign  and  domestic,  and  that 
the  tax  should  be  laid  upon  the  amount  so  apportioned  on  the  value 
of  the  lands  in  Illinois.  This  resulted  by  indirection  in  laying  a 
tax  on  the  foreign  lands  and  was  erroneous.'^ 

1  In  re  Ramsdill,  190  N.  Y.  492,  493,  83  N.  E.  584,  reversing  119  N.  Y.  App.  Div. 
890.     (The  New  York  act  of  1911  forbids  marshaling  assets.) 

2  In  re  Porter,  67  Misc.  19,  124  N.  Y.  Suppl.  676. 

3  In  re  Grosvenor,  124  N.  Y.  App.  Div.  331,  108  N.  Y.  Suppl.  926. 

4  Connell  v.  Crosby,  210  111.  380,  392,  71  N.  E.  350. 
See  further,  ante,  s.  204. 

Sec.  355.    Taxes  on  Real  Estate. 

Taxes  on  real  estate  which  are  a  lien  and  payable  at  the  time  of 
the  decedent's  death  should  be  deducted  from  the  value  of  the 
estate  in  order  to  ascertain  its  net  value,  in  proceedings  under 
the  inheritance  tax.^  Where  the  testator  died  January  30,  1900, 
the  annual  taxes  for  the  year  1900  not  assessed  nor  a  lien,  nor  pay- 
able at  that  time,  under  the  New  York  statute  should  not  be  de- 
ducted before  the  levying  of  the  inheritance  tax.^ 

1  In  re  Liss,  39  Misc.  Rep.  123,  78  N.  Y.  Suppl.  969. 

2  In  re  Maresi,  74  N.  Y.  App.  Div.  76,  77  N.  Y.  Suppl.  76. 

Where  the  testator  died  January  27,  only  a  few  days  after  certain  real  estate 
he  conveyed  was  assessed  for  the  purpose  of  taxation,  and  upwards  of  two  months 
before  the  day  when  such  assessment  might  have  been  reduced  or  corrected  under 
the  charter  of  the  city  of  New  York,  the  court  holds  that  at  the  time  of  the  testa- 
tor's death  there  was  no  existing  debt,  as  the  tax  had  not  then  been  ascertained. 
All  that  had  been  done  up  to  that  time  was  fixing  the  valuation,  which,  unless 
corrected  in  the  manner  pointed  out  in  the  statute,  constituted  the  basis  upon 
which  the  tax  was  thereafter  to  be  assessed.  It  was  not  until  after  April  1st 
following  that  the  books  for  collection  of  taxes  were  closed.  In  re  Freund,  143 
N.  Y.  App.  Div.  335,  128  N.  Y.  Suppl.  48,  95  N.  E.  1129. 

Where  the  testator  died  December  9,  1895,  the  tax  levied  and  becoming  a 
lien  on  December  13,  1895,  should  be  deducted  from  the  valuation  of  the  estate 


§§  35&-358.1  DEBTS  AND  EXPENSES.  269 

for  the  purposes  of  the  inheritance  tax,  as  the  assessment  had  been  made  before 
that  time  and  was  binding  upon  him  although  the  precise  amount  of  the  tax 
had  not  been  ascertained  until  the  warrants  were  delivered  to  the  collectors. 
In  re  Brundage,  31  N.  Y.  App.  Div.  348,  52  N.  Y.  Suppl.  362.  See  also  In  re  Hoff- 
man, 42  Misc.  Rep.  90,  85  N.  Y.  Suppl.  1082. 

Sec.  356.    Tax  Paid  Improperly. 

Where  the  executrix  has  paid  a  tax  to  the  federal  government 
which  it  now  seems  was  not  a  proper  charge  against  the  estate,  this 
should  not  be  surcharged  against  the  executrix  where  it  is  admitted 
that  the  sum  may  be  recovered  back. 

In  re  Marx,  117  N.  Y.  App.  Div.  890, 103  N.  Y.  Suppl.  446,  reversing  49  Misc. 
280,  99  N.  Y.  Suppl.  334. 

Sec.  357.    Stranger  Paying  Taxes  on  Land. 

Where  a  stranger  paid  taxes  on  land,  these  payments  should  not 
be  deducted  from  the  valuation  of  the  property  transferred,  as  these 
taxes  were  paid  by  that  person  not  a  party  to  the  title  and  any 
payments  made  by  him  are  rather  in  the  character  of  a  loan  than 
of  a  payment  which  entitles  him  to  a  lien  on  the  land. 

In  re  Wood,  123  N.  Y.  Suppl.  574. 

Sec.  358.    Expenses  of  Administration. 

The  expenses  of  administration  should  be  deducted,^  including 
executor's  commissions,^  but  not  a  bequest  in  addition  to 
commissions.^ 

1  Callahan  v.  Woodbridge,  171  Mass.  595,  599,  51  N.  E.  176.  State  v.  Probate 
Court,  101  Minn.  485,  487,  112  N.  W.  878.  In  re  Wormser,  36  Misc.  434,  73 
N.  Y.  Suppl.  748.  In  re  Line,  155  Pa.  St.  378,  391,  26  A.  728,  32  Wkly.  Notes 
Cas.  376. 

Expense  of  Audit.  Where  the  appraisal  is  made  by  an  auditor  the  collateral 
heirs  are  properly  chargeable  with  the  expense  of  the  audit  resorted  to  as  a 
substitute  for  the  appraisement  directed  by  law,  and  which  they  should  have 
insisted  on.     In  re  Burkhart,  25  Pa.  Super.  Ct.  514. 

Where  the  parties  assent  to  the  correctness  of  the  estimate  of  expenses 
the  register  has  no  discretion  but  to  allow  it  unless  there  is  ground  for  a  sus- 
picion of  fraud.     In  re  Cullen,  8  Pa.  Co.  St.  234. 

^  Commissions  of  Foreign  Executor.  In  appraising  the  New  York  prop- 
erty of  a  resident  of  Pennsylvania,  the  appraiser  should  not  deduct  commissions 
to  executors  which  would  be  excessive  under  New  York  law  in  the  absence  of 
evidence  of  the  Pennsylvania  law  on  this  subject.  In  re  Kennedy,  20  Misc.  Rep. 
531,  46  N.  Y.  Suppl.  906,  2  Gibbons  220. 


m 


270  INHERITANCE  TAX  LAW.  [§§359-361. 

3  A  bequest  in  addition  to  commissions  to  an  executor  is  not  within  the  inten- 
tion of  section  3  of  the  statute  of  1887,  which  provides  for  a  case  where  a  bequest 
is  made  in  lieu  of  commissions.  In  re  Underhill,  20  N.  Y.  Suppl.  134,  2  Con. 
Surr.  262. 

Sec.  359.    Executor's  Commissions  Increased  by  Increase  in 
Value  of  Estate. 

Where  the  estate  in  the  hands  of  the  executor  increases  in  value 
so  that  the  executor's  commissions  are  increased,  the  increased 
commissions  should  be  deducted  from  the  inheritance  tax,  although 
the  tax  itself  can  be  estimated  only  on  the  value  of  the  property 
at  the  death  of  the  testator. 

In  re  Van  Pelt,  63  Misc.  616,  118  N.  Y.  Suppl.  655. 

Sec.  360.    Where  Will  Forbids  Commissions  to  Executors  or 
Trustees. 

Where  a  will  provided  that  no  compensation  or  commission  as 
such  should  be  paid  to  any  living  executor  or  trustee  for  any  ser- 
vices as  executor  or  trustee,  it  was  obvious  that  the  testator  intended 
that  his  estate  should  not  be  diminished  by  these  ordinary  expenses 
of  administration,  and  it  is  clearly  obvious  that  the  legacies  given 
to  the  executors  were  not  given  in  lieu  of  commissions.  The  court 
therefore  finds  nothing  to  authorize  the  deduction  from  the  total 
assessed  value  of  the  fees  and  commissions  of  executors  and  trustees. 

In  re  Vanderbilt,  68  N.  Y.  App.  Div.  27,  74  N.  Y.  Suppl.  450. 

Sec.  361.    Practice  where  Expenses  of  Settlement  Unknown. 

The  expenses  of  settling  an  estate  may  often  be  estimated  for 
the  purposes  of  the  tax. 

The  court  approves  of  the  practice  of  estimating  the  unpaid  debts  and  expenses 
of  administration  in  so  far  as  the  estate  has  not  been  administered  at  the  time  of 
the  appraisal,  provided  the  report  and  order  of  the  appraisers  reserve  the  right 
of  those  whose  interests  are  assessed  to  a  rebate  in  case  it  shall  appear  that  the 
debts  or  expenses  have  been  estimated  too  low  and  the  provision  for  a  further 
assessment,  though  perhaps  this  is  not  strictly  necessary,  if  they  are  estimated 
too  high.     In  re  Dimon,  82  N.  Y.  App.  Div.  107,  81  N.  Y.  Suppl.  428. 

Where  the  executor  was  doubtful  whether  seven  thousand  dollars  would  cover 
the  expense  of  final  settlement  of  an  estate,  the  court  ordered  the  amount  of 
seven  thousand  dollars  be  retained  by  the  executor  for  contingent  expenses 
which  may  be  incurred  in  the  final  settlement  and  that  interest  at  six  per  cent 
be  computed  on  five  per  cent  of  the  balance  from  one  year  after  the  death  of  the 
testator  until  the  date  of  the  decree.  In  re  Miller,  182  Pa.  St.  157,  162,  37  A. 
1000.     See  Shelton  v.  Campbell,  109  Tenn.  690,  72  S.  W.  112. 


§§362-365.]  DEBTS  AND  EXPENSES.  271 

Sec.  362.     Embezzlement  by  Executor. 

Where  the  executor  misappropriates  the  funds  of  the  estate  the 
ensuing  loss  is  not  to  be  deducted  in  reckoning  the  value  of  the 
estate  for  the  purpose  of  the  inheritance  tax.  All  charges  at 
the  death  of  the  testator  should  be  deducted,  but  the  misappro- 
priation by  the  executor  happened  after  the  death  of  the  testa- 
tor and  should  therefore  not  be  deducted,  as  subsequent  increase 
or  decrease  in  the  value  of  .the  estate  is  immaterial. 

In  re  Kite,  159  Cal.  392,  113  Pac.  1072. 

Sec.  363.    Expenses  of  Executors  in  Defending  Will. 

Lawful  expenditures  and  expenses  made  by  the  executors  in 
defending  a  will  against  the  heirs  at  law  should  be  deducted  in 
determining  the  amount  on  which  to  compute  the  inheritance  tax. 

Connell  v.  Crosby,  210  111.  380,  71  N.  E.  350,  distinguishing  /»  re  Lines,  155  Pa. 
St.  378,  26  A.  728,  where  the  expenses  of  legatees  assisting  the  trustees  was  not 
deducted,  and  In  re  Westurn,  152  N.  Y.  93,  46  N.  E.  315,  where  the  expenses  of 
heirs  who  had  successfully  contested  the  will  were  not  allowed.  In  re  Gihon, 
169  N.  Y.  443,  612  N.  E.  561,  modifying  64  N.  Y.  App.  Div.  504,  72  N.  Y.  Suppl. 
1104  (expenses  of  temporary  administrator  in  will  contest). 

Where  the  will  is  contested  the  expenses  for  attorney's  fees  incurred  by 
the  executor  must  be  treated  as  expenses  of  administration.  It  is  the  duty  of 
the  executor  and  clerk  of  the  county  court  to  make  an  estimate  of  such  fees  and 
expenses  and  to  tentatively  allow  for  them,  and  thus  approximate  the  amount 
of  the  tax  to  be  paid,  and  this  amount  should  be  paid  subject  to  revision  upon  final 
statement  and  settlement  of  account  under  section  11  of  the  act.  Provision 
is  made  for  a  refund  where  the  executor  may  have  paid  too  much  t^x.  Shelton  v. 
Campbell,  109  Tenn.  690,  72  S.  W.  112. 

Iec.  364.    Heirs  Contesting  Will. 
The  expenses  of  heirs  in  successfully  contesting  the  probate  of 
will  are  not  to  be  allowed  as  expenses,  as  they  are  not  claims 
lasting  against  the  decedent  or  his  property. 
In  re  Westurn,  152  N.  Y.  93, 102,  46  N.  E.  315,  reversing  8  N.  Y.  App.  Div.  59. 

Sec.  365.    Action  to  Construe  Will. 

The  costs  and  expenses  of  an  action  to  construe  a  will  should 
be  deducted  before  the  levying  of  the  inheritance  tax.  This  is  a 
proper  administrative  expenditure  of  funds. 

In  re  Maresi,  74  N.  Y.  App.  Div.  76,  77  N.  Y.  Suppl.  76,  citing  In  re  Gihon, 
169  N.  Y.  443,  62  N.  E.  561. 

[Will  construed  on  appraisal,  see  ante,  s.  332.] 


272  INHERITANCE  TAX  LAW.  [§§366-369. 

Sec.  366.    Expense  of  Resisting  Adverse  Claim. 

The  expenses  of  resisting  a  claim  under  an  alleged  contract  under 
which  claimant  alleged  that  he  was  entitled  to  the  whole  estate  by 
the  decedent  should  be  deducted  from  the  value  of  the  estate  for 
the  purposes  of  the  inheritance  tax. 

In  re  Sanford,  66  Misc.  395,  123  N.  Y.  Suppl.  284. 

Sec.  367.    Controversy  among  Distributees. 

The  expenses  of  a  controversy  among  the  distributees  as  to  the 
proper  distribution  of  an  estate  does  not  diminish  the  fund  for 
inheritance  taxation. 

In  re  Sanford,  66  Misc.  395,  123  N.  Y.  Suppl.  284.  In  re  Line,  155  Pa.  St. 
378,  391,  26  A.  728,  32  Wkly.  Notes  Cas.  376. 

Sec.  368.    Broker's  Commissions. 

The  commissions  of  a  broker  on  sale  of  real  estate  should  be 
paid  as  a  necessary  expense  of  administration. 
In  re  Rothschild,  63  Misc.  615,  118  N.  Y.  Suppl.  654. 

Sec.  369.    Trustee's  Commissions. 

A  will  provided  compensation  for  the  trustee  of  five  thousand 
dollars  a  year  for  ten  years,  or  fifty  thousand  dollars;  and  the 
court  holds  that  the  compensation  of  the  trustee,  earned  not  in  the 
administration  of  the  estate  but  in  the  management  thereof,  for 
the  benefit  of  the  legatees  or  devisees,  does  not  come  properly 
within  the  class  or  reason  for  exempting  the  administration  ex- 
penses. Such  services  have  no  reference  to  closing  the  estate 
for  the  purpose  of  distribution  to  those  entitled  to  it  and  are  not 
required  or  essential  to  the  rights  of  the  heirs  or  legatees.  These 
trusts,  however,  created  for  the  benefit  of  those  to  whom  the  prop- 
erty ultimately  passes,  are  of  voluntary  creation  and  are  intended 
for  the  preservation  of  the  estate.^  Under  the  New  York  act  of 
1896,  the  commissions  allowed  by  law  to  trustees  for  life  tenants 
should  be  deducted  from  the  valuation  of  the  interest  of  the  life 
tenants. 2  Under  the  same  statute  the  executors'  commissions  as 
trustees  should  be  deducted  in  assessing  the  transfer  tax.^ 

1  State  V.  Probate  Court,  101  Minn.  485,  487,  112  N.  W.  878.  The  court  relies 
somewhat  on  In  re  Gihon,  169  N.  Y.  443,  62  N.  E.  561,  and  Silliman's  Case, 
79  N.  Y.  App.  Div.  98,  80  N.  Y.  Suppl.  336. 


§§370-371.]  DEBTS  AND  EXPENSES.  273 

2/w  re  Gihon,  169  N.  Y.  443,  446,  612  N.  E.  561,  modifying  64  N.  Y.  App. 
Div.  504,  72  N.  Y.  Suppl.  1104. 

3  In  re  Silliman,  175  N.  Y.  513,  67  N.  E.  1090,  affirming  79  N.  Y.  App.  Div.  98, 
80  N.  Y.  Suppl.  336,  reversing  77  N.  Y.  Suppl.  267. 

The  estimated  commissions  of  trustees  to  whom  a  fund  is  turned  over 
by  the  executor  should  not  be  deducted  from  the  estate  in  estimating  the  value 
for  purposes  of  the  inheritance  tax.  The  commissions  of  trustees  form  no  part 
of  the  regular  administration  of  the  estate,  but  is  an  expense  to  be  borne  by  the 
trust  and  its  beneficiaries  and  cannot  be  deducted  to  reduce  the  tax  due  to  the 
state.  In  re  Becker,  26  Misc.  Rep.  633,  57  N.  Y.  Suppl.  940.  In  re  Silliman, 
79  N.  Y.  App.  Div.  98,  80  N.  Y.  Suppl.  336,  reversing  77  N.  Y.  Suppl.  267,  affirmed 
175  N.  Y.  513,  67  N.  E.  1090. 

Sec.  370.     Subrogation  of  Creditors. 

Where  the  administrator  has  paid  from  the  personal  estate  the 
transfer  tax,  a  claim  against  those  to  whom  the  property  descended 
in  equity  must  be  subrogated  to  that  claim  for  the  benefit  of  the 
creditors  where  they  had  the  right  to  the  application  of  such 
personal  property  to  the  payment  of  their  debts. 

Hughes  v.  Golden,  44  Misc.  128,  89  N.  Y.  Suppl.  765. 

Sec.  371.    Federal  Inheritance  Tax. 

The  federal  tax  cannot  be  deducted  before  appraisal  for  the 
state  tax  in  New  York.^  The  court  reasons  that  it  is  not  true  that 
the  federal  taxes  are  payable  primarily  out  of  the  estate;  and  the 
court  finds  that  the  federal  tax  is  of  exactly  the  same  nature  as 
the  state  tax  and  is  a  tax  not  on  property  but  on  succession.  The 
federal  tax  is  on  the  legacy  and  not  on  account  of  the  estate.  The 
fact  that  this  may  result  in  great  hardship  does  not  alter  the  rule 
but  results  from  the  rate  of  taxation  prescribed  by  the  federal 
statutes.2 

In  Massachusetts  the  federal  tax  was  to  be  deducted  under  the 
act  of  1891,  although  that  act  contains  no  express  exception. 
The  court  proceeds  on  the  theory  that  the  words  of  the  act  most 
naturally  signify  the  property  which  the  legatee  actually  would  get 
were  it  not  for  the  state  tax  imposed,  and  that  as  a  matter  of  justice 
he  should  not  be  taxed  for  more.^  The  Massachusetts  rule  would 
seem  to  be  the  fairer  and  the   New  York  rule  the  more  accurate. 

1  In  re  Irish,  28  Misc.  Rep.  647,  60  N.  Y.  Suppl.  30.  In  re  Curtis,  31  Misc. 
Rep.  83,  64  N.  Y.  Suppl.  574.  Contra,  In  re  Vanderbilt,  68  N.  Y.  App.  Div.  27, 
74  N.  Y.  Suppl.  450, 

The  United  States  transfer  tax  should  not  be  deducted  from  an  estate  before 
the  assessment  of  the  state  tax  upon  it.     The  percentage  fixed  by  the  state  for 


274  INHERITANCE  TAX  LAW.  [§372. 

its  own  use  cannot  be  diminished  even  by  the  law  of  the  United  States.  The 
title  and  possession  of  property  when  transmitted  upon  the  death  of  the  owner 
are  by  consent  of  the  state,  not  the  United  States.  Therefore,  the  percentage 
fixed  for  its  own  use  cannot  be  diminished  by  even  subtracting  the  tax  fixed  by 
the  United  States  for  war  revenue.  In  re  Becker,  26  Misc.  Rep.  633,  57  N.  Y. 
Suppl.  940. 

2/«  re  Gihon,  169  N.  Y.  443,  62  N.  E.  561,  modifying  64  N.  Y.  App.  Div.  504, 
72  N.  Y.  Suppl.  1104,  overruling  68  N.  Y.  Suppl.  381,  33  Misc.  206. 

8  Hooper  v.  Shaw,  176  Mass.  190,  57  N.  E.  361. 

Sec.  372.    Foreign  Inheritance  Taxes. 

The  question  whether  foreign  legacy  taxes  paid  are  to  be  de- 
ducted from  the  legacy  or  whether  they  are  an  expense  of  admin- 
istration which  should  be  paid  out  of  the  estate,  leaving  the  legacy 
payable  in  full,  is  a  question  of  intention.  Where  a  testator  makes 
no  provision  for  the  payment  of  such  taxes  from  his  estate,  he 
must  have  intended  the  actual  benefit  to  be  received  by  the  subject 
of  his  bounty  to  be  as  much  less  than  a  sum  named  in  his  will  as  he 
is  presumed  to  have  known  the  state  would  take  for  itself  in  trans- 
mitting property.  In  a  gift  of  specific  personal  property  located 
in  a  foreign  state  the  amount  demanded  by  such  state  as  the  price 
of  transfer  of  title  would  naturally  be  a  charge  against  the  subject  £ 
of  the  legacy,  not  because  of  the  testator's  presumed  familiarity,  ^ 
with  the  law  of  the  jurisdiction,  but  because  under  that  law  he  has 
not  the  power  to  transfer  by  will  the  entire  title. 

In  a  gift  of  a  pecuniary  legacy  of  a  certain  amount,  the  apparent 
intention  is  to  benefit  the  legatee  to  the  full  amount  named.  If 
such  will  is  to  be  administered  by  the  law  of  the  jurisdiction  impos- 
ing no  inh'eritance  tax,  or  none  upon  the  class  to  which  the  legatee 
belongs,  the  purpose  to  transmit  the  full  amount  to  such  legatee 
would  seem  secure.  The  conclusion  that  a  less  sum  was  intended^ 
because  at  the  time  of  the  testator's  death  some  portion  of  his, 
property  happened  to  be  within  the  jurisdiction  authorizing  a  tax 
upon  such  a  transfer,  seems  strained  and  illogical.  To  hold  that 
the  effect  of  the  foreign  law  is  to  reduce  the  legacy  given  by  the 
will  construed  in  accordance  with  the  law  of  the  testator's  domicile 
is  to  permit  the  foreign  law  to  regulate  the  testamentary  capacity 
of  a  resident;  as  the  foreign  tax  depends  upon  the  jurisdiction 
over  the  property  and  is  not  sustainable  as  a  regulation  of  the 
exercise  of  testamentary  power  by  the  citizen  of  another  state,  it 
follows  that  the  tax  is  merely  a  charge  upon  the  particular  property  ^: 
and  not  upon  the  pecuniary  legacies  given  by  the  will.  *^ 


§372.]  DEBTS  AND  EXPENSES.  275 

Kingsbury  v.  Bazeley,  75  N.  H.  13,  70  A.  916. 

The  decedent  was  a  resident  of  Pennsylvania  owning  stock  in  New  York  cor- 
porations. The  property  in  New  York  was  in  proportion  to  the  entire  estate  as 
two  to  five  and  the  appraiser  deducted  that  proportion  of  the  total  debts,  funeral 
and  administrations  expenses,  from  the  taxable  estate  in  this  state;  but  he 
refused  to  deduct  this  proportionate  sum  from  the  amount  of  the  legacy  tax  ^aid 
upon  the  entire  estate  in  Pennsylvania.  The  court  holds  that  the  fact  that  the 
Pennsylvania  tax  has  been  paid  cannot  be  considered  in  assessing  the  New  York 
tax.  In  re  Kennedy,  20  Misc.  Rep.  531,  46  N.  Y.  Suppl.  906,  2  Gibbons  220. 
See  In  re  Swift,  137  N.  Y.  77,  32  N.  E.  1096,  and  Hooper  v.  Shaw,  176  Mass.  190, 
57  N.  E.  361,  considering  analogous  questions. 

The  New  Hampshire  Rule.  *'No  ground  can  be  found,  in  the  absence  of  a 
direction,  either  express  or  implied  in  the  will,  for  a  pro  rata  distribution  among 
all  the  pecuniary  legacies  of  the  sums  paid  as  foreign  death  duties.  On  account 
of  some  legacies  a  charge  may  be  made  in  some  states  and  not  in  others.  A  deduc- 
tion from  a  legacy  on  account  of  a  tax  imposed  on  others  in  a  particular  juris- 
diction would  not  be  supported  by  any  basis  of  reason.  The  only  method  which 
could  be  followed  would  be  the  division  of  the  legacies  into  as  many  classes  as 
were  made  by  the  laws  of  all  the  states  in  which  property  was  found,  and  a  divi- 
sion of  the  sums  paid  pro  rata  among  each  class.  This  would  plainly  be  an 
administration  of  the  estate  according  to  laws  which  have  no  force  here,  and 
which  cannot,  in  the  absence  of  legislative  authority  for  such  course,  properly  be 
followed.  The  executors  have  in  hand,  if  they  are  ready  to  settle,  so  much  prop- 
erty. The  will,  construed  by  the  law  of  this  state,  directs  how  the  distribution 
shall  be  made.  The  fact  that  the  executors  have  less  than  they  would  have 
had,  except  for  the  demands  of  jurisdictions  to  which  they  were  obliged  to  go 
to  get  the  property  and  bring  it  here  for  distribution,  cannot  alter  the  law  of  the 
state  or  the  terms  of  the  will.  In  the  absence  of  evidence  from  which  a  con- 
trary direction  can  be  implied  from  the  will,  the  amount  deducted  by  other 
states  before  permitting  the  transfer  of  property  within  their  limits  to  the  executor 
for  distribution  here  is  not  property  within  this  state  for  distribution.  The 
executors  are  chargeable  only  for  what  has  come  to  their  hands  —  the  property 
less  the  duties  paid.  If  they  charge  themselves  with  the  full  value  of  the  prop- 
erty, a  practical  method  of  accounting  would  permit  them  to  discharge  themselves 
by  accounting  for  the  foreign  duties  paid  as  expenses  of  administration. 

"In  the  present  case  there  are  no  facts  showing  an  intention  to  charge  the 
pecuniary  legacies  with  foreign  duties  for  the  benefit  of  the  residuary  legatees. 
There  is  a  class  of  cases,  where  the  residuary  bequest,  by  reason  of  the  special 
circumstances  of  the  case,  has  been  construed  as  a  particular  legacy,  not  liable 
to  fail,  except  ratably  with  the  other  legacies,  on  account  of  any  unexpected  defi- 
ciency of  the  estate,  or  to  be  augmented  by  the  unforeseen  failure  of  the  other 
legacies.  2  Red.  Wills  447.  Dyose  v.  Dyose,  1  P.  Wms.  305.  There  is  nothing 
in  the  present  case  tending  to  show  that  the  residuary  bequest  was  intended  as 
anything  except  the  ordinary  disposal  of  a  residuum  which  might  be  left,  while 
the  first  part  of  the  eighty-second  clause  establishes  that  the  testatrix  considered 
the  possibility  that  the  residuary  legatees  would  receive  nothing.  In  the  latter 
part  of  the  same  clause  the  testatrix  directs  her  executors  to  pay  any  and  all 
inheritance  and  succession  taxes  that  may  become  due  upon  any  legacies  given 
to  individuals.     This  implies  a  recognition  of  the  possibility  of  such  taxes  and, 


276  INHERITANCE  TAX  LAW.  [§§373-374. 

as  to  legatees  other  than  individuals,  a  purpose  that  the  duties  legally  charge- 
able upon  such  legacies  should  be  borne  by  them;  but  as  the  foreign  duties  are 
not  due  upon  the  legacies  given  by  the  will,  but  are  a  deduction  from  property 
which  may  be  used  in  carrying  out  the  purpose  of  the  will,  the  language  is  insuffi- 
cient to  require  the  court  to  administer  the  law  of  all  the  states  in  which  property 
may  have  been  found  and  taxes  paid."  Per  Parsons,  C.  J.,  in  Kingsbury  v. 
Bazeley,  75  N.  H.  13,  70  A.  916,  919. 

See  as  to  reciprocal  provisions,  ante,  s.  194. 

Sec.  373.    Funeral  Expenses. 

Funeral  expenses  are  to  be  deducted  from  the  appraisal  as  an 
expense  of  settling  the  estate. 

In  re  Wormser,  36  Misc.  434,  73  N.  Y.  Suppl.  748. 

Iowa  Code,  s.  1467a,  provided  that  the  term  debts  shall  include  a  reasonable 
sum  for  funeral  expenses.  The  purpose  of  this  section  is  that  an  estate  whose 
value  is  near  the  dividing  line  shall  not  be  carried  into  the  exempt  class  by  ex- 
traordinary charges  under  the  guise  of  funeral  expenses  or  by  presentation  of 
stale  or  fictitious  claims  which  are  not  allowed  within  fifteen  months.  Morrow  v. 
Durant,  140  Iowa  437,  118  N.  W.  781,  23  L.  R.  A.  (N.  S.)  474n. 

Sec.  374.    Cemetery  Lot  and  Tomb. 

The  Iowa  statute  allows  as  exempt  a  "reasonable"  fund  for  the 
expense  of  a  tomb. 

Where  the  residuary  legatees  concede  the  propriety  and  reason- 
ableness of  the  fund  for  erecting  a  tomb  to  the  testator,  the  state 
in  the  absence  of  fraud  or  collusion  cannot  interfere  nor  has  it  a 
right  to  try  the  question  of  the  reasonableness  of  the  expense  except 
for  the  purposes  of  determining  the  classification  of  an  estate  as 
exempt  or  non-exempt  from  taxation.  The  question  whether  the 
amount  reserved  by  a  will  for  the  erection  of  a  tomb  is  "reasonable" 
is  a  question  of  mixed  law  and  fact  on  which  it  is  very  important 
that  the  will  of  the  decedent  expressly  provided  for  this  expendi- 
ture, and  this  provision  of  the  will  raises  the  presumption  of 
reasonableness. 

Morrow  v.  Durant,  140  Iowa  437,  118  N.  W.  781  (where  court  from  lack  of 
evidence  refused  to  consider  whether  a  provision  of  $2,000  for  a  tomb  is 
reasonable). 

The  Iowa  inheritance  tax  law,  s.  1467,  provides  that  the  property  subject  to 
tax  is  that  "which  shall  pass  by  will  ...  to  any  person,"  and  s.  1467b  extended 
the  previous  section  to  apply  to  "property  of  every  kind."  The  court,  however, 
finds  that  this  latter  section  does  not  render  property  reserved  by  the  will  for  a 
tomb  subject  to  tax.  The  court  remarks  that  that  interpretation  would  make  the 
statute  unconstitutional,  as  it  is  only  upheld  on  the  theory  that  it  is  not  a  tax 
upon  the  property  itself  but  on  the  right  to  succession  to  property.  Morrow  v. 
Durant,  140  Iowa  437,  118  N.  W.  781,  23  L.  R.  A.  (N.  S.)  474n. 


§§375-376.]  DEBTS  AND  EXPENSES.  277 

Sec.  375.    Care  of  Cemetery  Lots. 

A  legacy  for  care  of  the  testator's  cemetery  lot  is  generally 
held  exempt  as  a  part  of  the  funeral  expenses. '^  A  bequest  of  a 
sum  in  trust  for  keeping  a  burial  lot  in  condition  and  repair  is  rea- 
sonably a  part  of  the  funeral  expenses, ^  but  not  where  it  is  for  the 
care  of  lots  for  himself  and  relatives.^  Legacies  to  a  church  * 
or  to  a  cemetery  association  have  been  held  not  exempt  as  a  part 
of  the  funeral  expenses.^ 

1  In  re  Vinot,  7  N.  Y.  Suppl.  517.  In  re  Liss,  39  Misc.  Rep.  123,  78  N.  Y. 
Suppl.  969. 

2  In  re  Maverick,  135  N.  Y.  App.  Div.  144,  119  N.  Y.  Suppl.  914. 

The  court  distinguishes  In  re  Gould,  156  N.  Y.  423, 51  N.  E.  287,  In  re  McAvoy, 
112  N.  Y.  App.  Div.  377,  98  N.  Y.  Suppl.  437,  as  in  the  Gould  case  the  testator 
had  made  a  large  bequest  to  his  son  as  a  reward  for  faithful  services  and  in  the 
McAvoy  case  the  bequest  was  to  pay  for  masses  of  others  and  the  testator. 

3  A  legacy  in  trust  the  interest  of  which  is  to  be  devoted  to  the  care  of  two 
cemetery  lots  is  subject  to  the  inheritance  tax.  It  was  contended  that  this 
bequest  was  to  be  considered  as  in  the  nature  of  funeral  expenses,  but  the  mani- 
fest intention  of  the  testator  was  to  provide  a  fund  the  income  of  which  should 
be  devoted  to  caring  for  the  last  resting  place  of  all  her  relatives,  and  that  this 
involved  caring  for  her  grave  was  a  mere  incident  of  the  general  purpose.  In  re 
Long,  22  Pa.  Super.  Ct.  370. 

*  Where  a  will  gave  to  the  church  two  thousand  dollars  and  in  consideration 
of  the  bequest  the  testator  desired  that  it  shall  keep  in  order  in  perpetuity  his 
family  burial  lot,  the  legacy  is  subject  to  the  payment  of  the  collateral  inherit- 
ance tax.  This  obligation  does  not  exempt  the  legacy.  The  fact  that  the  legacy 
is  not  a  pure  gratuity  is  not  material.  The  court  follows  In  re  Seibert,  18  Wkly. 
Notes  Cas.  276.     In  re  Walter,  3  Pa.  Co.  Ct.  447. 

^  A  bequest  to  a  cemetery  association  of  a  thousand  dollars,  the  interest  to  be 
used  for  perpetual  care  of  the  testator's  lot,  is  not  part  of  the  funeral  expenses. 
The  court  holds  there  is  a  distinction  between  expenditures  for  a  burial  lot  made 
by  an  executor  in  his  discretion  and  a  bequest  made  by  a  decedent  in  his  last 
(vill  to  a  certain  beneficiary  and  for  a  certain  specific  purpose;  and  as  cemetery 
issociations  are  not  specifically  mentioned  as  being  exempt  the  transfer  is  sub- 
ject to  tax.     In  re  Fay,  62  Misc.  154,  116  N.  Y.  Suppl.  423. 

Sec.  376.     Masses. 

A  legacy  for  masses  may  be  made  directly  to  some  religious 
organization,  in  which  case  it  will  be  treated  as  a  bequest  for  re- 
igious  purposes,^  or  it  may  be  treated  as  a  personal  bequest  to  the 
priest  who  is  to  say  the  masses. ^ 

1  In  re  Eppig,  62  Misc.  613,  118  N.  Y.  Suppl.  683. 

The  court  holds  that  as  the  legacies  are  bequeathed  directly  to  religious  bodies, 
md  as  provision  for  masses  is  merely  collateral  and  incidental,  they  are  therefore 
ixempt  under  section  221.     In  re  Didion,  54  Misc.  201,  105  N.  Y.  Suppl.  924. 


278  INHERITANCE  TAX  LAW.  [§376. 

2  In  re  Brinkman,  38  Ohio  Wkly.  L.  Bui.  304. 

The  court  finds  the  bequest  to  be  valid.  That  the  beneficiary  has  designated 
as  a  wish  on  the  part  of  the  testatrix  to  have  a  particular  priest  celebrate  the 
masses  is  equivalent  to  a  direction  and  that  therefore  the  bequest  is  subject  to  the 
inheritance  tax.  In  re  Black,  24  N.  Y.  St.  341,  5  N.  Y.  Suppl.  452,  1  Con.  Surr. 
477. 

The  will  bequeathed  to  a  priest,  or  in  the  event  of  his  death  to  his  successors, 
the  sum  of  $800  to  be  used  in  saying  eight  hundred  low  masses,  two  hundred 
for  each  of  four  different  persons.  The  court  holds  that  this  bequest  is  not 
specially  exempted  and  is  not  a  provision  for  funeral  expenses,  and  that  the  low 
mass  in  no  sense  is  a  part  of  the  funeral  service  even  so  far  as  such  masses  were  said 
for  the  testator.    In  re  McAvoy,  112  N.  Y.  App.  Div.  377,  98  N.  Y.  Suppl.  437. 


CHAPTER  XLII. 


ASSESSMENT   OF  TAX. 

§377.  Whether  Assessment  a  Proper  Function  of  Probate  Court. 

§378.  Jurisdiction  of  Probate  Courts  Exclusive. 

§379.  Jurisdiction  Affected  by  Right  of  Action  by  Beneficiary. 

§  380.  In  Equity  on  Distribution. 

§381.  Power  to  Fix  Liabilities  and  Apportion  Tax. 

§  382.  When  Assessment  Postponed. 

§  383.  Taxes  Due  in  the  Future. 

§  384.  In  what  Proceedings  Assessment  is  Proper. 

§  385.  Order  of  Exemption. 

§386.  Oral  Statement  by  Court. 

§  387.  Implied  Power  to  Hold  Provision  of  Will  Void. 

§  388.  Jurisdiction  of  Probate  Courts  over  Estates  of  Non-Resident 

Decedents. 

§389.  Ancillary  Administration  in  Case  of  Non-Resident. 

§  390.  Evidence. 

§391.  Burden  of  Proof. 

§  392.  Appeal. 

§  393.  Power  to  Vacate  Assessment. 

§394.  Proper  Decree  where  Statute  Misconstrued  by  Tax  Officials. 
[Notice  of  assessment,  see  ante,  s.  71. J 

Sec.  377.    Whether  Assessment  a  Proper  Function  of  Pro- 
bate Court. 

The  jurisdiction  of  the  probate  court  to  assess  and  collect  the 
tax  has  been  unsuccessfully  attacked  as  extra-judicial  or  beyond 
the  proper  functions  of  a  probate  court. 

In  re  Wolfe  137  N.  Y.  205,  33  N.  E.  156,  reversing  2  Connolly  600. 

The  imposition  and  collection  of  this  tax  are  simply  incidents  in  the  final 
settlement  and  adjustment  of  estates,  and  therefore  properly  within  the  jurisdic- 
tion of  surrogate's  courts.  In  re  McPherson,  104  N.  Y.  306,  324,  10  N.  E.  685, 
58  Am.  Rep.  502. 

The  ascertainment  of  the  amount  of  the  inheritance  tax  is  a  judicial  question 
and  being  a  necessary  proceeding  in  the  administration  of  the  estate  of  deceased 
persons  may  be  properly  committed  to  the  probate  court.  State  v.  Probate  Courts 
112  Minn.  279,  128  N.  W.  18,  21. 

[What  court  should  compute  tax,  see  ante,  s.  325.] 


280  INHERITANCE  TAX  LAW.  [§§378-380. 

Sec.  378.    Jurisdiction  of  Probate  Courts  Exclusive. 

The  special  statutory  authority  to  assess  is  commonly  exclusive. 

In  re  Wolfe,  137  N.  Y.  205,  33  N.  E.  156,  reversing  2  Connolly  600. 

The  jurisdiction  given  to  the  surrogate  to  determine  and  assess  the  inherit- 
ance tax  is  exclusive  and  cannot  be  exercised  by  the  supreme  court  on  a  petition 
to  construe  a  will.     V/eston  v.  Goodrich,  86  Hun  194,  33  N.  Y.  Suppl.  382. 

As  to  collection  in  equity  on  distribution,  see,  however,  Barret  v.  Continental 
Realty  Co.,  130  Ky.  109,  114  S.  W.  750,  more  fully  reported,  post  s.  380. 

Action  of  court  of  domicil  on  distribution  is  binding  on  another  court  as  to 
marshaling  assets.  In  re  Clark,  37  Wash.  671,  80  P.  267,  reported  more  fully 
ante,  s.  204,  n.  8. 

Sec.  379.    Jurisdiction    Affected    by    Right    of    Action    by 
Beneficiary. 

A  statute  giving  the  probate  court  jurisdiction  of  the  settlement 
of  inheritance  taxes  does  not  give  it  exclusive  jurisdiction,  but  the 
legatee  may  sue  the  executor  at  law  to  recover  his  legacy.^  The 
Michigan  statute  of  1903,  providing  that  it  is  the  duty  of  the 
executor  to  collect  the  inheritance  tax  and  that  he  shall  not  deliver 
any  property  subject  to  tax  to  any  person  until  the  tax  assessed 
has  been  paid  to  him  or  to  the  county  treasurer,  does  not  prevent 
the  institution  of  an  action  in  ejectment  by  the  devisees.  No 
delivery  of  possession  of  real  estate  to  the  devisees  was  necessary. 
Under  the  will  they  took  title  subject  to  the  right  of  the  executor 
to  take  possession  for  the  purposes  of  administration.  The  rights 
of  the  state  are  of  no  concern  to  the  descendants.^ 

^  Essex  V.  Brooks,  164  Mass.  79,  41  N.  E.  119. 

2  Weller  v.  Wheelock,  155  Mich.  698,  118  N.  W.  609. 

Sec.  380.     In  Equity  on  Distribution. 

In  a  proceeding  in  equity  to  obtain  distribution  the  court  may 
require  payment  of  the  tax  before  distribution  although  the  pro- 
bate court  is  given  special  authority  over  matters  of  taxation. 

Ky.  St.  1906,  c.  22,  ss.  13,  14,  15,  confer  jurisdiction  on  the  county  court 
to  determine  questions  arising  in  relation  to  the  tax,  but  this  jurisdiction  is  not 
exclusive  when  the  jurisdiction  of  the  court  of  equity  is  invoked  to  distribute 
an  estate  and  the  interest  of  each  or  any  number  of  the  heirs  at  law  is  subject 
to  the  inheritance  or  other  tax.  The  court  at  the  instance  of  the  official  repre- 
sentative of  the  commonwealth  charged  with  the  duty  of  collecting  such  tax 
may  require  its  payment  out  of  the  share  or  shares  of  those  chargeable  with  the 
tax  before  distributing  the  estate  or  funds  among  them,  and  thereby  save  both 
the  tax  collector  and  the  heirs  the  trouble  and  expense  of  a  separate  and  inde- 
pendent proceeding  in  the  county  court  to  compel  the  payment  of  the  tax.     The 


;i.l  ASSESSMENT  OF  TAX.  281 

rcuit  court,  therefore,  in  requiring  the  payment  of  the  tax  before  distribution 
lid  not  exceed  its  jurisdiction.  Barret  v.  Continental  Realty  Co.,  130  Ky.  109, 
14  S.  W.  750. 

jc.  381.    Power  to  Fix  Liabilities  and  Apportion  Tax. 

The  probate  court  may  be  empowered  to  determine  what  pro- 
)rtion  of  the  tax  shall  be  paid  by  each  party  interested,^  which 
power  may  be  implied  in  the  probate  courts  by  general  authority 

tver  the  tax.^ 
1  Connell  v.  Croshy,  210  111.  380,  71  N.  E.  350.     Tyson  v.  State,  28  Md.  577. 
\  *  The  question  as  to  the  liability  to  pay  a  tax  is  a  question  affecting  a  devise, 
gacy  or  inheritance  under  the  act,  for  if  the  tax  is  paid  the  devise,  legacy  or 
inheritance  will  be  diminished  by  the  payment.     Callahan  v.  Woodbridge,  171 

ass.  595,  51  N.  E.  176. 

A  provision  of  the  inheritance  tax  law  giving  the  probate  court  jurisdiction 
to  hear  and  determine  all  questions  relative  to  the  inheritance  tax,  gives  it 
jurisdiction  over  a  petition  praying  the  court  to  determine  whether  such  a  tax 

payable  and  to  fix  its  amount.    Bradford  v.  Storey,  189  Mass.  104,  75  N.  E.  256. 

"When  we  read  all  of  the  provisions  of  this  act  Lof  1885],  it  is  perfectly  appar- 
ent that  a  special  system  of  taxation  was  created  for  the  benefit  of  the  state, 
with  all  the  necessary  machinery  for  its  working;  the  control  with  respect  to 
which  was  vested  in  the  surrogate's  court,  with  a  jurisdiction  exclusive  in  its 
nature.  In  the  assessment  of  a  tax  upon  property  passing  by  will,  or  by  the 
intestate  law,  the  responsibility  is  imposed  by  the  law  upon  the  surrogate.  He 
acts  for  the  state  and  he  is  commanded  to  assess  and  fix  the  tax  to  which  the 
property  is  liable.  To  comply  with  the  command  in  section  13  of  the  act,  in 
that  respect,  he  must,  necessarily,  determine  the  question  of  liability  to  taxation, 
inasmuch  as  if  no  such  liability  exists  he  is  without  jurisdiction  in  the  matter. 

hen  the  machinery  of  this  sytem  of  taxation  is  set  in  motion,  under  section  13 

the  act,  whether  upon  the  application  of  interested  parties,  or  upon  his  own 
motion,  the  surrogate,  by  force  of  its  provisions,  is  at  once  invested  with  the 
office  and  the  functions  of  an  assessor  for  the  state,  whose  duty  it  is  to  assess 
for  its  use  a  tax,  and  in  whom  not  only  by  virtue  of  the  office,  but  by  the  further 
provisions  of  section  15,  inheres  the  authority,  and  upon  whom  rests  the  obli- 
gation, to  determine  the  question  of  whether  the  property  of  the  decedent, 
which  passes  to  others,  is  subject  or  liable  to  taxation  by  the  state.  He  must 
decide  whether  the  property  is  taxable,  for  that  fact  lies  at  the  foundation  of 
his  jurisdiction  and  is  of  the  essence  of  his  right  to  proceed  with  the  assessment. 
Not  all  the  property  of  decedents  may  be  subject  to  the  tax  imposed  by  the 
first  section,  and  what  property  shall  be  assessed  for  taxation  is  left,  by  the  thir- 
teenth section,  for  the  surrogate  to  determine.  To  quote  again  the  language, 
he  'shall  assess  and  fix  the  cash  values  of  all  the  estates,  etc.,  and  the  tax  to 
which  the  same  is  liable,'  and  this  direction  to  assess  involves  the  necessity, 
as  well  as  the  power,  to  determine  the  question  of  liability,  as  much  as  it  does 
in  the  case  of  assessors  of  taxes  in  the  general  scheme  of  taxation. 

I  can  see  no  difference  between  the  principle  upon  which  the  surrogate  acts 
in  proceeding  to  assess  property  for  taxation  under  the  act,  and  that  upon  which, 


282  INHERITANCE  TAX  LAW.  [§§382-S 

in  the  general  system  of  taxation  in  the  state,  tax  assessors  act  in  the  assea 
ment  of  persons  or  property  for  purposes  of  taxation.  It  is  well  settled,  as  to  them^ 
that  in  their  proceedings  they  must  determine  the  question  of  liability  to  taxa- 
tion as  a  fact,  which  gives  them  jurisdiction  to  assess.  It  is  not  only  an  im- 
portant, but  it  is  a  conditional  step  in  the  proceeding  for  the  assessment."  Per 
Gray,  J.,  in  In  re  Wolfe,  137  N.  Y.  205,  211,  33  N.  E.  156,  reversing  2  Connolly 
600. 

Sec.  382.    When  Assessment  Postponed. 

Assessment  may  be  properly  postponed  where  litigation  over 
the  probate  of  a  will  renders  it  impossible  to  say  whether  the 
property  will  pass  under  the  will,  or  as  in  case  of  intestacy,^  or 
where  it  is  impossible  to  tell  the  present  value  of  the  property ,2 
or  where  the  beneficial  interests  are  unascertainable.^  A  failure 
to  assess  promptly  is  not  in  such  cases  an  adjudication  that  no  tax 
is  due.^ 

1  In  re  Westurn,  152  N.  Y.  93,  99,  46  N.  E.  315,  reversing  8  N.  Y.  App.  Div.  59. 

2  Where  the  executors  have  confederate  money  in  their  hands  which  has 
become  valueless  the  tax  upon  this  money  cannot  be  determined  until  it  is 
decided  whether  the  executors  will  be  allowed  for  this  loss  on  settlement  with 
legatees.  If  the  legatees  get  good  money  the  state  must,  of  course,  have  a  tax 
from  it.    State  v.  Brevard,  62  N.  C.  141. 

3  In  re  Irwin,  36  Misc.  277,  73  N.  Y.  Suppl.  415. 

The  right  of  remaindermen  to  file  a  bond  for  the  payment  of  the  tax  is  not 
taken  up  where  it  did  not  appear  that  any  request  to  file  such  a  bond  had  been 
made  in  the  lower  court.  In  re  Kingman,  220  111.  563,  77  N.  E.  135.  As  to 
unascertainable  interests,  see  further,  ss.  234,  335,  347. 

4  In  re  Irwin,  36  Misc.  Rep.  277,  73  N.  Y  Suppl.  415. 

Sec.  383.    Taxes  Due  in  the  Future. 

The  probate  court  in  the  absence  of  special  provisions  has  no 
jurisdiction  to  provide  for  the  future  payment  of  taxes  or  to 
determine  when  or  under  what  circumstances  the  rate  of  taxation 
would  increase.  The  question  before  the  court  is  what  tax  has 
accrued  and  the  court  should  limit  itself  to  that  question. 

State  V.  Probate  Court,  112  Minn.  279,  128  N.  W.  18,  21. 

Sec.  384.     In  what  Proceedings  Assessment  is  Proper. 

Assessment  of  the  inheritance  tax  should  only  be  made  in  the 
special  proceedings  provided  by  law  for  that  purpose. 

In  re  Farley,  15  N.  Y.  St.  Rep.  727  (not  on  motion  by  the  executor).  In  re 
Morris,  138  N.  C.  259,  50  S.  E.  682  (not  on  appeal  from  an  order  that  executors 
account). 


§§  38&-388.1  ASSESSMENT  OF  TAX.  283 

Sec.  385.    Order  of  Exemption. 

Power  to  fix  or  order  exemptions  may  be  implied  by  power  to 
appraise  and  assess  the  tax. 

In  re  Collins,  104  N.  Y.  App.  Div.  184,  93  N.  Y.  Suppl.  342. 

An  administrator's  petition  for  an  order  of  exemption  is  insufficient  to  sup- 
port such  an  order  where  it  relates  only  to  the  personal  property  of  the  decedent 
and  contains  no  proof  that  he  did  not  die  seized  of  real  estate  liable  to  taxation 
under  the  statute  of  1903,  chapter  41.  Notice  of  the  order  should  be  given  to 
the  state  comptroller  under  section  231,  requiring  notice  of  an  appraisal.  In  re 
Collins,  104  N.  Y.  App.  Div.  184,  93  N.  Y.  Suppl.  342. 

In  a  Tennessee  case  the  question  of  an  exemption  under  the  inheritance  tax 
law  came  up  by  a  suit  by  the  county  court  clerk  against  the  administrator  for 
the  purpose  of  recovering  the  tax  in  the  circuit  court.  English  v.  Crenshaw, 
120  Tenn.  531,  110  S.  W.  210. 

Sec.  386.     Oral  Statement  by  Court. 

Where  on  an  affidavit  of  the  executor  as  to  the  assets  the  surrogate 
expresses  the  opinion  orally  that  the  estate  is  not  subject  to  tax, 
but  enters  no  order  or  judgment,  the  state  is  not  barred  from 
subsequently  asking  for  an  appraisal. 

In  re  Schmidt,  39  Misc.  Rep.  77,  78  N.  Y.  Suppl.  879. 

Sec.  387.     Implied  Power  to  Hold  Provision  of  Will  Void. 

The  power  to  assess  the  tax  includes  the  power  to  hold  void  any 
provision  in  the  will  and  thus  to  decide  that  nothing  passed  under 
it  to  the  beneficiary  named. 

In  re  Ullman,  137  N.  Y.  403,  33  N.  E.  480. 

Sec.  388.    Jurisdiction  of  Probate  Courts  over  Estates  of 
Non-Resident  Decedents. 

Probate  courts  may  have  jurisdiction  to  assess  a  tax  on  the 
estates  within  their  jurisdiction  of  non-resident  decedents. 

Callahan  v.  Woodbridge,  171  Mass.  595,  51  N.  E.  176. 

The  question  may  be  determined  by  an  answer  to  the  question.  Had  the 
court  power  to  issue  letters?  The  court  holds  that  this  interest  which  the  non- 
resident testator  had  in  a  New  York  corporation  must  be  held  to  be  property 
within  the  meaning  of  the  word  as  used  in  the  code  giving  the  surrogate's  court 
jurisdiction  over  estates  for  purposes  of  administration.  And  hence,  the  surro- 
gate's court  has  jurisdiction  to  impose  the  tax.  In  re  Fitch,  160  N.  Y.  87,  43 
N.  E.  701,  affirming  39  N.  Y.  App.  Div.  609. 

Where  the  testator  died  domiciled  in  Ireland  owning  real  estate  in  Montana, 
it  was  claimed  by  the  petitioners  that  the  inheritance  tax  is  imposed  not 
upon  the  property  but  upon  the  right  or  privilege  to  take,  and  that  the  court 


\ 


284  INHERITANCE  TAX  LAW.  [§§389-392. 

must  therefore  have  jurisdiction  not  only  of  the  distribution  but  also  of  the  dis- 
tributees, in  order  to  levy  the  tax;  and  that  since  neither  of  these  essentials  exists 
there  can  be  no  lawful  levy  of  the  tax  in  this  case.  But  the  court  says  that  the 
delivery  provided  serves  all  the  purposes  of  distribution  and  the  power  to  direct 
the  delivery  is  tantamount  to  the  power  to  order  distribution  directly  to  the 
persons  entitled  to  take.    State  v.  District  Court,  41  Mont.  357,  109  P.  438,  441. 

Sec.  389.    Ancillary  Administration  in  Case  of  Non-Resident. 

Before  fixing  the  inheritance  tax  on  the  estate  of  a  non-resident 
it  may  be  necessary  to  take  out  ancillary  jurisdiction  and  file  an 
inventory. 

Gardiner  v.  Carter,  74  N  H.  507,  510,  69  A.  939. 

Under  the  New  York  statute  of  1892,  the  jurisdiction  to  assess  a  tax  on  a 
non-resident  depends  on  the  appointment  of  an  ancillary  administrator.  And 
where  the  property  of  a  non-resident  is  situated  in  two  counties  and  an  ancillary 
administrator  has  been  appointed  in  one  county,  there  can  be  no  appointment 
in  another  county  and  the  surrogate  of  the  councy  which  first  obtained  jurisdic- 
tion is  the  only  surrogate  who  can  assess  the  tax.  In  re  Hathaway,  27  Misc. 
Rep.  474,  59  N.  Y.  Suppl.  166. 

Michigan  is  also  requiring  ancillary  jurisdiction  under  an  opinion  of  its  attorney 
general  and  the  amendment  of  1911,  but  mosc  states  do  not  require  it. — Ed. 

Sec.  390.    Evidence. 

In  New  York  it  has  been  held  that  the  statute  providing  that 
an  interested  person  may  not  testify  in  his  own  behalf  as  to  a 
personal  transaction  between  himself  and  the  deceased  party, 
does  not  render  the  legatee  incompetent  to  testify  in  a  proceeding 
to  assess  a  transfer  tax  as  to  the  conversations  and  relations  with 
the  decedent/  or  to  show  that  the  mutually  acknowledged  relation 
of  a  parent  existed  .^ 

1  In  re  Bentley,  31  Misc.  Rep.  651,  66  N.  Y.  Suppl.  95. 

2  In  re  Brundage,  31  N.  Y.  App.  Div.  348,  52  N.  Y.  Suppl.  362. 
[Evidence  proper  on  appraisal  has  been  treated  under  appraisal,  ante,  ss.  337- 

341.] 

Sec.  391.     Burden  of  Proof. 

The  state  has  the  burden  of  proving  that  the  transfer  tax  should      | 
be  imposed. 

In  re  Miller,  77  N.  Y.  App.  Div.  473,  78  N.  Y.  Suppl.  930,  overruling  75  N.  Y. 
Suppl.  929. 

Sec.  392.    Appeal. 

Appeal  from  the  assessment  by  the  court  of  first  instance  is 
commonly  allowed  to  all  parties  interested,^  including  the  state.^ 


§392.1  ASSESSMENT  OF  TAX.  285 

Appeal  may  be  an  exclusive  remedy  for  cases  of  incorrect  valua- 
tion,^ while  in  some  states  the  taxpayer  may  have  a  right  of  action 
to  recover  taxes  paid  under  protest  although  he  has  failed  to 
appeal,*  or  he  may  have  a  right  to  be  heard  as  to  his  liability  when 
the  court  attempts  to  enforce  its  decree.^  The  appeal  may  be 
taken  by  filing  notice  of  appeal,^  which  must  state  the  grounds  of 
appeal  7  and  which  may  be  filed  within  a  certain  time  after  notice 
of  the  filing  of  the  appraisal  ^  to  the  court  named  in  the  statute.^ 

The  New  York  statutes,  curiously,  provide  an  appeal  from  the 
surrogate  sitting  as  a  taxing  officer  to  the  surrogate  sitting  as  a 
court, 1^  where  the  appeal  can  only  be  sustained  on  evidence  of 
error  in  the  first  appraisal. ^^  The  record  should  print  the  will 
of  the  decedent  in  New  Jersey. ^^ 

1  People  V.  Sholem,  238  111.  203,  87  N.  E.  390. 

The  executors  are  not  interested  and  therefore  cannot  appeal  from  the 
decision  of  the  court  in  the  question  as  to  whether  a  tax  is  now  due  and  payable 
or  payable  in  the  future,  as  the  tax  is  payable  by  the  legatees  and  not  by  the 
executors.  In  re  Handley,  181  Pa.  St.  339,  37  A.  587,  reversing  judgment, 
3  Lack.  Leg.  N.  9. 

2  People  V.  Sholem,  238  III.  203,  87  N.  E.  390.  In  re  Hull,  109  N.  Y.  App. 
Div.  248,  95  N.  Y.  Suppl.  819.  In  re  Blackstone,  171  N.  Y.  682,  affirming  69 
N.  Y.  App.  Div.  127  (comptroller  of  city  of  New  York).  Humphreys  v.  State, 
70  Ohio  St.  67,  101  Am.  St.  888,  70  N.  E.  907,  65  L.  R.  A.  776,  affirming  13  Low. 
D.  168,  1  C.  C.  N.  S.  1,  14  Cir.  D.  238. 

In  Illinois  it  would  be  unconstitutional  to  permit  an  appeal  only  by  the 
persons  interested  in  the  property  of  the  estate  and  not  by  the  state  itself. 
People  V.  Sholem,  238  111.  203,  87  N.  E.  390. 

3  In  re  Hacket,  14  Misc.  Rep.  282,  35  N.  Y.  Suppl.  1051.  See  Cross  v.  Superior 
Court,  2  Cal.  App.  342,  83  P.  815. 

^  Beats  V.  State,  139  Wis.  544,  552,  121  N.  W.  347.  As  to  refunding,  see  further, 
chapter  XLVI. 

^  It  was  contended  that  the  orphans'  court  had  no  jurisdiction  to  entertain  the 
question  of  liability  because  the  parties  interested  were  debarred  from  raising 
that  question  by  their  failure  to  appeal  from  the  surrogate's  assessment  within 
the  time  limited  by  the  terms  of  section  12.  The  court,  however,  construes 
section  16  as  empowering  the  orphans'  court  to  determine  whether  the  tax  should 
be  paid  and  to  enforce  its  decree,  and  holds  that  a  party  interested  must  be 
deemed  to  be  permitted  to  interpose  any  objection  to  such  a  decree.  The  court 
distinguishes  In  re  Wolfe,  137  N.  Y.  205,  construing  section  15  of  the  New  York 
act,  which  is  in  substantially  identical  terms  with  section  13  of  the  New  Jersey 
statute,  on  the  ground  that  the  New  York  act  in  section  15  expressly  confers 
on  the  surrogate's  court  jurisdiction  "to  hear  and  determine  all  questions  in 
relation  to  the  tax  arising  under  the  provisions"  of  the  act.  The  New  Jersey 
statute,  however,  confers  no  such  jurisdiction  on  the  surrogate,  but  section  15 
of  the  New  Jersey  act  expressly  confers  that  jurisdiction  upon  the  ordinary  or 
orphans'  court.  In  re  Vineland  Historical  and  Antiquarian  Society,  66  N.  J. 
Eq.  291,  66  A.  1039. 


286  INHERITANCE  TAX  LAW.  [§392. 

6  In  re  Seymour,  144  N.  Y.  App.  Div.  151,  128  N.  Y.  Suppl.  775. 

The  admission  of  service  of  the  notice  of  appeal  by  the  attorney  of  the 
state  comptroller  cannot  be  accepted  as  a  waiver  of  default  in  appealing,  for 
the  validity  of  the  appeal  depended,  not  upon  service  of  notice  thereof  upon  the 
attorney,  but  upon  timely  filing  of  the  notice  in  the  surrogate's  office.  In  re 
Seymour,  144  N.  Y.  App.  Div.  151,  128  N.  Y.  Suppl.  775. 

'  In  re  Stone,  56  Misc.  247,  107  N.  Y.  Suppl.  385. 

The  hearing  must  be  hmited  to  the  errors  noticed  in  the  appeal.  In  re 
Davis,  149  N.  Y.  539,  548,  44  N.  E.  185,  affirming  91  Hun  53. 

An  order  fixing  the  transfer  tax  upon  an  estate  is  an  entirety  and  the  party 
claiming  to  be  aggrieved  thereby  in  taking  an  appeal  should  present  upon  that 
appeal  every  objection  which  he  has  to  the  order.  It  would  lead  to  endless 
delay  and  confusion  if  he  was  permitted  to  take  a  separate  appeal  for  each 
objection  made  to  the  order  of  the  surrogate.  The  specification  of  one  or  more 
objections  is  deemed  equivalent  that  the  appellant  regards  the  decree  in  all 
other  respects  correct.  In  re  Cook,  194  N.  Y.  400,  403,  87  N.  E.  786,  affirming 
125  N.  Y.  App.  Div.  114,  109  N.  Y.  Suppl.  417. 

But  where  the  time  for  appeal  has  gone  by  and  subsequently  a  proceeding  is 
commenced  by  new  heirs  claiming  the  estate  and  attempting  to  revoke  the 
letters  of  administration  already  granted,  the  surrogate  has  jurisdiction  under 
the  notice  of  appeal  already  given  to  consider  the  new  question  arising,  and 
is  not  excluded  from  doing  so  on  the  ground  that  it  was  not  specified  in  the 
notice  of  appeal.  In  re  Westurn,  152  N.  Y.  93,  104,  46  N.  E.  315,  reversing 
8  N.  Y.  App.  Div.  59. 

8  In  re  Belcher,  211  Pa.  St.  615,  619,  61  A.  252. 

No  extension  of  the  time  for  appeal  can  be  granted  by  the  court.  In 
re  Seymour,  144  N.  Y.  App.  Div.  151,  128  N.  Y.  Suppl.  775. 

9  People  V.  Sholem,  238  111.  203,  87  N.  E.  390  (directly  to  the  supreme  court). 
"The  function  of  an  appraiser  is  somewhat  similar  to  a  jury  called  by  the 

court  in  an  equity  case  to  aid  its  conscience.  The  whole  matter  is  with  the 
surrogate  and  continues  with  him  until  final  determination  after  appeal.  The 
purpose  of  the  appeal  from  the  surrogate  to  the  surrogate  is  not  simply  to  review 
his  former  determination,  but  it  is  proper  on  the  appeal  to  receive  evidence  that 
a  certain  transfer  was  made  in  contemplation  of  death,  and  that  the  property 
transfer  should  be  included  in  the  transfer  tax.  In  re  Thompson,  57  N.  Y.  App. 
Div.  317,  9  N.  Y.  Ann.  Cas.  290,  68  N.  Y.  Suppl.  18. 

N.  Y.  St.  1896,  ss.  231  and  232,  provide  for  the  action  of  the  surrogate  in  a 
dual  capacity.  By  section  231  he  may  act  as  a  taxing  officer  or  appraiser,  and 
under  section  232  any  person  dissatisfied  with  the  appraisement  or  assessment  may 
appeal  to  the  surrogate.  It  was  insisted  that  this  practice  was  anomalous  and 
unnecessary  and  that  an  appeal  could  be  taken  from  the  surrogate  acting  as 
appraiser  directly  to  the  appellate  division.  The  court  remarks  that  it  is  some- 
what unusual  that  a  judicial  officer  should  sit  in  review  of  his  own  decision  as 
an  assessor,  but  finds  that  this  practice  is  proper,  as  the  surrogate  is  a  mere  taxing 
officer  or  assessor  when  acting  under  section  231.  In  re  Costello,  189  N.  Y. 
288,  82  N.  E.  139,  modifying  117  N.  Y.  App.  Div.  807,  103  N.  Y.  Suppl.  6. 

"  In  re  Johnson,  37  Misc.  Rep.  542,  75  N.  Y.  Suppl.  1046.  In  re  Thompson, 
57  N.  Y.  App.  Div.  317,  9  N.  Y.  Ann.  Cas.  290,  68  N.  Y.  Suppl.  18. 

^''Astor  V.  Slate,  75  N.  J.  Eq.  303,  72  A.  78. 


§393.]  ASSESSMENT  OF  TAX.  287 

Sec.  393.    Power  to  Vacate  Assessment. 

In  New  York  the  power  of  the  surrogate  to  reverse  or  modify 
his  own  decree  has  been  a  fruitful  source  of  litigation  and  of  much 
difference  of  opinion.  Changes  in  the  law  enlarging  the  powers  of 
the  surrogate  have  rendered  obsolete  some  of  the  early  decisions  and 
it  seems  to  be  settled  now  that  the  surrogate  can  vacate  or  modify 
his  decree,^  even  after  the  expiration  of  the  time  for  appeal ,2  but 
only  as  the  same  power  would  be  exercised  by  a  court  of  record.^ 
The  power  was  held  properly  exercised  where  the  surrogate  acted 
under  an  unconstitutional  statute,^  or  beyond  his  jurisdiction,^ 
or  in  case  of  clerical  errors,*  or  other  manifest  error,"  and  not  merely 
as  to  questions  of  law,^  or  disputed  questions  of  fact.® 

i/w  re  Warren,  62  Misc.  444,  116  N.  Y.  Suppl.  1034.  In  re  Silliman,  175 
N.  Y.  513,  67  N.  E.  1090,  affirming  79  N.  Y.  App.  Div.  98,  80  N.  Y.  Suppl.  336, 
reversing  77  N.  Y.  Suppl.  267.  Contra,  In  re  Crerar,  56  N.  Y.  App.  Div.  479, 
67  N.  Y.  Suppl.  795,  9  Ann.  Cas.  101.  In  re  Von  Post,  35  Misc.  367,  71  N.  Y. 
Suppl.  1039. 

2  In  re  Mather,  41  Misc.  Rep.  414,  84  N.  Y.  Suppl.  1105.  In  re  Daly,  34  Misc. 
Rep.  148,  69  N.  Y.  Suppl.  494.  Contra,  In  re  Schermerhorn,  38  N.  Y.  App. 
Div.  350,  57  N.  Y.  Suppl.  26. 

3/w  re  Barnum,  129  N.  Y.  App.  Div.  418,  114  N.  Y.  Suppl.  33. 

4  In  re  Scrimgeour,  175  N.  Y.  507,  67  N.  E.  1089,  affirming  80  N.  Y.  App. 
Div.  388,  80  N.  Y.  Suppl.  636,  78  N.  Y.  Suppl.  971  (after  time  for  appeal  had  gone 
by).  See  In  re  Backhouse,  185  N.  Y.  544,  77  N.  E.  1181,  affirming  110  N.  Y. 
App.  Div.  737,  96  N.  Y.  Suppl.  466. 

6  In  re  Coogan,  27  Misc.  Rep.  563,  59  N.  Y.  Suppl.  111.  In  re  Backhouse,  185 
N.  Y.  544,  77  N.  E.  1181,  affirming  110  N.  Y.  App.  Div.  737,  96  N.  Y.  Suppl. 
466. 

6  In  re  Campbell,  50  Misc.  485,  100  N.  Y.  Suppl.  637  (omission  of  debt).  In  re 
Earle,  74  N.  Y.  App.  Div.  458,  77  N.  Y.  Suppl.  503,  affirming  71  N.  Y.  Suppl. 
1038  (defective  report). 

'  Morgan  v.  Cmoie,  49  N.  Y.  App.  Div.  612,  63  N.  Y.  Suppl.  608,  (where  legatee 
died  before  testator).  In  re  Willet,  51  Misc.  176,  100  N.  Y.  Suppl.  850,  affirmed 
119  N.  Y.  App.  Div.  119,  104  N.  Y.  Suppl.  850.  In  re  Cameron,  181  N.  Y.  560, 
74  N.  E.  1115,  affirming  97  N.  Y.  App.  Div.  436,  89  N.  Y.  Suppl.  977. 

^  After  the  surrogate  had  determined  the  cash  value  of  the  estate  subject  to 
tax,  certain  judgments  on  claims  which  the  executor  had  denied  were  recovered. 
The  court  holds  that  the  power  of  the  surrogate  to  correct  errors  is  limited  to 
clerical  errors  or  mistakes  which  do  not  involve  questions  of  law.  In  re  Con- 
nelly, 38  Misc.  Rep.  466,  77  N.  Y.  Suppl.  1032. 

The  surrogate's  court  has  no  authority  to  vacate  its  decree  fixing  the  tax  on 
legacies  simply  on  the  ground  that  certain  things  were  included  and  excluded 
erroneously  on  the  appraisal,  as  this  is  not  a  clerical  error,  but  an  error  of  law 
within  the  section  of  the  code.  In  re  Wallace,  28  Misc.  Rep.  603,  59  N.  Y.  Suppl. 
1084. 


288  INHERITANCE  TAX  LAW.  [§394. 

'  Evidence  of  a  sale  of  property  after  the  appraisal  lower  than  the  appraised 
valuation  does  not  give  the  surrogate  power  to  modify  his  decree  of  appraisal. 
In  re  Lowry,  89  N.  Y.  App.  Div.  226,  85  N.  Y.  Suppl.  924.  See  In  re  Fulton,  30 
Misc.  Rep.  70,  62  N.  Y.  Suppl.  995  (excessive  valuation  sufficient  ground  for 
re-opening  assessment). 

Newly  Discovered  Debt.  The  surrogate  has  no  power  to  modify  an  order 
made  within  his  jurisdiction  and  allow  a  partial  refund  simply  because  of  a 
newly  discovered  debt  due  by  the  estate  after  the  time  for  appeal  has  expired. 
In  re  Hamilton,  41  Misc.  Rep.  268,  84  N.  Y.  Suppl.  44. 

Sec.  394.    Proper    Decree  where  Statute  Misconstrued  by 
Taxing  Officials. 

Where  the  court  finds  that  an  unsound  interpretation  of  the 
statute  was  adopted  and  enforced  by  the  officers  charged  with 
the  administration  of  the  law,  the  ends  of  justice  require  that  the 
interpretation  of  the  statute  should  not  be  foreclosed  by  the  decree 
of  the  court  although  there  is  nothing  in  the  record  to  enable  the 
court  to  say  that  the  statute  was  by  the  collector  mistakingly 
construed.  Therefore  the  proceedings  were  dismissed  without 
prejudice. 

High  V.  Coyne,  178  U.  S.  Ill,  20  S.  Ct.  747,  44  L.  Ed.  997.  FUelity  Insurance 
Co.  V.  McClain,  178  U.  S.  113,  20  S.  Ct.  774,  44  L.  Ed.  998. 


I 


CHAPTER  XLIII 


COLLECTION  OF  TAX. 

395.  Collection  a  Proper  Function  of  Probate  Courts. 

396.  Absence  of  Special  Machinery  for  Collection. 
^8  397.  Concurrent  Jurisdiction  to  Recover. 
Ji  398.  Actions  of  Contract  against  Beneficiary. 

399.  Officers  for  Collection. 

400.  Fees  of  Collecting  Officers. 

401.  When  Proceedings  Premature. 

402.  Limitations. 
§403.  Retroactive  Statute  as  to  Limitation. 

404.     Practice. 
I§  405.     Tax  Officials  Joined  in  Litigation  between  Other  Parties. 
[Law  of  date  when  proceedings  began  governj?  proceedings  for  collection,  see 
ante,  s.  22.] 
[Order  of  court  on  distribution  no  defence,  see  ante,  s,  304.] 

Sec.  395.    Collection  a  Proper  Function  of  Probate  Courts. 

The  collection  of  inheritance  taxes  is  a  proper  function  of  the 
probate  court.^ 

Safety  Deposit  Companies. — ^The  Illinois  act  requiring  safety  de- 
posit companies  to  give  notice  to  state  officials  before  delivering 
deposits  is  not  void  as  making  them  in  effect  trustees  for  the  state 
to  assist  it  in  collecting  the  tax,  or  as  subjecting  property  to  a 
public  use  without  compensation,  or  as  subjecting  property  to 
unreasonable  searches  and  seizures.^ 

1  In  re  McPherson,  104  N.  Y.  306,  324,  10  N.  E.  685,  58  Am.  Rep.  502.  In  re 
Wolfe,  137  N.  Y.  205,  33  N.  E.  156,  reversing  2  Connolly  600.  State  v.  Probate 
Court,  112  Minn.  279,  128  N.  W.  18,  21.     [Effect  of  repeal,  see  ante,  s.  91.] 

2  National  Safe  Deposit  Co.  v.  Stead,  250  111.  584,  95  N.  E.  973. 


Sec.  396.    Absence  of  Special  IVlachinery  for  Collection. 

The  fact  that  the  statute  does  not  contain  special  provision  for 
the  ascertainment  and  collection  of  the  tax  cannot  defeat  the 
state's  right  to  a  recovery.^  Where  a  plaintiff  seeks  to  obtain  a 
determination  that  the  state  has  no  right  to  any  tax,  the  court 
will  not  adjudicate  whether  there  remains  a  legal  method  of  col- 
lecting the  tax,  as  this  is  a  matter  which  will  be  decided  when 
the  state  seeks  to  enforce  its  right.^ 


290  INHERITANCE  TAX  LAW.  [§§397-399. 

1  Fisher  v.  State,  106  Md.  104,  66  A.  681.  See  In  re  Astor,  20  Abb.  N.  Cas.  405 
6  Dem.  Surr.  402. 

The  court  notices  that  no  specific  mode  is  designated  for  the  collection  of  the 
tax  under  the  act  of  1909,  as  the  court  says  that  the  legislature  properly  assumed 
that  the  collection  had  been  covered  elsewhere.  The  statute  of  1893,  c.  174, 
embraced  within  itself  a  complete  system  of  taxation;  under  section  15  the  duty 
and  method  of  collecting  the  tax  is  provided,  and  this  remedy  is  properly  applied 
under  the  statute  of  1909.     Knox  v.  Emerson,  123  Tenn.  409,  131  S.  W.  972. 

The  fact  that  there  is  no  established  practice  of  the  probate  court  in  like  cases 
made  and  provided  for  the  service  of  citations  out  of  that  court  if  it  is  a  fact  does 
not  make  the  law  unconstitutional.  If  the  executor  does  not  perform  his  duties 
then  the  method  usual  in  such  cases  should  doubtless  prove  efficacious.  The 
practice  prescribed  by  statute  to  enforce  collection  seems  clear  enough.  Union 
Trust  Co.  V.  Durfee,  125  Mich.  487,  84  N.  W.  1101,  7  Detroit  Leg.  N.  597. 

2  Trippet  v.  State,  149  Cal.  521,  530,  86  P.  1084,  8  L.  R.  A.  (N.  S.)  1210. 
[Effect  of  absence  of  special  provision  for  appraisal,  see  ss.  339,  344.] 

Sec.  397.     Concurrent  Jurisdiction  to  Recover. 

Jurisdiction  in  the  probate  court  does  not  necessarily  preclude 
concurrent  jurisdiction  in  other  courts  to  recover  the  tax. 

Fidelity  &  Deposit  Co.  v.  Crenshaw,  120  Tenn.  606,  110  S.  W.  1017. 

The  fact  that  the  original  suit  for  the  settlement  of  an  estate  is  still  pending 
in  chancery  court  and  the  statute  provides  that  the  inheritance  tax  may  be  col- 
lected in  such  cases  in  such  situs  does  not  prevent  jurisdiction  by  the  county  court 
under  section  22  of  the  Tenn.  St.  1893,  c.  174.  Harrison  v.  Johnston,  109  Tenn. 
245,  70  S.  W.  414. 

Sec.  398.    Actions  of  Contract  against  Beneficiary. 

If  an  administrator  or  executor  actually  pays  over  money  of  his 
decedent  to  a  collateral  distributee  or  legatee  without  retaining 
therefrom  a  tax,  it  becomes  to  the  extent  of  the  tax  money  had 
and  received  by  him  for  the  use  of  the  state  and  an  action  may 
be  maintained  against  such  distributee  or  legatee  therefor. 

Montague  v.  State,  54  Md.  481,  487. 

La.  St.  1855,  s.  7,  declares  that  every  person  not  domiciled  in  Louisiana  and  not 
being  a  citizen  of  any  state  or  territory  shall  pay  an  inheritance  tax  of  ten  per 
cent.  This  tax  is  not  a  debt  of  the  succession,  it  is  simply  a  debt  of  the  heir  who 
happens  to  be  domiciled  in  a  foreign  country,  and  therefore  a  suit  to  recover  this 
tax  should  be  brought  directly  against  the  heirs  who  under  the  statute  owe  it 
to  the  state.     Succession  of  Pargoud,  13  La.  Ann.  367. 

Sec.  399.     Officers  for  Collection. 

The  responsibility  for  collection  of  the  tax  was  early  imposed  in 
Pennsylvania  on  the  register  of  wills, ^  or  it  may  be  the  treasurer  of 
the  county  where  the  taxable  property  is  situated,^  and  a  mere 
revenue  agent  should  not  be  joined  as  a  party  to  the  proceedings.* 


ii 


§§400-402.]  COLLECTION  OF  TAX.  291 

1  Alleghany  County  v.  Stengel,  213  Pa.  St.  493,  63  A.  58. 

The  official  bond  of  the  register  of  wills  does  not  bind  him  to  turn  over  col- 
lateral inheritance  taxes  collected,  as  under  the  statute  of  1841,  c.  99,  imposing 
collection  of  the  inheritance  taxes  on  the  register,  the  legislature  did  not  rely 
on  his  general  official  bond  as  a  security  for  the  performance  of  this  new  duty, 
but  required  a  special  bond  for  this  purpose.  Commonwealth  v.  Toms,  45  Pa.  St. 
(9  Wright)   408. 

2  See  San  Diego  v.  Schwartz,  145  Cal.  49,  78  P.  231. 

The  words  "proper  county"  evidently  refer  to  the  county  of  the  surrogate 
first  properly  acquiring  jurisdiction,  and  the  surrogate  of  a  county  retains  such 
jurisdiction  throughout  all  proceedings  even  should  there  be  real  estate  in  every 
county  in  the  state.    In  re  Keenan,  5  N.  Y.  Suppl  200,  1  Con.  Surr.  226. 

3  The  fact  that  a  revenue  agent  was  joined  with  the  county  atcorney  in  a  pro- 
ceeding to  collect  an  inheritance  tax  did  not  render  the  petition  bad  on  demurrer 
although  a  motion  to  strike  the  name  of  the  revenue  agent  from  the  petition  would 
have  been  proper.    Commonwealth  v.  Gaulbert,  134  Ky.  157,  119  S.  W.  779. 

Sec.  400.     Fees  of  Collecting  Officers. 

In  almost  all  the  states  the  system  prevails  of  paying  the  col- 
lection officers  a  salary,  with  no  fees  in  addition,^  but  in  Tennessee 
compensation  is  on  the  percentage  basis.^ 

^  San  Diego  v.  Schwartz,  145  Cal.  49,  78  P.  231.  Succession  of  Levy,  115  La. 
378,  39  S.  37,  affirmed  Cahen  v.  Brewster,  203  U.  S.  552,  27  S.  Ct.  174,  51  L.  Ed. 
310.    Banks  v.  State,  60  Md.  305  (register  of  wills). 

^Shelton  v.  Campbell,  109  Tenn.  690,  72  S.  W.  112  (state  revenue  agent  en- 
titled to  a  fee  of  five  per  cent  as  attorney  for  county  clerk  under  the  act  of  1893). 
Harrison  v.  Johnston,  109  Tenn.  245,  70  S.  W.  414  (district  attorney  allowed  no 
fee  under  the  act  of  1893). 

In  a  proceeding  under  the  Tennessee  statute  of  1909,  which  is  but  a  supplement 
of  the  statute  of  1893,  the  attorney  of  the  county  court  clerk  is  entitled  to  a  fee 
to  be  paid  by  the  taxpayer.     Knox  v.  Emerson,  123  Tenn.  409,  131  S.  W.  972. 

Sec.  401.    When  Proceedings  Premature. 

Authority  to  commence  proceedings  after  refusal  to  pay  the 
tax  implies  that  no  process  to  enforce  the  tax  can  be  instituted 
within  the  time  allowed  for  payment,  and  any  such  proceeding  is 
premature. 

Frazer  v.  People,  3  N.  Y.  Suppl.  134  6  Dem.  Surr.  174  (no  costs  against  the 
taxpayer  should  be  allowed). 

Sec.  402.    Limitations. 

A  general  statute  of  limitations  will  not  usually  cover  inherit- 
ance taxes,^  but  where  the  state  fails  to  collect  the  collateral 
inheritance  tax  for  a  period  of  twenty  years  from  the  death  of  the 


292  INHERITANCE  TAX  LAW.  [§403. 

decedent,  a  presumption  of  payment  arises  as  to  bona  fide  pur- 
chasers from  those  to  whom  the  remainder  in  fee  descended. ^  The 
Massachusetts  statute  of  1891,  providing  that  executors  and 
administrators  shall  be  liable  for  the  taxes  until  paid,  plainly  im- 
ports that  nothing  except  payment  shall  operate  as  a  discharge  or 
bar  the  collection  of  the  tax.^  The  limitation  may  run  only  from 
the  death  of  the  life  tenant  on  remainder  interests  ^  in  favor  of 
purchasers  without  notice,^  and  may  not  affect  the  personal  lia- 
bility of  executors.^  The  Massachusetts  act  of  1891,  which  pro- 
vides that  taxes  shall  be  due  at  the  expiration  of  two  years  and 
that  the  treasurer  shall  bring  suit  within  six  months  after  the 
taxes  are  due  and  payable,  does  not  operate  to  set  a  limit  of  two 
years  and  six  months  on  the  right  of  recovery,  but  the  provision 
as  to  action  is  directory  merely/ 

1  The  Massachusetts  Revised  Laws,  chapter  202,  section  2,  provide  for  six 
years*  limitation  on  actions  of  contract  founded  upon  contracts  or  liabilities  ex- 
pressed or  implied.  The  court  holds  that  a  petition  under  the  inheritance  statute 
for  the  fixing  of  the  inheritance  tax  is  not  included  in  this  limitation,  although 
the  limitation  applies  expressly  to  "actions  brought  by  the  commonwealth  or 
for  its  benefit."  The  court  holds  that  a  tax  is  not  a  debt  in  the  ordinary  sense 
of  the  word  and  is  not  founded  upon  a  contract  expressed  or  implied,  and  the 
collector  cannot  maintain  an  action  to  recover  it  except  as  authorized  by  statute. 

The  word  "liabiHty"  is,  it  is  true,  of  large  significance,  but  as  used  in  the  gen- 
eral and  special  statutes  of  limitations  refers  plainly  to  liabilities  of  a  contractual 
nature  and  not  to  proceedings  to  collect  the  inheritance  tax.  Bradford  v.  Storey, 
189  Mass.  104,  75  N.  E.  256. 

^Appeal  of  Mellon,  114  Pa.  St.  564,  573,  8  A.  183,  although  no  administration 
taken  out  and  matter  never  called  to  attention  of  register.  See  In  re  Stewart, 
147  Pa.  St.  383,  23  A.  599,  presumed  after  42  years  that  register  did  his  duty. 

3  Howe  V.  Howe,  179  Mass.  546,  549,  55  L.  R.  A.  626. 

^Appeal  of  James,  2  Del.  Co.  Rep.  (Pa.)  164.  Appeal  of  Mellon,  114  Pa.  St. 
564,  570,  8  A.  183. 

^Appeal  of  James,  2  Del.  Co.  Rep.  (Pa.),  164. 

•  In  re  Cullen,  8  Pa.  Super.  Ct.  234. 

'  Howe  V.  Howe,  179  Mass.  546,  55  L.  R.  A.  626. 

Sec.  403.     Retroactive  Statute  as  to  Limitation. 

A  statute  providing  that  the  limitation  should  be  no  defence  to 
a  proceeding  to  collect  the  tax  is  retroactive,  and  will  be  so  con- 
strued as  to  permit  actions  for  collection  already  barred  under 
existing  statute. 

In  re  Moench,  39  Misc.  Rep.  480,  80  N.  Y.  Suppl.  222.  In  re  Strang,  117 
N.  Y.  Div.  App.  796,  102  N.  Y.  Suppl.  1062. 

As  to  retroactive  laws,  see  further,  ante,  s.  73  et  seq. 


§§404-405.1  COLLECTION  OF  TAX.  293 

Sec.  404.    Practice. 

Proceedings  may  be  commenced  on  notice  to  the  district  attorney^ 
and  an  affidavit  of  probable  cause,^  and  amendments  to  the  com- 
plaint may  be  allowed  as  in  other  matters.^ 

1  In  re  Vanderbilt,  10  N.  Y.  Suppl.  239,  2  Con.  Surr.  319. 

2  An  affidavit  which  simply  says  that  the  comptroller  notified  the  district 
attorney  and  that  the  proceedings  were  commenced  in  good  faith  furnishes  no 
evidence  as  to  the  facts  and  circumstances  from  which  the  court  may  form  an 
opinion  as  to  the  existence  of  probable  cause.  In  re  McCarthy,  5  Misc.  Rep. 
276,  25  N.  Y.  Suppl.  987. 

3  Where  the  treasurer  in  his  original  application  claims  a  tax  of  three  per  cent 
after  the  expiration  of  the  period  within  which  the  right  to  sue  for  the  tax  is 
limited  the  application  may  be  amended  by  asking  that  the  tax  be  computed  at 
different  rates  depending  on  the  finding  of  the  court  as  to  the  facts,  as  this  amend- 
ment does  not  set  up  a  new  or  different  cause  of  action  but  merely  corrects  the 
statement  in  the  original  application  as  to  the  rate  at  which  the  tax  should  be 
computed.     Connell  v.  Crosby,  210  111.  380,  71  N.  E.  350. 

[Notice  to  parties,  see  ante,  ss.  71,  72.] 

Sec.  405.    Tax  Officials  Joined  in  Litigation  between  Other 
Parties. 

The  state  comptroller  in  New  York  is  not  a  necessary  party  to 
an  action  for  the  specific  performance  of  an  ante-nuptial  contract.^ 
Where  an  executor  in  Massachusetts  was  sued  by  a  legatee  for  his 
legacy,  the  executor  had  the  state  treasurer  summoned  in  as  a 
party  to  settle  the  inheritance  tax,  and  the  treasurer  withdrew  his 
objection  to  being  brought  in.^ 

1  In  re  Kidd,  115  N.  Y.  App.  Div.  205,  100  N.  Y.  Suppl.  917,  reversed  on 
another  point  in  188  N.  Y.  274,  80  N.  E.  924. 

^  Essex  V.  Brooks,  164  Mass.  79,  41  N.  E.  119. 

Subrogation  of  Corporation  Paying  Taxes. —  In  those  states  where  the 
corporation  becomes  liable  when  it  permits  a  transfer  of  stock  without  the  pay- 
ment of  taxes,  it  would  seem  possible  that  a  corporation  would  have  a  right  of 
action  over  against  the  estate  liable  for  the  tax,  although  no  cases  on  this  sub- 
ject have  yet  been  reported.  An  action  of  quasi-contract  might  possibly  lie,  or 
recovery  might  be  had  on  the  ground  of  suppression  of  facts  by  the  executors 
on  transfer.  For  cases  somewhat  analogous,  see  Dana  v.  Colby,  63  N.  H.  169; 
Ede  Company  v.  Heywood,  153  Cal.  615. 


CHAPTER  XLIV. 


LIEN. 

§  406.  Real  Estate. 

§  407.  Lien  on  Whole  Property  where  Life  Tenancy  and  Remainder 

Exists. 

§  408.  Priority   as  against  Mortgage. 

§  409.  Effect  of  Partition. 

§410.  EflEect  of  Judicial  Sale. 

§  411.  No  Personal  Liability  on  Purchaser. 

Sec.  406.    Real  Estate. 

The  lien  on  real  estate  may  be  confined  to  realty  specifically^ 
devised,  but  is  usually  expressly  provided  otherwise  by  the  statute. 

Brown  v.  Lawrence  Park  Realty  Co.,  133  N.  Y.  App.  Div.  753, 118  N.  Y.  Suppl. 
132.     (Direction  in  will  to  sell  land  to  pay  legacies  avoids  lien  on  land.) 

Sec.  407.    Lien  on  Whole  Property  where  Life  Tenancy  and 
Remainder  Exists. 

Where  real  estate  was  left  to  a  life  tenant  with  remainder  to  the 
brothers  and  sisters  who  survived,  with  a  contingent  remainder 
over,  the  court  holds  that  the  property  is  subject  to  a  lien  for  the 
payment  of  the  whole  tax,  and  that  if  there  is  no  money  forth- 
coming to  pay  the  whole  tax,  it  is  the  duty  of  the  executor  to  pay  it.  j 
And  the  court  directs  the  sale  of  so  much  of  the  whole  of  that 
property  as  may  be  necessary  to  raise  the  fund  to  pay  the  whole 
tax. 

In  re  Wilcox,  118  N.  Y.  Suppl.  254. 

Sec.  408.     Priority  as  against  Mortgage. 

On  the  foreclosure  of  a  mortgage  where  the  mortgagor  has  died, 
the  lien  of  the  transfer  tax  under  the  New  York  act  of  1892,  although 
subordinate  to  the  mortgage,  still  cannot  be  wiped  out,  as  the 
statutes  give  the  mortgagee  no  right  to  make  the  state  a  party  to 
the  foreclosure  proceedings;  and  therefore  the  mortgagee  cannot 
tender  a  title  which  a  purchaser  is  bound  to  take. 


§§409-410.]  LIEN.  295 

Kitching  v.  Shear,  26  Misc.  Rep.  (N.  Y.)  436,  57  N.  Y.  Suppl.  464. 

"This  lien,  however,  was  not  paramount  to  the  lien  of  the  mortgage,  which 
was  in  existence  prior  to  the  decease  of  the  testatrix.  So  far  as  the  mortgagee 
is  concerned,  his  rights  could  not  well  be  impaired  by  subsequent  devolutions 
of  the  title  and  the  creation  of  liens  associated  therewith.  The  tax  in  question 
is  not  to  be  assimilated  with  the  general  taxes  which  are  imposed  by  public  au- 
thority, and  which  attach  to  property  affected  thereby  as  a  whole,  and  without 
discrimination  with  respect  to  particular  estates  or  interests  therein.  The  right 
of  the  state  in  such  cases  is  always  paramount.  It  is  not  concerned  with  the 
particular  estates  or  liens  which  affect  the  property,  but,  dealing  with  it  as  a 
whole,  imposes  the  tax,  leaving  it  to  the  parties  interested  in  the  property  to 
secure,  as  between  themselves,  such  an  adjustment  of  the  burden  as  the  circum- 
stances of  the  case  may  seem  to  require.  But  in  the  case  of  the  transfer  tax  a 
different  condition  exists.  It  is  imposed  upon  the  right  of  succession,  and  is 
levied  upon  successors  in  respect  to  the  shares  to  which  they  succeed.  In  re 
Hoffman,  143  N.  Y.  327,  331,  38  N.  E.  311.  In  no  sense,  then,  can  the  tax  be 
deemed  to  affect  the  interest  of  one  who  had  a  lien  upon  the  property  which  was 
paramount  to  the  ownership  of  the  testatrix,  and  therefore  superior  to  any  estate 
or  interest  which  the  testatrix  might  assume  to  create  in  the  property."  Per 
Beekman,  J.,  in  Kitching  v.  Shear,  26  Misc.  Rep.  436,  57  N.  Y.  Suppl.  464. 

Sec.  409.    Effect  of  Partition. 

Where  the  decedent  owned  an  undivided  third  of  an  entire  tract 
of  land,  partition  of  his  interest  could  not  have  the  effect  of  appor- 
tioning the  Hen  and  fixing  a  part  thereof  exclusively  on  any  one  lot. 

Appeal  of  Mellon,  114  Pa.  St.  564,  574,  8  A.  183. 

Sec.  410.     Effect  of  Judicial  Sale. 

The  lien  for  the  tax  should  not  prevent  the  saie  of  realty  by  the 
court,  as  the  lien  may  be  transferred  to  the  proceeds  of  the  sale.^ 
In  a  Pennsylvania  case  the  intestate  died  leaving  real  estate, 
which  was  apportioned  among  his  collateral  heirs  after  his  death. 
Subsequently  the  share  of  one  of  the  heirs  was  sold  by  judicial 
sale  to  satisfy  debts  and  liens  against  the  heir;  and  the  court 
holds  that  the  lien  of  the  whole  of  the  collateral  inheritance  tax 
on  the  whole  of  the  land  was  satisfied  and  discharged  by  this  sale, 
inasmuch  as  the  money  realized  from  the  sale  was  more  than  suffi- 
cient to  have  paid  the  tax  lien,  and  should  have  been  so  applied. 
The  fact  that  the  amount  of  the  lien  had  not  been  ascertained  to 
have  been  fixed  cannot  affect  the  result.^ 

^  As  the  proceeds  arising  from  the  sale  either  are  now  in  court  or  will  be  paid 
into  court  and  will  in  any  event  be  subject  to  the  order  of  the  court,  the  objec- 
tion is  without  merit.  The  Ijen  of  the  state  is  against  the  property  of  the  dece- 
dent and  will  first  be  satisfied  out  of  any  personal  estate  left  by  him  and  if  this 


296  INHERITANCE  TAX  LAW.  [§411 

sum  is  not  sufficient  then  the  real  estate  may  be  subjected  to  the  payment  of 
this  claim  of  the  state,  and  the  trial  court  can  make  such  order  with  the  entire 
estate  under  its  control  as  is  necessary  to  satisfy  any  claim  of  the  state  against 
the  estate  for  taxes,  inheritance  or  otherwise.  Mandel  v.  Fidelity  Trust  Co.,  128 
Ky.  239,  32  Ky.  L.  Rep.  1104,  107  S.  W.  775. 
^Appeal  of  Mellon,  114  Pa.  St.  574,  8  A.  183. 

Sec.  411.    No  Personal  Liability  on  Purcliaser. 

One  who  buys  land  subject  to  the  lien  of  the  inheritance  tax 
may  incur  no  personal  liability  on  account  of  the  tax.  The  Hen 
can  be  enforced  against  the  land,  but  no  personal  judgment  can 
be  rendered  against  him  therefor.^ 

The  court  suggests  that  the  statute  should  provide  a  lien  on 
property  not  extending  to  an  innocent  purchaser  for  value  without 
notice.^ 

1  Wilhelmi  v.  Wade,  65  Mo.  39  (under  the  United  States  act  of  1864). 

2  In  re  McKennan,  25  S.  D.  369,  126  N.  W.  611  (reversed  on  rehearing,  130 
N.  W.  33). 


-I 

11 


CHAPTER  XLV. 


PAYMENT. 

§  412.     Pecuniary  Legacies. 
§  413.     Form  of  Receipts. 

[As  to  time  of  payment  see  further,  ante,  s.  299  et  seq.] 

Sec.  412.     Pecuniary  Legacies. 

In  the  case  of  a  money  legacy  the  tax  may  be  deducted  from  it 
and  the  balance  paid  to  the  legatee. 

In  re  Hoyt,  37  Misc.  720,  76  N.  Y.  Suppl.  504. 

Sec.  413.     Form  of  Receipts. 

The  receipts  should  not  be  so  framed  in  California  as  to  bind 
the  state  or  conclude  its  right  to  have  the  question  reviewed  on 
appeal.  The  receipt  should  be  only  for  so  much  money  on  account 
of  the  tax. 

Becker  v.  Nye,  8  Cal.  App.  129,  96  P.  333. 


CHAPTER  XLVI. 


REFUNDING  TO  TAXPAYER. 

§  414.  What  Law  Governs. 

§  415.  When. 

§  416.  Proceedings. 

§  417.  Interest. 

§  418.  Defences.  —  Stoppel  and  Limitation. 

Sec.  414.    What  Law  Governs. 

The  right  to  obtain  a  refund  of  a  tax  is  governed  by  the  law 
in  effect  at  the  time  that  the  proceeding  is  commenced,  and  not  by 
the  law  in  force  at  the  death  of  the  testator. 

In  re  Coogan,  27  Misc.  Rep.  563,  59  N.  Y.  Suppl.  111. 

Sec.  415.    When. 

Taxes  computed  on  a  mistaken  construction  of  law  ^  or  paid  as  a 
temporary  payment^  should  be  refunded.  Money  paid  by  executors 
on  a  life  estate,  in  ignorance  of  the  fact  that  the  life  estate  had 
been  terminated  by  death,  may  be  recovered  back  by  the  executors 
as  paid  under  a  mistake  of  fact.  This  is  not  a  voluntary  payment, 
as  to  constitute  a  voluntary  payment  it  must  be  made  with  full 
knowledge  of  all  the  facts  and  circumstances.^  Where  a  benefi- 
ciary under  misconception  of  the  law  advanced  the  money  to  pay 
more  than  was  really  chargeable  to  him,  and  where  the  property 
is  sold  for  the  tax,  he  is  subrogated  to  the  rights  of  the  state  and 
should  be  repaid  what  he  has  erroneously  paid.* 

1  Sherman  v.   United  States,  178  U.  S.  150,  152,  20  Sup.  Ct.  779. 

2  In  re  Skinner,  106  N.  Y.  App.  Div.  217,  94  N.  Y.  Suppl.  144,  modifying  92 
N.  Y.  Suppl.  972. 

3  Kahn  v.  Herold,  147  Fed.  575,  affirmed  in  86  C.  C.  A.  598,  159  Fed.  608, 
163  Fed.  947  (under  U.  S.  St.  1898). 

4  In  re  Wilcox,  118  N.  Y.  Suppl.  254. 

Sec.  416.    Proceedings. 

Refunding  should  be  accomplished  under  proceedings  expressly 
provided  by  statute,^  only  by  an  official  authorized  by  law,^  or 
as  an  incident  of  an  order  vacating  a  tax,^  and  may  be  ordered 


§  417.]  REFUNDING  TO  TAXPAYER.  299 

even  though  no  appeal  from  the  imposition  of  the  tax  was  taken.'* 
The  tax  may  be  paid  under  protest  and  then  action  brought  for 
refunding,^  or  refunding  may  be  compelled  by  mandamus.  Where 
the  New  York  statute  of  1896,  section  225,  as  amended  by  the 
New  York  statute  of  1897,  chapter  284,  provides  that  if  the  sur- 
rogate modifies  or  reverses  his  order  fixing  the  tax,  the  state  comp- 
troller shall  by  order  direct  and  allow  the  refunding  of  the  tax,  a 
mandamus  is  the  proper  proceeding  to  compel  the  state  comptroller 
to  make  the  refund.® 

1  In  re  Sherar,  25  Misc.  138,  54  N.  Y.  Suppl.  930,  2  Gibbons  28.  Thacher  v. 
United  States,  149  Fed.  902. 

The  act  of  1887  provides  a  simple  proceeding  for  the  reimbursement  of  money 
paid  for  an  inheritance  tax  and  was  intended  to  be  exclusive  for  this  object,  and 
therefore  the  taxpayer  has  no  rights  under  section  1323  of  the  code  authorizing 
the  appellate  court  in  reversing  a  judgment  to  make  restitution  of  property  lost 
by  judgment.  In  re  Howard,  54  Hun  305,  7  N.  Y.  Suppl.  594.  In  re  Hall, 
54  Hun  637,  7  N.  Y.  Suppl.  595. 

2  People  V.  Griffith,  245  111.  532,  543,  92  N.  E.  313  (state  and  not  county  treas- 
urer). See  In  re  Park,  8  Misc.  Rep.  550,  29  N.  Y.  Suppl.  1081  (surrogate  may 
order  county  treasurer  to  refund  under  the  act  of  1892). 

^  The  surrogate  may  refuse  to  insert  in  an  order  vacating  an  assessment  a 
direction  to  the  state  comptroller  to  refund  the  amount  of  the  tax.  Such  an 
order  is  entirely  proper  but  is  not  essential,  as  the  statute  itself  commands  the 
state  comptroller  to  direct  the  treasurer  of  the  county  or  the  comptroller  of  the 
city  of  New  York  to  refund.  In  re  Cameron,  181  N.  Y.  560,  74  N.  E.  1115, 
affirming  97  N.  Y.  App.  Div.  436,  89  N.  Y.  Suppl.  977. 

*  In  re  Sherar,  25  Misc.  Rep.  138,  54  N.  Y.  Suppl.  930,  2  Gibbons,  28. 

^  The  tax  was  paid  on  demand  under  written  protest  giving  the  grounds  for 
refusal  in  Knowlton  v.  Moore,  the  case  arising  under  the  United  States  revenue 
act,  the  testator  being  domiciled  in  New  York  state.  On  denial  of  a  petition 
for  refunding  action  was  brought  in  the  U.  S.  circuit  court.  Knowlton  v.  Moore, 
178  U.  S.  41,  20  S.  Ct.  747,  44  L.  Ed.  969. 

6  In  re  Coogan,  27  Misc.  Rep.  563,  59  N.  Y.  Suppl.  111. 

Sec.  417.     Interest. 

The  refunding  of  a  tax  carries  interest  on  the  amount  refunded,^ 
as  in  case  of  taxes  paid  under  an  unconstitutional  statute.^ 

1  In  re  Wilcox,  118  N.  Y.  Suppl.  254.  Contra,  Wieting  v.  Morrow,  (Iowa  1911,) 
132  N.  W.  193,  denying  the  right  to  interest  unless  expressly  ordered  by  statute. 

Interest  may  be  allowed  in  a  suit  to  recover  legacy  taxes  paid,  as  it  is  not  in 
form  an  action  against  the  United  States.  Kinney  v.  Conant,  166  Fed.  720,  92 
C.  C.  A.  410. 

2  In  re  Wood,  91  N.  Y.  App.  Div.  3,  86  N.  Y.  Suppl.  269. 

"The  tax  in  question  was  imposed  and  collected  by  the  state  under 
color   of   a    law   that   was   absolutely    void.        It    was   a    void    tax  and    not 


300 


INHERITANCE  TAX  LAW. 


[§418. 


merely  voidable  for  some  irregularity  or  error,  and  had  no  support  except  an 
unconstitutional  statute.  Such  a  law  is  simply  void.  It  confers  no  rights, 
imposes  no  duties,  confers  no  power,  and  in  legal  contemplation  is  as  inoperative, 
for  any  purpose,  as  if  it  had  never  been  passed."  Per  O'Brien,  J.  Therefore 
the  only  question  for  the  court  is  whether,  the  comptroller  having  received  the 
money  without  right  and  used  it  for  the  purposes  of  the  state  under  a  promise 
to  refund,  it  was  properly  charged  by  the  court  with  interest.  The  court  holds 
that  as  the  state  has  promised  to  refund  the  tax  the  obligation  to  refund 
money  received  and  retained  without  right  implies  and  carries  with  it  the  right 
to  interest,  although  section  225  makes  no  mention  of  interest  while  section  256 
relating  to  the  repayment  of  illegal  or  excessive  taxes  expressly  provides  for  the 
payment  of  interest.  In  re  O'Berry,  179  N.  Y.  285,  287,  72  N.  E.  109,  affirming 
91  N.  Y.  App.  Div.  3. 


Sec.  418.    Defences.  —  Estoppel  and  Limitations. 

One  may  be  estopped  from  claiming  a  refund,^  or  barred  by 
limitations,^  although  a  general  statute  of  limitations  may  not  be 
a  bar.^ 

^  Where  a  person  was  named  as  a  life  tenant  in  a  will  who  really  was  the  owner 
of  the  property  under  a  deed  in  his  possession  and  he  testifies  that  he  is  only  a 
life  tenant  and  does  not  disclose  his  ownership  under  the  deed  and  pays  the  tax 
as  life  tenant,  the  surrogate  court  eight  years  later  refuses  to  allow  a  refunding 
of  the  tax.     In  re  Mather,  41  Misc.  Rep.  414,  84  N.  Y.  Suppl.  1105. 

2  An  illegal  tax  was  paid  in  November,  1895,  and  the  law  then  in  force,  the 
statute  of  1892,  gave  the  taxpayer  five  years  in  which  to  apply  for  a  refund  of 
any  part  of  the  transfer  tax.  This  period  had  not  expired  when  the  statute  of 
1897,  c.  284,  went  into  effect,  apparently  providing  for  an  unlimited  period  in 
which  to  apply  for  a  modification  or  reversal  of  the  original  order  but  requiring 
the  application  for  the  refund  to  be  made  within  one  year  after  such  modification 
or  reversal.  N.  Y.  St.  1900,  c.  382,  limited  the  period  within  which  both  the 
application  for  modification  or  reversal  and  for  a  refund  must  be  made  to  two 
years.  The  taxpayer  applied  to  the  surrogate  in  October,  1903,  for  an  order 
modifying  the  original  order  which  fixed  the  transfer  tax  and  the  court  holds  that 
under  section  6,  article  7,  of  the  state  constitution,  which  provides  that  "neither 
the  legislature,  the  canal  board  nor  any  person  or  persons  acting  In  behalf  of 
the  state  shall  audit,  allow  or  pay  any  claim  which,  as  between  citizens  of  the 
state,  would  be  barred  by  lapse  of  time,"  it  seems  clear  that  the  comptroller  could 
not  have  audited,  allowed  or  paid  this  claim  even  if  the  two  years  limitation  in 
the  statute  of  1900  did  not  apply.  While  it  is  to  be  observed,  moreover,  that  the 
statute  of  1900,  with  its  two  years  limitation,  is  to  be  treated  as  purely  prospective, 
the  same  test  must  be  applied  to  the  act  of  1897,  in  which  event  the  respondent 
is  relegated  to  the  statute  of  1892  with  its  five  years  limitation  which  had  elapsed 
by  more  than  three  years  before  he  sought  relief.  In  re  Hoople,  179  N.  Y.  308, 
313,  72  N.  E.  229,  reversing  93  N.  Y.  App.  Div.  486,  87  N.  Y.  Suppl.  842. 

3  In  re  Sherar,  25  Misc.  Rep.  138,  54  N.  Y.  Suppl.  930,  2  Gibbons  28. 


INHERITANCE  TAX  LAW. 


STATUTES    ANNOTATED, 


i 


STATUTES  ANNOTATED. 
ALABAMA. 


^V  In  General. 

Alabama  had  a  collateral  inheritance  tax  on  personal  property 
only  from  1848  to  1868.  The  constitution  of  1901  forbids  a  direct 
inheritance  tax,  and  limits  any  collateral  inheritance  tax  that  may 
be  enacted  to  2J/^  per  cent.  No  inheritance  tax  law  has  been 
enacted  since  the  adoption  of  this  constitution. 

Constitutional  Limitations. 
Alabama  Constitution,  1901,  s.  219. 

The  legislature  may  levy  a  tax  of  not  more  than  two  and  one-half  per  centum 
of  the  value  of  all  estates,  real  and  personal,  money,  public  and  private  securities 
of  every  kind,  in  this  state  passing  from  any  person  who  may  die  seized  and 
possessed  thereof,  or  of  any  part  of  such  estate,  money  or  securities,  or  interest 
therein  transferred,  by  the  intestate  laws  of  this  state  or  by  will,  deed,  grant, 
bargain,  sale  or  gift,  made  or  intended  to  take  effect  in  possession  after  death 
of  the  grantor,  devisor  or  donor,  to  any  person  or  persons,  bodies  politic  or  corpor- 
ate, in  trust  or  otherwise,  other  than  to  or  for  the  use  of  the  father,  mother, 
husband,  wife,  brothers,  sisters,  children  or  lineal  descendants  of  the  grantor- 
devisor,  donor  or  intestate. 

List  of  Statutes. 

1847-48.     No.  1,  s.  86. 
1849-50.     No.  1,  s.  1. 
1862.     No.  1,  ss.  2,  24. 
1864.     No.  63,  64. 
1865-66.     No.  1,  ss.  2,  3. 
1866-67.     No.  260,  ss.  2,  4. 
Code  of  1867.     ss.  434,  436. 
1868.     No.  1. 

The  Early  Statutes. 

Ala.  St.  1847-48,  No.  1,  s.  86,  imposed  a  tax  of  two  per  cent  on 
all  gifts  by  will  of  personal  or  real  property  to  any  person  other  than 
the  child,  grandchild,  brother  or  sister,  children  or  wife  of  the 
testator;  and  provided  further  that  the  executor  should  pay  the 
tax  before  distribution. 

Ala.  St.  1849-50,  No.  1,  s.  1,  p.  7,  imposed  a  tax  of  two  dollars 
on  every  •  one  hundred  dollars  of  the  amount  of  any  legacy  or 


304  STATUTES  ANNOTATED.  [Ala.  St- 

bequest  to  any  person  other  than  to  the  child,  adopted  child, 
grandchild,  brother,  sister,  wife  or  husband,  father  or  mother.  The 
statutes  further  imposed  a  tax  of  two  dollars  on  every  one  hundred 
dollars  of  the  amount  of  property  received  by  deed  of  gift  to  any 
person  or  corporation  other  than  to  a  child,  adopted  child,  grand- 
child, brother,  sister,  mother  or  father. 

Ala.  St.  1851-52,  c.  1,  of  the  revenue  act  contains  no  reference 
to  inheritance  taxes. 

Ala.  St.  1853-54,  No.  1,  for  the  assessment  of  the  revenue  taxes 
contains  no  reference  to  inheritance  taxes. 

Ala.  St.  1855-56,  Ala.  St.  1857-58,  Ala.  St.  1859-60,  contain 
no  revenue  nor  inheritance  tax  statute. 

Ala.  St.  1862,  No.  1,  s.  2,  par.  26,  provides  a  tax  of  five  per  cent 
on  every  legacy  on  which  letters  testamentary  have  not  been  taken 
out  in  Alabama  received  by  any  person  other  than  the  child, 
adopted  child,  grandchild,  brother,  sister,  father,  mother,  husband 
or  wife,  and  on  all  property  given  by  deed  or  otherwise  to  any  such 
person. 

Ala.  St.  1862,  No.  1,  s.  24,  provides  a  tax  of  five  per  cent  on  every 
legacy  on  which  letters  testamentary  are  taken  out  in  this  state. 

Ala.  St.  1864,  No.  63,  provides  an  additional  tax  of  fifty  per  cent 
on  all  taxes  now  imposed  and  on  all  present  subjects  of  taxation. 

Ala.  St.  1864,  No.  64,  s.  1,  imposes  an  additional  tax  of  thirty- 
three  and  one-third  per  cent  on  all  subjects  of  taxation  embraced 
in  the  revenue  act  of  1862. 

Ala.  St.  1865-66,  No.  1,  s.  2,  par.  10,  imposes  a  tax  of  three  per 
cent  on  every  legacy  where  letters  testamentary  have  not  been 
taken  out  in  Alabama,  received  by  any  person  other  than  the 
child,  adopted  child,  brother,  sister,  father,  mother,  husband  or 
wife,  and  on  all  property  given  by  deed  or  otherwise  to  any  such 
person  on  the  amount  or  value  thereof. 

Ala.  St.  1865-66,  No.  1,  s.  3,  par.  1,  provides  a  tax  of  one 
and  one-half  per  cent  on  every  legacy  subject  to  assessment  left  by 
any  will  on  which  letters  testamentary  are  taken  out  in  Alabama. 

Ala.  St.  1866-67,  No.  260,  s.  2,  par.  9,  provides  a  tax  on  every 
legacy  where  letters  testamentary  have  not  been  taken  out  in 
Alabama,  received  by  any  person  other  than  the  child,  adopted 
child,  grandchild,  brother,  sister,  father,  mother,  husband,  wife, 
and  on  all  property  given  by  deed  or  otherwise  to  any  such  person, 
on  the  amount  or  value  thereof,  to  be  assessed  to  the  beneficiary, 
guardian,  trustee  or  legal  representative  at  the  rate  of  three  per  cent. 


Ala.  St.]  ALABAMA.  305 

Ala.  St.  1866-67,  No.  260,  s.  4,  par.  1,  imposes  a  tax  on  every 
legacy  subject  to  assessment,  unless  letters  testamentary  are  taken 
out  in  Alabama,  of  one  and  one-half  per  cent. 

Ala.  Code,  1867,  c.  3,  a.  2,  s.  434,  par.  9,  provides  a  tax  on  every 
legacy  where  letters  testamentary  have  not  been  taken  out  in 
Alabama  received  by  any  person  other  than  the  child,  adopted  child, 
grandchild,  brother,  sister,  father,  mother,  husband  or  wife,  and 
on  all  property  given  by  deed  or  otherwise  to  any  such  person,  of 
three  per  cent. 

Ala.  Code,  1867,  s.  436,  imposes  a  tax  on  every  legacy  subject  to 
assessment  on  which  letters  testamentary  are  taken  out  in  Alabama, 
of  one-half  of  one  per  cent. 

Ala.  St.  1868,  No.  1,  p.  297,  revenue  law,  omits  any  reference 
to  the  inheritance  tax. 


ALASKA. 


The  Alaskan  Organic  law  contains  no  reference  to  an  inheritance 
tax  or  uniformity  of  taxation.  See  Thorpe,  American  Charters, 
Constitutions  and  Organic  Laws,  Vol.  1,  pp.  235,  et  seq. 

There  is  no  inheritance  tax  at  present  in  Alaska. 


ARIZONA. 


In  General. 

Arizona  has  no  inheritance  tax  and  has  never  had  an  inheritance 
tax. 

Proposed  Constitution. 
Constitution  of  1911,  a.  9. 

S.  1.  The  power  of  taxation  shall  never  be  surrendered,  suspended  or  con- 
tracted away.  All  taxes  shall  be  uniform  upon  the  same  class  of  property  within 
the  territorial  limits  of  the  authority  levying  the  tax  and  shall  be  levied  and 
collected  for  public  purposes  only. 

S.  12.  The  law-making  power  shall  hav^e  authority  to  provide  for  the  levy  and 
collection  of  license,  franchise,  gross  revenue,  excise  income,  collateral  and  direct 
inheritance,  legacy  and  succession  taxes,  also  graduated  income  taxes,  graduated 
collateral  and  direct  inheritance  taxes,  graduated  legacy  and  succession  taxes, 
stamp,  registration,  production  or  other  specific  taxes. 


306  STATUTES  ANNOTATED.  [Ark  St. 


ARKANSAS. 


In  General. ' 

Arkansas  adopted  a  collateral  inheritance  tax  in  1901  and  ex- 
tended the  tax  to  direct  inheritances  in  1907.  The  attorney  general 
has  ruled  that  the  exemptions  apply  to  the  estate  as  a  whole,  not  to 
the  individual  shares. 

We  are  advised  by  the  attorney  general's  office  that  shares  of 
stock  in  an  Arkansas  corporation  owned  by  a  non-resident  decedent 
and  passing  to  a  non-resident  beneficiary  are  subject  to  the  inherit- 
ance tax,  as  being  property  within  the  jurisdiction  of  the  state  of 
Arkansas,  on  the  ground  that  as  the  domicile  of  the  corporation 
is  in  Arkansas  and  its  capital  stock  is  taxable  in  Arkansas,  any  of 
that  stock  owned  by  a  decedent,  whether  a  resident  or  a  non-resident, 
would  be  liable  to  a  succession  tax. 

On  the  other  hand,  the  tax  commissioner  of  Connecticut  is 
officially  informed  that  Arkansas  does  not  tax  shares  of  stock  in 
Arkansas  corporations  owned  by  non-resident  decedents  when 
such  shares  of  stock  were  physically  out  of  the  state  on  the  date 
of  the  death  of  the  decedent,  and  for  that  reason  has  ruled  that 
the  retaliative  provision  of  the  Connecticut  law  does  not  apply 
to  residents  of  Arkansas.  The  usual  provision  holding  the  corpora- 
tions responsible  for  the  collection  of  the  tax  is  not  found  in  the 
Arkansas  statutes,  and  it  contains  no  specific  reference  to  the 
property  of  non-residents.  The  tax  has  been  producing  less  than 
$1,000  per  year. 

List  of  Statutes. 

1901.     Statutes  of  Arkansas,  act  156,  p.  295. 
1903.  "         "  "        act  89,    p.  153. 

1907.  "         "  "        act  345,  p.  832. 

1909.  '•         "  •'        act  303,  p.  904. 

Kirby's  digest  of  the  statutes  (1901),  ss.  244  to  253. 
"       "     '•  "       (1903),  ss.  242,  243. 

Constitutional  Limitations. 
Arkansas  Constitution,  1874,  a.  16,  s.  5. 

All  property  subject  to  taxation  shall  be  taxed  according  to  its  value;  that  value 
to  be  ascertained  in  such  manner  as  the  general  assembly  shall  direct,  making  the 


.1 


1901,  c.  156.]  ARKANSAS.  307 

same  equal  and  uniform  throughout  the  state.  No  one  species  of  property,  from 
which  a  tax  may  be  collected,  shall  be  taxed  higher  than  another  species  of  property 
of  equal  value:  Provided,  the  general  assembly  shall  have  power,  from  time  to 
time,  to  tax  hawkers,  pedlers,  ferries,  exhibitions  and  privileges  in  such  manner 
as  may  be  deemed  proper:  Provided  further,  that  the  following  property  shall 
be  exempt  from  taxation:  Public  property  used  exclusively  for  public  purposes, 
churches  used  as  such,  cemeteries  used  exclusively  as  such,  school  buildings  and 
apparatus,  libraries  and  grounds  used  exclusively  for  school  purposes,  and  build- 
ings and  grounds  and  materials  used  exclusively  for  public  charity. 


STATUTES. 

Ark.  St.  1901,  c.  156.     Approved  May  23,  1901. 

S.  1.  All  property  within  the  jurisdiction  of  this  state,  and  any  interest 
therein,  whether  belonging  to  inhabitants  of  this  state  or  not,  and  whether 
tangible  or  intangible,  which  shall  pass  by  will  or  by  the  intestate  laws  of  this 
state,  or  by  deed,  grant,  sale  or  gift,  made  or  intended  to  take  effect  in  possession 
after  the  death  of  the  grantor,  to  any  person  or  corporation  in  trust  or  otherwise, 
other  than  to  or  for  the  use  of  the  father,  mother,  husband,  wife,  lineal  descendant, 
adopted  child  and  the  lineal  descendants  of  an  adopted  child  of  decedent,  shall 
be  liable  to  a  tax  of  five  (5)  per  centum  of  its  value  for  the  use  of  the  state;  and 
all  executors,  administrators  and  other  trustees,  and  any  such  grantee  under  a 
conveyance  made  during  the  grantor's  life,  shall  be  liable  for  all  such  taxes,  with 
interest  until  the  same  shall  have  been  paid  as  hereinafter  directed. 

Section  2  provides  for  the  appraisal  of  estates  in  remainder  to 
collaterals  within  sixty  days  after  the  death  of  the  testator,  and 
the  payment  of  the  tax  within  one  year.  Section  3  provides  for  a 
tax  on  a  gift  to  an  executor  or  trustee  above  reasonable  compensa- 
tion for  his  services.  Section  4  provides  that  taxes  shall  be  paya- 
ble one  year  from  the  death  of  testator  with  interest  at  nine  per 
cent  from  that  time.  The  remaining  sections  provide  for  the 
collection  of  the  tax. 

Ark.  St.  1903,  c.  89,  approved  March  20,  1903,  amends  Ark.  St. 
1901  by  exempting  from  the  tax  the  grandmother,  grandfather, 
brother  and  sister  or  any  child  thereof  of  the  decedent. 

Ark.  St.  1907,  c.  345,  approved  May  17,  1907,  amended  the 
existing  law  by  providing  a  tax  of  one  per  cent  on  lineals  and 
brother  and  sister  with  an  exemption  as  follows:  "Provided,  that 
any  estate  which  may  be  valued  at  a  less  sum  than  $20,000  shall 
not  be  subject  to  any  such  tax,  the  excess  over  such  sum  only  being 
taxable."  The  tax  on  collaterals  except  brother  and  sister  is  two 
per  cent  on  the  value  of  property  in  excess  of  $5,000.  In  all  other 
cases  the  rate  is  three  per  cent  on  all  estates  of  $10,000  or  less; 


308  STATUTES  ANNOTATED.  [Ark.  St. 

four  per  cent  on  estates  of  $10,000  to  $20,000;  five  per  cent  on 
estates  of  $20,000  to  $50,000,  "provided  that  an  estate  not  exceed- 
ing $2,000  in  value  shall  not  be  subject  to  tax." 

Ark.  St.  1909,  c.  303,  was  approved  and  went  into  force  May  31, 
1909,  and  provided  an  entirely  new  act  throughout. 

THE  PRESENT  ACT. 

Ark.  St.  1909,  c.  303.    Approved  May  31,  1909. 

An  Act  to  impose  a  tax  based  upon  the  rights  of  succession 
to  gifts,  legacies  and  inheritances  in  certain  cases,  and  to  provide  for  the 
collection  of  such  taxes. 

Transfers  Taxable. 

S.  1.  All  property  within  the  jurisdiction  of  this  state,  and  any  interest  therein, 
whether  belonging  to  inhabitants  of  this  state  or  not,  or  whether  tangible  or 
intangible,  which  shall  pass  by  will  or  by  the  intestate  laws  of  this  state,  or  by 
deed,  grant,  sale  or  gift  made  or  intended  to  take  effect  in  possession  after  the 
death  of  the  grantor  to  any  person  or  corporation  in  trust  or  otherwise,  shall  be 
liable  to  tax  for  the  use  of  the  state  at  the  rate  hereinafter  specified. 

Liabilities. —  Lien. —  Limitations. 

S.  2.  All  executors,  administrators  and  other  trustees,  and  all  heirs  or  benefi- 
ciaries taking  under  a  will  or  by  virtue  of  the  intestate  laws,  and  any  such  grantee 
under  a  conveyance  made  during  the  life  of  the  grantor,  shall  be  liable  for  all 
such  taxes,  with  interest,  until  the  same  shall  have  been  paid  as  herein  provided. 
And  said  tax  shall  be  and  continue  a  lien  upon  the  property  chargeable  therewith 
until  paid  to  the  state;  provided,  that  all  inheritance  taxes  shall  be  sued  for 
within  five  years  after  they  are  due  and  legally  demandable,  otherwise  they  shall 
be  presumed  to  be  paid  and  cease  to  be  a  lien  as  against  any  purchasers  of  real 
estate. 

Rates. 

S.  3.  When  the  property  or  any  interest  therein  shall  pass  to  a  grandfather, 
grandmother,  father,  mother,  husband,  wife,  lineal  descendant,  brother,  sister,  or 
any  adopted  child,  in  every  such  case  the  rate  of  tax  shall  be  one  dollar  on  every 
hundred  dollars  of  the  clear  market  value  of  such  property  received;  provided, 
that  any  estate  which  may  be  valued  at  a  less  sum  than  five  thousand  dollars 
($5,000)  shall  not  be  subject  to  any  tax,  the  excess  over  such  sum  only  being  taxed. 

S.  4.  When  the  property  or  any  interest  therein  shall  pass  to  any  uncle,  aunt, 
niece,  nephew,  or  any  lineal  descendant  of  the  same,  in  every  such  case  the  rate 
of  tax  shall  be  two  dollars  on  every  one  hundred  dollars  of  the  clear  market  value 
of  such  property  received,  in  excess  of  the  sum  of  $2,000. 

S.  5.  In  all  other  cases  the  rate  shall  be  as  follows:  On  each  and  every  one 
hundred  dollars  of  the  clear  market  value  of  all  property  and  at  the  same  rate 
for  any  less  amount,  on  all  estates  of  $10,000  and  less,  $3.00;  on  all  estates  of 
over  $10,000  and  not  exceeding  $20,000,  $4.00;  on  all  estates  of  over  $20,000 
and  not  exceeding  $50,000,  $5.00;  on  all  estates  exceeding  $50,000,  $6.00;  pro- 
vided, that  an  estate  of  not  exceeding  $1,000  in  value  shall  not  be  subject  to  tax. 


1909,  c.  303.]  ARKANSAS.  309 

Particular  Estates  and  Remainders. 

S.  6.  When  any  person  shall  bequeath  or  devise  any  property  tc  or  for  the 
use  of  grandfather,  grandmother,  father,  mother,  husband,  wife,  lineal  descendant, 
brother,  sister,  or  any  child  thereof,  an  adopted  child  or  any  heir  of  an  adopted 
child,  or  any  lineal  descendant  thereof,  during  life  or  for  a  term  of  years,  and 
remainder  to  another,  the  value  of  the  prior  estate  shall  within  sixty  days  after 
the  death  of  the  testator  be  appraised  in  the  manner  hereinafter  provided  and 
shall  be  taxable  as  provided  in  the  preceding  sections;  and  the  inheritance  tax 
on  the  remainder  of  the  estate  shall  be  held  in  abeyance  until  the  beneficiary 
shall  come  into  possession  of  same,  and  shall  thereupon  likewise  be  taxable  as 
therein  provided. 
Gifts  to  Executors  or  Trustees. 

S.  7.  Whenever  a  decedent  appoints  one  or  more  executors  or  trustees,  and  in 
lieu  of  their  allowance  makes  a  devise  or  bequest  of  property  to  them  which  would 
otherwise  be  liable  to  said  tax,  or  appoints  them  his  residuary  legatees,  and  said 
bequests,  devises  or  residuary  legacies  exceed  what  would  be  a  reasonable  compensa- 
tion for  their  services,  such  excess  shall  be  liable  to  such  tax,  and  the  court  of  probate 
having  jurisdiction  of  their  accounts  shall  fix  the  amount  of  such  compensation. 
When  Tax  Accrues.  —  Interest. 

S.  8.  All  taxes  imposed  by  this  act  shall  be  due  and  payable  to  the  treasurer 
of  the  state  by  the  executors,  administrators,  trustees,  heirs  or  beneficiaries,  at 
the  death  of  the  decedent,  and  if  paid  within  twelve  months  no  interest  shall  be 
charged  and  collected  thereon,  but  if  not  paid,  interest  at  the  rate  of  nine  per  cent 
per  annum  shall  be  charged  and  collected  from  the  time  said  tax  became  due. 
Inventory. 

S.  9.  It  shall  be  the  duty  of  every  administrator,  executor  or  trustee  having 
in  charge  or  trust  any  property  subject  to  said  tax  to  file  in  the  probate  court  of 
the  county  of  the  decedent's  death,  in  addition  to  the  inventory  of  personal 
property  now  required,  a  true  inventory  of  the  real  estate  owned  by  the  decedent 
at  the  date  of  his  death,  and  to  collect  the  tax  thereon  from  the  devisee  or  person 
entitled  to  said  property;  and  he  shall  not  deliver  any  specific  legacy  or  property 
subject  to  said  tax  to  any  person  until  he  has  collected  the  t^x  thereon. 
Tax  to  be  Deducted. 

S.  10.  Whenever  any  legacies  subject  to  said  tax  shall  be  charged  upon  or 
payable  out  of  any  real  estate,  the  heir  or  devisee,  before  paying  the  same,  shall 
deduct  said  tax  therefrom  and  pay  it  to  the  executor,  administrator  or  trustee, 
and  the  same  shall  remain  a  charge  upon  said  real  estate  until  it  is  paid;  and  pay- 
ment thereof  shall  be  enforced  by  the  executor,  administrator  or  trustee  in  the 
same  manner  as  the  payment  of  the  legacy  itself  could  be  enforced.  If  any  such 
legacy  be  given  in  money  to  any  person  for  a  limited  period,  such  administrator, 
executor  or  trustee  shall  retain  the  tax  on  the  whole  amount;  but  if  it  be  not 
in  money,  he  shall  make  an  application  to  the  court  having  jurisdiction  of  his 
accounts  to  make  an  apportionment,  if  the  case  require  it,  of  the  sum  to  be  paid 
into  his  hands  by  such  legatee  on  account  of  said  tax  and  for  such  further  order 
as  the  case  may  require. 
Appraisal. 

S.  11.     The  value  of  such  property  as  may  be  subject  to  said  tax  shall  be  its 
actual  value  as  found  by  the  court  of  probate,  after  notice  to  all  persons  interested 


310  STATUTES  ANNOTATED.  [Ark.  St.  1909. 

in  the  succession  to  said  property  served  for  the  time  and  in  the  manner  required 
by  law  in  proceedings  for  the  assignment  of  dower.  But  the  state  treasurer,  or 
any  person  interested  in  the  succession  to  said  property  may  apply  to  the  court 
of  probate  having  jurisdiction  of  the  estate  or  to  any  circuit  court  having,  juris- 
diction, in  case  there  is  no  administration,  and  on  such  application  said  court 
shall  appoint  three  disinterested  persons,  who,  being  first  sworn,  shall  view 
and  appraise  such  property  at  its  actual  market  value  for  the  purpose  of  said  tax, 
and  shall  make  return  thereof  to  the  court,  which  return  may  be  accepted  by  the 
said  court,  and  if  accepted  shall  be  binding.  And  the  fees  of  the  appraiser  shall 
be  such  as  are  customary  in  the  administration  of  estates.  In  the  case  of  an 
annuity  or  life  estate  the  value  thereof  shall  be  determined  by  the  tables  of  mor- 
tality employed  by  insurance  actuaries,  and  five  per  centum  compound  interest. 
Jurisdiction  of  Probate  Court. 

S.  12.  The  court  of  probate  having  either  principal  or  auxiliary  jurisdiction 
of  the  settlement  of  the  estate  of  a  decedent  shall  have  jurisdiction  to  hear  and 
determine  all  questions  in  relation  to  said  tax  that  may  arise  affecting  any  devise, 
legacy  or  inheritance  under  this  act,  subject  to  appeal  as  in  other  cases,  and  the 
state  treasurer,  through  the  attorney  general,  shall  represent  the  interests  of  the 
state  in  any  such  proceedings. 
Tax  to  be  Paid  before  Accounts  Settled. — Vouchers. 

S.  13.  No  final  settlement  of  the  account  of  any  executor,  administrator  or 
trustee  shall  be  confirmed  by  any  probate  court  unless  it  shall  show,  and  the 
court  shall  find,  that  all  taxes  imposed  by  the  provisions  of  this  act  upon  any  prop- 
erty or  interest  therein  belonging  to  the  estate  to  be  settled  by  said  account 
shall  have  been  paid,  and  the  receipt  of  the  treasurer  of  the  state  for  such  tax 
shall  be  the  proper  voucher  for  such  payment. 
Proceedings  for  Collection. 

S.  14.  It  shall  be  the  duty  of  the  attorney  general  to  appear  for  and  in  behalf 
of  the  state  treasurer,  and  institute  proceedings  in  the  proper  forum  for  the 
enforcement  of  the  provisions  of  this  act,  whenever,  from  information  by  the 
state  treasurer,  or  from  any  probate  judge,  or  otherwise  obtained,  he  shall  have 
reason  to  believe  any  of  the  taxes  provided  for  herein  have  become  past  due. 
And  when  requested  in  writing  by  any  probate  judge,  he  shall  assist  in  the  adjust- 
ment and  collection  of  any  such  taxes  which  shall  have  accrued  under  this  act; 
and  whenever,  in  the  judgment  of  the  attorney  general,  it  becomes  necessary 
and  expedient  he  shall  have  the  power  to  appoint  attorneys  to  assist  him  in  any 
of  the  duties  herein  required  of  him,  and  the  compensation  of  such  attorneys 
shall  be  two  per  cent  of  all  amounts  actually  collected,  except  where  there  may  be 
litigation  over  past  due  taxes,  in  which  event  the  compensation  shall  be  five  per 
cent  of  all  amounts  actually  recovered,  said  compensation  to  be  deducted  from 
the  amount  of  taxes  so  collected.  Provided,  that  any  attorney  appointed  here- 
under shall  be  a  resident  of  the  Congressional  district  in  which  such  action  for 
the  collection  of  inheritance  tax  may  be  brought  or  in  which  the  administration 
of  any  estate  liable  therefor  may  be  pending. 
Repeal. 

S.  15.  That  all  laws  and  parts  of  laws  in  conflict  herewith  be  and  the  same 
are  hereby  repealed,  and  that  this  act  take  effect  and  be  in  force  from  and  after 
its  passage. 


tl 


Cal.  St.]  CALIFORNIA.  311 


CALIFORNIA. 


In  General. 

California  adopted  a  collateral  inheritance  tax  in  1893  following 
the  old  New  York  law.  In  1905  the  graduated  direct  inheritance 
law  was  passed,  copying  the  Wisconsin  statute  except  that  the 
exemptions  are  more  liberal. 

The  statute  of  1911  sharply  increases  existing  progressive  rates 
and  perfects  the  administrative  features  of  the  law.  The  exemp- 
tions apply  to  each  individual  share,  not  to  the  estate  as  a  whole. 
The  supreme  court  of  California  has  decided  that  the  tax  is 
on  the  excess  over  the  exemption,  not,  as  in  many  states,  on  the 
entire  inheritance  if  it  exceeds  the  exemption. 

We  are  advised  by  the  controller's  office  that  California  taxes 
stock  of  a  California  corporation  owned  by  a  non-resident.  This 
is  the  construction  of  the  statute  made  by  superior  courts,  but 
the  question  lias  not  been  passed  upon  by  the  supreme  court. 
Corporations  and  individuals  delivering  or  transferring  certificates 
or  assets  of  a  non-resident  estate  are  responsible  for  the  tax.  It 
is  not  the  practice  to  require  a  complete  inventory  of  a  non-resident's 
estate. 

Constitutional  Limitations. 

California  Constitution,  1879,  a.  13,  s.  1. 

S.  1.  All  property  in  the  state,  not  exempt  under  the  laws  of  the  United 
States,  shall  be  taxed  in  proportion  to  its  value,  to  be  ascertained  as  provided  by 
law.  The  word  "property"  as  used  in  this  article  and  section,  is  hereby  declared 
to  include  moneys,  credits,  bonds,  stocks,  dues,  franchises  and  all  other  matters 
and  things,  real,  personal  and  mixed,  capable  of  private  ownership;  provided, 
that  growing  crops,  property  used  exclusively  for  public  schools  and  such  as  may 
belong  to  the  United  States,  this  state,  or  to  any  county  or  municipal  corporation 
within  this  state,  shall  be  exempt  from  taxation.  The  legislature  may  provide, 
except  in  case  of  credits  secured  by  mortgage  or  trust  deed,  for  a  reduction  from 
credits  of  debts  due  bona  fide  residents  of  this  state. 

[California  Constitution,  1879,  was  amended  November  6,  1894,  by  including 
in  the  exemptions  free  libraries  and  free  museums  and  was  amended  November  6, 
1900,  by  including  buildings  used  for  religious  worship.] 


312 


STATUTES  ANNOTATED. 


[Cal.  St. 


It            <( 

c.    28,  p.  33. 

"         " 

c.    83,  p.  77. 

"         " 

c.    85,  p.  101. 

"         " 

c.  152,  p.  55. 

((            (( 

c.  228,  p.  268. 

<<         <( 

c.  314,  p.  341. 

a             a 

c.    85,  p.  83. 

11             << 

c.  325,  p.  374. 

<(             (( 

c.  337,  p.  557. 

((             i( 

c.  394  and  395. 

California, 

1903,  p.  1356.    (This  is  the  Act  of  1893,  p.  193.) 

California 

(Henning),  Vol.  5,  p.  138.    (This  is  the  Statute  of 

List  of  Statutes. 

1850-53.  Compiled  Laws  of  California  (Garfield  &  Snyder),  c.  127,  a.  5. 
1893.  Statutes  of  California,  c.  168,  p.  193. 
1895. 
1897. 
1899. 
1903. 
1903. 
1905. 
1905. 
1905. 
1909. 
1911. 

General  Laws  of  Califoi 
General  Lav 
1905,  p.  341.) 

The  Alien  Tax  Statute  of  1853. 
GompUed  Laws  of  California,  1853,  c.  127,  a.  5,  ss.  1,  2,  3,  p.  678. 

S.  1.  Each  and  every  person  not  being  a  bona  fide  resident  of  this  state  and  not 
being  a  citizen  of  the  United  States,  who  shall  be  entitled,  whether  as  heir,  legatee 
or  donee,  to  the  whole  or  any  part  of  the  succession  of  a  person  deceased,  whether 
such  person  shall  have  died  in  this  state  or  otherwise,  shall  pay  a  tax  of  ten  per 
centum;  and  all  other  persons  entitled  as  heir,  legatee,  or  donee  to  succession  prop- 
erty two  and  one-half  per  centum  on  all  sums,  or  the  value  of  all  property,  which 
he  may  actually  receive  from  said  succession,  or  so  much  thereof  as  is  situated  in 
this  state,  after  deducting  debts  due  by  said  succession;  when  the  said  inheritance, 
donation  or  legacy,  consists  of  specific  property  and  the  same  has  not  been  sold, 
the  appraisement  thereof  in  the  inventory  shall  be  considered  as  the  value  of  the 
property.  The  amount  shall  be  paid  to  the  treasurer  of  the  county  in  which 
such  heir,  legatee  or  donee  may  reside  at  the  time  of  receipt  of  the  inheritance, 
donation  or  legacy,  within  thirty  days  from  the  receipt  thereof,  for  state  purposes; 
and  any  person  receiving  such  inheritance,  donation  or  legacy,  and  neglecting 
to  pay  the  percentage  herein  provided  within  the  said  thirty  days  shall  be  liable 
to  pay  double  the  amount  of  said  percentage,  with  costs  of  suit. 

[Sections  2  and  3  relate  to  the  collection  of  the  tax.] 


THE  COLLATERAL  INHERITANCE  ACT  OF  1893. 

Cal.  St.  1893,  c.  168.     Approved  March  23,  1893. 

An  Act  to  establish  a  tax  on  collateral  inheritances,  bequests 

and  devises,  to  provide  for  its  collection  and  to  direct  the 

disposition  of  the  proceeds. 

Title.— Void  as  to  Illegitimate  Children. 

The  title  of  the  statute  limits  the  act  to  collaterals,  and  illegiti- 
mate children  are  clearly  not  collateral  heirs  and  therefore  the 
act  is  void  as  to  them.    The  act  expressly  exempts  from  the  opera- 


1893,  c.  168.]  CALIFORNIA.  313 

tion  of  the  tax  any  child  or  children  adopted  in  conformity  with 
the  laws  of  the  state  of  California,  and  the  court  says  that  whether 
or  not  illegitimate,  children  acknowledged  in  accordance  with 
California  Civil  Code,  section  1387,  are  expressly  excepted  from  the 
tax;  that  they  are  not  collateral  heirs  and  any  inheritance  passing 
to  such  child  from  its  father  is  not  a  collateral  inheritance.  Wir- 
ringer  v.  Morgan,  12  Cal.  App.  26,  106  P.  425. 

S.  1.  After  the  passage  of  this  act,  all  property  which  shall  pass,  by  will  or 
by  the  intestate  laws  of  this  state,  from  any  person  who  may  die  seized  or  possessed 
of  the  same  while  a  resident  of  this  state,  or  if  such  decedent  was  not  a  resident 
of  this  state  at  the  time  of  death,  which  property,  or  any  part  thereof,  shall  be 
within  this  state,  or  any  interest  therein  or  income  therefrom  which  shall  be 
transferred  by  deed,  grant,  sale  or  gift,  made  in  contemplation  of  the  death  of 
the  grantor  or  bargainor,  or  intended  to  take  effect  in  possession  or  enjoyment 
after  such  death,  to  any  person  or  persons,  or  to  any  body  politic  or  corporate, 
in  trust  or  otherwise,  or  by  reason  whereof  any  person  or  body  politic  or  corporate 
shall  become  beneficially  entitled,  in  possession  or  expectancy,  to  any  property, 
or  to  the  income  thereof,  other  than  to  or  for  the  use  of  his  or  her  father,  mother, 
husband,  wife,  lawful  issue,  brother,  sister,  the  wife  or  widow  of  a  son,  or  the 
husband  of  a  daughter,  or  any  child  or  children  adopted  as  such  in  conformity 
with  the  laws  of  the  state  of  California,  and  any  lineal  descendant  of  such  de- 
cedent born  in  lawful  wedlock,  or  the  societies,  corporations  and  institutions 
now  exempted  by  law  from  taxation,  by  reason  whereof  any  such  person  or 
corporation  shall  become  beneficially  entitled,  in  possession  or  expectancy,  to 
any  such  property,  or  to  the  income  thereof,  shall  be  and  is  subject  to  a  tax  of 
five  dollars  on  every  hundred  dollars  of  the  market  value  of  such  property  and  at 
a  proportionate  rate  for  any  less  amount,  to  be  paid  to  the  treasurer  of  the  proper 
county,  as  hereinafter  defined,  for  the  use  of  the  state;  and  all  administrators,  exec- 
utors and  trustees  shall  be  liable  for  any  and  all  such  taxesuntil  the  same  shall  have 
been  paid,  as  hereinafter  directed ;  provided,  that  an  estate  which  may  be  valued  at 
a  less  sum  than  five  hundred  dollars  shall  not  be  subject  to  such  duty  or  tax. 

Validity. 

This  statute  is  not  unconstitutional  as  depriving  an  heir  of 
property  without  due  process  of  law  contrary  to  the  fourteenth 
amendment  of  the  federal  constitution.  It  is  claimed  that  this 
amendment  requires  that  the  state  must  provide  the  means  of 
ascertaining  the  amount  of  the  tax  and  for  notice  and  appraisement 
and  that  the  state  has  no  power  to  take  private  property  until  these 
things  are  done.  But  the  act  did  provide  for  notice.  The  court 
holds  that  the  fact  that  the  inheritance  tax  law  vests  a  tax  in  the 
state  at  once  on  the  death  of  the  decedent  is  immaterial,  as 
the  right  though  vested  is  still  as  to  actual  collection  subject  to  the 
appraisement  provided  by  the  statute.  Trippet  v.  State,  149  Cal. 
521,  86  P.  1084,  8  L.  R.  A.  (N.  S.)  1210. 


314  STATUTES  ANNOTATED.  [Cal.  St. 

A  distinction  in  the  statute  between  the  surviving  brothers  and 
sisters  of  the  testator  and  the  children  of  deceased  brothers  and 
sisters  is  vahd  although  the  inheritance  law  of  the  state  provides 
that  in  case  of  intestacy  the  estate  should  in  certain  instances  go 
equally  to  the  brothers  and  sisters  of  the  decedent  and  to  the 
children  of  any  deceased  brother  or  sister  by  right  of  representation. 
There  is  no  necessary  connection  between  inheritance  and  taxation 
and  in  making  laws  relating  to  these  two  subjects  the  legislature 
is  not  required  to  consider  them  together.  In  determining  the 
mode  in  which  the  estate  of  an  intestate  shall  be  distributed  the 
legislature  did  not  in  any  respect  impair  its  right  to  distribute 
the  burdens  of  taxation  or  to  determine  the  classes  by  which  that 
burden  shall  be  borne. 

"The  right  of  inheritance  including  the  designation  of  heirs  and 
the  proportions  which  the  several  heirs  shall  receive,  as  well  as  the 
right  of  testamentary  disposition,  are  entirely  matters  of  statutory 
enactment  and  within  the  control  of  the  legislature.  As  it  is  only 
by  virtue  of  the  statute  that  the  heir  is  entitled  to  receive  any  of  his 
ancestor's  estate,  or  that  the  ancestor  can  divert  his  estate  from  the 
heir,  the  same  authority  which  confers  this  privilege  may  attach 
to  it  the  condition  that  a  portion  of  the  estate  so  received  shall  be 
contributed  to  the  state  and  the  portion  thus  to  be  contributed  is 
peculiarly  within  the  legislative  discretion."  Per  Harrison,  J.,  in  In 
fg  Wilmerding's  Estate,  117  Cal.  281,  49  P.  181. 

"Child  Adopted."  — "Lineal  Descendant." 

A  child  of  an  adopted  child  is  exempt  under  these  provisions,  as 
he  takes  by  inheritance  as  issue  of  the  adopted  father.  Estate  of 
Winchester,  140  Cal.  468,  74  P.  10. 

Exemption  of  "Estates"  of  Less  than  $500. 

The  ''estates"  exempted  as  under  $500  are  not  the  estates  of  the 
decedents  but  estates  taken  by  inheritance  or  devise.  In  re  Wil- 
merding's  Estate,  117  Cal.  281,  49  P.  181. 

An  exemption  under  this  statute  of  the  estates  taken  by  in- 
heritance valued  at  less  than  $500  is  constitutional.  "As  this  tax 
is  not  upon  property,  but  upon  the  right  of  succession,  the  con- 
stitutional provision  that  all  property  shall  be  taxed  according 
to  its  value  is  inapplicable.  The  right  of  the  legislature  to  impose 
an  excise  tax  includes  the  right  to  select  the  subjects  upon  which 
it  shall  be  imposed."    There  is  no  constitutional  requirement  that  it 


1893,  c.  168.]  CALIFORNIA.  315 

shall  be  imposed  upon  every  inheritance  and  the  judgment  of  the 
legislature  in  that  respect  is  not  open  to  review  by  the  courts.  It 
may  have  considered  that  the  expense  of  valuation  of  an  estate  less 
than  $500  rendered  the  exemption  wise.  In  re  Wilmerding's 
Estate,  117  Cal.  281,  49  P.  181. 

S.  2.  When  any  grant,  gift,  legacy  or  succession  upon  which  a  tax  is  imposed 
by  section  one  of  this  act  shall  be  an  estate,  income  or  interest  for  a  term  of  years 
or  for  life,  or  determinable  upon  any  future  or  contingent  event,  or  shall  be  a 
remainder,  reversion  or  other  expectancy,  real  or  personal,  the  entire  property 
or  fund  by  which  such  estate,  income  or  interest  is  supported,  or  of  which  it  is 
a  part,  shall  be  appraised,  immediately  after  the  death  of  the  decedent,  at  what 
was  the  market  value  thereof  at  the  time  of  the  death  of  the  decedent,  in  the 
manner  hereinafter  provided;  and  the  superior  court  in  which  the  probate  pro- 
ceedings are  pending  shall  thereupon  assess  and  determine  the  value  of  the  estate, 
income,  or  interest  subject  to  said  tax,  in  the  manner  recorded  in  section  thirteen 
of  this  act,  and  the  tax  prescribed  by  this  act  shall  be  immediately  due  and  payable 
to  the  treasurer  of  the  proper  county  and,  together  with  the  interest  thereon,  shall 
be  and  remain  a  lien  on  said  property  until  the  same  is  paid;  provided,  that  the 
person  or  persons,  or  body  politic  or  corporate,  beneficially  interested  in  the 
property  chargeable  with  said  tax,  may  elect  not  to  pay  the  same  until  they  shall 
come  into  the  actual  possession  or  enjoyment  of  such  property,  and  in  that  case 
such  person  or  persons,  or  body  politic  or  corporate,  shall  execute  a  bond  to  the 
people  of  the  state  of  California,  in  a  penalty  of  twice  the  amount  of  the  tax 
arising  upon  personal  estate,  with  such  sureties  as  the  said  superior  court  may 
approve,  conditioned  for  the  payment  of  said  tax  and  interest  thereon,  at  such 
time  or  period  as  they  or  their  representatives  may  come  into  the  actual  possession 
or  enjoyment  of  such  property,  which  bond  shall  be  filed  in  the  office  of  the 
county  clerk  of  the  proper  county;  provided  further,  that  such  person  shall 
make  a  full  and  verified  return  of  such  property  to  said  court,  and  file  the  same  in 
the  office  of  the  county  clerk  within  one  year  from  the  death  of  the  decedent 
and  within  that  period  enter  into  such  security  and  renew  the  same  every  five  years. 

S.  3  provides  a  tax  on  gifts  to  executors  or  trustees  in  excess  of  a  reasonable 
compensation. 

S.  4  provides  that  taxes  imposed  shall  be  due  at  the  death  of  the  decedent  with 
interest  payable  from  eighteen  months  after  that  time  at  the  rate  of  ten  per  cent, 
and  with  a  discount  of  five  per  cent  on  taxes  paid  within  six  months  from  the 
death  of  the  decedent;  and  that  if  the  executors,  administrators  or  trustees  do 
not  pay  such  tax  within  eighteen  months  of  the  death  of  the  decedent  they  shall 
be  required  to  give  a  bond  for  the  payment  of  the  tax  and  interest. 

S.  5  provides  that  where  it  is  impossible  to  settle  an  estate  within  eighteen 
months,  the  interest  charged  shall  be  seven  per  cent  and  not  ten  per  cent  after  that 
time. 

S.  6  provides  that  the  administrator,  executor  or  trustee  shall  collec.t  the  tax. 

S.  7  gives  the  executor,  administrator  or  trustee  power  to  sell  property  to  pay  the 
tax. 

S.  8  covers  payment  and  receipts  for  the  tax. 

S.  9  provides  for  a  refund  to  the  beneficiary  where  debts  are  proven  against 
the  estate  after  distribution. 


316  STATUTES  ANNOTATED.  [Cal.  St. 

S.  10  makes  a  corporation  liable  for  transfer  of  stock  standing  in  the  name  of 
a  foreign  executor  or  administrator. 

Ss.  11  and  12  provide  for  the  appraisal  of  the  property. 
Ss.  13  and  14  cover  the  jurisdiction  and  duty  of  the  court. 

Moot  Questions  not  Decided. 

Where  a  plaintiff  seeks  to  obtain  a  determination  that  the  state 
has  no  right  to  any  tax  the  court  will  not  adjudicate  whether  there 
remains  a  legal  method  of  collecting  the.  tax,  as  this  is  a  matter 
which  will  be  decided  when  the  state  seeks  to  enforce  its  right. 
Trippet  v.  State,  149  Cal.  521,  86  P.  1084,  8  L.  R.  A.  (N.  S.)  1210. 

Appeal  the  Sole  Remedy. 

Appeal  lies  from  the  order  of  the  superior  court  directing  the 
payment  of  an  inheritance  tax  under  the  act  of  1893  and  therefore 
the  party  aggrieved  cannot  maintain  a  writ  of  prohibition  to  enjoin 
the  court  from  making  the  order.  Cross  v.  Superior  Court  (Cal. 
1905),  83  P.  815. 

Ss.  15-21  provide  the  duties  of  the  treasurer  and  other  state  officers  in  rela- 
tion to  the  collection  of  the  tax. 

Section  20,  as  to  the  fees  of  the  treasurer  for  the  collection  of 
inheritance  taxes,  has  been  so  modified  by  the  county  government 
acts  of  1893  and  1897,  that  the  provisions  allowing  the  treasurer 
to  keep  the  money  for  his  own  purposes  have  been  repealed. 
The  court  finds,  however,  that  section  20  was  not  wholly  repealed 
but  was  modified  so  that  thereafter  the  fees  returned  were  not 
for  the  use  of  the  treasurer  as  an  individual.  The  money  should 
be  paid  over  by  the  treasurer  to  the  county,  as  it  is  legally  in  the 
custody  of  the  county  until  paid  over  to  the  state.  The  county 
government  acts  were  the  statute  of  1893,  p.  507,  and  the  statute 
of  1897,  p.  573.    San  Diego  v.  Schwartz,  145  Cal.  49. 

S.  22  provides  that  the  tax  levied  and  collected  under  the  act  shall  be  paid 
into  the  treasurer  of  the  state  for  the  uses  of  "the  State  School  Fund." 

The  Amendment  of  1895. 

Cal.  St.  1895,  c.  28,  p.  33,  was  approved  and  went  into  effect 
March  9, 1895,  and  made  verbal  changes  in  Cal.  St.  1893,  c.  168,  s.  2. 
The  act  of  1895  also  amended  ss.  6,  11,  15,  17  and  18  of  Cal.  St. 
1893,  c.  168. 


1S97,  c.  83.]  CALIFORNIA  317 

The  Act  of  1897. 

Cal.  St.  1897,  c.  83,  p.  77,  was  approved  and  went  into  effect 
March  9,  1897. 

S.  1.  Section  one  of  an  act  entitled  "An  Act  to  establish  a  tax  on  collateral 
inheritances,  bequests  and  devises,  to  provide  for  its  collection  and  to  direct  the 
disposition  of  the  proceeds,"  approved  March  twenty-third,  eighteen  hundred 
and  ninety-three,  is  hereby  amended  so  as  to  read  as  follows:  — 

S.  1.  After  the  passage  of  this  act,  all  property  which  shall  pass,  by  will  or 
by  the  intestate  laws  of  this  state,  from  any  person  who  may  die  seized  or  possessed 
of  the  same  while  a  resident  of  this  state,  or  if  such  decedent  was  not  a  resident 
of  this  state  at  the  time  of  death,  which  property,  or  any  part  thereof,  shall  be 
within  this  state,  or  any  interest  therein  or  income  therefrom,  which  shall  be 
transferred  by  deed,  grant,  sale  or  gift,  made  in  contemplation  of  the  death  of  the 
grantor  or  bargainor,  or  intended  to  take  effect  in  possession  or  enjoyment  after 
such  death,  to  any  person  or  persons,  or  to  any  body  politic  or  corporate,  in  trust 
or  otherwise,  or  by  reason  whereof  any  person  or  body  politic  or  corporate  shall 
become  beneficially  entitled,  in  possession  or  expectancy,  to  any  property,  or 
to  the  income  thereof,  other  than  to  or  for  the  use  of  his  or  her  father,  mother, 
husband,  wife,  lawful  issue,  brother,  sister  and  niece  or  nephew  when  a  resident 
of  this  state,  the  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter,  or  any 
child  or  children  adopted  as  such  in  conformity  with  the  laws  of  the  state  of 
California,  and  any  lineal  descendant  of  such  decedent  born  in  lawful  wedlock, 
or  the  societies,  corporations  and  institutions  now  exempted  by  law  from  taxation, 
or  to  any  public  corporation,  or  to  any  society,  corporation,  institution  or  asso- 
ciation of  persons  engaged  in  or  devoted  to  any  charitable,  benevolent,  educational, 
public  or  other  like  work  (pecuniary  profit  not  being  its  object  or  purpose),  or  to 
any  person,  society,  corporation,  institution  or  association  of  persons  in  trust 
for  or  to  be  devoted  to  any  charitable,  benevolent,  educational  or  public  purpose, 
by  reason  whereof  any  such  person  or  corporation  shall  become  beneficially  en- 
titled, in  possession  or  expectancy,  to  any  such  property  or  to  the  income  thereof, 
shall  be  and  is  subject  to  a  tax  of  five  dollars  on  every  hundred  dollars  of  the 
market  value  of  such  property  and  at  a  proportionate  rate  for  any  less  amount 
to  be  paid  to  the  treasurer  of  the  proper  county,  as  hereinafter  defined,  for  the  use 
of  the  state;  and  all  administrators,  executors  and  trustees  shall  be  liable  for  any 
and  all  such  taxes  until  the  same  shall  have  been  paid,  as  hereinafter  directed; 
provided,  that  an  estate  which  may  be  valued  at  a  less  sum  than  five  hundred 
dollars  shall  not  be  subject  to  such  duty  or  tax. 

S.  2.  The  exemptions  contained  in  this  act  shall  apply  to  all  property  which 
has  passed,  by  will,  succession  or  transfer,  since  the  approval  of  the  act  of  which 
this  act  is  amendatory,  except  in  those  cases  where  the  tax  has  been  paid  to  the 
treasurer  of  the  proper  county. 

Void  as  Retroactive. 

The  clauses  which  extend  the  exemptions  of  the  existing  law  and 
provide  that  the  exemptions  shall  apply  to  all  cases  where  taxes 
have  not  been  paid  under  existing  law,  are  void  as  in  violation  of 
the  constitution  which  provides  that  the  legislature  shall  not  make 


318  STATUTES  ANNOTATED.  [Cal.  St. 

any  gift  or  donation  of  any  public  money  or  thing  of  value.  Under 
the  act  of  1893  the  inheritance  tax  became  the  property  of  the  state 
on  the  death  of  the  decedent.  In  re  Stanford's  Estate,  126  Cal.  112, 
58  P.  462,  45  L.  R.  A.  788. 

Void  as  a  Local  Law. 

Section  2  may  be  void  as  in  violation  of  the  provision  of  the 
California  constitution  that  the  legislature  shall  not  pass  local  or 
special  laws  releasing  persons  from  their  debts  or  obligations  to  the 
state,  as  although  this  was  neither  a  local  nor  a  special  law  in  form 
still  it  is  opposed  to  the  intent  of  the  constitution.  In  re  Stanford's 
Estate,  126  Cal.  112,  58  P.  462,  45  L.  R.  A.  788.       - 

Validity  of  Exemption  to  Resident  Nieces  and  Nephews. 

The  California  statute  as  amended  by  the  statute  of  1897, 
exempting  nephews  and  nieces  when  residents  of  the  state  is  not 
void  under  the  United  States  constitution.  On  the  contrary,  the 
effect  of  the  United  States  constitution  is  to  extend  the  exemption 
there  given  to  citizens  of  other  states,  as  the  effect  of  the  federal 
constitution  is  to  measure  the  exemption  by  the  exemption  given 
to  citizens  of  California.  The  court  notes  the  case  of  In  re  Maho- 
ney,  133  Cal.  180,  65  P.  389,  85  Am.  St.  Rep.  155,  and  says  that  the 
question  was  raised  there  by  aliens  and  that  therefore  no  con- 
stitutional question  was  involved,  and  the  decision  in  the  Mahoney 
case  was  a  dictum  which  the  court  refuses  to  follow  in  In  re 
Johnson,  139  Cal.  532,  534,  apparently  overruling  In  re  Stanford's 
Estate,  54  P.  259,  which  was  itself  reversed  on  another  point  in 
126  Cal.  112,  58  P.  462,  45  L.  R.  A.  788. 

The  Amendment  of  1899. 

Cal.  St.  1899,  c.  85,  p.  101,  became  effective  without  the  governor's 
approval,  March  14, 1899.  It  amended  the  statute  of  1897  by  omit- 
ting from  the  exempt  class  a  brother  or  sister  of  the  decedent  or 
niece  or  nephew  when  non-resident  of  California.  Otherwise  sec- 
tion 1  of  Cal.  St.  1897,  c.  83,  p.  77,  is  repeated  in  the  act  of  1899. 

Section  2  of  the  act  of  1897  is  repeated  verbatim  by  Cal.  St.  1899. 

Classification  by  Relationship  Valid. 

The  California  statute  of  1893  as  amended  in  1899  was  attacked 
on  the  ground  that  it  was  in  violation  of  the  fourteenth  amendment. 


1899,  c.  85.]  CALIFORNIA.  319 

It  was  argued  that  the  fourteenth  amendment  compels  the  state 
in  levying  inheritance  taxes  to  conform  to  blood  relationship. 
The  court  holds,  however,  that  the  inheritance  tax  involves  the 
exercise  of  the  legislative  discretion  and  judgment  with  which  the 
fourteenth  amendment  did  not  interfere,  and  that  it  is  not  arbitrary 
to  put  in  one  class  for  the  purpose  of  inheritance  all  blood  relatives 
to  a  designated  degree  except  brothers  and  sisters,  and  to  place  all 
other  and  more  remote  relatives  including  brothers  and  sisters  in  a 
second  class  along  with  strangers  to  the  blood.  Campbell  v.  Cali- 
fornia, 200  U.  S.  87,  95,  26  S.  Ct.  182,  50  L.  Ed.  382. 

The  Amendments  of  1903. 

Cal.  St.  1903,  c.  228,  p.  268,  was  approved  March  20,  1903.  It 
amended  the  act  of  1899  as  follows :  — 

It  adds  to  the  statute  of  1899  an  exemption  after  the  provision 
as  to  adopted  children  "or  to  any  person  to  whom  deceased  for  not 
less  than  ten  years  prior  to  death,  stood  in  the  mutually  acknowl- 
edged relation  of  a  parent";  and  adds  also  to  the  same  exemption 
"any  Hneal  ancestor." 

Section  2  is  a  copy  of  section  2  of  Cal.  St.  1899. 

Cal.  St.  1903,  c.  52,  p.  55,  approved  February  27,  1903,  added 
a  new  section  numbered  203^,  providing  for  the  employment  of 
special  attorneys  for  the  collection  of  the  tax. 

THE  INHERITANCE  TAX  ACT  OF  1905. 

Sts.  of  1905,  c.  314.     Approved  March  20,  1905. 

An  Act  to  establish  a  tax  on  gifts,  legacies,  inheritances,  bequests* 
DEVISES,  SUCCESSIONS  AND  TRANSFERS,  to  provide  for  its  collection,  and  to 
direct  the  disposition  of  its  proceeds;  to  provide  for  the  enforcement  of  liens 
created  by  this  act  and  for  suits  to  quiet  title  against  claims  of  lien  arising 
hereunder;  to  repeal  an  act  entitled  "An  Act  to  establish  a  tax  on  collateral 
inheritances,  bequests  and  devises,  to  provide  for  the  collection  and  to  direct 
the  disposition  of  its  proceeds,"  approved  March  23,  1893,  and  all  amend- 
ments thereto  and  all  acts  and  parts  of  acts  in  conflict  with  this  act. 

Property  Subject  to  Inheritance  or  Transfer  Tax.  —  Lien  on  Property. 

S.  1.  All  property  which  shall  pass,  by  will  or  by  the  intestate  laws  of  this 
state,  from  any  person  who  may  die  seized  or  possessed  of  the  same  while  a 
resident  of  this  state,  or  if  such  decedent  was  not  a  resident  of  this  state  at  the 
time  of  death,  which  property,  or  any  part  thereof,  shall  be  within  this  state, 
or  any  interest  therein,  or  income  therefrom,  which  shall  be  transferred  by  deed, 
grant,  sale,  or  gift,  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or 
bargainor,  or  intended  to  take  effect  in  possession  or  enjoyment  after  such  death, 
to  any  person  or  persons,  or  to  any  body  politic  or  corporate,  in  trust  or  otherwise, 


1 

320  STATUTES  ANNOTATED.  [Cal.  St.' 

or  by  reason  whereof  any  person  or  body  politic  or  corporate  shall  become  bene- 
ficially entitled,  in  possession  or  expectancy,  to  any  property,  or  to  the  income 
thereof,  shall  be  and  is  subject  to  a  tax  hereinafter  provided  for,  to  be  paid  to  the 
treasurer  of  the  proper  county,  as  hereinafter  directed,  for  the  use  of  the  state; 
and  such  tax  shall  be  and  remain  a  lien  upon  the  property  passed  or  transferred 
until  paid  and  the  person  to  whom  the  property  passes  or  is  transferred  and  all 
administrators,  executors  and  trustees  of  every  estate  so  transferred  or  passed 
shall  be  liable  for  any  and  all  such  taxes  until  the  same  shall  have  been  paid  as 
hereinafter  directed.  The  tax  so  imposed  shall  be  upon  the  market  value  of  such 
property  at  the  rates  hereinafter  prescribed  and  only  upon  the  excess  over  the 
exemptions  hereinafter  granted. 

Whenever  any  person  or  corporation  shall  exercise  a  power  of  appointment 
derived  from  any  disposition  of  property  made  either  before  or  after  the  passage 
of  this  act,  such  appointment  when  made  shall  be  deemed  a  transfer  taxable  under 
the  provisions  of  this  act  in  the  same  manner  as  though  the  property  to  which 
such  appointment  relates  belonged  absolutely  to  the  donee  of  such  power  and 
had  been  bequeathed  or  devised  by  such  donee  by  will ;  and  whenever  any  person 
or  corporation  possessing  such  power  of  appointment  so  derived  shall  omit  or 
fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole  or  n  part, 
a  transfer  taxable  under  the  provisions  of  this  act  shall  be  deemed  to  take  place 
to  the  extent  of  such  omissions  or  failure,  in  the  same  manner  as  though  the 
persons  or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoyment 
of  the  property  to  which  such  power  related  had  succeeded  thereto  by  a  will  of 
the  donee  of  the  power  failing  to  exercise  such  power ,^  taking  effect  at  the  time  of 
such  omission  or  failure. 

Nature  of  Tax. 

The  collateral  inheritance  tax  is  not  a  tax  on  property  as  such, 
but  one  upon  the  right  of  succession  —  a  tax  for  the  privilege  of 
succeeding  to  property.  In  re  Kennedy,  157  Cal.  517,  108 
P.  280. 

Whether  Discriminating  Against  Non- Residents. 

The  contention  that  the  California  statute  of  1905,  c.  314,  is 
unconstitutional  as  discriminating  between  the  citizens  of  the 
state  and  those  of  other  states,  will  not  be  considered  where  it  does 
not  appear  by  the  pleadings  to  which  class  the  appellant  belongs. 
In  re  Damon,  10  Cal.  App.  542,  102  P.  684. 

**A11  Property  Which  Shall  Pass  by  Will  or  by  the  Intestate 
Laws." 

Homestead.  —  It  was  claimed  that  this  language  included 
property  set  apart  to  the  widow  as  a  homestead.  The  court 
finds,  however,  that  where  the  power  of  setting  apart  as  a 
homestead   is   exercised  by  the   probate  court,    the  devisee   and 


1905,  c.  314.]  CALIFORNIA.  321 

legatees  take  no  beneficial  interest  whatever.  The  probate  court 
may  even  set  apart  as  a  homestead  real  property  specifically 
devised  by  a  will  and  thus  defeat  the  devise.  Where  it  is  so  set 
apart  as  a  homestead  the  title  of  the  person  to  whom  it  is  so  set 
apart  is  in  no  way  derived  by  will,  but  comes  solely  from  the  home- 
stead order. 

It  is  clear,  therefore,  that  what  the  widow  takes  under  this  order 
of  the  probate  court  she  does  not  take  by  wjU  or  by  the  intestate 
laws  of  the  state.  The  language  "pass  by  will  or  by  the  intestate 
laws  of  this  state"  means  to  pass  by  virtue  and  force  of  the  law  of 
this  state  governing  testate  or  intestate  succession.  It  was 
claimed  that  the  property  of  the  testator  passed  to  the  devisees 
and  that  subsequently  by  an  order  of  the  probate  court  the 
homestead  was  carved  out  of  it. 

The  court  replies  that  the  right  to  any  tax  imposed  vested 
in  the  state  at  the  moment  of  death  and  could  not  be  legally 
divested  by  any  department  of  the  state,  but  that  the  right  so 
vested  to  the  tax  imposed  by  the  act;  and  when  it  is  determined 
that  the  act  imposed  no  tax  as  to  property  lawfully  diverted  by 
the  court  in  probate  with  the  consequence  that  it  could  never 
be  distributed  to  the  devisee,  legatee  or  heir,  it  is  apparent  that 
no  vested  right  of  the  state  is  impaired.  Therefore,  the  inheritance 
tax  cannot  be  assessed  on  such  property.  The  fact  that  the  wife  to 
whom  the  homestead  is  set  apart  is  also  a  devisee  and  legatee  is  of 
no  consequence  in  determining  whether  the  right  of  the  state  to 
the  tax  includes  property  set  apart  as  homestead.  In  re  Kennedy, 
157  Cal.  517,  108  P.  280. 

Community  Property.  —  The  surviving  wife's  share  of  com- 
munity property  is  subject  to  the  inheritance  tax.  The  inheri- 
tance tax  statute  was  passed  presumably  in  view  of  the  California 
decisions  that  the  wife  took  her  share  of  the  community  property 
upon  the  death  of  her  husband  by  succession  as  his  heir.  In  re 
Moffitt's  Estate,  153  Cal.  359,  95  P.  653;  In  re  Sim's  Estate,  153 
Cal.  365,  95  P.  655;  People  v. Lebus  (Cal.  1908),  96  P.  1118. 

It  was  claimed  on  the  question  of  a  tax  on  the  surviving 
wife's  share  of  the  property,  that  the  property  was  acquired  under 
the  California  constitution  of  1849  and  that  therefore  the  wife 
acquired  a  vested  right  in  the  community  property,  which  was 
protected  by  the  federal  constitution. 

The  court  finds,  however,  that  the  declaration  in  the  constitution 
of  1849,  that  "laws  shall  be  passed  more  clearly  defining  the  rights 


322  STATUTES  ANNOTATED.  [Cal.  St. 

of  a  wife  in  relation  as  well  to  her  separate  property  as  to  that  held 
in  common  with  her  husband"  amounts  to  no  more  than  a  mandate  to 
the  legislature  to  define  and  prescribe  the  rights  of  the  wife  in  the 
property  of  the  community.  It  was  the  design  of  the  constitution 
of  1849  to  preserve  so  far  as  might  be  the  rights  to  the  community 
property  which  wives  had  enjoyed.  But  even  under  the  Spanish 
law  the  wife  had  no  vested  estate  in  the  community  property, 
but  it  was  a  mere  expectancy  so  long  as  the  community  existed. 
The  pourt  finds,  therefore,  that  the  California  inheritance  tax 
law  is  not  in  violation  of  the  federal  constitution  on  the  ground 
that  it  takes  away  a  vested  interest.  In  re  Mofhtt,  153  Cal.  359,  95 
P.  1025,  affirming  on  rehearing  95  P.  653,  deciding  the  question  as 
to  the  federal  constitution,  which  was  not  considered  in  the  original 
opinion. 

"Market  Value." 

QucBre,  whether  the  homestead,  family  allowance,  expenses  of 
administration  and  debts  of  decedent  should  be  excluded  from 
the  value  of  the  estate.    Becker  v.  Nye  (Cal.  1908),  96  P.  333. 

Where  the  executor  misappropriates  the  funds  of  the  estate 
the  ensuing  loss  is  not  to  be  deducted  in  reckoning  the  value  of 
the  estate  for  the  purpose  of  the  inheritance  tax  under  the  California 
statute  of  1905,  c.  314.  The  court  observes  that  all  charges  at 
the  death  of  the  testator  should  be  deducted,  but  that  the  misap- 
propriation by  the  executor  happened  after  the  death  of  the  testa- 
tor and  should  therefore  not  be  deducted,  as  subsequent  increase 
or  decrease  in  the  value  of  the  estate  is  immaterial.  In  re  Hite, 
159  Cal.  (1911)  392,  113  P.  1072 

Property  not  in  Excess  of  $25,000  in  Value.  —  Classification  of  Relation- 
ship. —  Primary  Rates  of  Taxation. 

S.  2.  When  the  property  or  any  beneficial  interest  therein  so  passed  or  trans- 
ferred exceeds  in  value  the  exemption  hereinafter  specified  and  shall  not  exceed 
in  value  twenty-five  thousand  dollars  the  tax  hereby  imposed  shall  be:  — 

(1)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  husband,  wife,  lineal  issue,  lineal  ancestor  of  the  decedent  or 
any  child  adopted  as  such  in  conformity  with  the  laws  of  this  state,  or  any  child 
to  whom  such  decedent  for  not  less  than  ten  years  prior  to  such  transfer  stood  in 
the  mutually  acknowledged  relation  of  a  parent,  provided,  however,  such  relation- 
ship began  at  or  before  the  child's  fifteenth  birthday,  and  was  continuous  for  said 
ten  years  thereafter,  or  any  lineal  issue  of  such  adopted  or  mutually  acknowledged 
child,  at  the  rate  of  one  per  centum  of  the  clear  value  of  such  interest  in  such 
property. 


1905,  c.  314.]  CALIFORNIA.  323 

(2)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  or  a  descendant  of  a  brother  or  sister  of 
the  decedent,  a  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter  of  the  de-> 
cedent,  at  the  rate  of  one  and  one-half  per  centum  of  the  clear  value  of  such 
interest  in  such  property. 

(3)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  father  or  mother  or  a  descendant  of 
a  brother  or  sister  of  the  father  or  mother  of  the  decedent,  at  the  rate  of  three  per 
centum  of  the  clear  value  of  such  interest  in  such  property. 

(4)  W^here  the  person  or  persons  entitled  to  any  beneficial  interests  in  such 
property  shall  be  the  brother  or  sister  of  the  grandfather  or  grandmother  or  a 
descendant  of  the  brother  or  sister  of  the  grandfather  or  grandmother  of  the 
decedent,  at  the  rate  of  four  per  centum  of  the  clear  value  of  such  interest  in  such 
property. 

(5)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  herein- 
before stated,  or  shall  be  a  stranger  in  blood  to  the  decedent,  or  shall  be  a  body 
politic  or  corporate,  at  the  rate  of  five  per  centum  of  the  clear  value  of  such 
interest  in  such  property. 

Classification  of  Values  in  Excess  of  $25,000.  —  Rates  of  Taxation. 

S.  3.  The  foregoing  rates  in  section  two  are  for  convenience  termed  the 
primary  rates.  When  the  market  value  of  such  property  or  interest  exceeds 
twenty-five  thousand  dollars,  the  rates  of  tax  upon  such  excess  shall  be  as  fol- 
lows: — 

(1)  Upon  all  in  excess  of  $25,000  and  up  to  $50,000,  one  and  one  half  times  the 
primary  rates. 

(2)  Upon  all  in  excess  of  $50,000  and  up  to  $100,000,  two  times  the  primary 
rates. 

(3)  Upon  all  in  excess  of  $100,000  and  up  to  $500,000,  two  and  one-half  times 
the  primary  rates. 

(4)  Upon  all  in  excess  of  $500,000,  three  times  the  primary  rates. 

Exemptions. 

S.  4.     The  following  exemptions  from  the  tax  are  hereby  allowed:  — 

(1)  All  property  transferred  to  societies,  corporations  and  institutions  now  or 
hereafter  exempted  by  law  from  taxation  or  to  any  public  corporation  or  to  any 
society,  corporation,  institution  or  association  of  persons  engaged  in  or  devoted 
to  any  charitable,  benevolent,  educational,  public,  or  other  like  work  (pecuniary 
profit  not  being  its  object  or  purpose),  or  to  any  person,  society,  corporation, 
institution  or  association  of  persons  in  trust  for  or  to  be  devoted  to  any  charitable, 
benevolent,  educational  or  public  purpose,  by  reason  whereof  any  such  person  or 
corporation  shall  become  beneficially  ent  tied,  in  possession  or  expectancy,  to 
any  such  property  or  to  the  income  thereof  shall  be  exempt. 

(2)  Property  of  the  clear  value  of  ten  thousand  ($10,000.00)  dollars  transferred 
to  the  widow  or  to  a  minor  child  of  the  decedent,  and  of  four  thousand  ($4,000.00) 
dollars  transferred  to  each  of  the  other  persons  described  in  the  first  subdivision  of 
section  two  shall  be  exempt. 


324  STATUTES  ANNOTATED.  [Cal.  St. 

(3)  Property  of  the  clear  value  of  two  thousand  ($2,000.00)  dollars  transferred 
to  each  of  the  persons  described  in  the  second  subdivision  of  section  two  shall  be 
exempt. 

(4)  Property  of  the  clear  value  of  one  thousand  five  hundred  ($1,500.00)  dollars 
transferred  to  each  of  the  persons  described  in  the  third  subdivision  of  section  two 
sha  1  be  exempt. 

(5)  Property  of  the  clear  value  of  one  thousand  ($1,000.00)  dollars  transferred 
to  each  of  the  persons  described  in  the  fourth  subdivision  of  section  two  shall 
be  exempt. 

(6)  Property  of  the  clear  value  of  five  hundred  ($500.00)  dollars  transferred 
to  each  of  the  persons  and  corporations  described  in  the  fifth  subdivision  of 
section  two  shall  be  exempt. 

"Exemption  is  a  matter  of  grace  on  the  part  of  the  legislature 
and  cannot  be  claimed  beyond  the  extent  to  which  a  law-making 
body  has  seen  fit  to  allow  it."  In  re  Timken's  Estate,  158  Cal.  51, 
109  P.  608. 

Construction. 

It  was  claimed  that  the  rule  of  strict  construction  should  apply 
to  an  inheritance  tax  exemption,  but  the  court  holds  that  this 
rule  extends  to  exemptions  as  well  as  impositions  and  that  a  strict 
construction  should  be  indulged  against  a  rule  of  exemption  both 
unequal  and  unjust.    In  re  Bull's  Estate,  153  Cal.  715,  96  P.  366. 

Computing  Tax  and  Exemptions. 

The  court  holds  that  if  the  estate  is  over  $25,000  the  statute 
does  not  mean  that  the  first  $25,000  is  exempt  but  that  the  "primary 
rates"  were  to  be  computed  in  all  cases  and  that  the  tax  is  not 
merely  upon  the  excess  over  $25,000.  In  re  Bull's  Estate,  153  Cal. 
715,  96  P.  366,  followed  in  In  re  Timken's  Estate,  158  Cal.  51,  106 
P.  608. 

Sections  1  to  4  providing  for  an  ascending  scale  of  rates  and  ex- 
emptions necessitate  a  deduction  of  the  exemption  from  the  first 
$25,000  in  each  distributive  share  instead  of  from  the  distributive 
share  as  a  whole.  The  entire  amount  of  each  share  whether  exempt 
or  not  is  considered  for  the  purpose  of  fixing  the  rate  of  taxation. 
The  exemption  is  to  be  deducted  from  the  first  $25,000  and  the  tax 
fixed  on  that  first  $25,000  less  the  exemptions.  In  re  Timken's 
Estate,  158  Cal.  51,  109  P.  608. 

The  Rule  for  Deduction  of  Exemptions. 

Under  date  of  January,  1908,  the  controller's  office  issued  a 
circular,  No.  105,  dealing  with  the  subject  of  the  method  to  be 


! 


1905,  c.  314.]  CALIFORNIA.  325 

followed  in  deducting  exemptions  in  figuring  inheritance  taxes. 
At  that  time  the  question  had  not  been  passed  on  by  the  higher 
courts,  but  subsequently  the  supreme  court,  in  Estate  of  Bull 
(153  Cal.  715),  announced  the  principle. 

The  following  is  the  more  important  portion  of  the  circular 
referred  to:  — 

"Some  confusion  has  arisen  in  the  computation  of  inheritance  taxes,  principally 
in  connection  with  the  figuring  of  exemptions  when  inheritances  exceed  in  amount 
$25,000.  There  should  be  no  difficulty  if  there  is  kept  in  mind  the  invariable  rule 
that  the  deduction  of  the  exemption,  whatever  it  may  amount  to,  is  to  be  made 
from  the  first  $25,000  in  value  of  the  inheritance.  Thus,  if  the  property  passing 
to  an  heir  or  legatee  is  worth  $30,000,  and  the  exemption  is  $4,000 —  the  latter  sum 
should  be  deducted  from  the  first  $25,000,  which  will  leave  $21,000  taxable  at  the 
primary  rate.  Then  the  tax  on  the  remaining  $5,000  is  computed  at  the  next 
higher  rate,  and,  of  course,  the  sum  of  the  taxes  on  the  $21,000  and  on  the  $5,000 
is  the  total  of  the  taxes  to  be  paid.  The  mistake  into  which  many  persons  would 
fall  in  this  instance  would  be  that  of  computing  the  tax  on  the  whole  of  the  first 
$25,000  at  the  primary  rate,  and  then  deducting  the  $4,000  exemption  from  the 
remaining  $5,000,  These  two  methods  of  computation  bring  different  results. 
Assuming  that  in  the  above  example  the  primary  rate  was  1  per  cent,  as  it  would 
be  if  the  person  receiving  the  inheritance  were  a  son  or  daughter,  the  tax  would 
be  $285  by  the  first  method  of  computation  and  $265  by  the  second. 

To  take  another  example  we  will  suppose  that  upon  his  death  A  leaves  to  B, 
his  minor  son,  a  bequest  amounting  to  $60,000.  In  this  instance  the  primary  rate 
is  1  per  cent  and  the  exemption  is  $10,000.  Therefore,  in  computing  the  tax  the 
calculation  will  be  made  as  follows:  — 

Total  amount  of  bequest $60,000 

Exemption  is  taken  from  first $25,000 

Amount  of  exemption 10,000 

Excess  taxable  at  primary  rate $15,000 

Amounts  taxable    rates  and  sum  of  taxes 
as  follows  — 

At  1  per  cent $15,000 Tax  $150 

At  11^  per  cent 25,000  "     375 

At  2  per  cent 10,000  "     200 

Total  amount  taxed    $50,00 ) 

Exemption  as  above 10,000 

$60,000        $725 

If,  in  this  instance,  the  computation  had  been  made  by  figuring  the  first  $25,000 
all  at  1  per  cent,  and  the  second  $25,000  at  IH  per  cent,  and  exempting  the  last 
$10,000,  the  total  of  the  tax  would  have  been  only  $625,  or  $100  less  than  the 
correct  amount. 

The  equitable  reason  for  the  rule  adopted  is  that  it  operates  uniformly  by  mak- 
ing the  exemptions  of  equal  value  to  all  persons  within  any  one  of  the  several 


326  STATUTES  ANNOTATED.  [Cal.  St. 

classifications  enumerated  in  the  statute.  It  can  be  easily  shown  that  to  deduct 
exemptions  from  the  total  value  of  inheritances,  instead  of  from  the  first  $25,000, 
would  be  to  favor  the  persons  receiving  large  inheritances  by  making  the  exemp- 
tions of  greater  value  to  them  than  to  heirs  receiving  less  amounts.  Assume,  for 
example,  that  there  are  three  estates,  valued  at  $30,000,  $60,000  and  $120,000, 
respectively.  Assume,  also,  that  in  each  instance  the  entire  estate,  less  tax,  goes 
to  the  widow.  If,  then,  the  $10,000  exemption  be  taken  from  the  first  $25,000, 
the  value  of  such  exemption,  at  1  per  cent  tax  rate,  will  be  $100  in  each  instance. 
On  the  other  hand,  if  the  last  $10,000  should  be  exempted  in  each  case  the  value 
of  the  exemptions  would  be:  In  the  first  estate,  with  $5,000  exempted  at  1  per 
cent  and  $5,000  at  13^,  the  value  of  exemption  would  be  $125;  in  the  second 
estate,  with  $10,000  exempted  at  2  per  cent,  value  of  exemption  would  be  $200; 
in  third  estate,  with  $10,000  exempted  at  23^2  per  cent,  exemption  would  be  worth 
$250." 

Sections  5  to  29  cover  the  assessment  and  collection  of  the  tax. 
Sections  which  have  been  construed  are  as  follows :  — 

Administrators  to  Deduct  Amount  of  Tax. 

S.  9.  Any  administrator,  executor  or  trustee  having  in  charge  or  trust  any 
legacy  or  property  for  distribution,  subject  to  the  said  tax,  shall  deduct  the  tax 
therefrom,  or  if  the  legacy  or  property  be  not  money  he  shall  collect  the  tax 
thereon  upon  the  market  value  thereof,  from  the  legatee  or  person  entitled  to 
such  property  and  he  shall  not  deliver,  or  be  compelled  to  deliver  any  specific 
legacy  or  property  subject  to  tax  to  any  person  until  he  shall  have  collected  the 
tax  thereon;  and  whenever  any  such  legacy  shall  be  charged  upon  or  payable 
out  of  real  estate,  the  executor,  administrator  or  trustee  shall  collect  said  tax 
from  the  distributee  thereof,  and  the  same  shall  remain  a  charge  on  such  real 
estate  until  paid;  if  however,  such  legacy  be  given  in  money  to  any  person  for 
a  limited  period,  the  executor,  administrator  or  trustee  shall  retain  the  tax  upon 
the  whole  amount;  but  if  it  be  not  in  money  he  shall  make  application  to  the 
superior  court  to  make  an  apportionment,  if  the  case  require  it,  of  the  sum  to  be 
paid  into  his  hands  by  such  legatees,  and  for  such  further  order  relative  thereto 
as  the  case  may  require. 

Where  a  decree  of  distribution  orders  a  deduction  only  of 
"the  amount  of  the  inheritance  tax  as  required  by  law"  and  does 
not  fix  the  amount  of  such  tax  nor  expressly  adjudicate  that  any 
tax  should  be  deducted,  but  leaves  the  matter  dependent  upon 
whether  or  not  the  law  requires  any  inheritance  tax,  the  distributees 
are  entitled  to  the  entire  residue  of  the  estate  under  that  decree 
where  no  inheritance  tax  could  be  collected.  Wirringer  v.  Morgan, 
12  Cal.  App.  26,  106  P.  425. 

Tax  to  be  Paid  to  County  Treasurer.  —  Receipt  Must  be  Countersigned 
by  State  Controller. 

S.  11.  Every  sum  of  money  retained  by  an  executor,  administrator  or  trustee, 
or  paid  into  his  hands,  for  any  tax  on  property,  shall  be  paid  by  him,  within  thirty 


1905,  c.  314.]  CALIFORNIA.  327 

days  thereafter,  to  the  treasurer  of  the  county  in  which  the  probate  proceedings 
are  pending,  and  the  said  treasurer  shall  give,  and  every  executor,  administrator, 
or  trustee  shall  take,  duplicate  receipts  for  such  payment,  one  of  which  receipts 
said  executor,  administrator  or  trustee  shall  immediately  send  to  the  controller  of 
the  state,  whose  duty  it  shall  be  to  charge  the  treasurer  so  receiving  the  tax 
with  the  amount  thereof,  and  said  controller  shall  seal  said  receipt  with  the  seal 
of  his  office  and  countersign  the  same  and  return  it  to  the  executor,  administrator 
or  trustee,  whereupon  it  shall  be  a  proper  voucher  in  the  settlement  of  his  accounts; 
and  an  executor,  administrator  or  trustee  shall  not  be  entitled  to  credits  in  his 
accounts,  nor  be  discharged  from  liability  for  such  tax,  nor  shall  said  estate  be 
distributed,  unless  he  shall  produce  a  receipt  so  sealed  and  countersigned  by  the 
controller,  or  a  copy  thereof,  certified  by  him,  and  file  the  same  with  the  court. 

The  provision  that  the  controller  shall  countersign  the  receipts 
for  payment  of  taxes  gives  him  no  authority  to  revise  the  amount 
of  the  tax  as  found  by  the  court.  In  countersigning  a  receipt  he 
decides  nothing,  nor  should  the  receipt  be  so  framed  as  to  bind  the 
state  or  conclude  its  right  to  have  the  question  reviewed  on  appeal. 
The  receipt  should  be  only  for  so  much  money  on  account  of  the 
tax.    Becker  v.  Nye  (Cal.  1908),  96  P.  333. 

The  provision  of  section  8  of  the  act  of  1893  that  the  estate 
shall  not  be  distributed  until  the  administrator  produces  a  receipt 
showing  that  a  tax  has  been  paid  is  also  found  in  section  11  of  the 
repealing  act  of  1905.  This  provision  is  therefore  simply  continued 
in  force  by  the  act  of  1905  and  therefore  the  estate  of  one  who  died 
before  the  repealing  act  was  passed  cannot  be  distributed  until 
the  tax  is  paid.  The  repealing  act  could  not  renounce  the  vested 
right  of  the  state  to  the  inheritance  tax.  In  re  Lander  (Cal.  1907), 
93  P.  202. 

When  Value  of  Inheritance  or  Bequest  is  Uncertain.  —  Ap- 
praisement. —  Expense  of  Same. 

S.  14.  When  the  value  of  any  inheritance,  devise,  bequest  or  other  interest 
subject  to  the  payment  of  said  tax  is  uncertain,  the  superior  court  in  which  the 
probate  proceedings  are  pending,  on  the  application  of  any  interested  party  or 
upon  its  own  motion,  shall  appoint  some  competent  person  as  appraiser,  as  often 
as  and  whenever  occasion  may  require,  whose  duty  it  shall  be  forthwith  to  give 
such  notice,  by  mail,  to  all  persons  known  to  have  or  claim  an  interest  in  such 
property  and  to  such  persons  as  the  court  may  by  order  direct,  of  the  time  and 
place  at  which  he  will  appraise  such  property  and  at  such  time  and  place  to 
appraise  the  same  and  make  a  report  thereof,  in  writing,  to  said  court,  together 
with  such  other  facts  in  relation  thereto  as  said  court  may  by  order  require  to  be 
filed  with  the  clerk  of  said  court;  and  from  this  report  the  said  court  shall,  by 
order,  forthwith  assess  and  fix  the  market  value  of  all  inheritances,  devises, 
bequests  or  other  interests  and  the  tax  to  which  the  same  is  liable  and  shall  im- 


328  STATUTES  ANNOTATED.  [Cal.  St 

mediately  cause  notxe  thereof  to  be  given,  by  mail,  to  all  parties  known  to  be 
interested  therein ;  and  the  value  of  every  future  or  contingent  or  limited  estate, 
income,  or  interest  shall  for  the  purposes  of  this  act,  be  determined  by  the  rule, 
method  and  standards  of  mortality  and  of  value  that  arv.  set  forth  in  the  actuaries' 
combined  experience  tables  of  mortality  for  ascertaining  the  value  of  policies 
of  life  insurance  and  annuities  and  for  the  determination  of  the  liabilities  of  life 
insurance  companies,  save  that  the  rate  of  interest  to  be  assessed  in  computing 
the  present  value  of  all  future  interests  and  contingencies  shall  be  five  per  centum 
per  annum;  and  the  insurance  commissioner  shall,  on  the  application  ot  said 
court,  determine  the  value  of  such  future  or  contingent  or  limited  estate,  income 
or  interest,  upon  the  facts  contained  in  such  report  and  certify  the  same  to  the 
court,  and  his  certificate  shall  be  conclusive  evidence  that  the  method  of  com- 
putation adopted  therein  is  correct.  The  said  appraiser  shall  be  paid  by  the 
county  treasurer  out  of  any  funds  that  he  may  have  in  his  hands  on  account  of 
said  tax,  on  presentation  of  a  sworn  itemized  account  and  on  the  certificate  of  the 
court,  at  the  rate  of  five  dollars  per  day  for  every  day  actually  and  necessarily 
employed  in  said  appraisement,  together  with  his  actual  and  necessary  traveling 
expenses. 

The  court  refers  to  the  fact  that  the  practice  as  to  appraisal 
throughout  the  state  has  not  been  uniform,  some  judges  taking  the 
inventory  and  appraisement  as  the  basis,  while  others  cause  an 
appraisement  to  be  made  under  the  inheritance  tax  law,  and  still 
others  resort  to  both  methods.  The  act  of  1905,  section  5,  provides 
for  the  ascertainment  of  the  value  of  life  estates  and  future  estates 
by  the  appraiser  to  be  appointed  by  the  court,  and  the  court  of  ap- 
peals expresses  the  opinion  that  it  would  be  better  to  appoint 
appraisers  in  all  cases.  Becker  v.  Nye  (Cal.  1908),  96  P.  333. 
(See  the  recent  Statute  of  1911,  c.  394.)  v 

Superior  Court  to  have  Jurisdiction. 

S.  16.  The  superior  court  in  the  county  in  which  is  situate  the  real  property  of  a 
decedent  who  was  not  a  resident  of  the  state,  or  if  there  be  no  real  property,  then 
in  the  county  in  which  any  of  the  personal  property  of  such  non-resident  is 
situate,  or  in  the  county  of  which  the  decedent  was  a  resident  at  the  time  of  his 
death,  shall  have  jurisdiction  to  hear  and  determine  all  questions  in  relation  to 
the  tax  arising  under  the  provisions  of  this  act,  and  the  court  first  acquiring 
jurisdiction  hereunder  shall  retain  the  same,  to  the  exclusion  of  every  other. 


This  section  gives  the  superior  court  jurisdiction  as  to  appraisal 
and  the  judgment  of  the  court  on  this  matter  is  conclusive,  subject 
only  to  be  reviewed  on  appeal.  The  state  as  an  interested  party 
may  appeal  from  the  decision.  Becker  v.  Nye  (Cal.  1908),  96  P. 
333. 


^ivb 


5,  c.  314.]  CALIFORNIA.  329 

OPINION   OF   THE   ATTORNEY  GENERAL    IN   REGARD   TO   PRO- 
CEDURE  ON  CITATION. 

There  is  reprinted  herewith  a  letter  written  by  Attorney  General  U.  S.  Webb 
under  date  of  March  30,  1908,  in  response  to  a  request  by  Mr.  Herbert  C.  Jones, 
attorney  for  the  county  treasurer  of  Santa  Clara  County,  for  an  opinion  regarding 
procedure  under  certain  conditions.    Mr.  Jones*  questions  were  the  following:  — ■ 

"*  *  *  Suppose  that  all  of  a  decedent's  property  has  passed  by  deeds  made 
in  contemplation  of  death,  in  which  case  there  are  no  probate  proceedings;  and 
suppose  that  the  grantees  wish  to  pay  the  inheritance  tax.  What  is  the  proper 
procedure  to  determine  the  market  value  of  the  taxable  property?  Is  there  any 
provision  for  the  appointment  of  an  appraiser  in  such  a  case?  If  not,  is  the 
market  value  to  be  fixed  by  the  county  treasurer,  and  are  the  grantees  who  pay 
on  the  basis  so  fixed  by  him  and  file  their  receipt  as  provided  in  section  24  pro- 
tected from  any  subsequent  claim  by  the  state  that  the  market  value  was  not 
correct?" 

To  these  questions  the  attorney  general  made  reply  as  follows :  — 

"Section  1  of  the  act  of  1905  (Stats.  1905,  p.  341)  provides  that  the  tax  shall  be 
assessed  against  all  property  passing  by  deed,  grant,  sale,  or  gift,  made  in  con- 
templation of  the  death  of  the  grantor,  etc. ;  likewise  that  the  tax  shall  be  assessed 
against  all  property  passing  by  "deed,  grant,  sale,  or  gift  *  *  *  intended  to  take 
effect  in  possession  or  enjoyment  after  the  death  of  the  grantor,"  etc. 

Your  question  recognizes  these  facts,  and  is  directed  as  to  procedure. 

Section  17  of  the  act  provides  that  when  it  shall  appear  to  the  superior  court 
or  judge  thereof  that  a  tax  accrued  under  the  act  has  not  been  paid,  such  judge  or 
court  shall  cause  citation  to  issue  for  the  parties  known  to  have  interest  in  the 
property  so  liable,  and  further  provides  the  manner  of  service  and  the  procedure 
after  service. 

Section  18  provides  that  when  the  county  treasurer  has  reason  to  believe  that 
any  accrued  tax  is  unpaid,  he  shall  notify  the  district  attorney,  and  that  the 
district  attorney  so  notified  "shall  prosecute  the  proceedings  in  the  superior  court, 
as  provided  in  section  17,  for  the  enforcement  and  collection  of  this  tax." 

It  would  seem,  under  these  sections,  not  only  proper,  but  also  the  duty  of  the 
district  attorney  (or  the  attorney  acting  instead  of  the  district  attorney,  as  pro- 
vided by  section  23  of  the  act)  to  present  to  the  court  a  petition  showing  the  ex- 
istence of  the  facts  which  bring  the  matter  within  the  provisions  of  said  sections  17 
and  18.  That  petition,  it  occurs  to  me,  should  show  the  fact  of  transfer,  with 
date,  etc.,  the  property  conveyed,  the  parties  to  whom  conveyed,  and  in  whom 
title  rests,  that  such  conveyance  was  made  in  contemplation  of  death,  or,  that 
such  conveyance  was  "intended  to  take  effect  in  possession  or  enjoyment  after 
such  death,"  the  name  of  the  person  or  persons  in  possession  or  enjoyment,  the 
fact  that  the  tax  has  not  been  paid,  and  the  probable  value  of  the  property  con- 
veyed. While  these  are  the  more  essential  facts,  all  other  facts  should  be  alleged 
which  would  tend  to  place  the  court  in  possession  of  the  exact  situation. 

After  service  of  the  citation  and  the  appearance  of  the  party  or  parties  liable 
for  the  tax,  the  court  will  have  jurisdiction  of  the  person  or  persons  and  of  the 
subject-matter,  as  fully  as  though  it  was  sought  to  enforce  the  payment  of  the 
tax  from  the  estate  of  a  deceased  person. 


i 

330  STATUTES  ANNOTATED.  [Cal.  St. 

Assuming  that  the  grantor  in  your  case  was  a  resident  of  the  state,  section  16, 
so  far  as  applicable  to  your  case,  reads :  — 

"The  superior  court  *  *  *  in  the  county  of  which  the  decedent  was  a  resident 
at  the  time  of  his  death,  shall  have  jurisdiction  to  hear  and  determine  all  questions 
in  relation  to  the  tax  arising  under  the  provisions  of  this  act,  and  the  court  first 
acquiring  jurisdiction  hereunder  shall  retain  the  same,  to  the  exclusion  of  every 
other." 

I  am  not  overlooking  the  fact  that  in  the  language  just  quoted  the  word  "de- 
cedent" is  used,  but  in  section  28  of  said  act  it  is  provided  that:  — 

"The  word  'decedent'  as  used  in  this  act  shall  include  the  testator,  intestate, 
grantor,  bargainor,  vendor  or  donor." 

Section  14  provides  for  the  appraisement :  — 

"When  the  value  of  any  inheritance,  devise,  bequest  or  other  interest  subject 
to  the  payment  of  said  tax  is  uncertain,  the  superior  court  in  which  the  probate  pro- 
ceedings are  pending  *  *  *  shall  appoint  some  competent  person  as  appraiser,  "etc. 

It  is  true  that  in  the  language  quoted  it  is  said  "the  superior  court  in  which  the 
probate  proceedings  are  pending  "  but  this  language  must  be  read  in  conjunction 
with  the  language  heretofore  quoted  in  section  16. 

The  primary  purpose  of  section  14  is  to  fix  the  manner  of  appraisements,  etc., 
and  not  the  designation  of  jurisdiction,  while  section  16  is  the  section  of  the  act 
devoted  wholly  to  the  question  of  jurisdiction.  That  section,  as  heretofore  quoted, 
gives  to  the  court  jurisdiction  "to  hear  and  determine  all  questions  in  relation 
to  the  tax  arising  under  the  provisions  of  this  act." 

Where  the  value  of  the  "interest  subject  to  the  payment  of  said  tax  is  uncertain," 
a  necessity  for  appraisement  exists  and  appraisement,  in  my  view,  is  a  question 
in  relation  to  the  tax*,  which  the  court  has  ample  jurisdiction  to  determine. 

In  the  foregoing  I  have  assumed  that  the  payment  of  the  tax  would  be  resisted. 
When  the  petition  has  been  filed  and  citation  issued,  where  the  person  liable  for 
the  tax  is  willing  to  pay  the  same,  upon  the  amount  being  ascertained,  upon  the 
filing  of  the  petition  the  person  could  immediately  appear  and  the  appraisement 
be  speedily  made.  I  entertain  no  doubt  that  the  payment  of  the  tax  ascertained 
to  be  due  through  the  proceeding  above  indicated,  in  the  absence  of  appeal, 
would  acquit  the  person  so  paying  of  liability  under  the  act  and  protect  him  from 
any  claim  subsequently  made  by  the  state. 

This  question  has  not  yet  reached  the  appellate  courts  and  I  am,  therefore, 
unable  to  give  you  decision  supporting  the  views  expressed.  I  trust,  however, 
that  you  will  take  the  matter  up  along  these  lines,  and  if  this  office  can  be  of  any 
service  to  you  hereafter,  such  service  will  be  cheerfully  rendered. 

Repeal  of  **Collateral  Inheritance  Tax  Law.*' 

S.  27.  An  act  entitled  'An  Act  to  establish  a  tax  on  collateral  inheritances, 
bequests  and  devises,  to  provide  for  its  collection,  and  to  direct  the  disposition  of 
the  proceeds,"  approved  March  23,  1893,  and  all  amendments  thereto,  and  all 
acts  and  parts  of  acts  in  conflict  with  this  act  are  hereby  expressly  repealed. 

Effect  on  Taxes  Already  Due. 

The  right  of  the  state  to  the  inheritance  tax  under  the  law  of 
1893  is  immediately  upon  the  death  of  the  decedent  a  vested  right 


905,  c.  314.]  CALIFORNIA.  .  331 

which  cannot  be  surrendered  by  a  legislative  act  and  no  amendment 
or  extension  can  take  away  this  right.  So  a  tax  due  before  the 
statute  of  1905  was  passed  can  be  collected  after  it  is  passed.  Trippet 
V.  State,  149  Cal.  521,  86  P.  1084,  8  L.  R.  A.  (N.  S.)  1210.  In  re 
Lander  (Cal.  1907),  93  P.  202. 

Cal.  St.  1905,  c.  314,  substantially  enacted  the  provisions  of 
the  former  law  respecting  the  payment  and  collection  of  succession 
taxes  and  was  done  with  the  knowledge  of  the  existence  of  certain 
uncollected  taxes  and  with  the  intent  to  continue  in  force  a  mode  and 
means  for  their  collection.  And  the  court  has  the  authority  under 
this  statute  to  order  the  executor  to  deduct  from  certain  legacies 
the  amount  of  the  tax,  especially  in  view  of  St.  1905,  c.  85,  to 
the  effect  that  the  court  must  be  satisfied  that  any  inheritance 
tax  has  been  paid  before  any  decree  or  distribution  of  an  estate  is 
made.    In  re  Bowen's  Estate  (Cal.  1908),  94  P.  1055. 

The  court  finds  that  the  amendment  of  1905  to  the  California 
statute  did  not  render  the  federal  question  as  to  the  validity  of  the 
prior  statute  a  moot  question  in  relation  to  the  estate  of  one  who 
had  died  before  the  statute  of  1905  was  passed.  Campbell  v. 
California,  200  U.  S.  87,  26  S.  Ct.  182,  50  L.  Ed.  382. 

Where  a  new  law  was  passed  in  California  in  1905,  after  a  case  was 
taken  to  the  supreme  court  at  Washington  repealing  the  prior 
statutes  without  any  clause  saving  the  right  of  the  state  in  respect 
to  charges  already  approved,  the  court  was  asked  to  reverse  the 
judgment  of  the  California  court  on  the  ground  that  the  state  no 
longer  had  any  authority  whatever  to  levy  an  inheritance  tax,  but 
the  court  holds  that  it  is  its  duty  to  decide  the  federal  question 
and  to  leave  the  local  question  to  the  supreme  court  of  California. 
Campbell  v.  California,  200  U.  S.  87,  26  S.  Ct.  182,  50  L.  Ed.  382. 

RULES  OF   PRACTICE  OF  THE  CONTROLLER'S   OFFICE   UNDER 
THE  ACT  OF  1905. 

1.  Form  of  receipt.  —  As  it  is  necessary  that  the  controller's  office  should  keep 
an  intelligible  record  of  payments,  it  is  requested  that  treasurers'  receipts  be 
made  out  to  show  date  of  death,  total  value  of  estate,  relationship  and  share  of 
each  distributee,  exemptions  allowed,  net  tax,  interest  due  if  any  and  total  tax. 
Blank  forms  of  receipts  are  furnished  by  this  office. 

2.  Incorrect  computations.  —  When  receipts  presented  for  countersignature 
show  upon  their  face  a  probable  error  in  computation  of  the  tax,  they  will  be 
returned  for  fuller  information  or  for  correction.  In  every  instance  thus  far  the 
courts  have  been  found  desirous  of  correcting  errors  where  they  have  occurred. 


332  STATUTES  ANNOTATED.  [Cal.  St. 

3.  Mode  of  computing  tax.  —  In  computing  the  tax,  and  especially  in  the  matter 
of  deducting  exemptions  from  the  first  $25,000  in  value  of  the  estate,  the  rule  laid 
down  by  the  supreme  court  inEstate  of  Bull  (153  Cal.  715)  should  be  followed.  That 
rule  is  more  fully  explained  in  the  controller's  circular  (reprinted  at  p.  000,  ante) 

4.  Court  order  necessary.  —  In  cases  where  there  have  been  no  probate  proceed- 
ings, but  an  inheritance  or  transfer  tax  is  due  as,  for  example,  when  the  whole 
estate  has  been  deeded  in  contemplation  of  death,  an  order  fixing  the  amount 
payable  must  be  obtained  from  the  superior  court. 

5.  Increase  or  decrease  of  estate.  —  Inasmuch  as  the  tax  vests  at  date  of  death, 
the  appraised  value  should  represent  as  nearly  as  possible  what  the  estate  was 
worth  at  time  of  decease.  Neither  subsequent  increase  in  value  of  the  estate 
nor  its  diminution  should  be  considered.  Rents,  interest,  and  other  increments 
should  not  be  included  and  no  deduction  should  be  made  for  expense  of  mainte- 
nance or  for  improvements  subsequent  to  the  time  the  tax  vested. 

6.  Payment  on  partial  distribution.  —  When  an  order  of  partial  distribution 
has  been  made  by  probate  court,  payment  may  be  made  of  that  proportionate  part 
of  the  tax,  the  usual  order  fixing  the  tax  due  being  first  obtained. 

7.  Insufficient  or  excessive  paymen  .  —  The  issue  of  a  treasurer's  receipt 
countersigned  by  the  controller  does  not  release  an  estate  from  further  payment 
if  subsequently  additional  property  is  discovered  which  was  not  covered  by  the 
order  fixing  the  tax.  On  the  other  hand,  where  the  amount  of  tax  paid  was  in 
excess  of  what  was  actually  due  under  the  law,  the  excess  may  be  recovered. 

8.  Method  of  recovery  of  excess.  —  In  order  to  recover  any  excess  of  tax  which 
may  have  been  paid,  an  order  of  court  should  be  secured  reciting  the  facts  in 
sufficient  detail  to  make  the  record  intelligible,  after  which  the  controller  will 
authorize  the  county  treasurer  to  repay  the  amount  of  the  excess  out  of  any 
inheritance  tax  funds  in  his  (the  treasurer's)  hands,  and  to  credit  himself  with 
such  amount  in  his  next  periodical  settlement  with  the  state. 

9.  Treasurers'  commissions  and  appraisers'  fees.  —  In  computing  the  com- 
missions to  which  county  treasurers  are  entitled  under  section  22  of  the  Inheritance 
Tax  Act,  the  words  "each  year"  are  construed  to  mean  each  fiscal  year.  This  rule 
is  based  on  an  opinion  rendered  by  Attorney  General  Ford  under  date  of  May  24, 
1899.  Treasurers,  will  credit  themselves  with  the  proper  amount  of  commission 
in  each  semi-annual  settlement  with  state.  Appraisers'  fees  may  be  paid  any  time 
on  order  of  court  ou :  of  any  inheritance  tax  money  in  treasurer's  hands,  but 
in  settlement  with  state  a  copy  of  each  such  order  must  be  furnished  the  controller 
so  that  he  may  credit  the  treasurer  with  such  payments  The  net  result  of  all  such 
transactions  will,  of  course,  appear  in  county  auditor's  report. 

10.  When  an  inheritance  or  transfer  tax  has  been  paid  in  a  case  where  there 
is  no  probate  record,  but  a  citation  has  been  issued  and  order  of  court  made, 
especially  where  realty  has  been  transferred,  the  controller  will,  on  presentation 
of  the  receipt  of  the  county  treasurer,  with  a  description  of  the  property,  certify 
to  such  payment  of  tax,  which  certificate  may  be  recorded,  if  so  desired. 

Other  Acts. 

Cal.  St.  1905,  c.  85,  p.83,  approved  March  7,  1905,  is  as  follows:  — 

S.  1.  Section  1669  o"  the  Code  of  Civil  Procedure  of  the  state  of  California  is 
hereby  amended  to  read  as  follows:  — 


1911,  c.  395.]  CALIFORNIA.  333 

1669.  Before  any  decree  of  distribution  of  an  estate  is  made,  the  court  must 
be  satisfied,  by  the  oath  of  the  executor  or  administrator,  or  otherwise,  that  all 
state,  county  and  municipal  taxes,  legally  levied  upon  property  of  the  estate, 
and  any  inheritance  tax  which  is  due  and  payable  have  been  fully  paid. 

Cal.  St.  1905,  c.  325,  p.  374,  approved  March  20,  1905,  provides 
machinery  for  the  collection  of  the  inheritance  tax  and  also  provides 
that  actions  may  be  brought  against  the  estate  for  the  purpose  of 
quieting  title  to  property  against  the  lien  or  claim  of  lien  of  taxes 
under  the  inheritance  statutes. 

Cal.  St.  1909,  c.  337,  p.  557,  approved  March  20,  1909,  provides 
for  the  collection  of  taxes  by  an  inheritance  tax  deputy. 

THE  PRESENT  ACT. 

Cal.  St.  1911,  c.  395.     Approved  April  7,  1911. 

An  Act  to  establish  a  tax  on  gifts,  legacies,  inheritances,  be- 
quests, DEVISES,  successions  AND  TRANSFERS,  to  provide  for 
its  collection,  and  to  direct  the  disposition  of  its  proceeds;  to  pro- 
vide for  the  enforcement  of  liens  created  by  this  act  and  for  suits 
to  quiet  title  against  claims  of  lien  arising  hereunder;  to  repeal  an 
act  entitled  "An  Act  to  establish  a  tax  on  gifts,  legacies,  inheritances,  be- 
quests, devises,  successions  and  transfers,  to  provide  for  its  collection  and  to 
direct  the  disposition  of  its  proceeds;  to  provide  for  the  enforcement  of  liens 
created  by  this  act  and  for  suits  to  quiet  title  against  claims  of  lien  arising 
hereunder;  to  repeal  an  act  entitled  'An  Act  to  establish  a  tax  on  collateral 
inheritances,  bequests  and  devises,  to  provide  for  the  collection  and  to  direct 
the  disposition  of  its  proceeds,'  approved  March  23,  1893,  and  all  amendments 
thereto,  and  to  repeal  all  acts  and  parts  of  acts  in  conflict  with  this  act,"  ap- 
proved March  20,  1905,  and  all  amendments  thereto  and  all  acts  and  parts 
of  acts  in  conflict  with  this  act. 

Property  Subject  to  Tax.  —  Lien. 

S.  1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  property, 
real,  personal  or  mixed,  or  of  any  interest  therein  or  income  therefrom,  in  trust  or 
otherwise,  to  persons,  institutions  or  corporations,  not  hereinafter  exempted, 
to  be  paid  to  the  treasurer  of  the  proper  county,  as  hereinafter  directed,  for  the  use 
of  the  state,  in  the  following  cases:  — 

(1)  When  the  transfer  is  by  will  or  by  the  intestate  or  homestead  laws  of  this 
state,  from  any  person  dying  seized  or  possessed  of  the  property  while  a  resident 
of  the  state,  or  by  any  probate  homestead  set  apart  from  said  property. 

(2)  When  the  transfer  is  by  will  or  intestate  laws  of  property  within  this  state 
and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

(3)  When  the  transfer  is  of  property  made  by  a  resident,  or  by  a  non-resident 
when  such  non-resident's  property  is  within  this  state,  by  deed,  grant,  bargain, 
sale,  assignment  or  gift,  made  without  valuable  and  adequate  consideration  in 
contemplation  of  the  death  of  the  grantor,  vendor,  assignor  or  donor,  or  intended 
to  take  effect  in  possession  or  enjoyment  at  or  after  such  death.    When  any  such 


334  STATUTES  ANNOTATED.  [Cal.  St. 

person,  institution  or  corporation  becomes  beneficially  entitled  in  possession  or 
expectancy  to  any  property  or  the  income  therefrom,  by  any  such  transfer 
whether  made  before  or  after  the  passage  of  this  act. 

(4)  Such  taxes  shall  be  and  remain  a  Hen  upon  the  property  passed  or  trans- 
ferred until  paid,  and  the  person  to  whom  the  property  passes  or  is  transferred 
and  all  administrators,  executors  and  trustees  of  every  estate  so  transferred  or 
passed,  shall  be  liable  for  any  and  all  such  taxes  until  the  same  shall  have  been 
paid  as  hereinafter  directed;  provided,  that  unless  sued  for  within  five  years 
after  they  are  due  and  legally  demandable,  such  taxes  shall  cease  to  be  a  lien  as 
against  any  bona  fide  purchaser  of  real  property;  and  provided  that  no  such  lien 
shall  cease  within  five  years  from  the  date  of  the  passage  of  this  act.  The  tax 
so  imposed  shall  be  upon  the  market  value  of  such  property  at  the  rates  hereinafter 
prescribed  and  only  upon  the  excess  over  the  exemptions  hereinafter  granted. 

Whenever  any  person  or  corporation  shall  exercise  a  power  of  appointment 
derived  from  any  disposition  of  property  made  either  before  or  after  the  passage 
of  this  act,  such  appointment,  when  made,  shall  be  deemed  a  transfer  taxable 
under  the  provisions  of  this  act,  in  the  same  manner  as  though  the  property  to 
which  such  appointment  relates  belonged  absolutely  to  the  donee  of  such  power, 
and  had  been  bequeathed  or  devised  by  such  uonee  by  will;  and  whenever  any 
person  or  corporation  possessing  such  power  of  appointment  so  derived  shall 
omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole 
or  in  part,  a  transfer  taxable  under  the  provisions  of  this  act  shall  be  deemed  to 
take  place  to  the  extent  of  such  omission  or  failure,  in  the  same  manner  as  though 
the  persons  or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoy- 
ment of  the  property  to  which  such  power  related  had  succeeded  thereto  by  a 
will  of  the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at  the 
time  of  such  omission  or  failure. 

[See  notes  to  the  Acts  of  1893  and  1905,  ante,  pp.  313,  320.] 

Primary  Rates. 

S.  2.  When  the  property  or  any  beneficial  interest  therein  so  passed  or  trans- 
ferred exceeds  in  value  the  exemption  hereinafter  specified  and  shall  not  exceed  in 
value  twenty-five  thousand  dollars,  the  tax  hereby  imposed  shall  be:  — 

(1)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  husband,  wife,  lineal  issue,  lineal  ancestor  of  the  decedent  or 
any  child  adopted  as  such  in  conformity  with  the  laws  of  this  state,  or  any  child 
to  whom  such  decedent  for  not  less  than  ten  years  prior  to  such  transfer  stood  in 
the  mutually  acknowledged  relation  of  a  parent,  provided,  however,  such  relation- 
ship began  at  or  before  the  child's  fifteenth  birthday,  and  was  continuous  for 
said  ten  years  thereafter,  or  any  lineal  issue  of  such  adopted  or  mutually  acknowl- 
edged child,  at  the  rate  of  one  per  centum  of  the  clear  value  of  such  interest  in 
such  property. 

(2)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  or  a  descendant  of  a  brother  or  sister  of  the 
decedent,  a  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter  of  the  decedent, 
at  the  rate  of  two  per  centum  of  the  clear  value  of  such  interest  in  such  property. 

(3)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  father  or  mother  or  a  descendant 


1911,  c.  395.]  CALIFORNIA.  335 

of  a  brother  or  sister  of  the  father  or  mother  of  the  decedent,  at  the  rate  of  three 
per  centum  of  the  clear  value  of  such  interest  in  such  property. 

(4)  Where  the  person  or  persons  entitled  to  any  beneficial  interests  in  such  prop- 
erty shall  be  the  brother  or  sister  of  the  grandfather  or  grandmother  or  a  descendant 
of  the  brother  or  sister  of  the  grandfather  or  grandmother  of  the  decedent,  at 
the  rate  of  four  per  centum  of  the  clear  value  of  such  interest  in  such  property. 

(5)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  herein- 
before stated,  or  shall  be  a  stranger  in  blood  to  the  decedent,  or  shall  be  a  body 
politic  or  corporate,  at  the  rate  of  five  per  centum  of  the  clear  value  of  such 
interest  in  such  property. 

[See  notes  to  the  Act  of  1905,  ante,  p.  324.] 

Progressive  Rates. 

S.  3.  The  foregoing  rates  in  section  two  are  for  convenience  termed  the 
primary  rates.  When  the  market  value  of  such  property  or  interest  exceeds 
twenty-five  thousand  dollars,  the  rates  of  tax  upon  such  excess  shall  be  as  follows: 

(1)  Upon  all  in  excess  of  $25,000  and  up  to  $50,000,  two  times  the  primary  rate& 

(2)  Upon  all  in  excess  of  $50,000  and  up  to  $100,000,  three  times  the  primary 
rates. 

(3)  Upon  all  in  excess  of  $100,000  and  up  to  $500,000,  four  times  the  primary 
rates. 

(4)  Upon  all  in  excess  of  $500,000,  five  times  the  primary  rates. 
[See  notes  to  the  Act  of  1905,  ante,  p.  324.] 

Exemptions. 

S.  4.     The  following  exemptions  from  the  tax  are  hereby  allowed :  — 

(1)  All  property  transferred  to  societies,  corporations  and  institutions  now  or 
hereafter  exempted  by  law  from  taxation,  or  to  any  public  corporation,  or  to  any 
society,  corporation,  institution  or  association  of  persons  engaged  in  or  devoted 
to  any  charitable,  benevolent,  educational,  public  or  other  like  work  (pecuniary 
profit  not  being  its  object  or  purpose),  or  to  any  person,  society,  corporation, 
institution  or  association  of  persons  in  trust  for  or  to  be  devoted  to  any  charitable, 
benevolent,  educational  or  public  purpose,  by  reason  whereof  any  such  person  or 
corporation  shall  become  beneficially  entitled,  in  possession  or  expectancy,  to  any 
such  property  or  to  the  income  thereof  shall  be  exempt. 

(2)  Property  of  the  clear  value  of  twenty-four  thousand  ($24,000.00)  dollars 
transferred  to  the  widow  or  to  a  minor  child  of  the  decedent,  and  of  ten  thousand 
($10,000.00)  dollars  transferred  to  each  of  the  other  persons  described  in  the  first 
sub-division  of  section  two  shall  be  exempt. 

(3)  Property  of  the  clear  value  of  two  thousand  ($2,000.00)  dollars  transferred 
to  each  of  the  persons  described  in  the  second  sub-division  of  section  two  shall 
be  exempt. 

(4)  Property  of  the  clear  value  of  one  thousand  five-  hundred  ($1,500.00) 
dollars  transferred  to  each  of  the  persons  described  in  the  third  sub-division  of 
section  two  shall  be  exempt. 

(5)  Property  of  the  clear  value  of  one  thousand  ($1,000.00)  dollars  transferred 
to  each  of  the  persons  described  in  the  fourth  sub-division  of  section  two  shall 
be  exempt. 


336  STATUTES  ANNOTATED.  [Cal.  St. 

(6)  Property  of  the  clear  value  of  five  hundred  ($500.00)  dollars  transferred 
to  each  of  the  persons  and  corporations  described  in  the  fifth  sub-division  of 
bcction  two  shall  be  exempt. 

[See  notes  to  the  Act  of  1905,  ante,  p.  324.] 

Life  Estates.  —  Estates  Determinable  on  Future  Events. 

S.  5.  When  any  grant,  gift,  legacy,  devise  or  succession  upon  which  a  tax 
is  imposed  by  section  one  of  this  act  shall  be  an  estate,  income,  or  interest  for  a 
term  of  years  or  for  life,  or  determinable  upon  any  future  or  contingent  event,  or 
shall  be  a  remainder,  reversion  or  other  expectancy,  real  or  personal,  the  entire 
property  or  fund  by  which  such  estate,  income  or  interest  is  supported,  or  of 
which  it  is  a  part,  shall  be  appraised  immediately  after  the  death  of  the  decedent 
and  the  market  value  thereof  determined  in  the  manner  provided  in  section 
fifteen  of  this  act  and  the  tax  prescribed  by  this  act  shall  be  immediately  due  and 
payable  to  the  treasurer  of  the  proper  county  and,  together  with  the  interest 
thereon,  shall  be  and  remain  a  lien  on  said  property  until  the  same  is  paid;  pro- 
vided, that  the  person  or  persons,  or  body  politic  or  corporate,  beneficially 
interested  in  the  property  chargeable  with  said  tax,  may  elect  not  to  pay  the  same 
until  they  shall  come  into  the  actual  possession  or  enjoyment  of  such  property, 
and  in  that  case  such  person  or  persons  or  body  politic  or  corporate,  shall  execute 
a  bond  to  the  people  of  the  state  of  California,  in  a  penalty  of  twice  the  amount 
of  the  tax  arising  upon  personal  estate,  with  such  sureties  as  the  said  superior 
court  may  approve,  conditioned  for  the  payment  of  said  tax  and  interest 
thereon,  at  such  time  or  period  as  they  or  their  representatives  may  come  into 
the  actual  possession  or  enjoyment  of  such  property,  which  bond  shall  be 
filed  in  the  office  of  the  county  clerk  of  the  proper  county  and  a  certified 
copy  thereof  shall  be  immediately  transmitted  to  the  state  controller; 
provided  further,  that  such  person  shall  make  a  full  and  verified  return  of  such 
property  to  said  court,  and  file  the  same  in  the  office  of  the  county  clerk  within 
one  year  from  the  death  of  the  decedent,  and  within  that  period  enter  into  such 
security  and  renew  the  same  every  five  years. 

Bequests  to  Executors  or  Trustees. 

S.  6.  Whenever  a  decedent  appoints  or  names  one  or  more  executors  or 
trustees,  and  makes  a  bequest  or  devise  of  property  to  them  in  lieu  of  commissions 
or  allowances,  which  otherwise  would  be  liable  to  said  tax,  or  appoints  them  his 
residuary  legatees  and  said  bequest,  devises,  or  residuary  legacies  exceed  what 
would  be  a  reasonable  compensation  for  their  services,  such  excess  over  and  above 
the  exemptions  herein  provided  for  shall  be  liable  to  said  tax;  and  the  superior 
court  in  which  the  probate  proceedings  are  pending  shall  fix  the  compensation. 

Taxes  Due  and  Payable  at  Death.  —  Interest.  —  Discount. 

S.  7.  All  taxes  imposed  by  this  act,  unless  otherwise  herein  provided  for,  shall 
be  due  and  payable  at  the  death  of  the  decedent  and  if  the  same  are  paid  within 
eighteen  months,  no  interest  shall  be  charged  and  collected  thereon,  but  if  not 
so  paid,  interest  at  the  rate  of  ten  per  centum  per  annum  shall  be  charged  and 
collected  from  the  time  said  tax  accrued;  provided,  that  if  said  tax  is  paid  within 
six  months  from  the  accruing  thereof  a  discount  of  five  per  centum  shall  be  allowed 
and  deducted  from  said  tax.    And  in  all  cases  where  the  executors,  administrators 


1911,  c.  395.]  CALIFORNIA.  337 

or  trustees  do  not  pay  such  tax  within  eighteen  months  from  the  death  of  the 
decedent,  they  shall  be  required  to  give  a  bond  in  the  form  and  to  the  effect 
prescribed  in  section  five  of  this  act  for  the  payment  of  said  tax,  together  with 
interest. 

Penalty.  —  Interest. 

S.  8.  The  penalty  of  ten  per  cent  per  annum  imposed  by  section  seven  hereof, 
for  the  non-payment  of  said  tax,  shall  not  be  charged  in  cases  where,  in  the  judg- 
ment of  the  court,  by  reason  of  claims  made  upon  the  estate,  necessary  litigation 
or  other  unavoidable  cause  of  delay,  the  estate  of  any  decedent,  or  a  part  thereof 
can  not  be  settled  at  the  end  of  eighteen  months  from  the  death  of  the  decedent; 
but  in  such  cases  seven  per  cent  per  annum  shall  be  charged  upon  the  said  tax 
from  the  expiration  of  said  eighteen  months  until  the  cause  of  such  delay  is  re- 
moved, after  which  ten  per  cent  interest  per  annum  shall  again  be  charged  until 
the  tax  is  paid ;  but  litigation  to  defeat  the  payment  of  the  tax  shall  not  be  con- 
sidered necessary'  litigation. 

Administrators  to  Deduct  Amount  of  Tax. 

S.  9.  Any  administrator,  executor  or  trustee  having  in  charge  or  trust  any 
legacy  or  property  for  distribution,  subject  to  the  said  tax,  shall  deduct  the  tax 
therefrom,  or  if  the  legacy  or  property  be  not  money  he  shall  collect  the  tax 
thereon,  upon  the  market  value  thereof,  from  the  legatee  or  person  entitled  to  such 
property,  and  he  shall  not  deliver,  or  be  compelled  to  deliver,  any  specific  legacy  or 
property  subject  to  tax  to  any  person  until  he  shall  have  collected  the  tax  thereon; 
and  whenever  any  such  legacy  shall  be  charged  upon  or  payable  out  of  real  estate, 
the  executor,  administrator  or  trustee  shall  collect  said  tax  from  the  distributee 
thereof,  and  the  same  shall  remain  a  charge  on  such  real  estate  until  paid;  if, 
however,  such  legacy  be  given  in  money  to  any  person  for  a  limited  period,  the 
executor,  administrator  or  trustee  shall  retain  the  tax  upon  the  whole  amount; 
but  if  it  be  not  in  money  he  shall  make  application  to  the  superior  court  to  make 
an  apportionment,  if  the  case  require  it,  of  the  sum  to  be  paid  into  his  hands  by 
such  legatees,  and  for  such  further  order  relative  thereto  as  the  case  may  require. 

[See  notes  to  the  Act  of  1905,  ante,  p.  326.] 

Power  of  Sale. 

S.  10.  All  executors,  administrators  and  trustees  shall  have  full  power  to  sell 
so  much  of  the  property  of  the  decedent  as  will  enable  them  to  pay  said  tax,  in 
the  same  manner  as  they  may  be  enabled  by  law  to  do  for  the  payment  of  debts 
of  the  estate,  and  the  amount  of  said  tax  shall  be  paid  as  hereinafter  directed. 

Payment.  —  Receipts. 

S.  11.  Every  sum  of  money  retained  by  an  executor,  administrator  or  trustee, 
or  paid  into  his  hands,  for  any  tax  on  property,  shall  be  paid  by  him,  within  thirty 
days  thereafter,  to  the  treasurer  of  the  county  in  which  the  probate  proceedings 
are  pending.  Upon  the  payment  to  any  county  treasurer  of  any  tax  due  under 
this  act,  such  treasurer  shall  issue  a  receipt  therefor  in  triplicate,  one  copy  of 
which  he  shall  deliver  to  the  person  paying  said  tax,  and  the  original  and  one  copy 
thereof  he  shall  immediately  send  to  the  controller  of  state,  whose  duty  it  shall  be 
to  charge  the  treasurer  so  receiving  the  tax  with  the  amount  thereof,  and  said 


338  STATUTES  ANNOTATED.  [Cal.  St. 

controller  shall  retain  one  of  said  receipts  and  the  other  he  shall  countersign  and 
seal  with  the  seal  of  his  office,  and  immediately  transmit  to  the  clerk  of  the  court 
fixing  such  tax.  And  an  executor,  administrator  or  trustee  shall  not  be  entitled 
to  credits  in  his  accounts,  nor  be  discharged  from  liability  for  such  tax,  nor  shall 
said  estate  be  distributed,  unless  a  receipt  so  sealed  and  countersigned  by  the 
controller,  or  a  copy  thereof,  certified  by  him,  shall  have  been  filed  with  the  court. 

Any  person  shall,  upon  payment  to  the  county  treasurer  of  the  sum  of  fifty 
cents,  be  entitled  to  a  duplicate,  or  copy,  of  any  receipt  that  may  have  been  given 
by  said  treasurer  for  the  payment  of  any  tax  under  this  act. 

[See  notes  to  the  Act  of  1905,  ante,  p.  327.] 

Refund  to  Pay  Debts. 

S.  12.  Whenever  any  debts  shall  be  proven  against  the  estate  of  a  decedent 
after  the  payment  of  legacies  or  distribution  of  property  from  which  the  said  tax 
has  been  deducted  or  upon  which  it  has  been  paid,  and  a  refund  is  made  by  the 
legatee,  devisee,  heir  or  next  of  kin,  a  proportion  of  the  tax  so  deducted  or  paid 
shall  be  repaid  to  him  by  the  executor,  administrator  or  trustee,  if  the  said  tax 
has  not  been  paid  to  the  county  treasurer  or  to  the  state  treasurer,  or  by  said 
county  treasurer,  or  said  state  treasurer  (on  warrant  of  the  state  controller)  if 
it  has  been  so  paid. 

Duty  of  Administrator  on  Transfer  of  Stock. 

S.  13.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  transfer 
any  stock  or  obligation  in  this  state  standing  in  the  name  of  a  decedent,  or  in 
trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the  treasurer 
of  the  proper  county  on  the  transfer  thereof.  No  safe  deposit  company,  trust 
company,  corporation,  bank  or  other  institution,  person  or  persons  having  in 
possession  or  under  control  securities,  deposits  or  other  assets  belonging  to  or 
standing  in  the  name  of  a  decedent  who  was  a  resident  or  non-resident  or  belonging 
to,  or  standing  in  the  joint  names  of  such  a  decedent  and  one  or  more  persons, 
including  the  shares  of  the  capital  stock  of,  or  other  interests  in,  the  safe  deposit 
company,  trust  company,  corporation,  bank  or  other  institution  making  the 
delivery  or  transfer  herein  provided,  shall  deliver  or  transfer  the  same  to 
the  executors,  administrators  or  legal  representatives  of  said  decedent,  or  to  the 
survivor  or  survivors  when  held  in  the  joint  names  of  a  decedent  and  one  or  more 
persons,  or  upon  their  order  or  request,  unless  notice  of  the  time  and  place  of 
such  intended  delivery  or  transfer  be  served  upon  the  state  controller  and  county 
treasurer  at  least  ten  days  prior  to  said  delivery  or  transfer;  nor  shall  any  such  safe 
deposit  company,  trust  company,  corporation,  bank  or  other  institution,  person 
or  persons,  deliver  or  transfer  any  securities,  deposits  or  other  assets  belonging 
to  or  standing  in  the  name  of  a  decedent,  or  belonging  to,  or  standing  in  the  joint 
names  of  a  decedent  and  one  or  more  persons,  including  the  shares  of  the  capital 
stock  of,  or  other  interests  in,  the  safe  deposit  company,  trust  company,  corpora- 
tion, bank  or  other  institution  making  the  delivery  or  transfer,  without  retaining 
a  sufficient  portion  or  amount  thereof  to  pay  any  tax  and  interest  which  may 
thereafter  be  assessed  on  account  of  the  delivery  or  transfer  of  such  securities, 
deposits  or  other  assets,  including  the  shares  of  the  capital  stock  of,  or  other 
interests  in,  the  safe  deposit  company,  trust  company,  corporation,  bank  or  other 
institution  making  the  delivery  or  transfer,  under  the  provisions  of  this  act,  unless 


1911,  c.  395.]  CALIFORNIA.  3S9 

the  state  controller,  or  person  by  him  in  writing  authorized  so  to  do,  consents 
thereto  in  writing.  And  it  shall  be  lawful  for  the  state  controller  or  the  county 
treasurer,  personally  or  by  representatives,  to  examine  said  securities,  deposits 
or  assets  at  the  time  of  such  delivery  or  transfer.  Failure  to  serve  such  notice 
or  failure  to  allow  such  examination,  or  failure  to  retain  a  sufficient  portion  or 
amount  to  pay  such  tax  and  interest  as  herein  provided,  or  violation  of  the  pro- 
visions of  this  section,  shall  render  said  safe  deposit  company,  trust  company, 
corporation,  bank  or  other  institution,  person  or  persons  liable  to  the  payment 
of  the  amount  of  the  tax  and  interest  due  or  thereafter  to  become  due  upon  said 
securities,  deposits  or  other  assets,  including  the  shares  of  the  capital  stock  of, 
or  other  interests  in,  the  safe  deposit  company,  trust  company,  corporation,  bank 
or  other  institution  making  the  delivery  or  transfer,  and  in  addition  thereto,  a 
penalty  of  not  less  than  one  thousand  nor  more  than  twenty  thousand  dollars; 
and  the  payment  of  such  tax  and  interest  thereon,  or  of  the  penalty  above  pre- 
scribed, or  both,  may  be  enforced  in  an  action  brought  by  the  state  controller  or 
county  treasurer  in  any  court  of  competent  jurisdiction. 

Appraisers. 

S.  14.  The  state  controller  shall  appoint,  and  may  at  his  pleasure  remove,  one 
or  more  persons  in  each  county  of  the  state  to  act  as  inheritance  tax  appraisers 
therein.  Every  such  inheritance  tax  appraiser  (in  addition  to  any  fees  paid  him 
as  appraiser  under  section  1444  of  the  Code  of  Civil  Procedure)  shall  be  paid  by 
the  county  treasurer,  out  of  any  funds  that  he  may  have  in  his  hands  on  account 
of  said  tax,  on  presentation  of  a  sworn  itemi  ed  account  and  on  the  certificate  of 
the  superior  court,  at  the  rate  of  five  dollars  per  day  for  every  day  actually  and 
necessarily  employed  in  said  inheritance  tax  appraisement,  together  with  his 
actual  and  necessary  traveling  and  other  incidental  expenses,  and  the  fees  paid 
such  witnesses  as  he  shall  subpoena  before  him,  which  fees  shall  be  the  same  as 
those  now  paid  to  witnesses  subpoenaed  to  attend  in  courts  of  record.  Any  such 
appraiser  who  shall  take  any  fee  or  reward,  other  than  such  as  may  be  allowed 
him  by  law,  from  any  executor,  administrator,  trustee,  legatee,  next  of  kin  or 
heir  of  any  decedent,  or  from  any  other  person  liable  to  pay  said  tax,  or  any  por- 
tion thereof,  shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  thereof  shall 
be  fined  not  less  than  two  hundred  and  fifty  dollars  nor  more  than  five  hundred 
dollars,  or  be  imprisoned  in  the  county  jail  ninety  days,  or  both,  and  in  addition 
thereto  the  court  shall  dismiss  him  from  such  service.  (C/.  Cal.  St.,  1911,  c.  394, 
post  p.  346.) 

[See  notes  to  the  Act  of  1905,  ante,  p.  328.] 

Appraisal. 

S.  15.  (1)  The  superior  court  having  jurisdiction  to  determine  any  such  tax, 
either  upon  its  own  motion  or  upon  the  application  of  any  interested  person, 
including  the  state  controller  or  county  treasurer,  shall  by  order  direct  the  person, 
or  one  of  the  persons,  appointed  pursuant  to  section  14  of  this  act,  to  fix  the  clear 
market  value  of  property  of  persons  whose  estates  shall  be  subject  to  the  payment 
of  any  tax  under  this  act.  Every  such  appraiser  shall  forthwith  give  notice  by 
mail  to  all  persons  known  to  have  aclaim  or  interest  in  the  propertyto  be  appraised, 
including  the  state  controller  and  the  treasurer  of  the  county  in  which  such  tax 
is  to  be  paid,  and  to  such  person  or  persons  as  the  superior  court  may  by  order 


340  STATUTES  ANNOTATED.  [Cal.  S^ 

direct,  of  the  time  and  place  when  he  will  hear  all  persons  interested  in  the  aj 
praisement  of  such  estate.  He  shall  thereupon  appraise  the  said  property  at  its' 
fair  market  value  as  herein  prescribed;  and  for  the  purpose  of  making  said  ap- 
praisement the  said  appraiser  is  hereby  authorized  to  issue  subpoenas  and  compel 
the  attendance  of  witnesses  before  him,  to  administer  oaths,  and  to  take  the 
evidence  of  such  witnesses  under  oath  concerning  such  property  and  the  value 
thereof;  and  he  shall  make  report  thereof  and  of  such  value  in  writing  to  the 
said  superior  court,  together  with  the  depositions  of  the  witnesses  examined,  and 
such  other  facts  in  relation  thereto  as  said  superior  court  may  order  or  require; 
and  the  value  of  every  future  or  contingent  or  limited  estate,  income  or  interest 
shall,  for  the  purposes  of  this  act,  be  determined  by  the  rule,  method  and  standards 
of  mortality  and  of  value  that  are  set  forth  in  the  actuaries'  combined  experience 
tables  of  mortality  for  ascertaining  the  value  of  policies  of  life  insurance  and 
annuities,  and  for  the  determination  of  the  liabilities  of  life  insurance  companies, 
save  that  the  rate  of  interest  to  be  assessed  in  computing  the  present  value  of  all 
future  interests  and  contingencies  shall  be  five  per  centum  per  annum. 

The  insurance  commissioner  shall,  on  the  application  of  any  superior  court, 
determine  the  value  of  any  future  or  contingent  estates,  income  or  interest  therein 
limited,  contingent,  dependent  or  determinable  upon  the  life  or  lives  of  persons 
:'n  being,  upon  the  facts  contained  in  any  such  appraiser's  report,  or  other  facts 
to  him  submitted  by  said  court,  and  certify  the  same  to  the  superior  court,  and  his 
certificate  shall  be  conclusive  evidence  that  the  method  of  computation  adopted 
therein  is  correct. 

In  estimating  the  value  of  any  estate  or  interest  in  property,  to  the  beneficial 
enjoyment  or  possession  whereof  there  are  persons  or  corporations  presently 
entitled  thereto,  no  allowance  shall  be  made  on  account  of  any  contingent  in- 
cumbrance thereon,  nor  on  account  of  any  contingency  upon  the  happening  of 
which  the  estate  or  property  or  some  part  thereof  or  interest  therein  might  be 
abridged,  defeated  or  diminished;  provided,  however,  that  in  the  event  of  such 
incumbrance  taking  effect  as  an  actual  burden  upon  the  interest  of  the  beneficiary, 
or  in  the  event  of  the  abridgment,  defeat  or  diminution  of  said  estate  or  property 
or  interest  therein  as  aforesaid,  a  return  shall  be  made  to  the  person  properly 
entitled  thereto  of  a  proportionate  amount  of  such  tax  on  account  of  the  incum- 
brance when  taking  effect,  or  so  much  as  will  reduce  the  same  to  the  amount 
which  would  have  been  assessed  on  account  of  the  actual  duration  or  extent  of  th6 
estate  or  interest  enjoyed.  Such  return  of  tax  shall  be  made  in  the  manner  provided 
by  section  twelve  hereof  upon  order  of  the  court  having  jurisdiction. 

Where  any  property  shall,  after  the  passage  of  this  act,  be  transferred  subject  to 
any  charge,  estate  or  interest,  determinable  by  the  death  of  any  person,  or  at  any 
period  ascertainable  only  by  reference  to  death,  the  increase  accruing  to  any 
person  or  corporation  upon  the  extinction  or  determination  of  such  charge,  estate 
or  interest,  shall  be  deemed  a  transfer  of  property  taxable  under  the  provisions 
of  this  act  in  the  same  manner  as  though  the  person  or  corporation  beneficially 
entitled  thereto  had  then  acquired  such  increase  from  the  person  from  whom  the 
title  to  their  respective  estates  or  interests  is  derived. 

When  property  is  transferred  in  trust  or  otherwise,  and  the  rights,  interest 
or  estates  of  the  transferees  are  dependent  upon  contingencies  or  conditions  where- 
by they  may  be  wholly  or  in  part  created,  defeated,  extended  or  abridged,  a  tax 
shall  be  imposed  upon  said  transfer  at  the  highest  rate  which,  on  the  happening 


I 


11,  c.  395.]  CALIFORNIA.  341 

of  any  of  the  said  contingencies  or  conditions,  would  be  possible  under  the  pro- 
visions of  this  act,  and  such  tax  so  imposed  shall  be  due  and  payable  forthwith  by 
the  executors  or  trustees  out  of  the  property  transferred;  provided,  however, 
that  on  the  happening  of  any  contingency  whereby  the  said  property,  or  any  part 
thereof,  is  transferred  to  a  person  or  corporation  exempt  from  taxation  under  the 
provisions  of  this  act,  or  to  any  person  taxable  at  a  rate  less  than  the  rate  imposed 
and  paid,  such  person  or  corporation  shall  be  entitled  to  a  return  of  so  much  of 
the  tax  imposed  and  paid  as  is  the  difference  between  the  amount  paid  and  the 
amount  which  said  person  or  corporation  should  pay  under  the  provisions  of  this 
act.  Such  return  of  overpayment  shall  be  made  in  the  manner  provided  by  section 
twelve  of  this  act,  upon  order  of  the  court  having  jurisdiction. 

Estates  in  expectancy  which  are  contingent  or  defeasible  and  in  which  pro- 
ceedings for  the  determination  of  the  tax  have  not  been  taken  or  where  the 
taxation  thereof  has  been  held  in  abeyance,  shall  be  appraised  at  their  full,  un- 
diminished value  when  the  persons  entitled  thereto  shall  come  into  the  beneficial 
enjoyment  or  possession  thereof,  without  diminution  for  or  on  account  of  any 
valuation  theretofore  made  of  the  particular  estates  for  purposes  of  taxation,  upon 
which  said  estates  in  expectancy  may  have  been  limited. 

Where  an  estate  for  life  or  for  years  can  be  divested  by  the  act  or  omission  of 
the  legatee  or  devisee  it  shall  be  taxed  as  if  there  were  no  possibility  of  such 
divesting. 

The  report  of  the  appraiser  shall  be  made  in  duplicate,  one  of  which  duplicates 
shall  be  filed  with  the  clerk  of  said  court  and  the  other  in  the  office  of  the  state 
controller. 

(2)  From  such  report  of  appraisal  and  other  proof  relating  to  any  such  estate, 
or  property,  before  the  superior  court,  said  court  shall,  by  order,  forthwith  assess 
and  fix  the  market  value  of  such  property  and  the  amount  of  tax  to  which  the 
same  is  liable,  and  the  clerk  of  said  court  shall  immediately  give  notice  thereof 
by  mail  to  the  county  treasurer  and  the  state  controller  and  to  all  interested 
persons  who  shall  have  furnished  said  clerk  with  their  names  and  addresses  for  the 
purpose  of  receiving  such  notice. 

But  said  superior  court  may  determine  such  tax  or  taxes  without  appointing 
an  inheritance  tax  appraiser;  provided,  that  in  such  determination,  said  court 
shall  fix  a  day  upon  which  it  will  hear  all  parties  interested  in  said  property  and 
in  said  tax,  and  said  court  shall  order  the  clerk  thereof  to  give  notice  of  said 
hearing  for  such  time,  not  less  than  ten  days,  and  in  such  manner  as  said  court 
shall  direct,  and  said  clerk  shall  at  least  ten  days  before  said  hearing  mail  a  copy 
of  such  notice  to  the  county  treasurer  and  a  copy  to  the  state  controller. 

[See  notes  to  the  Act  of  1905,  ante,  p.  328,  and  the  St.  1911,  c.  394,  post,  p.  346.] 

Jurisdiction  of  Superior  Court. 

S.  16.  The  superior  court  in  the  county  in  which  is  situate  the  real  property 
of  a  decedent  who  was  not  a  resident  of  the  state,  or  if  there  be  no  real  property, 
then  in  the  county  in  which  any  of  the  personal  property  of  such  non-resident  is 
situate,  or  in  the  county  of  which  the  decedent  was  a  resident  at  the  time  of  his 
death,  shall  have  jurisdiction  to  hear  and  determine  all  questions  in  relation 
to  the  tax  arising  under  the  provisions  of  this  act,  and  the  court  first  acquiring 
jurisdiction  hereunder  shall  retain  the  same,  to  the  exclusion  of  every  other 

[See  notes  to  the  Act  of  1905,  ante,  p.  328.] 


342  STATUTES  ANNOTATED.  [Cal.  St. 

Citation. 

S.  17.  If  it  shall  appear  to  the  superior  court  upon  petition  of  the  state  con- 
troller or  the  county  treasurer  or  any  other  interested  person  that  any  transfer 
has  been  made  within  the  meaning  of  this  act  and  the  taxability  thereof  and  the 
liability  for  such  tax  and  the  amount  thereof  have  not  been  determined,  and  that 
no  proceedings  are  pending  in  any  court  in  this  state  wherein  the  taxability  of  such 
transfer,  the  liability  therefor  and  the  amount  thereof  may  be  determined,  said 
court  shall  issue  a  citation,  citing  the  persons  who  may  appear  liable  therefor,  or 
known  to  own  any  interest  in  or  part  of  the  property  transferred,  to  appear  before 
the  court  on  a  day  certain,  not  more  than  ten  weeks  from  the  date  of  such  citation, 
and  show  cause  why  said  tax  should  not  be  determined  and  paid.  The  service 
of  such  citation,  and  the  time,  manner  and  proof  thereof,  and  the  hearing  and 
determination  thereon,  and  the  enforcement  of  the  determination  or  decree,  shall 
conform  to  the  provisions  of  chapter  XII  of  title  XI  of  part  three  of  the  Code  of 
Civil  Procedure;  and  the  clerk  of  the  court  shall,  upon  the  request  of  the  state 
controller  or  the  treasurer  of  the  county,  furnish,  without  fee,  one  or  more  tran- 
scripts of  such  decree,  and  the  same  shall  be  docketed  and  filed  by  the  county 
clerk  of  any  county  in  the  state,  without  fee,  in  the  same  manner  and  with  the 
same  effect  as  provided  by  section  six  hundred  and  seventy-four  of  said  Code  of 
Civil  Procedure  for  filing  a  transcript  of  an  original  docket.  The  superior  court 
may  hear  the  said  cause  upon  the  relation  of  the  parties  and  the  testimony  of 
witnesses,  and  evidence  produced  in  open  court,  and,  if  the  court  shall  find  said 
property  is  not  subject  to  any  tax,  as  herein  provided,  the  court  shall,  by  order, 
so  determine;  but  if  it  shall  appear  that  said  property,  or  any  part  thereof,  is 
subject  to  any  such  tax,  the  same  shall  be  appraised  and  taxed  as  in  other  cases. 

Actions  to  Recover  Tax. 

S.  18.  If,  after  the  expiration  of  eighteen  months  from  the  accrual  of  any  tax 
under  this  article,  such  tax  shall  remain  due  and  unpaid  after  the  refusal  or  neglect 
of  the  persons  liable  therefor  to  pay  the  same,  the  county  treasurer  shall  notify, 
or  the  state  controller  may  notify,  the  district  attorney  of  the  county  in  writing  of 
such  failure  or  neglect,  and  such  district  attorney  shall  bring  and  prosecute  an 
action  or  actions  in  the  name  of  the  state  as  plaintiff,  for  the  recovery  of  such  tax 
and  for  the  purpose  of  enforcing  any  lien  or  liens  against  all  or  any  of  the  property 
subject  thereto.  In  any  such  action  the  owner  of  any  property  or  of  any  interest 
in  property  against  which  the  lien  of  any  such  tax  is  sought  to  be  enforced  and 
any  predecessor  in  interest  of  any  such  owner  whose  title  or  interest  was  deraigned 
through  any  such  decedent  by  will  or  succession  or  by  decree  of  distribution  of 
the  estate  of  such  decedent,  and  any  lienor  or  incumbrancer  subsequent  to  the 
lien  of  such  tax  may  be  made  a  party  defendant.  The  enumeration  in  this  section 
of  the  persons  who  may  be  made  defendants  shall  not  be  deemed  to  be  exclusive, 
but  the  joinder  or  non-joinder  of  parties,  except  when  otherwise  herein  provided, 
shall  be  governed  by  the  rules  in  equity  in  similar  cases. 

Actions  to  Quiet  Title. 

(a)  Actions  may  be  brought  against  the  state  for  the  purpose  of  quieting  the 
title  to  any  property,  against  the  lien  or  claim  of  lien  of  any  tax  or  taxes  under 
this  act,  or  for  the  purpose  of  having  it  determined  that  any  property  is  not  subject 
to  any  lien  for  taxes  under  this  act.     In  any  such  action,  the  plaintiffs  may  be 


1911,  c.  395.]  CALIFORNIA.  343 

any  administrator  or  executor  of  the  estate  or  will  of  any  decedent,  whether  the 
said  estate  shall  have  been  fully  administered  and  the  estate  settled  and  closed 
or  not,  and  any  heir,  legatee  or  devisee  of  any  such  decedent,  or  trustee  of  the 
estate  or  of  any  part  of  the  estate  of  such  decedent,  or  distributee  of  the  estate 
or  of  any  part  of  the  estate  of  any  such  decedent,  and  any  assignee,  grantee  or 
successor  in  interest  of  any  of  such  persons  and  all  or  any  other  persons  who 
might  be  made  parties  defendant  in  any  action  brought  by  the  state  under  the 
provisions  of  this  section,  and  notwithstanding  that  all  or  any  of  the  persons 
enumerated  in  this  section  shall  or  may  have  assigned,  granted,  conveyed  or  other- 
wise parted  with  all  or  any  interest  in  or  title  to  the  property,  or  any  thereof, 
involved  in  any  such  claim  of  lien  before  the  commencement  of  such  action.  All 
or  any  of  the  persons  in  this  action  enumerated  may  be  joined  or  united  as  parties 
plaintiff.  The  enumeration  in  this  section  of  the  persons  who  may  be  made  parties 
shall  not  be  deemed  to  be  exclusive,  but  the  joinder  or  non-joinder  of  parties,  except 
when  otherwise  herein  provided,  shall  be  governed  by  the  rules  in  equity  in 
similar  cases.  In  all  cases  any  person  who  might  properly  be  a  party  plaintiff 
in  any  such  action  who  refuses  to  join  as  plaintiff  may  be  made  a  defendant. 

(b)  All  actions  under  this  section  shall  be  commenced  in  the  superior  court  of 
the  county  in  which  is  situated  any  part  of  any  real  property  against  which  any 
lien  is  sought  to  be  enforced,  or  to  which  title  is  sought  to  be  quieted  against  any 
lien,  or  claim  of  lien;  but  if  in  said  action  no  lien  against  real  property  is  sought 
to  be  enforced,  the  action  shall  be  brought  in  the  superior  court  of  the  county  which 
has  or  which  had  jurisdiction  of  the  administration  of  the  estate  of  the  decedent 
mentioned  herein. 

(c)  Service  of  summons  in  the  actions  brought  against  the  state  shall  be  made 
on  the  controller  of  state  and  on  the  district  attorney  of  the  county  in  which  the 
estateof  the  decedent  mentioned  herein  is  being  administered,  or  has  been  adminis- 
tered in  probate  proceedings,  and  it  shall  be  the  duty  of  said  district  attorney  to 
defend  all  such  actions. 

(d)  The  procedure  and  practice  in  all  actions  brought  under  this  section,  except 
as  otherwise  provided  in  this  act,  shall  be  governed  by  the  provisions  of  the  Code 
of  Civil  Procedure  in  relation  to  civil  actions,  so  far  as  the  same  shall  or  may  be 
applicable,  including  all  provisions  relating  to  motions  for  new  trials  and  appeals. 

(e)  The  remedies  provided  in  this  section  shall  be  in  addition  to  and  not 
exclusive  of  any  remedies  provided  in  the  sections  preceding  this  section. 

K'oceedings  for  Determining  and  Collecting  Tax. 
S.  19.  Whenever  the  treasurer  of  any  county  shall  have  reason  to  believe  that 
ly  transfer  has  been  made  within  the  meaning  of  this  act  and  that  a  tax  due 
ereon  remains  undetermined  and  unpaid,  he  shall  notify  the  district  attorney 
in  writing  of  such  transfer,  and  the  district  attorney,  if  he  have  probable  cause 
to  believe  a  tax  is  due,  and  remains  undetermined,  shall  prosecute  the  necessary 
proceeding  in  the  superior  court  to  determine  and  fix  such  tax  and  for  the  enforce- 
ment and  collection  thereof. 

The  county  treasurer  in  his  discretion,  for  the  better  furtherance  of  the  purposes 
of  this  act,  shall  be  allowed  to  employ  such  special  attorney  or  attorneys  as  he 
may  deem  necessary,  provided  that  such  attorney  shall  be  paid  for  his  services 
out  of  the  fees  allowed  such  treasurer,  as  provided  in  section  twenty-two  of 
this  act. 


344  STATUTES  ANNOTATED.  [Cal.  St. 

Expenses. 

S.  20.  Whenever  the  superior  court  of  any  county  shall  certify  that  there 
was  probable  cause  for  issuing  a  citation  and  taking  the  proceedings  specified  in 
section  seventeen  or  eighteen  of  this  act  or  for  taking  any  proceeding  or  action 
to  determine  the  taxability  of  any  transfer  within  the  meaning  of  this  act,  or  to 
secure  fair  appraisement  of  any  property  taxable  under  this  act,  or  for  taking  any 
appeal  from  any  order  or  judgment  fixing  such  tax  or  determining  the  taxability 
of  any  transfer  within  the  meaning  of  this  act,  the  state  treasurer  shall  pay,  or 
allow,  to  the  treasurer  of  any  county,  all  expenses  incurred  therefor,  and  for  his 
other  lawful  disbursements  that  have  not  otherwise  been  paid. 

Duties  of  County  Treasurer. 

S.  21.  The  treasurer  of  each  county  shall  collect  and  pay  the  state  treasurer 
all  taxes  that  may  be  due  and  payable  under  this  act,  who  shall  give  him  a  receipt 
therefor;  of  which  collection  and  payment  he  shall  make  a  report,  under  oath, 
to  the  controller,  between  the  first  and  fifteenth  days  of  May  and  December  of 
each  year,  stating  for  what  estate  paid,  and  in  such  form  and  containing  such 
particulars  as  the  controller  may  prescribe;  and  for  all  such  taxes  collected  by  him 
and  not  paid  to  the  state  treasurer  by  the  first  day  of  June  and  January  of  each 
year  he  shall  pay  interest  at  the  rate  of  ten  per  centum  per  annum. 

Fees  of  County  Treasurer. 

S.  22.  The  treasurer  of  each  county  shall  be  allowed  to  retain,  on  all  taxes 
paid  and  accounted  for  by  him  each  year  under  this  act,  in  addition  to  his  salary 
or  fees,  now  allowed  by  law,  three  per  centum  on  the  first  fifty  thousand  dollars 
so  paid  and  accounted  for  by  him,  one  and  one-half  per  centum  on  the  next  fifty 
thousand  dollars  so  paid  and  accounted  for  by  him,  and  one-half  of  one  per  centum 
on  all  additional  sums  so  paid  and  accounted  for  by  him;  provided,  that  no 
county  treasurer  shall  be  entitled  to  retain  to  his  own  use  more  than  the  sum  of 
two  hundred  dollars  out  of  the  inheritance  taxes  paid  on  account  of  any  transfer 
or  transfers  made  by,  or  resulting  from  the  death  of,  any  one  decedent. 

Attorneys  for  County  Treasurer. 

S.  23.  The  treasurer  of  each  county,  in  his  discretion,  for  the  better  furtherance 
of  the  purposes  of  this  act,  shall  be  allowed  to  employ  such  special  attorney  or 
attorneys,  as  he  may  deem  necessary,  who  shall  have  all  the  authority  conferred 
upon  the  district  attorney  by  sections  seventeen  and  eighteen  of  this  act,  and  such 
attorney  shall  be  paid  for  his  services  out  of  the  money  collected  under  the  pro- 
visions of  this  act  a  reasonable  fee  to  be  allowed  by  the  probate  court  having 
jurisdiction,  said  fee,  together  with  the  sum  retained  by  the  county  treasurer, 
in  no  one  case  to  exceed  the  per  centum  allowed  in  such  case  by  section  twenty- 
two  of  this  act. 

Counsel.  —  Expenses. 

S.  24.  The  state  controller,  whenever  he  shall  be  cited  as  a  party  in  any  pro- 
ceeding or  action  to  determine  any  tax  under  this  act  provided,  or  whenever 
he  shall  deem  it  necessary  for  the  better  enforcement  of  this  act  to  commence  or 
appear  in  any  proceeding  or  action  to  determine  any  tax  hereunder,  may,  by  and 
with  the  consent  and  approval  of  the  attorney  general,  designate  and  employ 


1911,  c.  395.]  CALIFORNIA.  345 

counsel  to  represent  him  on  behalf  of  the  state,  and,  by  and  with  such  consent 
of  the  attorney  general,  he  is  hereby  authorized  to  incur  the  necessary  expense 
for  such  employment  and  any  reasonable  and  necessary  expense  incident  thereto. 
And  the  county  treasurer  is  hereby  authorized  and  directed  to  pay  out  of  any 
funds  which  may  be  in  his  hands  on  account  of  this  tax,  on  presentation  of  a  sworn 
itemized  account  and  on  certificate  of  the  state  controller  and  attorney  general, 
all  expenses  incurred  as  in  this  section  above  provided,  but  no  expense  for  legal 
services,  up  to  and  including  the  entry  of  the  order  of  the  court  fixing  the  tax 
and  the  same  becoming  final,  shall  exceed  ten  per  centum  of  the  tax  and  penalties 
collected;  provided,  that  all  reasonable  and  necessary  expenses  incurred,  other 
than  attorneys'  fees,  including  expense  of  serving  processes,  procuring  evidence 
and  printing  and  preparing  of  necessary  legal  papers,  may  be  allowed  and  paid  in 
the  manner  above  provided,  even  though  no  tax  be  recovered  in  such  action  or 
proceeding,  and  the  limitations  herein  made  shall  not  apply  thereto. 

Use  of  Proceeds  of  Tax. 

S.  25.  All  taxes  levied  and  collected  under  this  act,  up  to  the  amount  of 
$250,000  annually,  shall  be  paid  into  the  treasury  of  the  state,  for  the  uses  of  the 
state  school  fund,  and  all  taxes  levied  and  collected  in  excess  of  $250,000  annually 
shall  be  paid  into  the  state  treasury  to  the  credit  of  the  general  fund  thereof. 

Penalties. 

S.  26.  Every  officer  who  fails  or  refuses  to  perform,  within  a  reasonable  time, 
any  and  every  duty  required  by  the  provisions  of  this  act,  or  who  fails  or  refuses 
to  make  and  deliver  within  a  reasonable  time  any  statement  or  record  required  by 
this  act,  shall  forfeit  to  the  state  of  California  the  sum  of  one  thousand  dollars,  to 
be  recovered  in  an  action  brought  by  the  attorney  general  in  the  name  of  the 
people  of  the  state  on  the  relation  of  the  controller. 

Definitions. 

S.  27.  The  words  "estate"  and  "property"  as  used  in  this  act  shall  be  taken 
to  mean  the  real  and  personal  property  or  interest  therein  of  the  testator,  intestate, 
grantor,  bargainor,  vendor  or  donor  passing  or  transferred  to  individual  legatees, 
devisees,  heirs,  next  of  kin,  grantees,  donees,  vendees,  or  successors  and  shall  in- 
clude all  personal  property  within  or  without  the  state.  The  word  "transfer" 
as  used  in  this  act  shall  be  taken  to  include  the  passing  of  property  or  any  interest 
therein,  in  possession  or  enjoyment,  present  or  future,  by  inheritance,  descent, 
devise,  succession,  bequest,  grant,  deed,  bargain,  sale,  gift  or  appointment  in  the 
manner  herein  described.  The  word  "decedent"  as  used  in  this  act  shall  include 
the  testator,  intestate,  grantor,  bargainor,  vendor  or  donor. 

The  words  "county  treasurer"  and  "district  attorney"  and  "inheritance  tax 
appraiser,"  as  used  in  this  act,  shall  be  taken  to  mean  the  treasurer  or  the  district 
attorney  or  the  inheritance  tax  appraiser  of  the  county  of  the  superior  court  having 
jurisdiction,  as  provided  in  section  sixteen  of  this  act. 

The  words  "contemplation  of  death"  as  used  in  this  act  shall  be  taken  to  include 
that  expectancy  of  death  which  actuates  the  mind  of  a  person  on  the  execution  of 
his  will,  and  in  nowise  shall  said  words  be  limited  and  restricted  to  that  expectancy 
of  death  which  actuates  the  mind  of  a  person  in  making  a  gift  causa  mortis;  and 
it  is  hereby  declared  to  be  the  intent  and  purpose  of  this  act  to  tax  any  and  all 


346  STATUTES  ANNOTATED.  [Cal.  St. 

transfers  which  are  made  in  lieu  of  or  to  avoid  the  passing  of  the  property  trans- 
ferred by  testate  or  intestate  laws. 

Repeal. 

S.  28.  An  act  entitled  "An  Act  to  establish  a  tax  on  gifts,  legacies,  inheritances, 
bequests,  devises,  successions  and  transfers,  to  provide  for  its  collection,  and  to 
direct  the  disposition  of  its  proceeds;  to  provide  for  the  enforcement  of  liens 
created  by  this  act  and  for  suits  to  quiet  title  against  claims  of  lien  arising  here- 
under; to  repeal  an  act  entitled  'An  Act  to  establish  a  tax  on  collateral  inheritances, 
bequests  and  devises,  to  provide  for  the  collection  and  to  direct  the  disposition 
of  its  proceeds,'  approved  March  23,  1893,  and  all  amendments  thereto,  and  all 
acts  and  parts  of  acts  in  conflict  with  this  act,"  approved  March  20,  1905,  and  all 
amendments  thereto,  and  all  acts  and  parts  of  acts  in  conflict  with  this  act  are 
hereby  expressly  repealed;  provided,  however,  that  such  repeal  shall  in  no  wise 
affect  any  suit,  prosecution  or  court  proceeding  pending  at  the  time  this  act  shall 
take  effect,  or  any  right  which  the  state  of  California  may  have  at  the  time  of 
the  taking  effect  of  this  act,  to  claim  a  tax  upon  any  property  under  the  provisions 
of  the  act  or  acts  hereby  repealed,  for  which  no  proceeding  has  been  commenced; 
nor  aff'ect  any  appeal,  right  of  appeal  in  any  suit  pending,  or  orders  fixing  tax, 
existing  in  this  state  at  the  time  of  the  taking  effect  of  this  act. 

S.  29.     This  act  shall  take  effect  and  be  in  force  from  and  after  July  1,  1911. 

[See  notes  to  the  Act  of  1905,  s.  27,  ante,  pp.  330,  331.] 

Cal.  St.  1911,  c.  394.     Approved  April  7,  1911. 

An  Act  to  amend  section  1444  of  the  Code  of  Civil  Procedure  of 
THE  state  of  California,  relating  to  appraisers  of  estates  of 
deceased  persons. 

S.  1.  Section  1444  of  the  Code  of  Civil  Procedure  of  the  state  of  California 
is  hereby  amended  to  read  as  follows:  — 

1444.  To  make  the  appraisement,  the  court,  or  a  judge  thereof,  must  appoint 
three  disinterested  persons,  one  of  whom  must  be  one  of  the  inheritance  tax 
appraisers  provided  for  by  law  (any  two  of  which  appraisers  may  act) ;  provided, 
that  the  court  may,  in  its  discretion,  appoint  said  inheritance  tax  appraiser  as 
sole  appraiser  to  appraise  said  estate.  Said  appraisers  are  entitled  to  receive 
a  reasonable  compensation  for  their  services,  not  to  exceed  five  dollars  per  day, 
to  be  allowed  by  the  court  or  judge.  The  appraisers  or  appraiser  must,  with  the 
inventory,  file  a  verified  account  of  their  or  his  services  and  disbursements.  If 
any  part  of  the  estate  is  in  any  other  county  than  that  in  which  letters  issued,  an 
appraiser  or  appraisers  thereof  may  in  the  same  manner  as  above  provided,  be 
appointed,  either  by  the  court  or  judge  having  jurisdiction  of  the  estate,  or  by 
the  court  or  judge  of  such  other  county,  on  request  of  the  court  or  judge  having 
jurisdiction.  No  clerk  or  deputy,  nor  any  person  related  by  consanguinity  or 
affinity  to  or  connected  by  marriage  with,  or  being  a  partner  or  employee  of  the 
judge  of  the  court,  shall  be  appointed  or  shall  be  competent  to  act  as  appraiser  in 
any  estate,  or  matter  or  proceeding  pending  before  said  judge  or  in  said  court. 

S.  2.     This  act  shall  take  effect  and  be  in  force  from  and  after  July  1,  1911. 


Colo.  St.l  COLORADO.  347 


COLORADO, 


In  General. 

Colorado  enacted  an  inheritance  tax  in  1901,  using  the  Illinois 
statute  of  1895  as  a  model.    It  was  radically  amended  in  1909. 

Colorado  taxes  stock  in  a  Colorado  corporation  owned  by  a 
non-resident.  It  is  only  within  the  past  year  that  such  property 
has  been  taxed  to  any  appreciable  extent.  The  state  is  now  deriving 
considerable  revenue  from  this  source. 

Any  person  or  corporation  must  notify  the  attorney  general 
before  delivering  or  transferring  securities  of  a  non-resident,  and 
must  see  that  the  tax  is  paid.  A  non-resident's  estate  must  make 
an  affidavit  as  to  its  property  before  consent  will  be  given  to  the 
transfer  of  securities. 

Constitutional  Limitations. 

Colorado  Constitution  1876,  a.  10. 

S.  3.  All  taxes  shall  be  uniform  upon  the  same  class  of  subjects  within  the 
territorial  limits  of  the  authority  levying  the  tax,  and  shall  be  levied  and  collected 
under  general  laws,  which  shall  prescribe  such  regulations  as  shall  secure  a  just 
valuation  for  taxation  of  all  property,  real  and  personal.  .  .  . 

[This  language  remains  unchanged,  although  the  balance  of  the  section  was 
amended  in  1880,  1392  and  1904.] 


List  of  Statutes. 

1901. 

Statutes  of  Colorado,  c.  94,    s.  23-43. 

1902. 

c.  3,  p.  43. 

1907. 

"        "           "         c.  214,  p.  554. 

1909. 

"       "          "         c.  193,  p.  460. 

Mill's  Annotated  Statutes  (Revised  Supplement  1891—1905),  ss.  3813-3832 
inclusive.     (This  is  the  1902  Act  above  referred  to.) 

THE  STATUTE  OF  1901. 

Colo.  St.  1901,  c.  94,  s.  23,  imposes  a  tax  of  2  per  cent  on  lineals, 
with  an  exemption  of  $5,000;  3  per  cent  on  collaterals,  and  in 
all  other  cases  the  rate  is  graduated.  On  all  estates  of  $10,000  or 
less,  3  per  cent;  $10,000  to  $20,000,4  per  cent;  $20,000  to  $50,000, 
5  per  cent;  over  $50,000,  6  per  cent,  with  an  exemption  of  any 
estate  valued  at  less  than  $500. 


348  STATUTES  ANNOTATED.  iColo.  St. 

Colo.  St.  1901,  c.  94,  ss.  24-43,  provide  for  the  assessment  and 
collection  of  the  tax.     This  statute  was  approved  April  5,  1901. 


THE  STATUTE  OF  1902. 

History. 

The  Colorado  statute  is  based  upon  the  Illinois  statute.  In  re 
Inheritance  Tax,  23  Colo.  392,  48  P.  535. 

Title.  — One  Subject. 

Colo.  St.  1902,  c.  3,  s.  21,  et  seq.,  was  approved  March  22,  1902. 
The  act  is  entitled  ''An  Act  in  relation  to  public  revenue  and  repeal- 
ing all  previous  acts  or  parts  of  acts  in  conflict  therewith." 

This  act  is  not  void  as  being  too  general  in  title  in  view  of  the 
financial  history  of  the  state.  One  would  expect  to  find  in  an  act 
entitled  Revenue,  provisions  imposing  a  duty  upon  privileges  or 
successions. 

The  statute  is  not  void  as  containing  more  than  one  subject 
simply  because  it  includes  an  inheritance  tax  and  a  property  tax. 
The  claim  was  made  that  the  statute  modified  the  law  of  descent 
and  the  law  of  wills  and  also  included  the  taxation  of  property. 
The  court  is  of  the  opinion  that  the  title  of  the  act  clearly  embraces 
provisions  providing  for  public  revenue  by  tax  on  inheritances. 
In  re  Magnes,  32  Colo.  527,  77  P.  853. 

S.  21.  All  property,  real,  personal  and  mixed,  which  shall  pass  by  will  or  by 
the  intestate  laws  of  this  state  from  any  person  who  may  die  seized  or  possessed 
of  the  same  while  a  resident  of  this  state,  or  if  decedent  was  not  a  resident  of  this 
state  at  the  time  of  his  death,  which  property  or  any  part  thereof  shall  be  within 
this  state  or  any  interest  therein  or  income  therefrom,  which  shall  be  transferred 
by  deed,  grant,  sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor  or 
bargainor  or  intended  to  take  effect,  in  possession  or  enjoyment  after  such  death, 
to  any  person  or  persons  or  to  any  body  politic  or  corporate  in  trust  or  otherwise, 
or  by  reason  whereof  any  person  or  body  politic  or  corporate  shall  become  bene- 
ficially entitled  in  possession  or  expectation  to  any  property  or  income  thereof, 
shall  be  and  is,  subject  to  a  tax  at  the  rate  hereinafter  specified  to  be  paid  to  the 
treasurer  of  the  proper  county  for  the  use  of  the  state,  and  all  heirs,  legatees  and 
devisees,  administrators,  executors  and  trustees  shall  be  liable  for  any  and  all 
such  taxes  until  the  same  shall  have  been  paid  as  hereinafter  directed.  When 
the  beneficial  interests  to  any  property  or  income  therefrom  shall  pass  to  or  for 
the  use  of  any  father,  mother,  husband,  wife,  child,  brother,  sister,  wife  or  widow 
of  the  son  or  the  husband  of  the  daughter,  or  any  child  or  children  adopted  as 
such  in  conformity  with  the  laws  of  the  state  of  Colorado,  or  to  any  person  to 


1902,  c.  3.]  COLORADO.  349 

whom  the  deceased,  for  not  less  than  ten  years  prior  to  death,  stood  in  the  acknowl- 
edged relation  of  a  parent,  or  to  any  lineal  descendant  born  in  lawful  wedlock,  in 
every  such  case  the  rate  of  tax  shall  be  two  dollars  on  every  hundred  dollars  of 
the  clear  market  value  of  such  property  received  by  each  person,  and  at  and  after 
the  same  rate  for  every  less  amount;  Provided,  that  the  sum  of  ten  thousand 
dollars  of  any  such  estate  shall  not  be  subject  to  any  such  duty  or  taxes,  and  that 
only  the  amount  in  excess  of  ten  thousand  dollars  shall  be  subject  to  the  above 
duty  or  tax.  When  the  beneficial  interests  to  any  property  or  income  therefrom 
shall  pass  to  or  for  the  use  of  any  uncle,  aunt,  niece,  nephew  or  any  lineal  descend- 
ant of  the  same,  in  every  such  case  the  rate  of  such  tax  shall  be  three  dollars  on 
every  one  hundred  dollars  of  the  clear  market  value  of  such  property  received 
by  each  person.  In  all  other  cases  the  rate  shall  be  as  follows:  On  each  and  every 
hundred  dollars  of  the  clear  market  value  of  all  property  and  at  the  same  rate 
for  any  less  amount;  on  all  estates  of  ten  thousand  dollars  and  less — three  dollars 
on  all  estates  of  over  ten  thousand  dollars  and  not  exceeding  twenty  thousand 
dollars,  four  dollars;  on  all  estates  over  twenty  thousand  dollars  and  not  exceeding 
fifty  thousand  dollars,  five  dollars,  and  on  all  estates  over  fifty  thousand  dollars, 
six  dollars;  Provided,  that  an  estate  in  the  above  case  which  may  be  valued  at  a 
less  sum  than  five  hundred  dollars  shall  not  be  subject  to  any  such  duty  or  tax. 

Nature. 

The  fact  that  a  statute  is  called  an  inheritance  tax  is  of  much 
significance.  A  tax  upon  an  interest  in  personal  property  is  a  legacy 
tax.  A  tax  upon  an  interest  in  real  property  could  be  aptly  termed 
a  succession  tax.'  Iv[o  term  sufficiently  comprehensive  could  be 
more  aptly  employed  to  embrace  a  tax  upon  the  right  to  acquire 
interests  in  both  real  and  personal  property  passing  by  will  or  by 
inheritance  whether  lineal  or  collateral  than  the  term  "inheritance 
tax."  By  this  term  the  legislature  intended  to  express  the  specific 
nature  of  the  tax  and  that  it  should  operate  upon  all  interests  to 
which  a  person  succeeded  upon  death.  In  re  Macky,  46  Colo. 
79,  102  P.  1075. 

Not  a  Local  or  Special  Law. 

Colo.  St.  1902,  c.  3,  is  not  repugnant  to  the  constitutional  pro- 
hibition against  local  or  special  laws.  The  court  decides  that  the 
imposition  of  a  succession  tax  does  not  change  the  law  of  descent 
but  that  the  laying  of  the  tax  merely  casts  upon  the  devolution  of 
property  a  burden  that  was  not  borne  before.  In  re  Magnes,  23 
Colo.  527,  77  P.  853. 

Uniformity.  —  Nature  of  Tax.  —  Succession  Not  a  Natural 
Right. 

The  Colorado  inheritance  tax  law,  St.  1902,  c.  3,  s.  21  et  seq., 
is  not  void  on  the  ground  that  it  lacks  uniformity  as  the  Colorado 


350  STATUTES  ANNOTATED.  iColo.  St. 

Constitution,  article  10,  section  3,  applies  only  to  taxes  upon  prop- 
erty and  the  inheritance  tax  is  not  one  on  the  property  but  on  the 
succession,  and  furthermore  a  right  to  take  property  by  devise 
or  descent  is  a  creature  of  the  law  and  not  a  natural  right;  and 
therefore  the  authority  which  confers  it  may  impose  conditions  upon 
it.    In  re  Magnes,  32  Colo.  527,  77  P.  853. 

The  Colorado  inheritance  tax  of  1902,  c.  3,  s.  21,  is  not  a  tax  upon 
the  property  but  is  a  tax  or  excise  upon  the  power  or  right  of  receiv- 
ing property  by  a  will  or  under  intestate  laws.  In  re  Macky,  46 
Colo.  79, 102  P.  1075. 

"The  right  to  impose  such  [inheritance]  tax  is  based  upon  the 
power  of  the  state  in  its  sovereign  capacity  to  legulate  and  control 
the  transmission  of  property  by  inheritance.  Although  designated 
as  a  tax,  it  is  not  such  a  tax  upon  property  as  is  contemplated  by 
section  3  of  article  10  of  the  state  constitution.  It  is  rather  a 
contribution  which  the  state  levies  for  itself  as  a  condition  upon 
which  the  title  to  property  shall  pass  upon  the  death  of  its  owner." 
In  re  Inheritance  Tax,  23  Colo.  492,  493,  48  P.  535. 

A  Tax  on  Beneficiaries. 

The  Colorado  statute  of  1902  imposes  a  tax.  on  the  right  to 
receive  and  not  on  the  right  to  give,  on  the  beneficiary  rather  than 
the  estate  of  the  decedent.    In  re  Macky,  46  Colo.  79, 102  P.  1075. 

The  exemptions  apply  to  the  amount  taken  by  each 
beneficiary  and  not  to  the  amount  of  the  whole  estate  of  the  de- 
ceased. The  tax  is  levied  on  the  receipt  of  some  beneficial  interest  and 
the  expression  "such  estate"  relates  to  this  beneficial  interest  and 
not  to  the  whole  estate.    People  v.  Koenig,  37  Colo.  283,  85  P.  1 129. 

The  court  quotes  as  sustaining  its  doctrine  HowelVs  Estate, 
147  Pa.  St.  164,  23  A.  403;  Matter  of  Cager,  111  N.  Y.  343,  18  N. 
E.  866;  State  v.  Hamlin,  86  Me.  495,  30  A.  76,  25  L.  R.  A.  632, 
41  Am.  St.  Rep.  569;  Knowlton  v.  Moore,  178  U.  S.  41,  20  Sup.  Ct. 
747,  44  L.  Ed.  969.  In  the  Pennsylvania  case  a  peculiar  provision 
of  the  statute  led  to  an  opposite  result  to  that  in  the  other  cases. 
People  V.  Koenig,  37  Colo.  283,  85  P.  1129. 

An  implied  exemption  from  taxation  should  be  allowed 
to  state  institutions  as  laying  a  tax  upon  them  would  in  the  end 
produce  no  net  revenue.  And  bequests  to  a  state  and  county  for 
a  hospital  and  to  the  regent  of  the  state  university  for  an  auditorium 
are  not  subject  to  the  state  inheritance  tax.  In  re  Macky,  46  Colo. 
79,  102  P.  1075. 


1902,  c.  3.]  COLORADO.  351 

Compromise  with  **Heirs.'* 

Where  a  son  contested  a  will  of  his  father  and  to  settle  his  contest 
he  was  paid  a  sum  in  excess  of  the  legacy  provided  by  the  will,  this 
sum  is  subject  to  taxation.  The  money  was  paid  to  him  by  virtue 
of  his  heirship  because  he  was  the  son  of  the  decedent.  People  v. 
Rice,  40  Colo.  508,  91  P.  33. 

Section  22  provides  that  life  estates  shall  be  exempt ;  and  property 
shall  be  appraised  after  the  death  of  the  owner;  and  imposes  a  lien 
on  property. 

Colo.  St.  1902,  c.  3. 

S.  23.  All  taxes  imposed  by  this  act,  unless  otherwise  herein  provided  for, 
shall  be  due  and  payable  at  the  death  of  the  decedent,  and  interest  at  the  rate 
of  six  per  cent  per  annum  shall  be  charged  and  collected  thereon  for  such  time  as 
said  taxes  are  not  paid;  Provided,  that  if  said  tax  is  paid  within  six  months  from 
the  accruing  thereof,  interest  shall  not  be  charged  or  collected  thereon,  but  a 
discount  of  five  per  cent  shall  be  allowed  and  deducted  from  said  tax,  and  in  all 
cases  where  the  executors,  administrators  or  trustees  do  not  pay  such  tax  within 
one  year  from  the  death  of  the  decedent,  they  shall  be  required  to  give  a  bond 
in  the  form  and  to  the  effect  prescribed  in  section  twenty-two  of  this  act  for  the 
payment  of  said  tax,  together  with  interest. 

"//  said  tax  is  paid  within  six  months  .  .  .  interest  shall  not  be 
charged.'' 

This  proviso  does  not  have  the  effect  of  rendering  the  interest 
charged  a  penalty,  but  it  is  only  the  usual  inducement  held  out 
to  make  those  interested  in  estates  pay  their  taxes  promptly  and 
cannot  be  considered  as  fixing  a  time  when  the  tax  becomes  de- 
linquent after  which  a  penalty  is  imposed  for  non-payment.  People 
V.  Rice,  40  Colo.  508,  91  P.  33. 

''Interest  .  .  .  for  such  time  as  said  taxes  are  not  paid.'* 
The  interest  is  chargeable  although  the  estate  for  a  long  time  was 
involved  in  litigation  and  it  was  impossible  to  say  at  what  rate  the 
tax  should  be  paid  if  at  all,  as  it  was  impossible  to  say  what  the 
value  of  the  estate  was;  and  although  a  contest  was  made  against 
the  will  which  lasted  more  than  six  months  after  the  death  of  the 
decedent,  and  although  claims  against  the  estate  were  made  which 
if  successful  would  have  made  the  estate  insolvent.  People  v. 
Rice,  40  Colo.  508,  91  P.  33. 

Sections  24  to  30  contain  various  provisions  as  to  collection  and 
payment  of  the  tax. 


352  STATUTES  ANNOTATED  [Colo.  St- 

Sections  31  and  32  cover  appraisal. 

Sections  33  to  41  cover  jurisdiction  of  the  courts  and  various 
provisions  as  to  collection  and  payment  of  the  tax. 

THE  AMENDMENTS  OF  1907  AND  1909. 

Colo.  St.  1907.  c.  214,  approved  April  9,  1907,  amends  section 
30  of  Colo.  St.  1902,  c.  3,  by  providing  elaborate  provisions  as  to 
the  refund  of  taxes  erroneously  paid. 

Colo.  St.  1909,  c.  193,  p.  460,  approved  April  17,  1909,  amends 
Colo.  St.  1902,  ss.  21,  22,  29,  31  and  41. 

Statute  not  Retroactive. 
Colo.  St.  1909,  c.  193. 

S.  6.  This  act  shall  affect  only  the  estates  of  decedents  dying  after  its  pas- 
sage and  estates  of  all  decedents  dead  before  its  passage  shall  be  taxed  under 
previously  existing  law. 

THE  PRESENT  ACT. 

Colo.  St.  1902,  c.  3  (as  amended). 
Rates  and  Exemptions. 

S.  1.  All  property,  real,  personal  and  mixed,  which  shall  pass  by  will  or  by 
the  i;itestate  laws  of  this  state  from  any  person  who  may  die  seized  or  possessed 
of  the  same  while  a  resident  of  this  state,  or  if  decedent  was  not  a  resident  of  this 
state  at  the  time  of  his  death,  whicb-property  or  any  part  thereof  shall  be  within 
this  state,  or  any  interest  therein  or  income  therefrom,  which  shall  be  transferred 
by  deed,  grant,  sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor  or 
bargainor,  or  intended  to  take  effect,  in  possession  or  enjoyment  after  such  death, 
to  any  person  or  persons,  or  to  any  body  politic  or  corporate,  in  trust  or  otherwise, 
or  by  reason  whereof  any  person  or  body  politic  or  corporate  shall  become  bene- 
ficially entitled  in  possession  or  expectation  to  any  property  or  income  thereof, 
shall  be  and  is,  subject  to  a  tax  at  the  rate  hereinafter  specified  to  be  paid  to  the 
treasurer  of  the  proper  county  for  the  use  of  the  state,  and  all  heirs,  legatees  and 
devisees,  administrators,  executors  and  trustees  shall  be  liable  for  any  and  all 
such  taxes  until  the  same  shall  have  been  paid  as  hereinafter  directed.  When- 
ever the  beneficial  interest  to  any  property  or  income  therefrom  shall  pass  to  or 
for  the  use  of  any  father,  mother,  husband,  wife,  child,  brother,  sister,  wife  or 
widow  of  the  son,  or  the  husband  of  the  daughter,  or  any  child  or  children  adopted 
as  such  in  conformity  with  the  laws  of  the  state  of  Colorado,  or  to  any  person  to 
whom  the  deceased,  for  not  less  than  ten  years  prior  to  death,  stood  in  the  acknowl- 
edged relation  of  a  parent,  or  to  any  lineal  descendant  born  in  lawful  wedlock, 
in  every  such  case  the  rate  of  tax  shall  be  two  dollars  on  every  hundred  dollars 
of  the  clear  market  value  of  such  property  received  by  each  person,  and  at  and 
after  the  same  rate  for  every  less  amount ;  Provided,  that  the  sum  of  ten  thousand 
dollars  ($10,000)  of  any  such  estate,  vesting  in  the  grantee  in  perpetuity  shall  not 
be  subject  to  any  such  duty  or  tax,  and  that  only  the  amount  in  excess  of  ten 


1902,  c.  3.]  COLORADO.  353 

thousand  dollars  ($10,000)  shall  be  subject  to  the  above  duty  or  tax.  When  the 
beneficial  interests  to  any  property  or  in,come  therefrom  shall  pass  to  or  fro  (for) 
the  use  of  any  uncle,  aunt,  niece,  nephew,  or  any  lineal  descendant  of  the  same, 
in  every  such  case  the  rate  of  such  tax  shall  be  three  dollars  on  every  one  hundred 
dollars  of  the  clear  market  value  of  such  property  received  by  each  person.  In 
all  other  cases  the  rate  shall  be  as  follows:  On  each  and  every  hundred  dollars 
of  the  clear  market  value  of  all  property  and  at  the  same  rate  for  any  less  amount; 
on  all  estates  of  ten  thousand  dollars  and  less,  three  dollars;  on  all  estates  of  over 
ten  thousand  dollars  and  not  exceeding  twenty  thousand  dollars,  four  dollars; 
on  all  estates  over  twenty  thousand  dollars  and  not  exceeding  fifty  thousand 
dollars,  five  dollars,  and  on  all  estates  over  fifty  thousand  dollars,  and  not  exceed- 
ing five  hundred  thousand  dollars,  six  dollars,  and  on  all  estates  over  five  hundred 
thousand  dollars,  ten  dollars;  Provided,  that  an  estate  in  the  above  case  which 
may  be  valued  at  a  less  sum  than  five  hundred  dollars  shall  not  be  subject  to  any 
such  duty  or  tax;  Provided,  that  the  following  classes  of  property  shall  be  exempt 
from  the  inheritance  tax,  to  wit:  All  property  devised,  bequeathed  or  descending 
by  deed  in  contemplation  of  death  to  the  state  of  Colorado,  or  to  any  county,  city, 
town,  and  any  other  municipality,  or  for  the  use  of  public  libraries,  for  religious  or 
charitable  purposes  exclusively,  or  for  schools  and  colleges  not  for  profit. 

(L.  of  '02,  p.  49,  s.  21;  R.  S.  '08,  s.  5551,  as  amended  by  Statute  of  '09,  s.  1.) 

[See  notes  to  the  Act  of  1902,  ante,  p.  349.] 

When  Remainder  Assessed. 

S.  2.  When  any  person  shall  bequeath  or  devise  any  property  or  interest 
therein  or  income  therefrom  to  mother,  father,  husband,  wife,  brother,  sister, 
the  widow  of  the  son,  husband  of  the  daughter,  or  a  lineal  descendant  during  the 
life  or  for  a  term  of  years  and  remainder  to  the  collateral  heir  of  the  descendant 
(decedent)  or  to  the  stranger  in  blood  or  to  the  body  politic  or  corporate  at  their 
decease,  or  on  the  expiration  of  such  term,  the  property  so  passing  shall  be 
appraised  immediately  after  the  death  at  what  was  the  fair  market  value  thereof 
at  the  time  of  the  death  of  the  decedent  in  the  manner  hereinafter  provided,  and 
the  tax  prescribed  by  this  act  on  the  estate  of  the  deceased  shall  be  imrqediately 
due  and  payable  to  the  treasurer  of  the  proper  county,  and,  together  with  the 
interest  thereon,  shall  be  and  remain  a  lien  on  said  property  until  the  same  is  paid. 
(L.  of  '02,  p.  50,  s.  22;  R.  S.  '08,  s.  5552,  as  amended  by  Statute  of  '09,  s.  2.) 

Accrual  —  Interest. 

S.  3.  All  taxes  imposed  by  this  act,  unless  otherwise  herein  provided  for 
shall  be  due  and  payable  at  the  death  of  the  decedent,  and  interest  at  the  rate 
of  six  per  cent  per  annum  shall  be  charged  and  collected  thereon  for  such  time 
as  said  taxes  are  not  paid;  Provided,  that  if  said  tax  is  paid  within  six 
months  from  the  accruing  thereof,  interest  shall  not  be  charged  or  collected 
thereon,  but  a  discount  of  five  per  cent  shall  be  allowed  and  deducted  from 
said  tax,  and  in  all  cases  where  the  executors,  administrators  or  trustees 
do  not  pay  such  tax  within  one  year  from  the  death  of  the  decedent,  they  shall 
be  required  to  give  a  bond  in  the  form  and  to  the  effect  prescribed  in  section 
twenty-two  of  this  act  for  the  payment  of  said  tax,  together  with  interest. 

(L.  '02,  p.  51,  s.  23;  R.  S.  '08,  s.  5553.) 

(Section  22  referred  to  is  section  2  above  as  it  stood  in  Laws  of  '02.) 

[See  notes  to  the  Act  of  1902,  ante,  p.  351.J 


354  STATUTES  ANNOTATED.  IColo.  St. 

Deduction  of  Tax. 

S.  4.  Any  administrator,  executor  or  trustee  having  any  charge  or  trust  in 
legacies  or  property  for  distribution  subject  to  the  said  tax  shall  deduct  the  tax 
therefrom,  or  if  the  legacy  or  property  be  not  money  he  shall  collect  a  tax  thereon 
upon  the  appraised  value  thereof  from  the  legatee  or  person  entitled  to  such  prop- 
erty, and  he  shall  not  deliver  or  be  compelled  to  deliver  any  specific  legacy  or 
property  subject  to  tax  to  any  person  until  he  shall  have  collected  the  tax  thereon, 
and  whenever  any  such  legacy  shall  be  charged  upon  or  payable  out  of  real 
estate,  the  executor,  administrator  or  trustee,  before  paying  the  same  shall  deduct 
said  tax  therefrom  and  pay  the  same  to  the  county  treasurer  for  the  use  of  the 
state,  and  the  same  shall  remain  a  charge  on  such  real  estate  until  paid,  and 
the  payment  thereof  shall  be  enforced  by  the  executor,  administrator  or  trustee 
in  the  same  manner  that  the  said  payment  of  said  legacies  might  be  enforced; 
if,  however,  such  legacy  be  given  in  money  to  any  person  for  a  limited  period, 
he  shall  retain  the  tax  upon  the  whole  amount,  but  if  it  be  not  in  money,  he  shall 
make  application  to  the  court  having  jurisdiction  of  his  accounts  to  make  an 
apportionment,  if  the  case  requires  it,  of  the  sum  to  be  paid  into  his  hands  by 
such  legatees,  and  for  such  further  order  relative  thereto  as  the  case  may  require. 

(L.  '02,  p.  51,  s.  24;  R.  S.  '08,  s.  5554.) 

Power  of  Sale. 

S.  5.  All  executors,  administrators  and  trustees  shall  have  full  power  to  sell 
so  much  of  the  property  of  the  decedent  as  will  enable  them  to  pay  said  tax,  in 
the  same  manner  as  they  may  be  enabled  to  do  by  law,  for  the  payment  of  debts 
of  their  testators  and  intestates,  and  the  amount  of  said  tax  shall  be  paid  as 
hereinafter  directed. 

(L.  of  '02,  p.  52,  s.  25;  R.  S.  '08,  s.  5555.) 

Payment  and  Receipts. 

S.  6.  Every  sum  of  money  retained  by  any  executor,  administrator  or  trustee, 
or  paid  into  his  hands  for  any  tax  on  any  property,  shall  be  paid  by  him  within 
thirty  days  thereafter  to  the  treasurer  of  the  proper  county,  and  the  said  treasurer 
or  treasurers  shall  give,  and  every  executor,  administrator  or  trustee  shall 
take,  duplicate  receipts  from  him  of  said  payments,  one  of  which  receipts 
he  shall  immediately  send  to  the  state  treasurer,  whose  duty  it  shall  be  to 
charge  the  treasurer  so  receiving  the  tax  with  the  amount  thereof,  and  shall 
seal  said  receipt  with  the  seal  of  his  office  and  countersign  the  same  and  return 
it  to  the  executor,  administrator  or  trustee,  whereupon  it  shall  be  a  proper  voucher 
in  the  settlement  of  his  accounts,  but  the  executor,  administrator  or  trustee  shall 
not  be  entitled  to  credit  in  his  accounts  or  be  discharged  from  liability  for  such 
tax  unless  he  shall  produce  a  receipt  so  sealed  and  countersigned  by  the  treasurer 
and  a  copy  thereof  certified  by  him. 

(L.  of  '02,  p.  52,  s.  26;   R.  S.  '08,  s.  5556.) 

Information  as  to  Real  Estate. 

S.  7.  Whenever  any  of  the  real  estate  of  which  any  decedent  may  die  seized 
shall  pass  to  any  body  politic  or  corporate,  or  to  any  person  or  persons,  or  in 
trust  for  them,  or  some  of  them,  it  shall  be  the  duty  of  the  executor,  administrator 
or  trustee  of  such  decedent  to  give  information  thereof  in  writing  to  the  treasurer 
of  the  county  where  said  real  estate  is  situated,  within  six  months  after  they 


1902,  c.  3.]  COLORADO.  355 

undertake  the  execution  of  their  duties,  or  if  the  fact  be  not  known  to  them  within 
that  period,  then  within  one  month  after  the  same  shall  have  come  to  their 
knowledge. 

(L.  of  '02,  p.  53,  s.  27;  R.  S.  '08,  s.  5557.) 

Refund. 

S.  8.  Whenever  debts  shall  be  proved  against  the  estate  of  the  decedent  after 
distribution  of  legacies  from  which  the  inheritance  tax  has  been  deducted  in  com- 
pliance with  this  act,  and  the  legatee  is  required  to  refund  any  portion  of  the 
legacy,  a  due  proportion  of  the  said  tax  shall  be  repaid  to  him  by  the  executor  or 
administrator,  if  the  said  tax  has  not  been  paid  into  the  state  or  county  treasury, 
or  by  the  county  treasurer  if  it  has  been  so  paid. 

(L.  of  '02,  p.  53,  s.  28;  R.  S.  '08,  s.  5558.) 

Foreign  Fiduciaries. 

S.  9.  If  a  foreign  executor,  administrator  or  trustee,  shall  assign  or  transfer 
any  stock  or  obligations  in  this  state  standing  in  the  name  of  a  decedent,  or  in 
trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the  treasurer 
of  the  proper  county  on  the  transfer  thereof.  No  safe  deposit  company,  bank 
or  other  institution,  person  or  persons,  holding  or  controlling  the  transfer  of  se- 
curities or  assets  of  a  decedent,  resident  or  non-resident,  including  the  shares 
of  capital  stock  of,  or  other  interest  in,  such  institution  shall  deliver  or  transfer 
the  same  to  the  executors,  administrators,  or  legal  representatives  of  the  decedent, 
or  upon  their  order  or  request,  unless  notice  in  writing  of  the  time  and  place  of 
such  intended  transfer  be  served  upon  the  said  appraiser  of  the  proper  district 
and  the  attorney  general  of  the  state  at  least  ten  days  prior  to  the  said  transfer; 
Nor  shall  any  such  safe  deposit  company,  bank  or  other  institution,  person 
or  persons,  deliver  or  transfer  any  securities  or  assets  of  the  estate  of  a  non- 
resident decedent  without  retaining  a  sufficient  portion  or  amount  thereof  to  pay 
any  tax  and  interest  which  may  be  due  or  thereafter  be  assessed  on  account  of 
the  transfer  of  such  securities  or  assets  under  the  provisions  of  this  article,  unless 
the  attorney  general  consents  thereto  in  writing.  And  it  shall  be  lawful  for  the 
said  appraisor  (appraiser)  or  attorney  general  to  examine  said  securities  or  assets 
at  the  time  of  such  delivery  or  transfer.  Failure  to  serve  such  notice  or  to  allow 
such  examination  or  to  retain  a  sufficient  portion  or  amount  to  pay  such  tax  and 
interest  as  herein  provided,  shall  render  such  safe  deposit  company,  trust  company, 
bank  or  other  institution,  person  or  persons,  liable  to  the  payment  of  the  tax  and 
interest  due  upon  said  securities  or  assets,  in  pursuance  of  the  povisions  (provi- 
sions) of  this  article. 

(L.  '02,  p.  53,  s.  29;   R.  S.  '08,  s.  5559,  as  amended  by  Statute  of  '09,  s.  3.) 

Refund. 

S.  10.  When  any  amount  of  said  tax  has  been  paid  or  shall  have  been  paid 
erroneously  to  the  state  treasurer,  it  shall  be  lawful  for,  and  be  the  duty  of  the 
state  auditor,  upon  certificate  of  any  county  treasurer,  who  collected  same,  and 
of  the  state  treasurer,  and  of  the  judge  of  the  court,  which  ordered  the  payment 
of  any  such  erroneous  tax  (which  said  last  certificate  shall  designate  the  amount 
erroneously  paid  by  each  person  paying  same),  to  draw  a  warrant  on  the  state 
treasurer,  payable  to  the  executor,  administrator  or  trustee,  person  or  persons, 
who  may  have  paid  any  such  tax  in  error,   or  to  the  heirs-at-law  or  person  or 


356  STATUTES  ANNOTATED.  [Colo.  St. 

persons  legally  entitled  thereto,  the  amount  of  such  tax  so  erroneously  paid,  and 
it  shall  be  the  duty  of  the  state  treasurer,  upon  presentation  of  any  such  warrant 
to  pay  the  same. 

It  shall  also  be  the  duty  of  any  county  treasurer  to  whom  any  inheritance  tax 
has  been  erroneously  paid,  and  to  whom  a  commission  or  other  allowance  has 
been  paid  for  collecting  same,  upon  certificate  of  the  judge  of  the  court  under 
seal  of  the  court  which  ordered  the  payment  of  any  such  erroneous  tax  being  filed 
with  him,  showing  in  what  amount  the  payment  of  any  such  inheritance  tax  was 
erroneous,  to  refund  and  repay  to  the  executor,  administrator  or  trustee,  person 
or  persons  who  may  have  paid  any  amount  of  such  tax  in  error,  or  to  the  heirs- 
at-law  or  person  or  persons  legally  entitled  thereto,  the  amount  of  commission 
or  fees  charged  by  such  county  treasurer  for  collecting  the  amount  so  erroneously 
paid. 

Provided,  that  all  applications  for  the  repayment  of  said  tax  erroneously  paid 
and  for  said  treasurer's  commission,  shall  be  made  within  two  years  from  the 
date  of  said  payment. 

This  section  as  hereby  amended  shall  apply  to  all  erroneous  payments  of  in- 
heritance tax  heretofore  made,  as  well  as  to  those  which  may  hereafter  be  made. 

(L.  of  '02,  p.  53,  s.  30,  as  amended  by  L.  of  '07,  p.  554,  s.  1;  R.  S.  '08,  s.  5560.) 

The  third  paragraph  is  a  statute  of  limitations.  Report  of 
Attorney  General,  1907-08,  p.  88. 

Appraisers. 

^  S.  11.  For  the  purpose  of  facilitating  and  properly  collecting  the  said  inheritance 
tax,  and  in  order  to  fix  the  value  of  the  property  of  persons,  whose  estates  shall 
be  subject  to  the  payment  of  said  tax,  the  said  counties  of  the  state  of  Colorado 
shall  be  grouped  into  three  districts,  to  be  known  as  districts  number  one,  number 
two  and  number  three,  and  the  attorney  general  shall  appoint  one  person  as 
appraisor  (appraiser)  for  each  of  these  districts  to  serve  for  a  period  of  two  years; 
and  the  attorney  general  shall  have  the  power  of  removal  of  any  of  the  said  ap- 
praisers for  malfeasance  in  office  or  failure  to  perform  their  duties  as  appraisers, 
as  hereinafter  provided. 

The  appraiser  appointed  for  district  number  one  shall  receive  an  annual  salary 
of  twenty -four  hundred  dollars  ($2,400.00),  together  with  his  actual  and  necessary 
traveling  expenses  and  witness  fees.  The  appraisers  for  district  number  two 
and  district  number  three  shall  each  receive  an  annual  salary  of  eighteen  hundred 
dollars  ($1,800.00),  together  with  their  actual  and  necessary  traveling  expenses 
and  witness  fees.  The  state  treasurer  shall  pay  the  said  salaries  of  the  said  apprais- 
ers, together  with  their  necessary  travjeling  expenses  and  witness  fees  monthly 
out  of  any  fund  in  his  hands  or  custody  on  account  of  the  inheritance  tax,  and  he 
shall  retain  out  of  any 'funds  in  his  hands  received  from  said  inheritance  tax  a 
sufficient  fund,  at  all  times,  to  pay  the  said  salaries  of  said  appraisers,  together 
with  a  sufficient  fund  to  pay  the  necessary  traveling  expenses  and  witness  fees 
of  the  said  appraisers.  The  state  auditor  is  authorized  to  issue  a  warrant  upon  the 
state  treasurer,  upon  presentation  to  him  of  a  voucher,  signed  by  the  governor  and 
the  attorney  general  for  the  amount  of  said  salaries,  and  the  said  necessary 
traveling  expenses  and  witness  fees. 


1992,  c.  3.]  COLORADO.  357 

The  counties  of  the  state  shall  be  and  hereby  are  grouped,  for  the  purpose  of 
appointment  of  appraisers,  the  appraisement  of  estates  and  the  collection  of  the 
inheritance  tax  into  the  following  districts: 

District  Number  One:  Adams,  Arapahoe,  Cheyenne,  Clear  Creek,  Denver, 
Douglas,  Elbert,  Gilpin,  Jefferson,  Kit  Carson,  Logan,  Morgan,  Phillips,  Sedgwick, 
Washington,  Weld,  Yuma. 

District  Number  Two:  Archuleta,  Baca,  Bent,  Conejos,  Costilla,  Custer, 
Dolores,  El  Paso,  Fremont,  Huerfano,  Kiowa,  La  Plata,  Las  Animas,  Lincoln, 
Mineral,  Montezuma,  Otero,  Prowers,  Pueblo,  Rio  Grande,  Saguache,  San  Juan, 
Teller. 

District  Number  Three:  Boulder,  Chaffee,  Delta,  Eagle,  Garfield,  Grand, 
Gunnison,  Hinsdale,  Lake,  Larimer,  Mesa,  Montrose,  Ouray,  Park,  Pitkin,  Rio 
Blanco,  Routt,  San  Miguel,  Summit. 

Each  of  the  said  appraisers  shall  file  with  the  secretary  of  the  state  his  oath  of 
office,  and  his  official  bond  in  the  penal  sum  of  not  less  than  one  thousand  dollars 
($1,000.00)  nor  more  than  twenty  thousand  dollars  ($20,000.00)  in  the  discretion 
of  the  attorney  general,  conditioned  upon  the  faithful  performance  of  his  duties 
as  such  appraiser,  which  bond  shall  be  approved  by  the  attorney  general. 

It  shall  be  the  duty  of  the  several  appraisers,  as  often  as,  or  whenever  the  occa- 
sion may  require,  or  upon  the  motion  of  any  person  interested  in  the  estate,  in- 
cluding the  state  or  the  county  court  itself,  to  appraise  the  estate  of  any  deceased 
person  in  the  county  to  which  the  appraiser  is  appointed,  and  the  appraiser 
shall  forthwith  give  notice  by  mail  to  all  persons  known  to  have  or  claim  an  in- 
terest in  such  property,  and  to  such  persons  as  the  county  judge  may  by  order 
direct,  of  the  time  and  place  at  which  he  will  appraise  such  property,  and  at  such 
time  and  place  to  appraise  the  same  at  a  fair  market  value,  and  for  that  purpose 
the  appraiser  is  authorized  by  leave  of  the  county  judge  to  use  subpoenas  for  and 
Compell  (compel)  the  attendance  of  witnesses  before  him,  and  to  take  the  evidence 
of  such  witnesses  under  oath  concerning  such  property  and  the  value  thereof, 
and  he  shall  make  a  report  in  duplicate  thereof  and  of  such  value  in  writing  to 
the  county  court  and  the  attorney  general  showing  the  fair  market  value  of  all 
of  the  estate  belonging  to  the  deceased  at  the  time  of  his  death  and  the  descrip- 
tion of  the  same;  all  debts,  claims,  fees  and  commissions  filed  against  said  estate 
or  allowed  by  the  county  court,  together  with  all  fees  which  have  been  allowed 
to  the  executor  or  administrator  or  which  may  be  claimed  by  the  executor 
or  administrator  for  services  in  behalf  of  said  estate;  the  names,  relationship 
and  residence  of  all  persons  receiving  or  claiming  any  of  the  estate  of  the 
deceased  together  with  the  names  of  all  corporations  or  institutions  claim- 
ing any  of  the  estate  of  the  deceased;  a  description  of  any  property  belong- 
ing to  the  estate  of  said  decedent  that  may  have  been  transferred  by  deed, 
grant,  sale  or  gift  made  in  contemplation  of  death  of  the  grantor,  or  bargainor, 
or  intended  to  take  effect  in  possession  or  enjoyment  after  such  death;  a  descrip- 
tion of  all  estates  left  by  the  decedent,  whether  estates  in  fee,  annuities,  life  estates 
or  for  a  term  of  years;  whether  such  decedent  died  intestate  or  left  a  will,  together 
with  the  depositions  of  the  witnesses  examined  and  such  other  facts  in  relation 
thereto  as  the  county  court  may  by  order  require  to  be  filed  in  the  office  of  the 
clerk  of  said  county  court;  and  from  this  report  the  said  county  court  shall 
forthwith  make  and  order  and  fix  the  then  cash  value  of  all  estates,  annuities  and 
life  estates  or  terms  of  years  growing  out  of  said  estate,  and  the  tax  to  which 


358  STATUTES  ANNOTATED.  [Colo.  St. 

the  same  is  liable,  and  shall  immediately  give  notice  by  mail  to  all  parties 
known  to  be  interested  therein.  It  shall  be  the  duty  of  each  of  the  said 
appraisers  upon  learning  of  the  death  of  any  person  known  to  have  or 
supposed  to  have  died  possessed  of  an  estate  in  his  district  to  immediately 
make  an  investigation,  and  to  inform  the  attorney  general  and  county 
court  of  the  county  wherein  the  person  lived,  of  any  information  received 
by  him  respecting  the  estate  of  the  deceased.  Any  person  or  persons  dis- 
satisified  (dissatistied)  with  the  assessment  made  or  tax  fixed  by  the  county 
court  of  the  estate  of  the  decedent  may  appeal  therefrom,  after  the  fixing  of  the 
tax  by  the  county  court,  to  the  district  court  of  the  proper  county,  within  sixty 
days  after  the  making  of  said  assessment  and  the  fixing  of  said  tax,  upon  giving 
good  and  sufficient  security  to  the  satisfaction  of  the  county  judge  to  pay  all 
costs,  together  with  whatever  taxes  shall  be  fixed  by  the  county  court. 
Witnesses  subpoenaed  by  said  appraiser  shall  be  paid  such  fees  as  now  provided 
by  law;  Provided,  that  the  appraiser  may  with  the  consent  of  the  county  court 
on  the  petition  of  the  attorney  general,  call  in  expert  witnesses,  the  amount  of 
whose  fees  shall  be  determined  by  the  county  court. 

(L.  of  '02,  p.  54,  s.  31;  R.  S.  '08,  s.  5561,  as  amended  by  Statute  of  '09,  s.  4.) 

Appraisers  to  Receive  no  Reward  from  Parties  Interested. 

S.  12.  Any  appraiser  appointed  by  this  act  who  shall  take  any  fees  or  reward 
from  any  executor,  administrator,  trustee,  legatee,  next  of  kin  or  heir  of  any 
decedent,  or  from  any  other  person  liable  to  pay  said  tax  or  any  portion  thereof, 
shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  in  any  court  having  juris- 
diction of  misdemeanors  he  shall  be  fined  not  less  than  two  hundred  and  fifty 
d6llars,  nor  more  than  five  hundred  dollars,  and  imprisoned  not  exceeding  ninety 
days,  and  in  addition  thereto  the  county  judge  shall  dismiss  him  from  such  service. 

(L.  of  '02,  p.  55,  s.  32;  R.  S.  '08*  s.  5562.) 

Jurisdiction  of  County  Courts. 

S.  13.  The  county  court  in  the  county  in  which  the  real  property  is  situated, 
of  the  decedent  who  was  not  a  resident  of  the  state,  or  in  the  county  of  which  the 
decedent  was  a  resident  at  the  time  of  his  death,  shall  have  jurisdiction  to  hear 
and  determine  all  questions  in  relation  to  the  tax  arising  under  the  provisions 
of  this  act,  and  the  county  court  first  acquiring  jurisdiction  hereunder  shall  retain 
the  same  to  the  exclusion  of  every  other. 

(L.  of  '02,  p.  55,  s.  33;  R.  S.  '08,  s.  5563.) 

Process  for  Collection. 

S.  14.  If  it  shall  appear  to  the  county  court  that  any  tax  accruing  under  this 
act  has  not  been  paid  according  to  law,  it  shall  issue  a  summons  summoning  the 
persons  interested  in  the  property  liable  to  the  tax  to  appear  before  the  court  on 
a  day  certain  not  more  than  three  months  after  the  date  of  such  summons,  to 
show  cause  why  said  tax  should  not  be  paid.  The  process,  practice  and  pleadings 
and  the  hearing  and  determination  thereof,  and  the  judgment  in  said  court  in 
such  cases,  shall  be  the  same  as  those  now  provided  or  which  may  hereafter  be 
provided  in  probate  cases  in  the  county  courts  in  this  state,  and  the  fees  and  costs 
in  such  cases  shall  be  the  same  as  in  probate  cases  In  the  county  courts  of  this 
state. 

(L.  of  '02,  p.  55,  s.  34;  R.  S.  '08,  s.  5564.) 


1902,  c.  3.]  COLORADO.  359 

Prosecutions. 

S.  15.  Whenever  the  treasurer  of  any  county  shall  have  reason  to  believe 
that  any  tax  is  due  and  unpaid  under  this  act,  after  the  refusal  or  neglect  of  the 
person  interested  in  the  property  liable  to  pay  said  tax  to  pay  the  same,  he  shall 
notify  the  district  attorney  of  the  proper  county,  in  writing,  of  such  refusal  to 
pay  said  tax,  and  the  district  attorney  so  notified,  if  he  has  proper  cause  to  believe 
a  tax  is  due  and  unpaid,  shall  prosecute  the  proceeding  in  the  county  court  in  the 
proper  county,  as  provided  in  section  34  of  this  act  for  the  enforcement  and  col- 
lection of  such  tax,  and  in  such  case  said  court  shall  allow  as  costs  in  th^  said  case 
such  fees  to  said  attorney  as  he  may  deem  reasonable. 

(L.  of  '02,  p.  56,  s.  35;  R.  S.  '08,  s.  5565.) 

[Section  34  referred  to  is  section  14  herein.] 

Reports. 

S.  16.  The  county  judge  and  county  clerk  of  each  county  shall,  every  three 
months,  make  a  statement  in  writing  to  the  county  treasurer  of  the  county  of 
the  property  from  which  or  the  party  from  whom,  he  has  reason  to  believe  a 
tax  under  this  act  is  due  and  unpaid. 

(L.  of  '02,  p.  56,  s.  36;   R.  S.  '08,  s.  5566.) 

Costs  and  Expenses. 

S.  17.  Whenever  the  county  judge  of  any  county  shall  certify  that  there  was 
probable  cause  for  issuing  a  summons  and  taking  the  proceedings  specified  in 
section  34  of  this  act,  the  state  treasurer  shall  pay  or  allow  to  the  treasurer  of 
any  county  all  expenses  incurred  for  service  of  summons  and  his  other  lawful 
disbursements  that  have  not  otherwise  been  paid. 

(L.  of  '02,  p.  56,  s.  37;  R.  S.  '08,  s.  5567.) 

[Section  34  referred  to  is  section  14  herein.] 

Returns. 

S.  18.  The  treasurer  of  the  state  shall  furnish  to  each  county  judge  a  book, 
in  which  he  shall  enter  the  returns  made  by  appraisers,  the  cash  value  of  annuities, 
life  estates  and  terms  of  years  and  other  property  fixed  by  him,  and  the  tax  as- 
sessed thereon,  and  the  amounts  of  any  receipts  for  payments  thereof  filed  with 
him,  which  book  shall  be  kept  in  the  office  of  the  county  judge  as  a  public  record. 

(L.  of  '02,  p.  56,  s.  38;  R.  S.  '08,  s.  5568.) 

Payments  by  County  Treasurer. 

S.  19.  The  treasurer  of  each  county  shall  collect  and  pay  the  state  treasurer 
all  taxes  that  may  be  due  and  payable  under  this  act,  who  shall  give  him  a  re- 
ceipt therefor,  of  which  collection  and  payment  he  shall  make  a  report  under 
oath  to  the  state  auditor  on  the  first  Mondays  in  March  and  September  of  each 
year,  stating  for  what  estate  paid,  and  in  such  form  and  containing  such  particu- 
lars as  the  auditor  may  prescribe,  and  for  all  said  taxes  collected  by  him  and  not 
paid  to  the  state  treasurer  by  the  first  day  of  October  and  April  of  each  year, 
he  shall  pay  interest  at  the  rate  of  ten  per  cent  per  annum. 

(L.  of  '02,  p.  56,  s.  39;   R.  S.  '08,  s.  5569.) 


360  STATUTES  ANNOTATED.  [Colo.  St.  1902. 

Tax  becomes  revenue  for  fiscal  period  paid  in,  not  fiscal  period  of 
death.     Report  of  Attorney  General,  1907-08,  p.  103. 

Fees  of  County  Treasurer. 

S.  20.  The  treasurer  o  each  county  shall  be  allowed  to  retain  two  per  cent 
on  all  taxes  paid  and  accounted  for  by  him  under  this  act,  in  full  for  his  services 
in  collecting  and  paying  the  same,  to  be  taken  as  a  part  of  his  salary  of  fees  now 
allowed  by  law,  but  not  otherwise. 

(L.  of  '02,  p.  57,   s.  40;   R.  S.  '08,  s.  5570.) 

Receipts  —  Lien. 

S.  21.  Any  person  or  body  politic  or  corporate,  shall,  upon  the  payment  of 
the  sum  of  fifty  cents,  be  entitled  to  a  receipt  from  the  county  treasurer  of  any 
county,  or  tne  copy  of  the  receipt,  at  his  option,  that  may  have  been  given  by 
said  treasurer  for  the  payment  of  any  tax  under  this  act,  to  be  sealed  with  the 
seal  of  his  office,  which  receipt  shall  designate  on  what  real  property,  if  any, 
of  which  any  decedent  may  have  died  seized,  said  tax  has  been  paid  and  by  whom 
paid,  and  whether  or  not  it  is  in  full  cf  said  tax;  and  said  receipt  may  be  recorded 
in  the  clerk's  office  of  said  county  in  which  the  property  may  be  situated,  in  the 
book  to  be  kept  by  said  clerk  for  such  purpose. 

The  lien  of  the  inheritance  tax  provided  herein  shall  continue  until  the  said 
tax  is  settled  and  satisfied;  Provided,  that  lien  shall  be  limited  to  the  property 
chargeable  therewith. 

(L.  of  '02,  p.  57,  s.  41;  R.  S.  '08,  s.  5571,  as  amended  by  Statute  of  '09,  s.  5.) 
/■ 

Section  as  amended  '09  applies  only  as  indicated  above.  Amend- 
ment strikes  out  last  clause  of  original  section. 


Conn.  St.]  CONNECTICUT.  361 


CONNECTICUT, 


In  General. 

Connecticut  adopted  a  collateral  inheritance  tax  in  1889  and 
extended  it  to  direct  heirs  in  1897.  The  state  supreme  court  decided 
that  the  personal  property  of  a  non-resident  was  not  taxable  under 
this  statute,  but  that  the  law  as  amended  in  1903  included  such 
property.  There  were  important  revisions  in  1907  and  1909,  and 
the  exemptions  were  extended  by  the  statute  of  1911. 

The  Connecticut  statute  is  unique  and  commendable  in  that  it 
specifically  sets  forth  the  property  of  non-residents  which  is  subject 
to  the  tax.  In  most  states  the  statute  is  silent  on  the  subject,  and 
as  there  are  few  authoritative  decisions,  the  tax  authorities  must 
make  their  own  ruling. 

The  retaliative  provision,  under  which  Connecticut  taxes  stock 
and  registered  bonds  of  Connecticut  corporations  owned  by 
residents  of  states  which  so  tax  stocks  and  registered  bonds  of  their 
own  corporations  when  owned  by  Connecticut  residents,  is  an 
interesting  attempt  to  reduce  double  taxation  and  is  more  effective 
in  doing  so  than  the  Massachusetts  reciprocal  provision. 

Because  the  wording  of  the  inheritance  tax  statute  in  many  of 
the  states  is  so  ambiguous,  the  tax  commissioner  of  Connecticut 
considers  it  his  duty  to  obtain  official  information  from  the  different 
states  as  to  the  practice  which  is  there  followed.  Under  date  of 
March  16,  1911,  the  tax  commissioner  enumerates  the  following 
states  as  the  ones  whose  residents  must  pay  an  inheritance  tax  on 
stock  of  a  Connecticut  corporation  wherever  the  certificate  may  be : 
California,  Colorado,  Illinois,  Iowa,  Kansas,  Maine,  Massachusetts, 
Michigan,  Minnesota,  New  Hampshire,  New  Jersey,  New  York, 
North  Carolina,  Oklahoma,  Utah,  Vermont,  Washington,  West 
Virginia,  Wisconsin.  It  would  seem  that  in  view  of  the  legislation 
of  1911,  Maine  and  New  York  should  be  dropped  from  this  list. 

A  resident  of  the  following  states  must  pay  an  inheritance  tax 
on  the  registered  bonds  of  a  Connecticut  corporation  wherever 
the  bonds  may  be:  Colorado,  Kansas,  Michigan,  New  Hampshire, 
Oklahoma,   Vermont. 

Estates  of  residents  of  the  states  not  enumerated  are  not  required 
to  pay  a  tax  on  Connecticut  stock  or  registered  bonds  as  the  case 
may  be. 


362  STATUTES  ANNOTATED  IConn.  St. 

Since  1908  thirteen  states  have  been  added  to,  and  two  states 
dropped  from  the  Connecticut  list  of  states  taxing  stock  of  non- 
residents, and  three  states  added  to  the  list  of  those  taxing  regis- 
tered bonds. 

Hon.  William  H.  Corbin,  tax  commissioner  of  Connecticut,  who 
has  been  a  leader  in  the  movement  for  a  uniform  inheritance  tax, 
in  urging  that  the  duty  of  determining  inheritance  taxes  be  trans- 
ferred to  his  office,  says  in  his  report  to  the  1911  legislature:  — 

"Under  the  present  statute,  each  probate  judge  of  Connecticut 
determines  the  amount  of  the  inheritance  tax  due  the  state  on  all 
estates  under  his  jurisdiction.  There  are  one  hundred  and  thirteen 
probate  judges  in  as  many  probate  districts  in  the  state.  With 
some  diversity  in  the  interpretation  and  application  of  the  inheri- 
tance tax  law  by  these  judges,  a  quite  different  method  of  determin- 
ing this  tax  is  followed  by  some  judges  from  that  which  obtains 
with  others." 

No  Constitutional  Limitations. 

The  Connecticut  constitution  appears  to  contain  no  clause  re- 
quiring uniformity  of  taxation  or  in  any  way  limiting  the  legislature 

in  inheritance  taxation. 

/• 

List  of  Statutes. 

1889.  Statutes  of  Connecticut,  c.  180,  pp.  106-109,  inclusive. 
1893.         "         "  "  c.  257,  p.  406. 

1897.         "  c.  201,  p.  901. 

1901.         "         "  "  c.  123,  p.  1260. 

1903.         "         "  "  c.  63,    p.  42. 

1905.         "         "  "  c.  256,  p.  455. 

1907.         "         "  "  c.  179,  p.  729. 

1909.         "         "  "  c.  218,  p.  1161. 

1911.         "         "  "  c.  204. 

General  Statutes  of  Connecticut  (Revision  of  1902),  sections  2367-2377. 
(See  also  Revision  of  1888,  section  3872.) 

THE  STATUTE  OF  1889. 

Conn.  St.  1889,  c.  180,  p.'  106.     Adopted  June  5,  1889. 

S.  1.  All  property  within  the  jurisdiction  of  this  state,  and  any  interest  therein, 
whether  belonging  to  inhabitants  of  this  state  or  not,  and  whether  tangible  or 
intangible,  which  shall  pass  by  will  or  by  the  intestate  laws  of  this  state,  or  by 
deed,  grant,  sale,  or  gift  made  or  intended  to  take  effect  in  possession  or  enjoyment 
after  the  death  of  the  grantor,  to  any  person  in  trust  or  otherwise,  other  than  to 
or  for  the  use  of  the  father,  mother,  husband,  wife,  lineal  descendant,  adopted 


1889,  c.  180.1  CONNECTICUT.  363 

child,  the  lineal  descendant  of  any  adopted  child,  the  wife  or  widow  of  a  son,  the 
husband  of  the  daughter  of  a  decedent,  or  some  charitable  purpose,  or  purpose 
strictly  public  within  this  state,  shall  be  liable  to  a  tax  of  five  per  centum  of  its 
value,  above  the  sum  of  one  thousand  dollars,  for  the  use  of  the  state  and  all 
administrators,  executors  and  trustees,  and  any  such  grantee  under  a  conveyance 
made  during  the  grantor's  life  shall  be  liable  for  all  such  taxes,  with  lawful  interest 
as  hereinafter  provided,  until  the  same  shall  have  been  paid  as  hereinafter  directed. 

S.  2  covers  the  tax  on  remainders. 

S.  3  covers  the  tax  on  legacies  to  executors  or  trustees. 

S.  4  fixes  the  time  when  the  tax  shall  be  payable  as  one  year  from  the 
death  of  the  testator. 

Ss.  5-16  provide  for  the  collection  of  the  tax. 

S.  17  defines  the  words  "person,"  "property"  and  "charitable  purpose." 

Brother  and  Sister  Exempt  under  the  Act  of  1893. 

Conn.  St.  1893,  c.  257,  p.  406,  approved  July  1,  1893,  exempted 
from  the  collateral  inheritance  tax  the  brother  or  sister  of  the 
decedent. 

THE  STATUTE  OF  1897. 

Constitutionality. 

"Some  form  of  death  duty  has  been  used  as  a  mode  of  taxation 
from  ancient  times.  When  the  constitution  of  the  United  States 
was  adopted,  death  duties  had  been  in  use  in  England  as  well  as 
elsewhere,  and  were  an  established  mode  of  taxation  known  to  the 
people,  who,  in  the  exercise  of  the  sovereignty  vested  in  them, 
enacted  the  fundamental  law.  The  imposition  of  death  duties 
must  therefore  have  been  included  in  the  broad  power  of  taxation 
granted  to  the  legislature  by  the  constitution.  This  is  true"  of  the 
constitution  of  our  state.  Soon  after  the  organization  of  the  federal 
government  congress  imposed  death  duties,  and  has  used  this 
mode  of  taxation  at  intervals  until  the  present  time.  The  same  mode 
of  taxation  has  been  practiced  by  many  of  the  state  legislatures." 
And  the  fact  that  the  burden  of  the  tax  falls  only  on  persons  who  are 
legatees  in  estates  exceeding  $10,000  or  more  under  Conn.  Gen. 
Sts.  1902,  ss.  2367-2377,  is  not  material  to  its  validity.  The  court 
notices  the  claim  that  this  incidental  inequality  in  the  operation 
of  the  tax  is  an  arbitrary  distinction  but  the  court  says  that  taxation 
is  necessarily  arbitrary;  that  the  arbitrary  selection  essential  to 
taxation  is  controlled  by  the  legislative  and  not  by  judicial  dis- 
cretion. The  Connecticut  constitution  did  not  require  that  the 
tax  should  be  uniform  or  equal  and  the' fact  that  the  stress  of  the 
tax  may  fall  on  some  more  than  others  does  not  render  it  void. 


364  STATUTES  ANNOTATED.  [Conn.  St. 

And  this  is  due  to  the  mere  accident  of  changing  circumstances. 
The  law  is  simply  and  purely  an  imposition  of  an  indirect  tax  or 
duty  and  it  is  within  the  field  where  the  legislature  has  absolute 
discretion.    Appeal  of  Nettleton,  76  Conn.  235,  241,  56  A.  565. 

The  court  upholds  the  validity  of  the  Connecticut  statute  of  1897, 
following  Appeal  of  Gallup,  76  Conn.  617,  57  A.  699,  in  Appeal  of 
Hopkins,  77  Conn.  644,  60  A.  657. 

Nature  of  Tax. 

A  death  duty  is  an  exaction  by  the  state  to  be  collected  from  the 
property  left  by  a  deceased  person  while  in  its  custody  prescribed 
upon  the  occasion  of  his  death  and  the  consequent  devolution  of 
his  property  by  force  of  its  laws.  Appeal  of  Hopkins,  77  Conn.  644, 
649,  60  A.  657. 

"There  are  three  plans  which  may  be  followed  in  subjecting  the 
estate  of  a  deceased  person  to  a  succession  tax :  (1)  A  tax  based  upon 
the  distribution  of  the  net  proceeds  of  a  decedent's  property  to  the 
persons  upon  whom  it  devolves  by  force  of  the  laws  of  the  taxing 
state.  This  plan  includes  in  the  estate  subject  to  the  tax  the  net 
proceeds  of  a  decedent's  land  situate  in  the  taxing  state,  and  in 
case  the  decedent  was  domiciled  in  the  taxing  state,  but  not  other- 
wise, of  all  his  personal  property.  (2)  A  tax  based  upon  any  transfer 
actual  or  potential,  of  a  decedent's  personal  property  situate  at  his 
death  within  the  taxing  state,  whether  the  net  proceeds  of  that 
property  pass  to  the  decedent's  beneficiaries  by  force  of  the  laws 
of  the  taxing  state  or  not.  Under  this  plan  the  tax  is  more  nearly 
akin  to  an  ordinary  transfer  duty,  (3)  The  inclusion  in  one  act  of 
a  tax  under  each  of  these  plans.  There  would  seem  to  be  no  con- 
stitutional objection  to  the  adoption  of  either  plan.  {Blackstonev. 
Miller,  188  U.  S.  189,  23  Sup.  Ct.  277, 47  L.  Ed.  439.)  Oursuccession 
tax  is  laid  in  pursuance  of  the  first  plan,  and  the  act  is  framed  in 
view  of  the  existing  law  of  domicile  in  relation  to  this  subject." 
Appeal  of  Gallup,  76  Conn.  617,  621,  57  A.  699. 

Ten  Thousand  Dollars  Exempt. 

Conn.  St.  1897,  c.  201,  p.  901.    Approved  June  1,  1897. 

S.  1.  So  much  of  the  estate  of  any  deceased  person  as  exceeds  ten  thousand 
dollars  in  value  shall  be  subject  to  the  taxes  hereinafter  provided. 

Exemptions  Valid. 

The  exemptions  of  estates  of  less  than  $10,000  are  arbitrary  and 
unequal  but  not  unconstitutional  for  that  reason.  Appeal  of 
Nettleton,  76  Conn.  235,  241,  56  A.  565.  [Reported  more  fully,  ante, 
p.  363.] 


1897,  c.  201.]  CONNECTICUT.  365 

Property  Taxable. 

S.  2.  In  all  such  estates  any  property  within  the  jurisdiction  of  this  state, 
and  any  interest  therein,  whether  tangible  or  intangible,  and  whether  belonging 
to  parties  in  this  state  or  not,  which  shall  pass  by  will  or  by  the  inheritance  laws 
of  this  tate,  to  the  parent  or  parents,  husband,  wife,  or  lineal  descendants,  or 
legally  dopted  child  of  the  deceased  person,  shall  be  liable  to  a  tax  of  one-half 
of  one  per  centum  of  its  value  for  the  use  of  the  state  and  any  such  estate  or 
interest  therein  which  shall  so  pass  to  collateral  kindred  or  to  strangers  to  the 
blood  or  to  any  corporation,  voluntary  association,  or  society,  shall  be  liable  to  a 
tax  of  three  per  centum  of  its  value  for  the  use  of  the  state.  And  all  executors  and 
administrators  shall  be  liable  for  all  such  taxes  with  interest  thereon  at  the  rate  of 
nine  per  centum  per  annum,  from  the  time  when  such  taxes  shall  become  payable 
until  the  same  shall  have  been  paid  as  hereinafter  directed. 

"Any  property  within   the   jurisdiction   of   this   state" 

includes  that  residuum  of  the  decedent's  property  remaining  after 
claims  of  creditors  and  charges  of  administration  have  been  satisfied. 
These  words  include  land  within  the  state  belonging  to  any  dece- 
dent and  all  the  personal  property  of  a  decedent  domiciled  here,  but 
cannot  include  personal  property  in  this  state  which  belonged  to  a 
non-resident  decedent.    Appeal  of  Gallup,  76  Conn.  617,  57  A.  699. 

Debts  and  Expenses  Deducted. 

The  direction  to  the  administrator  to  pay  the  duty  implies  that 
it  is  to  be  paid  from  the  property  or  from  the  proceeds  of  the  property 
of  the  decedent  not  applied  to  the  satisfaction  of  the  debts  and 
administration  expenses.  Appeal  of  Hopkins,  77  Conn.  644,  60  A. 
657. 

Real  and  Personal  Property.  —  Property  of  Non- Residents. 

The  Connecticut  statute  of  1897  "is  framed  upon  established 
principles  and  is  adapted  to  avoid  the  peculiar  difficulties  and  to 
meet  with  fairness  the  interstate  obligations  attending  the  im- 
position of  death  duties." 

Conn.  Gen.  Sts.  1902,  ss.  2367-2377,  imposing  a  succession  tax 
on  any  property  within  the  jurisdiction,  apply  to  land  in  Connecticut 
belonging  to  any  person  and  to  personal  property  of  residents  of 
Connecticut  wherever  situated,  but  not  to  personal  property  of 
non-residents. 

''This  view  of  the  legislative  purpose  is  strengthened  by  an 
examination  of  the  amendment  passed  in  1903.  (Public  Acts  of  1903, 
p.  42.)  The  legislature  amends  section  2368  by  striking  out  the  words 
"by  the  inheritance  laws  of  this  state,"  and  inserting  in  lieu  thereof 
the  words  "by  inheritance."    Having  thus  removed  the  bar  erected 


366  .  STATUTES  ANNOTATED.  [Conn.  St. 

by  the  original  act,  against  the  use  of  any  of  its  provisions  for  im- 
posing a  transfer  tax  on  personal  property  of  non-residents,  it 
proceeds  to  authorize  such  a  transfer  tax  and  to  prescribe  the 
machinery  for  its  collection,  coupling  this,  however,  with  instruc- 
tions to  the  treasurer  not  to  collect  such  transfer  tax  in  any  case 
where  the  decedent  resided  in  a  state  which  does  not  collect  transfer 
or  succession  taxes  from  personal  property  therein  "belonging  to 
the  estates  of  Connecticut  decedents.  The  amendment  recognizes 
the  justice  of  the  scheme  adopted  in  the  original  act,  and  attempts 
its  modification  only  so  far  as  may  be  necessary  to  add  to  the  force 
of  example  the  influences  of  reciprocity."  Per  Hammersley,  J.,  in 
In  re  Gallup,  76  Conn.  617,  627,  57  A.  699. 

S.  3  covers  the  duties  of  the  probate  court  as  to  appraisal  and  inventory. 

Inventory  of  Property  of  Non-Residents. 

The  fact  that  the  main  portion  of  the  assets  has  been  distributed 
through  ancillary  administration  in  New  York  does  not  prevent  the 
court  from  ordering  an  inventory  of  that  property  to  be  filed  for 
the  purpose  of  taxation  in  Connecticut.  Appeal  of  Hopkins,  77 
Conn.  644,  655,  60  A.  657. 

Under  Conn.  St.  1897,  it  was  proper  for  the  probate  court  to 
order  the  administrator  to  file  an  inventory  and  appraisal  including 
all  the  personal  property  wherever  situated  although  the  adminis- 
trator could  not  be  held  liable  upon  his  final  account  for  the  value 
of  personal  property  without  the  state  of  which  it  has  been  im- 
possible for  him  to  procure  possession.  Appeal  of  Bridgeport  Trust 
Co.,77Conn.  657,  60A.  662. 

Computation  of  Tax. 

Where  the  statute  of  1897  contains  no  express  direction  as  to 
who  shall  compute  the  tax  or  the  manner  of  computation  the  duty 
is  implied  in  the  court  of  probate.  The  tax  should  be  computed 
by  the  jurisdiction  of  the  domicile  notwithstanding  ancillary  pro- 
bate may  be  also  necessary  as  to  property  existing  outside  of  the 
domicile.    Appeal  of  Hopkins,  77  Conn.  644,  60  A.  657. 

S.  4  provides  for  the  payment  of  the  tax. 
S.  5  covers  taxes  on  annuitants  or  life  tenants. 
Ss.  6  to  10  provide  for  the  collection  of  the  tax. 

S.  11  extends  the  tax  to  transfers  of  real  or  personal  estate  to  take  effect 
upon  the  death  of  the  grantor  or  donor. 


1897,  c.  201.]  CONNECTICUT.  367 

Repeal. 

S.  12.  Chapter  180  of  the  public  acts  of  1889  and  chapter  257  of  the 
public  acts  of  1893  are  hereby  repealed,  but  this  act  shall  not  apply  to  estates 
of  any  persons  deceased  before  the  passage  hereof,  but  the  estates  of  such  persons 
shall  be  subject  to  the  provisions  of  the  said  chapter  180  of  the  public  acts  of 
1889,  and  chapter  257  of  the  public  acts  of  1893. 

Gifts  for  Art  Exempted  in  1901. 

Conn.  St.  1901,  c.  123,  approved  June  10,  1901,  exempts  from 
the  inheritance  tax  gifts  which  have  been  or  may  be  made  by  will 
to  any  corporation  or  institution  located  in  the  state  for  free  ex- 
hibition and  preservation  for  the  benefit  of  the  public  of  works  of 
art  or  articles  of  beauty  or  interest. 

Tax  Extended  to  Non-Residents  in  1903. 

Conn.  St.  1903,  c.  63,  s.  1.     Approved  May  6,  1903. 

Section  2368  of  the  general  statutes  is  hereby  amended  by  striking  out  in  line 
four  the  words  "by  the  inheritance  laws  of  this  state"  and  inserting  in  lieu  thereof 
the  words  "by  inheritance,"  so  that  said  section  when  amended  shall  read  as 
follows:  In  all  such  estates  any  property  within  the  jurisdiction  of  this  state, 
and  any  interest  therein,  whether  tangible  or  intangible,  and  whether  belonging 
to  parties  in  this  state  or  not,  which  shall  pass  by  will  or  by  inheritance  to  the 
parent  or  parents,  husband,  wife,  or  lineal  descendants,  or  legally  adopted  child 
of  the  deceased  person,  shall  be  liable  to  a  tax  of  one-half  of  one  per  centum  of  its 
value  for  the  use  of  the  state;  and  any  such  estate  or  interest  therein  which  shall 
so  pass  to  collateral  kindred,  or  to  strangers  to  the  blood,  or  to  any  corporation, 
voluntary  association,  or  society,  shall  be  liable  to  a  tax  of  three  per  centum  of  its 
value  for  the  use  of  the  state.  All  executors  and  administrators  shall  be  liable  for 
all  such  t^xes,  with  interest  thereon  at  the  rate  of  nine  per  centum  per  annum 
from  the  time  when  said  taxes  shall  become  payable  until  the  same  shall  have 
been  paid  as  hereinafter  directed. 

As  to  the  purpose  and  effect  of  this  amendment  see  Appeal  of 
Gallup,  76  Conn.  617,  57  A.  699,  treated  at  p.  365,  supra. 

Conn.  St.  1905,  approved  July  19,  1905,  c.  256,  p.  455,  amends 
Conn.  St.  1903,  c.  63,  s.  2.  The  statute  provides  that  no  property 
shall  be  delivered  to  an  executor  appointed  under  the  laws  of  another 
state  except  after  notice  to  the  tax  commissioner  and  the  payment 
of  the  tax,  and  it  provides  for  the  valuation  of  the  property  where 
no  ancillary  administration  is  taken  out. 

THE  STATUTE  OF  1907. 

Conn.  St.  1907,  c.  179,  p.  729.     Approved  July  10,  1907. 

S.  1.  The  provisions  of  section  2368  of  the  general  statutes  as  amended  by 
section  one  of  chapter  63  of  the  public  acts  of  1903  shall  apply  to  the  following 


368  STATUTES  ANNOTATED.  [Conn.  St. 

property  belonging  to  deceased  persons,  non-residents  of  this  state,  which  shall 
pass  by  will  or  inheritance  under  the  laws  of  any  other  state  or  country,  and  such 
property  shall  be  subject  to  the  tax  prescribed  in  said  section:  All  real  estate 
and  tangible  personal  property,  including  moneys  on  deposit,  within  this  state; 
all  intangible  personal  property,  including  bonds,  securities,  shares  of  stock, 
and  choses  in  action  the  evidences  of  ownership  of  which  shall  be  actually  withiil 
this  state;  shares  of  the  capital  stock  or  registered  bonds  of  all  corporations 
organized  and  existing  under  the  laws  of  this  state  the  certificates  of  which  stock 
or  which  bonds  shall  be  without  this  state,  where  the  laws  of  the  state  or  country 
in  which  such  decedent  resided  shall,  at  the  time  of  his  decease,  impose  a  succes- 
sion, inheritance,  transfer,  or  similar  tax  upon  the  shares  of  the  capital  stock  or 
registered  bonds  of  all  corporations  organized  or  existing  under  the  laws  of  such 
state  or  country,  held  under  such  conditions  at  their  decease  by  residents  of  this 
state. 

S.  2  provides  for  notice  by  the  probate  court  to  the  state  treasurer. 

S.  3  provides  that  no  executor,  administrator  or  trustee  appointed  under 
the  laws  of  any  other  jurisdiction,  shall  assign,  transfer  or  take  possession  of  any 
property  in  Connecticut  of  a  non-resident  decedent  until  the  inheritance  tax  shall 
have  been  paid. 

S.  4  prohibits  the  transfer  of  property  to  a  foreign  executor,  administrator 
or  trustee  without  giving  notice  to  the  tax  commissioner  and  retaining  a  sufficient 
amount  of  property  to  pay  the  tax,  and  provides  for  a  penalty  for  failure  to  observe 
these  requirements. 

S.  5  provides  that  the  tax  commissioner  may  assess  the  tax  and  give  notice 
to  the  state  treasurer,  with  right  of  appeal  to  the  probate  court. 

S.  6  repeals  the  statute  of  1903,  c.  63,  as  amended  by  the  statute  of  1905, 
c.  256. 

THE  STATUTE  OF*  1909. 

Conn.  St.  1909,  c.  218,  p.  1161,  approved  August  11,  1909, 
amends  General  Statutes,  sections  2367,  2368,  2371,  2376  and  305. 

Conn.  St.  1909,  c.  218,  p.  1161,  s.  5,  provides  for  the  taxation  of 
the  exercise  of  the  power  of  appointment. 

THE  PRESENT  ACT. 

Connecticut  General  Statutes  of  1902  as  Amended. 
Will  Proved  Without  This  State,  How  Proved  in  This  State. 

S.  305.  When  a  will  conveying  property  situated  in  this  state  has  been  proved 
and  established  out  of  this  state,  in  and  by  a  court  of  competent  jurisdiction,  the 
executor  of  said  will,  or  any  person  interested  in  said  property,  may  produce  to 
the  court  of  probate  in  the  district  in  which  any  of  said  property  is  situated  a  duly 
authenticated  and  exemplified  copy  of  such  will,  and  of  the  record  of  the  proceed- 
ings proving  and  establishing  the  same,  and  request  that  such  copies  be  filed  and 
recorded,  which  request  shall  be  accompanied  by  a  full  and  correct  statement 
in  writing  of  all  property  and  estate  of  the  decedent  in  this  state;  and  if,  upon 
due  hearing  had  after  public  notice  and  such  citation  as  said  court  shall  order,  no 
sufficient  objection  be  shown,  said  court  shall  order  said  copies  to  be  filed  and 


1909,  c.  218.]  CONNECTICUT.  369 

recorded,  and  they  shall  thereupon  become  part  of  the  files  and  records  of  said 
court,  and  shall  have  the  same  effect  upon  the  property  so  conveyed  as  if  said 
will  had  been  originally  proved  and  established  in  said  court  of  probate,  but 
nothing  in  this  chapter  shall  give  effect  to  a  will  made  in  this  state  by  an  inhabi- 
tant thereof  which  is  not  executed  according  to  the  laws  of  this  state.  All  property 
so  passing  shall  be  subject  to  all  laws  of  this  state  relative  to  inheritances  and  suc- 
cessions. 

[See  notes  to  the  Acts  of  1897  and  1903,  ante,  pp.  363,  367.] 

Succession  Tax. 

S.  2367.  The  estate  of  every  deceased  person  to  the  amount  of  ten  thousand 
dollars,  when  said  estate  shall  pass  to  the  .parent  or  parents,  lineal  descendants, 
legally  adopted  child,  lineal  descendants  of  any  legally  adopted  child,  the 
wife  or  widow  of  a  son,  whether  such  son  was  born  in  wedlock  or  adopted, 
the  husband  of  a  daughter,  whether  such  daughter  was  born  in  wedlock  or 
adopted,  or  the  brother  or  sister  of  the  decedent,  and,  in  addition  to  said 
amount,  all  gifts  of  paintings,  pictures,  books,  engravings,  bronzes,  curios, 
bric-a-brac,  arms,  and  armor,  and  collections  of  articles  of  beauty  or  interest, 
made  by  will  to  any  corporation  or  institution  located  in  this  state  for  free 
exhibition  and  preservation  for  public  benefit;  also,  in  addition  to  said  amount, 
every  devise,  bequest  or  inheritance  not  exceeding  five  hundred  dollars  in 
amount  or  appraised  value  passing  to  other  kindred  or  strangers  to  the  blood, 
or  to  a  corporation,  voluntary  association  or  society  shall  be  exempt  from  the 
payment  of  any  succession  tax;  and,  subject  to  such  exemption,  the  estate  of 
every  deceased  person  shall  be  subject  to  the  tax  in  section  2368  provided.  When 
a  portion  of  the  property  passes  to  or  for  the  use  of  the  parent  or  parents,  husband, 
wife,  lineal  descendants,  legally  adopted  child,  lineal  descendents  of  any 
legally  adopted  child,  the  wife  or  widow  of  a  son,  whether  such  son  was  born 
in  wedlock  or  adopted,  the  husband  of  a  daughter,  whether  such  daughter  was 
born  in  wedlock  or  adopted,  or  the  brother  or  sister  of  the  decedent,  and 
the  remaining  portion  to  other  collateral  kindred  or  strangers  to  the  blood,  or  to  a 
corporation,  voluntary  association,  or  society,  the  amount  exempted  from  taxa- 
tion shall  be  that  proportion  of  ten  thousand  dollars  which  the  value  of  the 
property  passing  to  those  persons  mentioned  in  the  first  class  bears  to  the  total 
value  of  the  whole  estate.  The  amount  of  the  property  of  estates  of  non-resident 
decedents  which  shall  be  exempt  from  the  payment  of  a  succession  tax  shall  be 
only  that  proportion  of  the  whole  exempted  amount  which  is  provided  for  the 
estates  of  resident  decedents  which  the  amount  of  the  estate  of  the  non-resident 
which  is  actually  or  constructively  in  this  state  bears  to  the  total  value  of  the 
non-resident  decedent's  estate  wherever  situated.      [As  amended  in  1911.] 

[See  notes  to  the  Act  of  1897,  p.  363  et  seq.] 

Succession  Tax  for  Different  Classes.  —  Executors  Liable.  —  Interest. 

S.  2368.  In  all  such  estates  any  property  within  the  jurisdiction  of  this  state, 
and  any  interest  therein,  whether  tangible  or  intangible,  and  whether  belonging 
to  parties  in  this  state  or  not,  which  shall  pass  by  will  or  by  inheritance  or  by 
other  statutes  to  the  parent  or  parents,  husband,  wife,  or  lineal  descendants, 
or  legally  adopted  child  of  the  deceased  person,  shall  be  liable  to  a  tax  of  one  per 
centum  of  its  value  for  the  use  of  the  state;  and  any  such  estate  or  interest 
therein  which  shall  so  pass  to  collateral  kindred,  or  to  strangers  to  the  blood,  or 


370  STATUTES  ANNOTATED  [Conn.  St. 

to  any  corporation,  voluntary  association,  or  society,  shall  be  liable  to  a  tax  of 
five  per  centum  of  its  value  for  the  use  of  the  state.  All  executors  and  administra- 
tors shall  be  liable  for  all  such  taxes,  with  interest  thereon  at  the  rate  of  nine  per 
centum  per  annum  from  the  time  when  said  taxes  shall  become  payable  until  the 
same  shall  have  been  paid  as  hereinafter  directed. 
[See  notes  to  the  Act  of  1897,  ante,  p.  363  et  seq.] 

Glasses  of  Property  of  Non-residents  to  Which  Tax  Applies. 

The  provisions  of  section  2368  of  the  general  statutes  as  amended  by  section  one 
of  chapter  63  of  the  public  acts  of  1903  shall  apply  to  the  following  property  be- 
longing to  deceased  persons,  non-residents  of  this  state,  which  shall  pass  by  will 
or  inheritance  under  the  laws  of  any  other  state  or  country,  and  such  property 
shall  be  subject  to  the  tax  prescribed  in  said  section:  All  real  estate  and  tangible 
personal  property,  including  moneys  on  deposit,  within  this  state;  all  intangible 
personal  property,  including  bonds,  securities,  shares  of  stock,  and  choses  in  action, 
the  evidences  of  ownership  of  which  shall  be  actually  within  this  state;  shares 
of  the  capital  stock  or  registered  bonds  of  all  corporations  organized  and  existing 
under  the  laws  of  this  state,  the  certificates  of  which  stock  or  which  bonds  shall 
be  without  this  state,  where  the  laws  of  the  state  or  country  in  which  such  de- 
cedent resided  shall,  at  the  time  of  his  decease,  impose  a  succession,  inheritance, 
transfer,  or  similar  tax  upon  the  shares  of  the  capital  stock  or  registered  bonds  of 
all  corporations  organized  or  existing  under  the  laws  of  such  state  or  country,  held 
under  such  conditions  at  their  decease  by  residents  of  this  state. 

Non-residents;  Notice  to  State  Treasurer  and  to  Tax  Commissioner. — 
Appeal. 

Whenever  ancillary  administration  has  been  taken  out  in  this  state  on  the 
estate  of  any  non-resident  decedent  having  property  subject  to  said  tax  under  the 
provisions  of  section  one  of  this  act,  the  court  of  probate  having  jurisdiction  shall 
have  the  same  powers  in  relation  to  such  tax  and  shall  give  the  same  notice  to  the 
state  treasurer  of  all  hearings  relating  thereto  as  is  required  in  the  case  of  the 
estates  of  resident  decedents,  and  with  the  same  right  of  app«al.  The  provisions  of 
this  act  concerning  notice  to  the  tax  commissioner  shall  not  apply  to  cases  where 
ancillary  administration  has  been  taken  out  in  this  state  upon  the  estates  of  non- 
resident decedents. 

Possession  Not  to  be  Given  Until  Payment  of  Tax. 

Where  ancillary  administration  has  not  been  taken  out  in  tMs  state  on  the 
estate  of  a  non-resident  decedent,  including  any  property  within  the  provisions  of 
section  one  of  this  act,  no  executor,  administrator,  or  trustee  appointed  under 
the  laws  of  any  other  jurisdiction  shall  assign,  transfer  or  take  possession  of  any 
such  property  standing  in  the  name  or  belonging  to  the  estate  of,  or  helcin  trust 
for,  such  decedent  until  the  tax  prescribed  in  section  2368  as  amended  shall  have 
been  paid  to  the  state  treasurer  or  retained  as  hereinafter  provided. 

Foreign  Executors ;  Transfer  of  Property ;  Notice  to  Tax  Commissioner.  — 
Penalty. 

No  corporation  or  person  in  this  state  having  possession  of  or  control  ov>r  any 
such  property,  including  any  corporation,  any  shares  of  the  capital  stock  of  which 
may  be  subject  to  said  tax,  shall  deliver  or  transfer  the  same  to  such  fctreign 


\ 


1909,  c.  218.]  CONNECTICUT.  371 

executor,  administrator,  or  trustee,  or  to  the  legal  representatives  of  such  decedent, 
or  upon  their  order  or  request,  unless  notice  of  the  time  and  place  of  such  intended 
delivery  or  transfer  be  mailed  to  the  tax  commissioner  at  least  ten  days  prior  to 
said  delivery  or  transfer;  nor  shall  any  such  corporation  make  any  such  delivery 
or  transfer  without  retaining  a  sufficient  amount  of  said  property  to  pay  any  such 
tax  which  may  be  due  or  may  thereafter  become  due  under  said  section  2368 
as  amended,  unless  the  said  tax  commissioner  consents  thereto  in  writing.  Failure 
to  mail  such  notice,  or  to  allow  the  tax  commissioner  to  examine  said  property,  or 
to  retain  a  sufficient  amount  to  pay  such  tax  shall,  in  the  absence  of  the  written 
consent  of  the  tax  commissioner,  render  such  corporation  or  person  liable  to  the 
payment  of  a  penalty  of  three  times  the  amount  of  such  tax,  which  payment  shall 
be  enforced  in  an  action  brought  in  the  name  of  the  state. 

Assessment;  Notice  to  Treasurer  and  Others.  —  Reassessment;  Appeal. 

Said  ta}{  commissioner,  personally  or  by  his  representative,  may  examine  said 
property  at  the  time  of  said  delivery  or  transfer,  and  it  shall  be  his  duty,  as 
speedily  as  possible  after  receiving  notice  of  said  property  or  of  the  intended 
delivery  or  transfer  thereof,  to  fix  the  valuation  of  such  property  for  the  purpose 
of  assessing  such  tax;  and  he  shall  assess  the  tax,  and  the  amount  thereof,  payable 
on  said  prop*erty.  Wherever  a  tax  is  assessed  on  such  property  by  such  tax 
commissioner  he  shall  forthwith  lodge  with  the  state  treasurer  a  statement  showing 
such  valuation  with  the  amount  of  said  tax,  and  shall  give  notice  thereof  to  the 
person  or  corporation  having  possession  of  or  control  over  said  property.  Any 
administrator  or  executor  appointed  under  the  laws  of  any  other  jurisdiction  who 
is  aggrieved  by  the  valuation  or  assessment  affixed  as  aforesaid  by  the  tax  com- 
missioner, may,  within  twenty  days  after  the  date  of  the  filing  of  the  aforesaid 
statement  with  the  treasurer,  apply  to  the  court  of  probate  in  any  district  in  which 
any  of  said  property  so  assessed  is  situated,  which  court  shall  have  full  power  to 
cause  a  revaluation  of  all  property  so  assessed  and  a  reassessment  of  the  tax 
thereon,  to  be  made  in  the  manner  provided  by  law  for  the  appraisal  of  and  the 
assessment  of  the  succession  tax  on  estates  of  resident  decedents,  and  subject 
to  the  same  right  of  appeal. 

[See  notes  to  the  Act  of  1897,  p.  366.] 

Duty  of  Probate  Court.  —  Negligent  Executor  Removable. 

S.  2369.  The  court  of  probate  having  jurisdiction  of  the  settlement  of  any 
estate  shall,  within  ten  days  after  the  filing  of  a  will  or  the  application  for  letters 
of  administration,  if  in  its  opinion  said  estate  exceeds  in  value  said  sum  of  ten 
thousand  dollars,  send  to  the  treasurer  of  the  state  a  certificate  of  the  filing  of 
such  will  or  application,  and  shall  within  ten  days  after  the  return  and  acceptance 
of  the  inventory  and  appraisal  of  any  such  estate  send  a  certified  copy  of  said 
inventory  and  appraisal  to  the  treasurer  of  the  state,  together  with  his  certificate 
as  to  the  correctness  in  his  opinion  of  said  inventory  and  appraisal;  and  if  no 
new  appraisal  is  made  as  hereinafter  provided  the  valuation  therein  given  shall 
be  taken  as  the  basis  for  computing  said  taxes.  The  said  court  of  probate  shall, 
on  the  application  of  the  treasurer  of  the  state,  or  any  person  interested  in  the 
succession  thereof  and  within  four  months  after  granting  administration,  appoint 
three  disinterested  persons  who  shall  view  and  appraise  such  property  at  its  actual 
value  for  the  purposes  of  said  tax,  and  make  return  thereof  to  said  court,  and  on 
the  acceptance  of  said  return,  after  public  notice  and  hearing,  the  valuation  therein 


372  STATUTES  ANNOTATED.  [Conn.  St. 

made  shall  be  binding  upon  the  persons  interested  and  upon  the  state.  If  any  ex- 
ecutor or  administrator  shall  neglect  or  refuse  to  return  an  inventory  and  appraisal 
within  the  time  now  required  by  law,  unless  said  time  shall  have  been  extended 
by  said  court  for  cause,  after  hearing  and  such  notice  as  the  court  of  probate  may 
require  the  said  court  of  probate  may  remove  said  executor  or  administrator  and 
appoint  another  person  administrator  with  the  will  annexed,  or  administrator, 
as  the  case  may  be. 

[See  notes  to  the  Act  of  1897,  ante,  p.  366.] 

Tax  to  be  Paid  to  Treasurer  of  State.  —  Extension. 

S.  2370.  All  taxes  imposed  by  section  2368  shall  be  paid  to  the  treasurer  of  the 
state  by  the  executor  or  administrator  within  fourteen  months  after  the  qualifica- 
tion of  such  executor  or  administrator,  except  as  hereinafter  provided.  If,  for 
any  cause  found  by  the  said  court  of  probate  to  be  reasonable,  after  hearing  and 
notice  to  the  treasurer  of  the  state,  the  executor  or  administrator  is  unable  to  pay 
said  tax  within  the  time  limited,  the  said  court  of  probate  shall  have  power  in  its 
discretion  to  extend  the  time  for  the  payment  of  said  taxes. 

Estate  for  Life  or  Years,  or  Annuity. 

S.  2371.  Where  any  estate  or  an  annuity  is  bequeathed  or  devised  to  any  person 
for  life  or  any  limited  period,  with  remainder  over  to  another  or  others,  and  all 
the  beneficiaries  are  within  the  same  class,  the  tax  shall  be  computed  on  and  paid 
as  aforesaid  out  of  the  principal  sum  of  property  o  bequeathed  or  devised.  Where 
a  life  estate  or  an  annuity  is  bequeathed  or  devised  to  a  parent  or  parents,  husband, 
wife  or  lineal  descendants,  or  legal  y  adopted  child,  and  remainder  over  to  collateral 
kindred,  or  to  strangers  to  the  blood,  or  to  a  corporation,  voluntary  association, 
of  society,  then  the  tax  of  one  per  centum  shall  be  paid  out  of  the  principal  sum 
or  estate  so  bequeathed  or  devised  for  life,  or  constituting  the  fund  producing  said 
annuity,  and  the  remaining  four  per  centum  aue  from  collateral  kindred  or 
strangers  to  the  blood  shall  be  paid  out  of  the  said  principal  sum  or  estate  at  the 
expiration  of  the  particular  estate  or  annuity.  And  where  a  life  estate  or  annuity 
is  bequeathed  or  devised  to  collateral  kindred  or  strangers  to  the  blood,  or  to  a 
corporation,  voluntary  association,  or  society,  with  remainder  to  parent  or  parents, 
husband,  wife,  or  lineal  descendants,  or  legally  adopted  child,  a  tax  of  five  per 
entum  shall  be  paid  as  aforesaid  to  the  treasurer  of  the  state  out  of  the  principal 
sum  or  estate,  or  fund  producing  said  annuity;  on  the  termination  of  said  life 
estate  or  annuity  the  treasurer  of  the  state  shall  refund  and  pay  to  the  person  or 
persons  entitled  to  the  remainder  four-fifths  of  said  tax.  The  said  court  of  probate 
shall  send  to  the  treasurer  of  the  state  a  certificate  of  the  date  of  the  death  of  said 
life  tenant  or  annuitant  within  ten  days  after  the  same  has  come  to  its  knowledge. 

Where  personal  property  was  given  to  a  life  tenant  the  succession 
taxes  assessed  against  the  net  value  of  the  property  as  a  whole  are 
chargeable  to  principal.    Bishop  w.  Bishop,  81  Conn.  509,  71  A.  583. 

Sale  of  Estate  to  Pay  Tax. 

S.  2372.  All  administrators  or  executors  shall  have  power  to  sell  so  much  of 
the  estate  as  will  enable  them  to  pay  said  tax.  In  case  specific  estate  or  property 
is  bequeathed  or  devised  to  any  person,  unless  the  legatee  or  devisee  shall  pay  to 


1909,  c.  218.]  CONNECTICUT.  373 

the  executor  the  amount  of  the  tax  due  thereon  by  the  provisions  of  section  2368, 
the  executor  shall  sell  said  property  or  so  much  thereof  as  may  be  necessary  to 
pay  said  tax  and  the  fees  and  expenses  of  said  sale. 

When  Treasurer  may  have  Administrator  Appointed. 

S.  2373.  In  case  of  the  neglect  or  refusal  of  any  person  interested  to  apply  for 
letters  of  administration  within  thirty  days  after  the  death  of  any  intestate, 
the  treasurer  of  the  state  may  apply  to  the  court  of  probate  having  jurisdiction 
for  the  appointment  of  an  administrator ;  and  thereupon  after  hearing  and  public 
notice  the  said  court  of  probate  shall  appoint  an  administrator  of  said  estate. 

Probate  Court's  Jurisdiction. 

S.  2374.  The  court  of  probate  having  either  principal  or  ancillary  jurisdiction 
of  the  settlement  of  the  estate  of  the  decedent,  shall  have  jurisdiction  to  hear 
and  determine  all  questions  in  relation  to  said  tax  that  may  arise  affecting  any 
devise,  legacy,  or  inheritance  under  section  2368,  subject  to  appeal  as  in  other 
cases,  and  the  state  treasurer  shall  represent  the  interests  of  the  state  in  any 
such  proceeding. 

[See  notes  to  the  Act  of  1897,  ante,  p.  365.] 

S.  2375.  No  final  settlement  of  the  account  of  any  executor  or  administrator 
shall  be  accepted  or  allowed  by  any  court  of  probate,  unless  it  shall  show  and  the 
judge  of  said  .court  shall  find,  that  all  taxes  imposed  by  the  provisions  of 
section  2368  upon  any  property  or  interest  belonging  to  the  estate  to  be  settled 
by  said  account,  shall  have  been  paid,  and  the  receipt  of  the  treasurer  of  the 
state  for  such  tax  shall  be  the  proper  voucher  for  such  payment.  Settlement  of 
account  not  allowed  till  tax  is  paid. 

S.  2376.  All  transfers  and  alienations  by  deed,  grant,  or  other  conveyance, 
of  real  or  personal  estate  to  take  effect  upon  the  death  of  the  grantor  or  donor, 
shall  be  testamentary  gifts  within  the  taxation  purposes  of  section  2368,  and  all 
property  so  conveyed  shall  be  conveyed  subject  to  the  tax  imposed  by  said  section 
and  upon  the  same  principles  and  percentages  regarding  the  degree  of  relationship; 
and  the  grantee  or  donee  of  any  such  estate  shall,  upon  the  receipt  thereof,  pay 
to  the  treasurer  of  the  state  a  tax  of  three  per  cent,  or  one-half  of  one  per  cent  of 
the  value  of  such  property,  according  to  his  aforesaid  degree  of  relationship  to 
the  grantor  or  donor,  and  the  executor  or  administrator  of  any  such  grantor  or 
donor  shall  at  once  communicate  to  the  treasurer  of  the  state  his  knowledge  of  any 
and  all  such  conveyances.  No  executor,  administrator,  or  bailee  having  posses- 
sion of  any  deed,  grant,  conveyance,  or  other  evidence  of  such  transfer  or  alienation 
shall  deliver  the  same  or  anything  connected  with  the  subject  of  such  transfer  or 
alienation  until  the  tax  aforesaid  has  been  paid  to  the  treasurer  of  the  state. 

What  Estates  Affected  by  Preceding  Sections. 

S.  2377.  Sections  2367  to  2376,  both  inclusive,  shall  not  apply  to  the  estates 
of  any  persons  deceased  before  June  first,  1897;  but  the  estates  of  all  persons 
who  died  before  July  first,  1893,  and  on  or  after  August  first,  1889,  shall  be 
subject  to  the  provisions  of  chapter  180  of  the  public  acts  of  1889;  and  the  estates 
of  all  persons  who  died  before  June  first,  1897,  and  on  or  after  July  first,  1893, 


374  STATUTES  ANNOTATED.  [Conn.  St. 

shall  be  subject  to  the  provisions  of  said  chapter  180  as  modified  by  chapter  257 
of  the  public  acts  of  1893.  Said  chapters  180  and  257  are  continued  in  force  for 
the  purposes  in  this  section  expressed. 

Power  of  Appointment.     (Conn.  St.  1909,  c.  218,  s.  5.) 

Whenever  any  person  or  corporation  shall  exercise  the  power  of  appointment 
derived  from  any  disposition  of  property  made  feither  before  or  after  the  pas- 
sage of  this  act,  all  property  under  such  appointment  when  made,  shall  be 
deemed  to  be  taxable  under  the  laws  of  this  state  in  the  same  manner  as  though 
the  property  to  which  such  appointment  relates  belonged  absolutely  to  the  donee 
of  such  power  and  had  been  bequeathed  or  devised  by  such  donee  by  will;  and 
whenever  any  person  or  corporation  possessing  such  power  of  appointment  so 
derived  shall  fail  or  omit  to  exercise  the  same  within  the  time  provided  therefor, 
in  whole  or  in  part,  the  passing  of  such  property  taxable  under  the  laws  of 
this  state  shall  be  deemed  to  take  place  to  the  extent  of  such  omission  or  failure, 
in  the  same  manner  as  though  the  persons  or  corporations  thereby  becoming  en- 
titled to  the  possession  or  enjoyment  of  the  property  to  which  such  power  related 
had  succeeded  thereto  by  a  will  of  the  donee  of  the  power  failing  to  exercise  such 
power,  taking  effect  at  the  time  of  such  omission  or  failure. 


Del.  St.]  DELAWARE.  375 


DELAWARE, 


In  General. 

Delaware  adopted  a  collateral  inheritance  tax  in  1869.  In  1883 
its  application  was  limited  to  strangers  in  blood.  In  1909  the  present 
schedule  was  adopted.  There  have  been  as  yet  no  decisions 
construing  this  statute. 

The  exeipption  is  $500  and  applies  to  individual  shares.  No  tax 
is  claimed  on  stock  of  Delaware  corporations  owned  by  non-residents. 

Constitutional  Limitations. 
Delaware  Constitution,  1897,  a.  1. 

S.  9.  A\\  courts  shall  be  open;  and  every  man  for  an  injury  done  him  in  his 
reputation,  person,  movable  or  immovable  possessions,  shall  have  remedy  by  the 
due  course  of  law,  and  justice  administered  according  to  the  very  right  of  the 
cause  and  the  law  of  the  land,  without  sale,  denial,  or  unreasonable  delay  or 
expense;  and  every  action  shall  be  tried  in  the  county  in  which  it  shall  be  com- 
menced, unless  when  the  judges  of  the  court  in  which  the  cause  is  to  be  tried  shall 
determine  that  an  impartial  trial  thereof  cannot  be  had  in  that  county.  Suits 
may  be  brought  against  the  state,  according  to  such  regulations  as  shall  be  made 
by  law. 

Delaware  Constitution,  1897,  a.  8. 

S.  1.  All  taxes  shall  be  uniform  upon  the  same  class  of  subjects  within  the 
territorial  limits  of  the  authority  levying  the  tax,  and  shall  be  levied  and  collected 
under  general  laws,  but  the  general  assembly  may  by  general  laws  exempt  from 
taxation  such  property  as  in  the  opinion  of  the  general  assembly  will  best  promote 
the  public  welfare. 

List  of  Statutes. 

1869.     Statutes  of  Delaware,  Vol.  13,  c.  390. 


1871. 
1871. 
1877. 
1883. 
1883. 
1909. 


"     14,  c.  21. 
"     14,  c.  24. 
"     15,  c.  337. 
"     17,  c.  8. 
"     17,  c.  11. 
c.  229,  p.  514. 


Revised  Code  of  1852  (Revision  of  1874),  c.  7,  p.  38. 
Revised  Code  of  1852  (Revision  of  1893),  c.  7,  p.  66. 
Revised  Statutes,  1893,  pp.  66-69. 


376  STATUTES  ANNOTATED.  [Del.  St. 

Former  Statutes. 

Del.  St.  1869,  v.  13,  c.  390,  p.  357,  approved  April  8,  1869,  pro- 
vides an  inheritance  tax  in  sections  12  to  22. 

S.  12.  All  estates,  real  and  personal,  whatsoever,  passing  from  any  person 
who  may  die  seized  and  possessed  thereof,  being  in  this  state,  or  any  part  of.such 
estates,  or  any  interest  therein,  transferred  by  deed,  grant,  bargain,  gift  or  sale, 
made  or  intended  to  take  effect  in  possession  after  the  death  of  the  grantor, 
bargainor,  devisor  or  donor,  to  any  person  or  persons,  bodies  politic  or  corporate, 
in  trust  or  otherwise,  other  than  to  or  for  the  use  of  the  father,  mother,  wife, 
children  and  lineal  descendants  of  the  grantor,  bargainor,  devisor,  donor  or 
intestate,  shall  be  subject  to  a  tax  of  three  per  centum  on  every  hundred  dollars 
of  the  clear  value  of  such  estates,  and  all  executors  and  administrators  shall 
only  be  discharged  from  liability  for  the  amount  of  such  tax,  the  payment  of 
which  they  may  be  charged  with,  by  paying  the  same  for  the  use  of  this  state 
as  hereinafter  directed:  Provided,  that  no  estate  the  value  of  which  shall  not 
exceed  five  hundred  dollars  shall  be  subject  to  the  tax  imposed  by  this  section. 

Ss.  13  to  22  provide  for  the  payment  and  collection  of  the  tax. 

Del.  St.  1871,  Vol.  14,  c.  21,  p.  31,  amended  Del.  St.  1869,  Vol.  13, 
c.  390,  p.  357,  s.  12,  by  making  the  rate  of  tax  as  follows:  — 

"Where  the  successor  shall  be  a  brother  or  sister,  or  a  descendant  of  a  brother 
or  sister  of  the  predecessor,  a  tax  at  the  rate  of  one  per  centum  upon  the  value  of 
the  estate;  where  the  successor  shall  be  a  brother  or  sister  of  the  father  or  mother, 
or  a  descendant  of  a  brother  or  sister  of  the  father  or  mother  of  the  predecessor, 
a  tax  at  the  rate  of  two  per  centum  upon  the  value  of  the  estate:  where  the 
successor  shall  be  a  brother  or  sister  of  the  grandfather  or  grandmother,  or  a 
descendant  of  the  brother  or  sister  of  the  grandfather  or  grandmother  of  the 
predecessor,  a  tax  at  the  rate  of  three  per  centum  upon  the  value  of  the  estate; 
where  the  successor  shall  be  in  any  other  degree  of  collateral  consanguinity  to  the 
predecessor  than  is  hereinbefore  described,  or  shall  be  a  stranger  in  blood  to  him, 
a  tax  at  the  rate  of  five  per  centum  of  the  value  of  the  estate:  Provided,  that  no 
tax  shall  be  levied  in  respect  of  any  succession  existing  before  or  subsequent  to 
the  passage  of  this  act,  where  the  successor  shall  be  the  wife  of  the  predecessor." 

Del.  St.  1871,  c.  24,  s.  5,  repeals  Del.  St.  1869,  c.  390,  except 
sections  12  to  22  inclusive. 

Del.  St.  1877,  Vol.  15,  c.  337,  approved  March  9,  1877,  repealed 
Del.  St.  1869,  c.  390,  s.  14,  and  substituted  a  section  the  effect  of 
which  was  to  take  away  from  the  assessor  of  state  taxes  and  give 
to  the  register  of  wills  certain  duties  in  regard  to  the  appraisal  of 
real  estate. 

Del.  St.  1883,  Vol.  17,  c.  8,  s.  1,  approved  February  27,  1883, 
amended  section  13  of  the  Del.  St.  1869,  c.  390,  by  striking  out 


1909,  c.  225.]  DELAWARE.  377 

the  provision  that  executors  or  administrators  shall  pay  to  the 
register  of  wills  three  per  cent  of  the  money  in  their  hands  for  dis- 
tribution ;  and  providing  instead  that  the  tax  shall  be  paid  out  of 
the  money  belonging  to  such  legatees  or  distributees. 

Del.  St.  1883,  Vol.  17,  c.  11,  approved  March  27,  1883,  provided 
that  so  much  of  sections  12  and  13  of  Del.  St.  1869  as  imposes 
succession  or  collateral  inheritance  taxes  except  as  to  strangers 
in  blood  of  the  predecessor  be  repealed. 

Del.  St.  1909,  c.  225,  was  approved  March  26,  1909. 

THE  PRESENT  ACT. 

Delaware  St.  1909,  c.  225. 

Taxable  Transfers.  —  Rates.  —  Exemptions. 

S.  1.  All  property  within  the  jurisdiction  of  this  state,  real  and  personal,  and 
every  estate  and  interest  therein,  whether  belonging  to  inhabitants  of  this  state 
or  not,  which  shall,  after  the  approval  of  this  act,  pass  by  will,  or  by  the  intestate 
laws  of  this  state,  or  by  deed,  grant  or  gift  (except  in  cases  of  a  bona  fide  purchase 
for  full  consideration  in  money  or  money's  worth)  made  or  intended  to  take  effect 
in  possession  or  enjoyment  after  the  death  of  the  grantor  or  donor,  to  any  person 
or  persons,  bodies  politic  or  corporate,  in  trust  or  otherwise,  other  than  to  or  for 
the  use  of  the  father,  mother,  grandfather,  grandmother,  wife,  husband,  child 
or  children  by  birth  or  legal  adoption,  or  lineal  descendant,  of  the  grantor,  donor, 
devisor,  or  intestate  (hereinafter  called  the  decedent)  shall  be  subject  to  taxation 
and  pay  the  following  taxes,  that  is  to  say :  —  where  the  successor  shall  be  a 
brother  or  sister,  or  a  descendant  of  a  brother  or  sister  of  the  decedent,  a  tax  at 
the  rate  of  one  per  centum  upon  the  value  thereof;  where  the  successor  shall  be  a 
brother  or  sister  of  the  father  or  mother,  or  a  descendant  of  a  brother  or  sister  of 
the  father  or  mother  of  the  decedent,  a  tax  at  the  rate  of  two  per  centum  upon  the 
value  thereof;  where  the  successor  shall  be  a  brother  or  sister  of  the  grandfather 
or  grandmother,  or  a  descendant  of  the  brother  or  sister  of  the  grandfather  or 
grandmother  of  the  decedent,  a  tax  at  the  rate  of  three  per  centum  upon  the 
value  thereof;  where  the  successor  shall  be  in  any  other  degree  of  collateral  con- 
sanguinity to  the  decedent,  than  is  hereinbefore  described,  or  shall  be  a  stranger  in 
blood  to  him,  a  tax  at  the  rate  of  five  per  centum  of  the  value  thereof;  provided 
that  if  the  value  of  the  property,  estate  or  interest  therein,  passing  as  aforesaid 
to  any  successor,  shall  not  exceed  the  sum  of  five  hundred  dollars  ($500),  then 
and  in  such  event  the  successor  shall  be  entitled  to  receive  the  same,  free  and 
exempt  from  any  tax  imposed  by  the  provisions  of  this  act;  and  provided  further 
that  nothing  in  this  act  shall  be  construed  to  impose  any  tax  upon  any  property, 
estate  or  interest  therein  passing  to  or  for  the  use,  or  in  trust  for,  charitable, 
educational  or  religious  societies  or  institutions,  or  cities  or  towns  for  public 
improvement,  or  to  school  districts  or  library  commissions. 

Payment  of  Tax.  —  Penalty. 

S.  2.  Every  pecuniary  legacy  and  every  distributive  share  of  an  estate  payable 
in  this  state,  shall  be  subject  to  the  tax  prescribed  in  section  1  of  this  act,  and  every 


378  STATUTES  ANNOTATED.  [Del.  St. 

executor  or  administrator  to  whom  administration  may  be  granted,  before  he 
pays  any  pecuniary  legacy,  or  distributes  the  shares  of  any  estate  liable  to  the  tax 
imposed  by  the  preceding  section,  shall  pay  to  the  register  of  wills  of  the  proper 
county,  for  the  use  of  the  state,  that  per  centum  of  all  moneys  he  may  hold  for 
distribution  among  the  distributees  or  legatees,  as  is  prescribed  in  the  preceding 
section.  The  tax  aforesaid  shall  be  paid  by  such  executor  or  administrator  within 
thirteen  months  from  the  granting  of  letters  testamentary,  or  of  administration, 
and  any  executor  or  administrator  neglecting  or  refusing  to  pay  the  said  tax  shall 
not  be  allowed  by  the  register  any  commissions  on  the  estate,  and  shall  be  liable, 
on  his  official  bond,  for  the  amount  of  the  tax  due  the  state  on  the  funds  in  his 
hands.  The  exemptions  prescribed  in  section  1  of  this  act  shall  apply  to  all  legacies 
and  distributive  shares  of  estate. 

Appraisal. 

S.  3.  The  estate  or  interest  of  every  person,  body  politic  or  corporate,  in  all 
real  and  personal  property,  taxable  under  the  provisions  of  section  1  of  this  act, 
whether  in  remainder,  reversion  or  otherwise,  or  in  trust  or  otherwise,  or  condi- 
tioned upon  the  happening  of  a  contingency  or  dependent  upon  the  exercise  of 
a  discretion,  or  subject  to  a  power  of  appointment,  or  otherwise,  and  all  annuities 
taxable  as  aforesaid,  shall  be  valued  by  the  register  of  wills  for  the  purpose  of 
determining  the  amount  of  tax  to  be  collected  from  such  person,  body  politic, 
or  corporate,  under  the  provisions  of  this  act.  Where  the  property  shall  pass 
in  trust  or  otherwise  to  one  or  more  persons,  bodies  politic  or  corporate,  for  a 
term  of  years  or  greater  estate  or  interest,  and  with  remainder  or  reversion  to 
one  or  more  other  persons,  bodies  politic,  or  corporate,  the  estate  or  interest  of 
each  beneficiary  shall  be  valued  separately.  The  register  of  wills  referred  to  in 
this  section  shall  be  the  register  of  wills  of  the  county  where  letters  testamentary 
or  of  administration  have  been  granted  on  the  estate  of  the  donor,  grantor, 
devisor  or  intestate  from  whom  the  property  aforesaid  shall  have  passed  as  set 
forth  in  section  1  of  this  act,  but  if  no  such  letters  have  been  granted  then  the 
said  register  shall  be  the  register  of  wills  of  the  county  in  which  such  property  is, 
or  is  situated.  Such  valuation  shall  be  made  within  thirteen  months  of  the  death 
of  the  donor,  grantor,  devisor  or  intestate  aforesaid.  The  register  shall  give 
one  week's  notice  to  the  parties  in  interest  by  posting  the  same  in  his  office  or  in 
some  other  manner  as  he  shall  deem  proper,  of  the  time  when  he  will  hear  any  of 
said  parties  relative  to  such  valuation.  The  said  register  shall  have  power  to 
summon  witnesses  and  take  testimony  relative  to  the  valuation  aforesaid. 

Appeal. 

In  all  cases  there  shall  be  an  appeal  from  the  determination  of  the  register  as 
to  the  amount  of  taxes  to  be  paid  under  the  provisions  of  this  act,  to  the  orphans' 
court  of  the  county  of  said  register;  the  said  appeal  must  be  taken  to  the  term  of 
the  said  orphans'  court  next  following  the  determination  of  the  register  as  to  the 
valuation  aforesaid.    The  decision  of  the  said  orphans'  court  shall  be  final. 

The  costs  of  the  appeal  shall  in  all  cases  be  paid  by  the  appellant  and  shall 
be  taxed  by  the  court  against  said  appellant.  It  shall  be  the  duty  of  the  register 
to  notify  the  attorney  general  or  his  deputy  for  the  county  of  said  register's 
jurisdiction,  whenever  any  such  appeal  shall  be  taken  and  it  shall  be  the  duty  of 
the  attorney  general  to  represent  the  state  in  person  or  by  one  of  his  deputies  in 
the  hearing  on  the  appeal. 


1909,  c.  225.]  DELAWARE.  379 

Lien. 

Every  estate  and  interest  in  real  and  personal  property  shall  be  charged  with 
a  lien  for  the  amount  of  the  taxes  for  which  such  estate  or  interest  is  liable  under 
the  provisions  of  this  act,  whether  such  estate  or  interest  be  held  at  the  time  the 
tax  is  determined,  by  the  first  taker  thereof,  his  heirs,  assigns  or  any  other  persons, 
and  such  a  lien  shall  not  be  discharged  until  the  tax  shall  be  paid  in  full. 

Duty  of  Executor  or  Administrator  to  Collect  Tax. 

It  shall  be  the  duty  of  the  executor  or  administrator  of  the  donor,  grantor, 
devisor  or  intestate  from  whom  any  property  shall  pass  as  set  forth,  in  section  1 
of  this  act,  to  collect  the  taxes  determined  in  accordance  with  the  provisions  of 
this  section,  to  be  due  and  payable  on  account  of  said  property  or  any  estate  or 
interest  therein,  from  the  parties  liable  to  pay  said  tax,  or  their  legal  representative. 
Such  collection  shall  be  made  within  thirty  days  after  the  amount  of  the  tax  has 
been  determined  in  accordance  with  the  provisions  of  this  section,  provided  that 
the  right  of  possession  or  enjoyment  of  the  property,  estate  or  interest  taxed, 
shall  then  have  accrued,  otherwise  such  collection  shall  be  made  within  thirty 
days  after  such  right  of  possession  or  enjoyment  shall  accrue.  If  there  shall  be 
no  executor  or  administrator  as  aforesaid  at  such  time,  it  shall  be  the  duty  of  the 
register  of  wills  to  appoint  some  suitable  person  as  administrator. 

Jurisdiction  of  Orphans'  Court. 

If  the  owner  of  any  estate  or  interest  subject  to  the  payment  of  a  tax  under  the 
provisions  of  this  act  shall  refuse  or  neglect  to  pay  said  tax  to  the  executor  or 
administrator  aforesaid,  within  the  time  prescribed  for  the  collection  thereof  as 
hereinbefore  set  forth,  then  the  executor  or  administrator  aforesaid  shall  apply 
to  the  orphans'  court  of  said  county,  and  it  shall  be  the  duty  of  said  court  to  grant 
an  order  authorizing  and  directing  said  executor  or  administrator  to  sell  for  cash, 
upon  the  usual  notice,  the  said  estate  or  interest,  or  so  much  thereof  as  may  be 
necessary  to  pay  said  tax  and  all  expenses  of  such  sale  and  the  commissions  of  the 
executor  or  administrator  thereon.  The  said  order,  with  the  proceedings  of  the 
executor  or  administrator  therein,  shall  be  returned  to  the  next  term  of  the  said 
orphans'  court,  and  if  the  return  aforesaid  be  approved  by  the  court,  the  executor 
or  administrator  making  such  sale  shall  execute  and  deliver  to  the  purchaser  a 
deed  for  so  much  of  said  estate  or  interest  as  was  sold,  and  such  deed  shall  vest 
in  the  purchaser  the  title  thereto. 

Legacy  Charged  on  Land. 

Whenever  any  legacy  taxable  under  the  provisions  of  this  act,  is  charged  upon 
land,  the  holder  of  said  land  shall  pay  the  same  to  the  executor  or  administrator 
in  order  that  said  executor  or  administrator  may  pay  the  taxes  due  thereon. 

Property  Held  in  Trust. 

In  case  any  property  subject  to  the  provisions  of  this  act  shall  be  held  in  trust, 
it  shall  be  the  duty  of  the  trustee  to  pay  the  taxes  imposed  under  this  act,  to  the 
executor  or  administrator  of  the  donor,  grantor  or  devisor  from  whom  the  prop- 
erty shall  have  passed  as  set  forth  in  section  1  hereof,  and  if  there  shall  be  no  such 
executor  or  administrator  then  said  trustees  shall  pay  the  said  taxes  to  the  register 
of  wills  of  the  proper  county. 


380  STATUTES  ANNOTATED.  [Del.  St. 

Executor  or  Administrator  to  File  Statement  within  Two  Months. 

It  shall  be  the  duty  of  every  executor  or  administrator  within  two  months  after 
the  granting  of  letters  testamentary  or  administration,  to  file  in  the  office  of  the 
register  of  wills  of  the  county  in  which  such  letters  have  been  granted,  a  statement 
in  writing,  setting  forth  a  general  description  of  every  parcel  of  real  estate  in  this 
state  of  which  his  decedent  died  seized,  and  the  name  of  each  party  entitled  to 
any  estate  or  interest  in  any  parcel  of  said  real  estate  and  the  relationship,'if  afty, 
of  said  party,  to  the  decedent.  Said  statement  shall  be  supported  by  the  oath 
or  affirmation  of  said  executor  or  administrator  that  the  facts  there  incontained 
are  true  according  to  his  best  information  and  belief. 

Records. 

Every  such  statement  shall  be  recorded  by  the  register  of  wills  in  a  separate  book 
to  be  kept  by  him  for  that  purpose  and  which  shall  be  known  as  the  "Inheritance 
and  Succession  Docket,"  and  shall  be  duly  indexed.  Whenever  any  parcel  of  real 
property  or  any  estate  or  interest  therein  described  in  the  statement  of  the  execu- 
tor or  administrator  aforesaid,  shall  be  subject  to  tax  under  the  provisions  of  this 
act,  the  register  of  wills  shall  make  an  entry  in  the  docket  aforesaid,  of  the  amount 
of  the  tax  determined  by  him  as  hereinbefore  set  forth,  to  be  against  said  parcel 
and  every  estate  and  interest  therein,  and  in  the  event  of  an  appeal  to  the  orphans' 
court  as  aforesaid,  shall  further  set  down  in  said  docket  the  amount  of  the  tax 
aforesaid  as  fixed  by  said  court.  When  any  tax  as  aforesaid  shall  be  paid  and 
discharged,  the  said  register  shall  make  a  note  thereof  in  the  said  docket. 

Duty  to  Examine  Records.  —  Proceedings. 

It  shall  be  the  duty  of  the  state  treasurer  from  time  to  time  to  examine  every 
such  docket  as  aforesaid,  and  to  notify  the  attorney  general  of  any  failure  on  the 
part  of  any  register  of  wills  or  of  any  executor  or  aclministrator  to  perform  the 
duties  imposed  upon  them  by  this  act.  The  attorney  general  shall  thereupon 
take  proper  proceedings  against  the  party  or  parties  delinquent.  All  taxes  im- 
posed under  the  provisions  of  this  act  shall  be  for  the  use  of  the  state. 

When  no  Executor  or  Administrator  Tax  to  be  Paid  to  Register  of  Wills. 

If  for  any  cause  there  shall  be  no  executor  or  administrator  to  receive  a  tax 
imposed  under  the  provisions  of  this  act,  the  party  liable  for  said  tax  shall  have 
the  right  to  pay  the  same  direct  to  the  register  of  wills  of  the  proper  county  and 
such  payment  shall  operate  as  a  discharge  of  said  tax. 

Bond  of  Executor  or  Administrator  Liable. 

S.  4.  The  bond  of  an  executor  or  administrator  shall  be  liable  for  all  money 
he  may  receive  for  taxes,  or  for  the  proceeds  of  the  sale  of  any  estate  or  interest 
received  by  him  under  this  act,  and  if  any  executor  or  administrator  shall  fail 
to  perform  any  of  the  duties  imposed  upon  him  under  the  provisions  of  this  act 
the  register  of  \vins  granting  the  letters  of  administration  may  revoke  the  same, 
and  his  bond  shall  be  liable,  and  the  same  proceedings  shall  be  had  as  if  his  ad- 
ministration had  been  revoked  for  any  other  cause.  The  powers  and  duties  of  an 
administrator  de  bonis  non,  or  de  bonis  non  with  the  will  annexed,  shall  be  the 
same,  under  this  act,  as  an  executor  or  administrator,  and  he  shall  be  subject  to 
the  same  liabilities. 


1909,  c.  225.]  DELAWARE.  381 

Tax  to  be  Paid  to  Register  of  Wills. 

S.  5.  Every  executor  or  administrator  collecting  the  tax  aforesaid  by  sale  of 
any  estate  or  interest  as  aforesaid,  shall  pay  the  tax  so  collected  to  the  register 
of  wills  of  the  proper  county. 

Receipts. 

S.  6.  Every  register  of  wills  receiving  any  tax  under  the  provisions  of  this  act, 
shall  give  the  person  paying  the  same,  duplicate  receipts  therefor,  one  of  which 
shall  be  forwarded  by  the  person  so  paying  as  aforesaid,  to  the  state  treasurer 
to  be  by  him  preserved,  and  either  of  said  duplicate  receipts  shall  be  evidence  in 
suits  upon  the  bond  of  said  register  to  recover  the  taxes  so  by  him  received. 

Register  of  Wills.  —  Duty.  —  Gommission  Penalties. 

S,  7.  It  shall  be  the  duty  of  the  several  register  of  wills  in  the  state,  to  make 
returns,  urider  oath  to  the  state  treasurer,  on  the  first  days  of  January,  April, 
July  and  October,  in  each  year,  or  within  thirty  days  thereafter,  of  all  sums  of 
money  received  by  them  as  taxes  under  the  provisions  of  this  act,  the  first  return 
to  be  made  on  the  first  day  of  July  next  after  the  passage  of  this  act,  and  to  pay 
over  to  said  state  treasurer  the  amounts  so  by  them  received  respectively,  at 
the  time  of  making  such  returns,  for  which  they  shall  be  allowed  a  commission 
of  one-half  of  one  per  centum  on  the  amount  so  paid  over,  and  if  any  register  of 
wills  shall  fail  to  pay  over,  as  required  by  this  section,  the  state  treasurer  shall 
give  notice  to  the  attorney  general  of  the  state,  whose  duty  it  shall  be  to  institute 
suit  on  the  official  bond  of  such  register  of  wills,  for  the  use  of  the  state,  to  recover 
the  amount  due  from  such  register  of  wills,  and  in  such  suit  the  amount  appearing 
to  be  due,  with  interest  thereon,  and  costs,  shall  be  recovered,  which  recovery  shall 
be  evidence  of  misbehavior  in  office,  and  upon  conviction  thereof  such  register 
cf  wills  shall  be  removed  from  office. 

The  official  bond  of  every  register  of  wills  of  this  state,  now  or  hereafter  ap- 
pointed, shall  be  deemed  and  held  to  embrace  and  include  the  faithful  performance 
by  such  register  of  all  and  every  the  duties  imposed  upon  him  by  this  act.  (Ap- 
proved March  26,  A.D.  1909.) 


382  STATUTES  ANNOTATED.  [Del.,  Fla.,  Ga. 


DISTRICT  OF  COLUMBIA. 


There  is  no  inheritance  tax  law  in  force  in  the  District  of  Columbia. 
A  bill  for  an  inheritance  tax  in  the  District  passed  the  House  in 
December,  1910,  but  did  not  pass  the  Senate.  It  proposed  to 
tax  direct  inheritances  from  $10,000  to  $100,000,  1  per  cent; 
$100,000  to  $500,000,  21^  per  cent;  over  $500,000,  5  per  cent; 
collateral  inheritances,  uniformly  5  per  cent  on  the  excess  over 
$3,000. 


FLORIDA, 


In  General. 

Florida  has  no  inheritance  tax  and  has  never  had  an  inheritance 
tax. 

Ftorida  Constitution,  1885,  a.  9. 

S.  1.  The  legislature  shall  provide  for  a  uniform  and  equal  rate  of  taxation, 
and  shall  prescribe  such  regulations  as  shall  secure  a  jlist  valuation  of  all  property 
both  real  and  personal,  excepting  such  property  as  may  be  exempted  by  law  for 
municipal,  educational,  literary,  scientific,  religious  or  charitable  purposes. 


GEORGIA. 


In  General. 

Georgia  has  no  inheritance  tax  and  has  never  had  an  inheritance 
tax. 

Georgia  Constitution,  1877,  a.  7,  s.  2,  par.  1. 

All  taxation  shall  be  uniform  upon  the  same  class  of  subjects,  and  ad  valorem 
on  all  property  subject  to  be  taxed  within  the  territorial  limits  of  the  authority 
levying  the  tax,  and  shall  be  levied  and  collected  under  general  laws.  The  general 
assembly  may,  however,  impose  a  tax  upon  such  domestic  animals,  as,  from  their 
nature  and  habits,  are  destructive  of  other  property. 


Hawaii  St.]  HAWAII.  383 


HAWAII. 


In  General. 

This  territory  has  had  a  collateral  inheritance  tax  since  1892, 
which  was  extended  in  1905  to  direct  heirs.  The  act  was  further 
amended  in   1909. 

List  of  Statutes. 


1892. 

Statutes  of  Hawaii, 

,  c.  106. 

1896. 

U                 (< 

" 

c.  21. 

1903. 

" 

" 

c.  30. 

1905. 

(<        (( 

<( 

c.  102. 

1909. 

"        " 

" 

c.  66. 

1909. 

a            i, 

" 

c.  147. 

1911. 

i(            (< 

" 

c.  130. 

1897. 

Civil  Laws, 

sections  910-917. 

1905. 

Revised  Laws  of  Hawaii,  chapter  100,  sections  1290-1297. 

History  of  Legislation. 

The  Hawaii  enabling  act  does  not  seem  to  contain  any  particular 
restriction  on  inheritance  taxes. 

Hawaii  St.  1896,  c.  21,  approved  May  4,  1896,  amends  Hawaii 
St.  1892,  c.  106,  s.  1,  which  imposed  a  collateral  inheritance  tax 
of  5  per  cent 

Hawaii  St.  1892,  c.  106,  and  Hawaii  St.  1896,  c.  21,  were  codified 
in  the  Civil  Laws  of  the  Hawaiian  Islands,  1897,  published  as  c. 
63,  ss.  910,  917. 

Hawaii  St.  1903,  c.  30,  affirmed  chapter  63  of  the  Civil  Laws  of 
Hawaii. 

Hawaii  St.  1905,  Act  102,  approved  April  26,  1905,  extended 
the  tax  to  direct  heirs. 

Hawaii  St.  1909,  Act  33,  approved  April  8,  1909,  imposing  an  in- 
come tax,  is  amended  by  Hawaii  St.  1909,  Act  66,  by  adding  thereto 
the  provision  that  the  tax  should  not  be  levied  or  assessed  upon 
money  and  the  value  of  personal  property  acquired  by  gift  or  in- 
heritance. 

Hawaii  St.  1909,  Act  147,  approved  April  28,  1909,  amended 
sections  1,  5,  12,  and  25  of  Act  No.  102  of  the  Laws  of  1905,  relating 
to  the  inheritance  tax. 


384  STATUTES  ANNOTATED.  [Hawaii  St. 

THE  PRESENT  ACT. 

Hawaii  St.  1905,  No.  102,  as  amended. 

Transfers  Taxable.  —  Rate.  —  Exemptions. 

S.  1.  All  property  which  shall  pass  by  will  or  by  the  intestate  laws  of  this 
territory,  from  any  person  who  may  die  seized  or  possessed  of  the  same  while 
a  resident  of  this  territory,  or  which  being  within  this  territory  shall  pass  whether 
by  the  laws  of  this  territory  or  otherwise,  from  any  person  who  may  so.  die  while 
not  a  resident  of  this  territory,  or  which,  or  any  interest  in  or  income  from  which 
shall  be  transferred  by  deed,  grant,  sale  or  gift,  made  in  contemplation  of  the 
death  of  the  grantor,  vendor,  or  bargainor,  or  intended  to  take  effect  in  possession 
or  enjoyment  after  such  death,  to  any  person  or  persons,  or  to  any  body  poHtic  or 
corporate,  in  trust  or  otherwise,  or  by  reason  whereof  any  person  or  body  politic 
or  corporate  shall  become  beneficially  entitled,  in  possession  or  expectancy,  to  any 
property,  or  to  the  income  thereof,  shall  be  and  is  subject  to  a  tax  hereinafter  pro- 
vided for,  to  be  paid  to  the  treasurer  of  the  territory  of  Hawaii  as  hereinafter 
directed,  for  the  use  of  the  territory;  and  such  tax  shall  be  and  remain  a  lien  upon 
the  property  passed  or  transferred  until  paid  and  all  administrators,  executors 
and  trustees  of  every  estate  so  transferred  and  the  person  to  whom  the  property 
passes  or  is  transferred  or  passed  shall  be  liable  for  any  and  all  such  taxes  until  the 
same  shall  have  been  paid  as  hereinafter  directed.  The  tax  so  imposed  shall  be 
upon  the  market  value  of  such  property  at  the  rates  hereinafter  prescribed  and 
only  upon  the  excess  over  the  exemptions  hereinafter  granted. 

Whenever  any  person  or  corporation  shall  exercise  a  power  of  appointment 
derived  from  any  disposition  of  property  made  either  before  or  after  the  passage  of 
this  act,  such  appointment  when  made  shall  be  deemed  a  transfer  taxable  under 
the  provisions  of  this  act  in  the  same  manner  as  though  the  property  to  which 
such  appointment  relates  belonged  absolutely  to  the  donee  of  such  power  and 
had  been  bequeathed  or  devised  by  such  donee  b^^  will ;  and  whenever  any  person 
or  corporation  possessing  such  power  of  appointment  so  derived  shall  omit  or 
fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole  or  in  part, 
a  transfer  taxable  under  the  provisions  of  this  act  shall  be  deemed  to  take  place 
to  the  extent  of  such  omissions  or  failures  in  the  same  manner  as  though  the 
persons  or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoyment 
of  the  property  to  which  such  power  related  had  succeeded  thereto  by  a  will  of 
the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at  the  time 
of  such  omission  or  failure. 

When  the  beneficial  interest  to  any  property  or  income  therefrom  shall  so  pass 
to  or  for  the  use  of  his  or  her  father,  mother,  husband,  wife,  child,  grandchild,  or 
any  child  adopted  as  such  in  conformity  with  the  laws  of  the  territory  of  Hawaii, 
the  rate  of  the  tax  shall  be  two  per  cent  of  the  market  value  of  such  property, 
received  by  each  person,  in  excess  of  five  thousand  dollars;  in  all  other  cases  the 
rate  of  tax  shall  be  five  per  cent  of  the  market  value  of  such  property  in  excess  of 
five  hundred  dollars.  -All  property  so  passing  for  which  such  exemption  of  five 
thousand  dollars  can  be  maintained  shall  not  be  taxable  as  income  under  the 
provisions  bf  any  other  law. 

[As  amended  by  St.  1909,  Act  147,  s.  1.] 

"Inheritances  otherwise  taxed"  as  exempted  from  the  income 
tax  include  only  inheritances  otherwise   taxed   under   the  terri- 


1906,  No.  102.]  HAWAII.  385 

torial   laws  and  not  under  the  federal  laws.      Halstead  v.  Pratt, 
14  Hawaii  38. 

An  inheritance  of  personal  property  is  "acquired"  within  the 
meaning  of  section  3  of  the  income  tax  law  when  it  is  received,  or 
at  least  when  it  is  receivable,  and  not  immediately  upon  the  death 
of  the  decedent.     Halstead  v.  Pratt,  14  Hawaii  38. 

Exemptions. 

S,  2.  All  property  transferred  to  societies,  corporations  and  institutions  now 
or  hereafter  exempted  by  law  from  taxation,  or  to  any  public  corporation,  or  to 
any  society,  corporation,  institution  or  association  of  persons  engaged  in  or 
devoted  to  any  charitable,  benevolent,  educational,  public  or  other  like  work 
(pecuniary  profit  not  being  its  object  or  purpose),  or  to  any  person,  society,  cor- 
poration, institutions,  or  associations  of  persons  in  trust  for  or  to  be  devoted  to  any 
charitable,  benevolent,  educational  or  public  purpose,  by  reason  whereof  any  such 
person  or  corporation  shall  become  beneficially  entitled,  in  possession  or  ex- 
pectancy, to  any  such  property  or  to  the  income  thereof  shall  be  exempt  from  this 
tax. 

Particular  Estates  and  Remainders. 

S.  3.  When  any  grant,  gift,  legacy  or  succession  upon  which  a  tax  is  imposed 
by  section  1  of  this  act  shall  be  an  estate,  income  or  interest  for  a  term  of  years, 
or  for  life,  or  determinable  upon  any  future  or  contingent  event,  or  shall  be  a 
remainder,  reversion  or  other  expectancy,  real  or  personal,  the  entire  property  or 
fund  by  which  such  estate,  income  or  interest  is  supported,  or  of  which  it  is  a 
part,  shall  be  appraised  immediately  after  the  death  of  the  decedent,  and  the 
market  value  thereof  determined  in  the  manner  provided  in  section  12  of  this  act, 
and  the  tax  prescribed  by  this  act  shall  be  immediately  due  and  payable  to  the 
treasurer  of  the  territory,  and,  together  with  the  interest  thereon,  shall  be  and 
remain  a  lien  on  said  property  until  the  same  is  paid,  provided,  that  the  person 
or  persons,  or  body  politic  or  corporate,  beneficially  interested  in  the  property 
chargeable  with  said  tax,  may  elect  not  to  pay  the  same  until  they  shall  come  into 
the  actual  possession  or  enjoyment  of  such  property,  and  in  that  case  such  person 
or  persons,  or  body  politic  or  corporate,  shall  execute  a  bond  to  the  treasurer  of  the 
territory,  in  a  penalty  of  twice  the  amount  of  the  tax  arising  upon  personal  estate, 
with  such  sureties  as  a  circuit  judge  at  chambers  may  approve,  conditioned  for 
the  payment  of  said  tax,  and  interest  thereon,  at  such  time  or  period  as  they 
or  their  representatives  may  come  into  the  actual  possession  or  enjoyment  of 
such  property,  which  bond  shall  be  filed  in  the  office  of  the  treasurer  of  the  territory ; 
provided  further,  that  such  person  shall  make  a  full  and  verified  return  of  such 
property  to  a  circuit  judge  at  chambers,  and  file  the  same  in  the  office  of  the 
treasurer  within  one  year  from  the  death  of  the  decedent,  and  within  that  period 
enter  into  such  security,  and  renew  the  same  every  five  years. 

Gift  to  Executors  or  Trustees. 

S.  4.  Whenever  a  decedent  appoints  or  names  one  or  more  executors  or 
trustees  and  makes  a  bequest  or  devise  of  property  to  them  in  lieu  of  commissions 
or  allowances,  which  otherwise  would  be  liable  to  said  tax,  or  appoints  them  his 


386  STATUTES  ANNOTATED.  [Hawaii  St. 

residuary  legatees,  and  said  bequests,  devises,  or  residuary  legacies  exceed  what 
would  be  a  reasonable  compensation  for  their  services,  such  excess  over  and  above 
the  exemptions  herein  provided  for  shall  be  liable  to  said  tax;  and  the  circuit 
judge  at  chambers,  before  whom  the  probate  proceedings  are  pending,  shall  fix 
the  compensation. 

When  Tax  Accrues.  —  Interest.  —  Appraisal. 

S.  5.  All  taxes  imposed  by  this  act,  unless  otherwise  herein  provided  for,  shall 
be  due  and  payable  at  the  death  of  the  decedent  and  if  the  same  are  paid  within 
eighteen  months,  no  interest  shall  be  charged  and  collected  thereon,  but  if  not 
so  paid,  interest  at  the  rate  of  ten  per  centum  per  annum  shall  be  charged  and 
collected  from  the  time  said  tax  accrued ;  provided,  that  if  said  tax  is  paid  within 
twelve  months  from  the  accruing  thereof,  a  discount  of  five  per  centum  shall  be 
allowed  and  deducted  from  said  tax.  And  in  all  cases  where  the  executors, 
administrators  or  trustees  do  not  pay  such  tax  within  eighteen  months  from  the 
death  of  the  decedent,  they  shall  be  required  to  give  a  bond  in  the  form  and  to 
the  effect  prescribed  in  section  3  of  this  act  for  the  payment  of  said  tax,  together 
with  interest. 

Provided,  that  nothing  in  this  act  contained  shall  be  construed  to  require  the 
collection  or  payment  of  any  tax  assessed  or  assessable  against  any  property 
or  interest  which  upon  final  distribution  in  any  estate  cannot  be  distributed  to 
or  come  into  the  possession  or  enjoyment  of  the  persons  entitled  thereto. 

[As  amended  by  St.  1909,  Act  147,  s.  2.     See  St.  1911,  Act  130,  post,  p.  392.] 

Penalties. 

S  6.  The  penalty  of  ten  per  cent  per  annum  imposed  by  section  5  hereof, 
for  the  non-payment  of  said  tax,  shall  not  be  charged  in  cases  where,  in  the  judg- 
ment of  the  court,  by  reason  of  claims  made  upon  Jthe  estate,  necessary  litigation 
or  other  unavoidable  cause  of  delay,  the  estate  of  any  decedent,  or  a  part  thereof 
cannot  be  settled  at  the  end  of  eighteen  months  from  the  death  of  the  decedent; 
and  in  such  cases  only  seven  per  cent  per  annum  shall  be  charged  upon  the  said 
tax  from  the  expiration  of  said  eighteen  months  until  the  cause  of  such  delay 
is  removed,  after  which  ten  per  cent  interest  per  annum  shall  again  be  charged 
until  the  tax  is  paid;  but  litigation  to  defeat  the  payment  of  the  tax  shall  not 
be  considered  necessary  litigation. 

Deduction  of  Tax  from  Gifts. 

S.  7.  Any  administrator,  executor  or  trustee  having  in  charge  or  trust  any 
legacy  or  property  for  distribution,  subject  to  the  said  tax,  shall  deduct  the  tax 
therefrom,  or  if  the  legacy  or  property  be  not  money  he  shall  collect  the  tax  thereon 
upon  the  market  value  thereof,  from  the  legatee  or  person  entitled  to  such  prop- 
erty, and  he  shall  not  deliver,  or  be  compelled  to  deliver,  any  specific  legacy  or 
property  subject  to  fax  to  any  person  until  he  shall  have  collected  the  tax  thereon 
and  whenever  any  such  legacy  shall  be  charged  upon  or  payable  out  of  real  estate, 
the  executor,  administrator  or  trustee  shall  collect  said  tax  from  the  distributee 
thereof,  and  the  same  shall  remain  a  charge  on  such  real  estate  until  paid;  if, 
however,  such  legacy  be  given  in  money  to  any  person  for  a  limited  period,  the 
executor,  administrator  or  trustee  shall  retain  the  tax  upon  the  whole  amount; 
but  if  it  be  not  in  money  he  shall  make  application  to  the  circuit  judge,  having 


1905,  No.  102.]  HAWAII.  387 

jurisdiction,  to  make  an  apportionment,  if  the  case  require  it,  of  the  sum  to  be 
paid  into  his  hands  by  such  legatees,  and  for  such  further  order  relative  thereto  as 
the  case  may  require. 

Power  of  Sale. 

S.  8.  All  executors,  administrators  and  trustees  shall  have  full  power  to  sell 
so  much  of  the  property  of  the  decedent  as  will  enable  them  to  pay  said  tax,  in 
the  same  manner  as  they  may  be  enabled  by  law  to  do  for  the  payment  of  debts 
of  the  estate,  and  the  amount  of  said  tax  shall  be  paid  as  hereinafter  directed. 

Payments.  —  Receipts. 

S.  9.  Every  sum  of  money  retained  by  an  executor,  administrator  or  trustee 
or  paid  into  his  hands,  for  any  tax  on  property,  shall  be  paid  by  him,  within  thirty 
days  thereafter,  to  the  treasurer  of  the  territory,  and  the  said  treasurer  shall 
give,  and  every  executor,  administrator  or  trustee  shall  take  duplicate  receipts 
for  such  payrnent,  one  of  which  receipts  said  executor,  administrator  or  trustee 
shall  immediately  file  with  the  circuit  judge  having  jurisdiction  of  the  probate 
proceedings,  whereupon  it  shall  be  a  proper  voucher  in  the  settlement  of  his 
account;  and  an  executor,  administrator  or  trustee  shall  not  be  entitled  to  credits 
in  his  accounts,  nor  be  discharged  from  liability  for  such  tax,  nor  shall  said  estate 
be  distributed,  unless  he  shall  produce  a  receipt  so  sealed  and  countersigned  by 
the  treasurer,  or  a  copy  thereof,  certified  by  him,  and  file  the  same  with  the  court 
aforesaid. 

Refund  to  Pay  Debts. 

S.  10.  Whenever  any  debts  shall  be  proven  against  the  estate  of  a  decedent, 
after  the  payment  of  legacies  or  distribution  of  property  from  which  the  said  tax 
has  been  deducted  or  upon  which  it  has  been  paid,  and  a  refund  is  made  by  the 
legatee,  devisee,  heir  or  next  of  kin,  a  proportion  of  the  tax  so  deducted  or  paid 
shall  be  repaid  to  him  by  the  executor,  administrator  or  trustee,  if  the  said  tax 
has  not  been  paid  to  the  treasurer. 

Transfer  by  Foreign  Executor,  etc. 

S.  11.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  fansfer 
any  stock  or  obligations  in  this  territory  standing  in  the  name  of  a  decedent,  or 
in  trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the  treasurer 
of  the  territory  on  the  transfer  thereof.  No  safe  deposit  company,  trustee  com- 
pany, corporation,  bank  or  other  institution,  person  or  persons  having  in  posses- 
sion or  under  control  securities,  deposits  or  other  assets  of  a  decedent,  including 
the  shares  of  the  capital  stock  of,  or  other  interests  in,  the  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution,  making  the  delivery  or 
transfer  herein  provided,  shall  deliver  or  transfer  the  same  to  the  executors,  admin- 
istrators or  legal  representatives  of  said  decedent,  or  upon  their  order  or  request, 
unless  notice  of  the  time  and  place  of  such  intended  delivery  or  transfer  be  served 
upon  the  treasurer  at  least  ten  days  prior  to  said  delivery  or  transfer;  nor  shall 
any  such  safe  deposit  company,  trust  company,  corporation,  bank  or  other  insti- 
tution, person  or  persons  deliver  or  transfer  any  securities,  deposits  or  other 
assets  of  the  estate  of  a  non-resident  decedent  including  the  shares  of  the  capital 
stock  of,  or  other  interests  in,  the  safe  deposit  company,  trust  company,  corpora- 
tion, bank  or  other  institution,  making  the  delivery  or  transfer,  without  retaining 
a  sufficient  portion  or  amount  thereof  to  pay  any  tax  and  penalty  which  may 


388  STATUTES  ANNOTATED.  [Hawaii  St. 

thereafter  be  assessed  on  account  of  the  delivery  or  transfer  of  such  securities, 
deposits  or  other  assets  including  the  shares  of  the  capital  stock  of  or  other 
interests  in,  the  safe  deposit  company,  trust  company,  corporation,  bank  or  other 
institution  making  the  delivery  or  transfer,  under  the  provisions  of  this  act, 
unless  the  treasurer  consents  thereto  in  writing.  And  it  shall  be  lawful  for  the 
said  treasurer,  personally,  or  by  representative,  to  examine  said  securities,  de- 
posits or  assets  at  the  time  of  such  delivery  or  transfer.  Failure  to  serve  such 
notice  and  to  allow  such  examination,  and  to  retain  a  sufficient  portion  or  amount 
to  pay  such  tax  and  penalty  as  herein  provided,  shall  render  said  safe  deposit 
company,  trust  company,  corporation,  bank  or  other  institution,  person  or  persons 
liable  to  the  payment  of  two  times  the  amount  of  the  tax  and  penalty  due  or 
thereafter  to  become  due  upon  said  securities,  deposits  or  other  assets,  including 
the  shares  of  the  capital  stock  of,  or  other  interests  in,  the  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution,  making  the  delivery  or 
transfer;  and  the  payment  as  herein  provided  shall  be  enforced  in  an  action 
brought  in  accordance  with  the  provisions  of  section  fifteen  of  this  chapter. 

Appraisal. 

S.  12.  When  the  value  of  any  inheritance,  devise,  bequest  or  other  interest 
subject  to  the  payment  of  said  tax  is  uncertain,  the  circuit  judge  before  whom  the 
probate  proceedings  are  pending,  on  the  application  of  any  interested  party,  or 
upon  his  own  motion  may  appoint  some  competent  person  or  persons  as  appraisers, 
as  often  as  and  whenever  occasion  may  require,  whose  duty  it  shall  be  forthwith 
to  give  notice,  by  mail,  to  all  persons  known  to  have,  or  to  claim  an  interest  in 
such  property,  to  the  treasurer  of  the  territory  and  to  such  persons  as  the  circuit 
judge  may  by  order  direct,  of  the  time  and  place  at  which  he  will  appraise  such 
property,  and  at  such  time  and  place  to  appraise  the  same  and  make  a  report 
thereof,  in  writing,  to  said  circuit  judge,  together  with  sucl>.other  facts  in  relation 
thereto  as  said  circuit  judge  may  by  order  require  to  be  filed  with  the  clerk  of  said 
court;  and  from  this  report,  or  in  case  appraisers  are  not  appointed,  in  any  event 
the  said  circuit  judge  shall,  by  order,  assess  and  fix  the  value  of  all  iriheritances, 
devises,  bequests  or  other  interests,  and  the  tax  to  which  the  same  is  liable,  and 
shall  immediately  cause  notice  thereof  to  be  given  by  mail,  to  all  persons  known 
to  be  interested  therein.  The  value  of  every  future  or  contingent  or  limited  estate, 
income  or  interest  shall,  for  the  purpose  of  this  act,  be  determined  by  the  insurance 
commissioner,  by  the  rule,  method  and  the  standards  of  mortaUty  and  of  value 
that  are  set  forth  in  the  American  experience  tables  of  mortality  for  ascertaining 
the  value  of  policies  of  life  insurance  and  annuities  and  for  the  determination  of 
the  liabilities  of  life  insurance  companies,  save  that  the  rate  of  interest  to  be 
assessed  in  computing  the  present  value  of  all  future  interests  and  contingencies 
shall  be  five  per  centum  per  annum,  and  said  commissioner  shall  certify  such  value 
to  the  appraisers  or  judge  as  the  case  may  be.  Every  appraiser  shall  be  paid  on 
the  certificate  of  the  circuit  judge  at  chambers  at  the  rate  of  five  dollars  per  day 
for  every  day  actually  and  necessarily  employed  in  such  appraisal,  and  his  actual 
and  necessary  traveling  expenses  at  the  same  rate  now  paid  for  traveling  expenses 
to  witnesses  subpoenaed  to  attend  courts  of  record.  Such  fees  and  all  other  charges 
herein  provided  for  shall  be  paid  out  of  the  estate  of  the  decedent  as  an  expense 
of  administrator. 

[As  amended  by  St.  1909,  Act  147,  s.  3.] 

[See  further,  s.  5,  ante,  p.  386.] 


1905,  No.  102.]  HAWAII.  389 

Appraisers  to  Take  no  Reward  from  Parties. 

S.  13.  Any  appraiser  appointed  by  virtue  of  this  act  who  shall  take  any  fee 
or  reward  from  any  executor,  administrator,  trustee,  legatee,  next  of  kin,  or  heir 
of  any  decedent,  or  from  any  other  person  liable  to  pay  said  tax,  or  any  portion 
thereof,  shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  thereof,  shall  be 
fined  not  less  than  two  hundred  and  fifty  dollars  nor  more  than  five  hundred 
dollars,  or  imprisoned  for  a  period  of  ninety  days,  or  both. 

Jurisdiction  of  Court. 

S.  14.  The  circuit  judge  at  chambers  having  jurisdiction  of  the  decedent's 
estate  in  this  territory,  shall  have  jurisdiction  to  hear  and  determine  all  questions 
in  relation  to  the  tax  arising  under  the  provisions  of  this  act. 

Citation. 

S.  15.  If  rt  shall  appear  to  the  circuit  judge  that  any  tax  accruing  under  this 
act  has  not  been  paid  according  to  law,  he  shall  issue  a  citation,  citing  the  persons 
known  to  own  any  interest  in  or  part  of  the  property  liable  to  the  tax  or  any  person 
or  corporation  liable  under  the  law  for  the  payment  of  said  tax  to  appear  before 
him  at  chambers  on  a  day  certain,  not  more  than  ten  weeks  after  the  date  of  such 
citation,  and  show  cause  why  said  tax  should  not  be  paid. 

Circuit  judges  acting  under  this  law  shall  have  power  to  enter  and  enforce  all 
appropriate  orders  and  decrees  and  all  other  appropriate  powers  that  may  be  ex- 
ercised by  circuit  judges  at  chambers  whether  in  equity  or  probate. 

Duties  of  Treasurer. 

S.  16.  Whenever  the  treasurer  shall  have  reason  to  believe  that  any  tax  is 
due  and  unpaid  under  this  act,  after  the  refusal  or  neglect  of  the  persons  interested 
in  the  property  liable  to  said  tax  to  pay  the  same,  he  shall  notify  the  attorney 
general  of  the  territory,  in  writing,  of  such  failure  to  pay  such  tax,  and  the  attor- 
ney general,  so  notified,  if  he  have  probable  cause  to  believe  a  tax  is  due  and 
unpaid,  shall  prosecute  the  proceeding  before  the  circuit  judge  as  provided  in 
section  fifteen  of  this  act,  for  the  enforcement  and  collection  of  such  tax; 

Record. 

S.  17.  The  treasurer  of  the  territory  shall  furnish  to  each  of  the  clerks  of 
the  several  circuit  courts  a  book,  which  shall  be  a  public  record  and  in  which  he 
shall  enter  the  name  of  every  decedent,  upon  whose  estate  an  application  has  been 
made  to  the  circuit  judges  of  the  several  circuit  courts,  for  the  issuance  of  letters 
of  administration,  or  letters  testamentary,  or  ancillary  letters,  the  date  and  place 
of  death  of  such  decedent,  the  estimated  value  of  his  real  and  personal  property, 
the  names,  places  or  [sic]  residence  and  relationship  to  him  of  his  heirs  at  law, 
the  names  and  places  of  residence  of  the  legatees  and  devisees  in  any  will  of  any 
such  decedent,  the  amount  of  each  legacy  and  the  estimated  value  of  any  real 
property  devised  therein,  and  to  whom  devised.  These  entries  shall  be  made  from 
the  data  contained  in  the  papers  filed  on  any  such  application,  or  in  any  proceeding 
relating  to  the  estate  of  the  decedent.  The  clerk  of  the  circuit  court  shall  also 
enter  in  such  book  the  amount  of  personal  property  of  any  such  decedent,  as  shown 
by  the  inventory  thereof  when  made  and  filed  in  his  office,  and  the  returns  made 
by  any  appraiser  appointed  by  the  circuit  judge,  under  this  statute,  and  the 


390  STATUTES  ANNOTATED.  [Hawaii  St. 

value  of  annuities,  life  estates,  terms  of  years  and  other  property  of  such  decedent, 
or  given  by  him  in  his  will  or  otherwise,  as  fixed  by  the  circuit  judge,  and  the  tax 
assessed  thereon,  and  the  amounts  of  any  receipts  for  payment  of  any  tax  on  the 
estate  of  such  decedent  under  this  statute  filed  with  him.  The  clerk  of  the 
circuit  court  shall,  on  the  first  day  of  January,  April,  July  and  October  of  each 
year  make  a  report  in  duplicate,  upon  forms  to  be  furnished  by  the  treasurer  con^ 
taining  all  the  data  and  matters  required  to  be  entered  in  such  book,  and  also  of 
the  property  from  which,  or  the  party  from  which,  he  has  reason  to  believe  the 
tax  under  this  act  is  due  and  unpaid,  one  of  which  shall  be  immediately  delivered 
to  the  treasurer  and  the  other  transmitted  to  the  attorney  general. 

Expenses. 

S.  18.  Whenever  a  circuit  judge  at  chambers  shall  certify  that  there  was 
probable  cause  for  issuing  a  citation  and  taking  the  proceedings  specified  in  section 
fifteen  of  this  act,  the  treasurer  shall  pay,  or  allow  all  expenses  incurred  for 
services  of  citation,  and  other  lawful  disbursements  that  have  not  otherwise  been 
paid. 

Treasurer  to  Collect  Taxes. 

S.  19.  The  treasurer  shall  collect  all  taxes  that  may  be  due  and  payable  under 
this  act. 

Special  Attorneys. 

^.  20.  The  treasurer,  in  his  discretion,  for  the  better  furtherance  of  the  pur- 
poses of  this  act,  shall  be  allowed  to  employ  such  special  attorney  or  attorneys 
as  he  may  deem  necessary,  who  shall  have  all  the  authority  conferred  upon  the 
attorney  general  by  sections  fifteen  and  sixteen  of  this  act,  and  such  attorney  shall 
be  paid  for  his  services  reasonable  fees. 

Receipts. 

S.  21.  Any  person,  or  body  politic  or  corporate  shall,  upon  payment  of  the 
sum  of  fifty  cents,  be  entitled  to  a  receipt  from  the  treasurer,  or  a  copy  of  the 
receipt  at  his  option,  that  may  have  been  given  by  said  treasurer  for  the  payment 
of  any  tax  under  this  act,  to  be  sealed  with  the  seal  of  his  office,  which  receipt 
shall  designate  on  what  real  property,  if  any,  of  which  any  decedent  may  have 
died  seized,  said  tax  has  been  paid,  and  by  whom  paid,  and  whether  or  not  it  is  in 
full  of  said  tax;  and  said  receipt  may  be  recorded  in  the  clerk's  office  of  the  circuit 
court  in  which  such  estate  was  probated,  in  a  book  to  be  kept  by  said  clerk  for  such 
purpose,  which  shall  be  labeled  "Inheritance  Tax." 

Penalties  on  Officers. 

S.  22.  Every  officer  who  fails  or  refuses  to  perform,  within  a  reasonable  time, 
any  and  every  duty  required  by  the  provisions  of  this  act,  or  who  fails  or  refuses 
to  make  and  deliver  within  a  reasonable  time  any  statement  or  record  required 
by  this  act,  shall  forfeit  to  the  territory  of  Hawaii  the  sum  of  one  thousand  dollars, 
to  be  recovered  in  an  action  brought  by  the  attorney  general  in  the  name  of  the 
territory. 


1905,  No.  102.1  HAWAII  391 

Repeal. 

S.  23.  Chapter  100  of  the  Revised  Laws  of  Hawaii  relating  to  inheritance  tax 
and  all  amendments  thereto  and  all  laws  and  parts  of  laws  in  conflict  with  this 
act  are  hereby  expressly  repealed. 

Definitions. 

S.  24.  The  words  "estate"  and  "property"  as  used  in  this  act  shall  be  taken 
to  mean  the  real  and  personal  property  or  interest  therein  of  the  testator,  intestate, 
grantor,  bargainor,  vendor  or  donor  passing  or  transferred  to  individuals,  legatees, 
devisees,  heirs,  next  of  kin,  grantees,  donees,  vendees  or  successors  and  shall 
include  all  personal  property  within  or  without  the  territory.  The  word  "transfer" 
as  used  in  this  act  shall  be  taken  to  include  the  passing  of  property  or  any  interest 
therein,  in  possession  or  enjoyment,  present  or  future,  by  inheritance,  descent, 
devise,  succession,  bequest,  grant,  deed,  bargain,  sale,  gift  or  appointment  in 
the  manner  fierein  described.  The  word  "decedent"  as  used  in  this  act  shall 
include  the  tes  ator,  intestate,  grantor,  bargainor,  vendor  or  donor. 

Actions. 

S.  25.  In  all  cases  where  any  tax  has  become  or  shall  hereafter  become  a  lien 
upon  any  property  under  or  by  virtue  of  any  of  the  provisions  of  this  act  the 
attorney  general  may,  whenever  any  property  of  said  estate  has  been  distributed 
without  the  payment  to  the  territory  of  all  or  any  part  of  the  taxes  payable  on 
account  thereof,  under  this  act  bring  and  prosecute  an  action  or  actions  in  the 
name  of  the  territory  as  plaintiff  for  the  purpose  of  enforcing  such  lien  or  liens 
against  all  or  any  of  the  property  subject  thereto.  In  any  such  action  the  owner 
of  any  property  or  of  any  interest  in  property  against  which  the  lien  of  any  such 
tax  is  sought  to  be  enforced,  and  any  predecessor  in  interest  of  any  such  owner 
whose  title  or  interest  was  derived  through  any  such  decedent  by  will  or  succession 
or  by  decree  or  distribution  of  the  estate  of  such  decedent,  and  any  lienor  or  in- 
cumbrancer subsequent  to  the  lien  of  such  tax  may  be  made  a  party  defendant. 
The  enumeration  in  this  section  of  the  persons  who  may  be  made  defendants  shall 
not  be  deemed  to  be  exclusive;  but  the  joinder  or  non-joinder  of  parties,  except 
when  otherwise  herein  provided,  shall  be  governed  by  the. rules  in  equity  in  similar 
cases. 

(a)  Actions  may  be  brought  against  the  territory  for  the  purpose  of  quieting 
the  title  to  any  property,  against  the  lien  or  claim  of  lien  of  any  tax  or  taxes  under 
this  act,  or  for  the  purpose  of  having  to  determine  that  any  property  is  not  subject 
to  any  lien  for  taxes  under  this  act.  In  any  such  action  the  plaintiffs  may  be  any 
administrator  or  executor  of  the  estate  or  will  of  any  decedent,  whether  the  said 
estate  shall  have  been  fully  administered  and  the  estate  settled  and  closed  or 
not,  and  any  heir  to  the  legatee  or  devisee  of  any  such  decedent,  or  trustee  of  the 
estate  or  of  any  part  of  the  estate  of  such  decedent,  or  distributee  of  the  estate  or 
of  any  part  of  the  estate  of  any  such  decedent,  and  any  assignee,  grantee  or  suc- 
cessor in  interest  of  any  such  persons,  and  all  or  any  other  persons  who  might  be 
made  parties  defendant  in  any  action  brought  by  the  territory  under  the  provisions 
of  this  section,  and  notwithstanding  that  all  or  any  of  the  persons  enumerated  in 
this  section  shall  or  may  have  assigned,  granted,  conveyed  or  otherwise  parted 
with  all  or  any  interest  in  or  title  to  the  property,  or  any  (part)  thereof,  involved 
in  any  such  claim  of  lien  before  the  commencement  of  such  action.    All  or  any  of 


392  STATUTES  ANNOTATED.  [Hawaii  St. 

the  persons  in  this  action  enumerated  may  be  joined  or  united  as  parties  plaintiff. 
The  enumeration  in  this  section  of  the  persons  who  may  be  made  parties  shall  not 
be  deemed  to  be  exclusive,  but  the  joinder  or  non-joinder  of  parties,  except  when 
otherwise  herein  provided,  shall  be  governed  by  the  rules  in  equity  in  similar  cases. 
In  all  cases  any  person  who  might  properly  be  a  party  plaintiff  in  any  such  action 
who  refuses  to  join  as  plaintiff  may  be  made  a  defendant. 

(b)  All  actions  under  this  section  shall  be  triable  before  the  circuit  court  of  the 
circuit  in  which  decedent's  estate  is  being  or  has  been  administered. 

[As  amended  by  the  Statute  of  1909,  Act  147,  approved  April  28,  1909.] 

(c)  Service  of  summons  in  actions  brought  against  the  territory  shall  be  made 
on  the  attorney  general,  and  it  shall  be  the  duty  of  said  attorney  general  to  defend 
all  such  actions. 

(d)  The  procedure  and  practice  in  all  actions  brought  under  this  section,  except 
as  otherwise  provided  in  this  act,  shall  be  governed  by  the  provisions  of  the 
Revised  Laws  of  Hawaii  in  relation  to  civil  actions,  so  far  as  the  same  shall  or  may 
be  applicable,  including  all  provisions  relating  to  motions  for  new  trials  and 
appeals. 

(e)  The  remedies  provided  in  this  section  shall  be  in  addition  to  and  not 
exclusive  of  any  remedies  provided  in  the  sections  preceding  this  section. 

Hawaii  St.  1911,  Act  130. 

S.  5.  All  taxes  imposed  by  this  act,  unless  otherwise  herein  provided  for, 
shall  be  due  and  payable  at  the  death  of  the  decedent,  and  if  the  same  are  paid 
within  eighteen  months,  no  interest  shall  be  charged  and  collected  thereon,  but 
if  not  so  paid  interest  at  the  rate  of  ten  per  cent  per  annum  shall  be  charged 
and  collected  from  the  [date  of  death;]  provided  that  if  said  tax  is  paid  within 
twelve  months  from  the  [date  of  death,]  a  discount  of  five  per  cent  shall  be  allowed 
and  deducted  from  said  tax,  [and]  in  all  cases  where  the  executors,  administra- 
tors or  trustees  do  not  pay  such  tax  within  eighteen  months  from  [the  date  of] 
the  death  of  the  decedent,  they  shall  be  required  to  give  a  bond  in  the  form  and 
to  the  effect  prescribed  in  section  3  of  this  act?  for  the  payment  of  said  tax 
together  with  interest. 

[All  property,  the  transfer  of  which  is  subject  to  tax  under  the  provisions  of 
this  act,  shall  be  appraised  at  its  full  cash  value  as  of  the  date  of  death.  When- 
ever, by  reason  of  the  provisions  of  this  act,  it  shall  become  necessary  to  appraise 
or  ascertain  the  value  of  any  stocks,  bonds  or  securities,  such  as  are  customarily 
bought  or  sold  in  open  market  in  the  city  of  Honolulu  or  elsewhere,  the  value  of 
such  stocks,  bonds  or  securities  shall  be  ascertained  by  taking  the  price  for  which 
such  stocks,  bonds  or  securities  were  bought  and  sold  upon  the  date  of  death,  or 
if  there  were  no  sales  upon  such  day,  then  by  ascertaining  the  range  of  the  mar- 
ket and  the  average  of  prices  as  thus  found  running  through  a  reasonable  period 
of  time  before  and  after  the  date  of  death.] 

Material  in  brackets  is  new  matter. 


Idaho  St.]  IDAHO.  393 


IDAHO. 


In  General. 

Idaho,  in  1907,  copied  the  present  California  law  almost  verbatim. 
The  classification,  rates  of  tax  and  exemptions  are  exactly  as 
given  for  California  prior  to  the  amendment  of  1911. 

Idaho  is  not  collecting  a  tax  on  stock  of  an  Idaho  corporation 
owned  by  a  non-resident  if  the  shares  are  physically  outside  of  the 
state,  although  the  statute  contains  the  common  provision  holding 
the  corporation  responsible  for  the  tax  if  it  transfers  such  stock 
before  the  inheritance  tax  is  paid. 


Constitutional  Limitations. 
Idaho  Constitution,  1889,  a.  7,  s.  2. 

The  legislature  shall  provide  such  revenue  as  may  be  needful,  by  levying  a 
tax  by  valuation,  so  that  every  person  or  corporation  shall  pay  a  tax  in  proportion 
to  the  value  of  his,  her  or  its  property,  except  as  in  this  article  hereinafter  otherwise 
provided.  The  legislature  may  also  impose  a  license  tax  (both  upon  natural 
persons  and  upon  corporations,  other  than  municipal,  doing  business  in  this 
state);  also  a  per  capita  tax:  Provided,  the  legislature  may  exempt  a  limited 
amount  of  improvements  upon  land  from  taxation. 


Idaho  Constitution,  1889,  a.  8,  s.  5. 

All  taxes  shall  be  uniform  upon  the  same  class  of  subjects  within  the  territorial 
limits,  of  the  authority  levying  the  tax,  and  shall  be  levied  and  collected  under 
general  laws,  which  shall  prescribe  such  regulations  as  shall  secure  a  just  valuation 
for  taxation  of  all  property,  real  and  personal:  Provided,  that  the  legislature 
may  allow  such  exemptions  from  taxation  from  time  to  time  as  shall  seem  neces- 
sary and  just,  and  all  existing  exemptions  provided  by  the  laws  of  the  territory, 
shall  continue  until  changed  by  the  legislature  of  the, state:  Provided  further, 
that  duplicate  taxation  of  property  for  the  same  purpose  during  the  same  year 
is  hereby  prohibited. 


List  of  Statutes. 

1907.      Statutes  of  Idaho,  c.  78,  p.  558  (approved  March  16,  1907). 
Idaho  Revised  Codes,  1908,  Vol.  1,  c.  5,  p.  797,  ss.  1873-1897. 


394  STATUTES  ANNOTATED.  [Idaho  Rev.  Cds- 

THE  PRESENT  ACT. 

Idaho  Revised  Codes,  Title  10,  c.  5. 
Transfers  Taxable. 

S.  1873.  All  property  which  shall  pass,  by  will  or  by  the  intestate  laws  of  this 
state,  from  any  person  who  may  die  seized  or  possessed  of  the  same  while  a  resi- 
dent of  this  state,  or  if  such  decedent  was  not  a  resident  of  this  state  at  J;he  time 
of  death,  which  property  or  any  part  thereof,  shall  be  within  this  state,  or  any 
interest  therein,  or  income  therefrom,  which  shall  be  transferred  by  deed,  grant 
sale  or  gift,  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  bar- 
gainor, or  intended  to  take  effect  in  possession  or  enjoyment  after  such  death,  to 
any  person  or  persons,  or  to  any  body  politic  or  corporate,  in  trust  or  otherwise, 
or  by  reason  whereof  any  person  or  body  politic  or  corporate  shall  become  bene- 
ficially entitled,  in  possession  or  expectancy,  to  any  property,  or  to  the  income 
thereof,  shall  be  and  is  subject  to  a  tax  hereinafter  provided  for,  to  be  paid  to  the 
treasurer  of  the  proper  county,  as  hereinafter  directed  for  the  benefit  of  the  general 
fund  of  this  state  to  be  used  for  all  the  purposes  for  which  said  fund  is  available. 
And  the  county  treasurer  shall,  upon  the  receipt  of  said  tax,  pay  the  same  to  the 
state  treasurer  and  take  duplicate  receipts  thereof,  one  of  which  the  county 
treasurer  shall  retain,  and  transmit  the  other  to  the  state  auditor  and  receive  from 
him  credit  for  the  amount  thereof  on  his  account;  and  such  tax  shall  be  and 
remain  a  lien  upon  the  property  passed  or  transferred  until  paid,  and  the  person 
to  whom  the  property  passes  or  is  transferred,  and  all  administrators,  executors 
and  trusteees  of  every  estate  so  transferred  or  passed,  shall  be  liable  for  any 
and  all  such  taxes  until  the  same  shall  have  been  paid  as  hereinafter  directed.  The 
tax^so  imposed  shall  be  upon  the  market  value  of  such  property  at  the  rates  herein- 
after prescribed,  and  only  upon  the  excess  over  the  exemptions  hereinafter  granted. 

Appointment  Deemed  a  Taxable  Transfer. 

S.  1874.  Whenever  any  person  or  corporation  shall  exercise  a  power  of 
appointment  derived  from  any  disposition  of  property  made  either  before  or  after 
the  passage  of  this  chapter,  such  appointment  when  made  shall  be  deemed  a 
transfer  taxable  under  the  provisions  of  this  chapter  in  the  same  manner  as  though 
the  property  to  which  such  appointment  relates  belonged  absolutely  to  the  don^e 
of  such  power,  and  had  been  bequeathed  or  devised  by  such  donee  by  will;  and 
whenever  any  person  or  corporation  possessing  such  apowerof  appointment  so 
derived  shall  omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor, 
in  whole  or  in  part,  a  transfer  taxable  under  the  provisions  of  this  chapter  shall  be 
deemed  to  take  place  to  the  extent  of  such  omission  or  failure,  in  the  same  manner 
as  though  the  person  or  corporations  thereby  becoming  entitled  to  the  possession 
or  enjoyment  of  the  property  to  which  such  power  related  had  succeeded  thereto 
by  a  will  of  the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at 
the  time  of  such  omission  pr  failure. 

Rate  of  Tax. 

S.  1875.  When  the  property  or  any  beneficial  interest  therein  so  passed  or 
transferred  exceeds  in  value  the  exemption  hereinafter  specified,  and  shall  not 
exceed  in  value  twenty- five  thousand  dollars,  the  tax  hereby  imposed  shall  be:  — 

1.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  husband,  wife,  lineal  issue,  lineal  ancestor  of  the  decedent, 


Title  10,  c.  5.]  IDAHO.  395 

or  any  child  adopted  as  such  in  conformity  with  the  laws  of  this  state,  or  any 
child  to  whom  such  decedent,  for  not  less  than  ten  years  prior  to  such  transfer, 
stood  in  the  mutually  acknowledged  relation  of  a  parent:  Provided,  however, 
such  relationship  began  at  or  before  the  child's  fifteenth  birthday,  and  was  con- 
tinuous for  said  ten  years  thereafter,  or  any  lineal  issue  of  such  adopted  or  mutually 
acknowledged  child,  at  the  rate  of  one  per  centum  of  the  clear  value  of  such 
interest  in  such  property. 

2.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister,  or  a  descendant  of  a  brother  or  sister,  of 
the  decedent,  a  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter  of  the  de- 
cedent, at  the  rate  of  one  and  one-half  per  centum  of  the  clear  value  of  such 
interest  in  such  property. 

3.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  father  or  mother,  or  a  descendant  of 
a  brother  or  sister  of  the  father  or  mother  of  the  decedent,  at  the  rate  of  three 
per  centum  of  the  clear  value  of  such  interest  in  such  property. 

4.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  grandfather  or  grandmother,  or  a 
descendant  of  the  brother  or  sister  of  the  grandfather  or  grandmother,  of  the 
decedent,  at  the  rate  of  four  per  centum  of  the  clear  value  of  such  interest  in 
such  property. 

5.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  herein- 
before stated,  or  shall  be  a  stranger  in  blood  to  the  decedent,  or  shall  be  a  body 
politic  or  corporate,  at  the  rate  of  five  per  centum  of  the  clear  value  of  such 
nterest  in  such  property. 

Progressive  Rates. 

S.  1876.  The  foregoing  rates  in  the  preceding  section  are  for  convenience 
termed  the  primary  fates.  When  the  market  value  of  such  property  or  interest 
exceeds  twenty-five  thousand  dollars,  the  rates  of  tax  upon  such  excess  shall  be 
as  follows:  -r- 

1.  Upon  all  in  excess  of  twenty-five  thousand  dollars  and  up  to  fifty  thousand 
dollars,  one  and  one-half  times  the  primary  rates; 

2.  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  hundred  thousand 
dollars,  two  times  the  primary  rates; 

3.  Upon  all  in  excess  of  one  hundred  thousand  dollars  and  up  to  five  hundred 
thousand  dollars,  two  and  one-half  times  the  primary  rates; 

4.  Upon  all  in  excess  of  five  hundred  thousand  dollars,  three  times  the  primary 
rates. 

Exemptions. 

5.  1877.     The  following  exemptions  from  the  tax  are  hereby  allowed:  — 

1.  All  property  transferred  to  societies,  corporations  and  institutions  now  or 
hereafter  exempted  by  law  from  taxation,  or  to  any  public  corporations,  or  to 
any  society,  corporation,  institution  or  association  of  persons  engaged  in  or 
devoted  to  any  charitable,  benevolent,  educational,  public  or  other  like  work 
(pecuniary  profit  not  being  its  object  or  purpose),  or  to  any  person,  society,  cor- 
poration, institution  or  association  of  persons  in  trust  for  or  to  be  devoted  to  any 
charitable,  benevolent,  educational  or  public  purpose,  by  reason  whereof  any 


396  STATUTES  ANNOTATED.  [Idaho  Rev.  Cds. 

such  person  or  corporation  shall  become  beneficially  entitled,  in  possession  or 
expectancy,  to  any  such  property  or  to  the  income  thereof  shall  be  exempt; 

2.  Property  of  the  clear  value  of  ten  thousand  dollars  transferred  to  the  widow 
or  to  a  minor  child  of  the  decedent,  and  of  four  thousand  dollars  transferred  to 
each  of  the  other  persons  described  in  the  first  subdivision  of  section  1875  shall  be 
exempt; 

3.  Property  of  the  clear  value  of  two  thousand  dollars  transferred  to  each  of 
the  persons  described  in  the  second  subdivision  of  section  1875  shall  be  exempt; 

4.  Property  of  the  clear  value  of  one  thousand  five  hundred  dollars  transferred 
to  each  of  the  persons  described  in  the  third  subdivision  of  section  1875  shall  be 
exempt; 

5.  Property  of  the  clear  value  of  one  thousand  dollars  transferred  to  each  of  the 
persons  described  in  the  fourth  subdivision  of  section  1875  shall  be  exempt ; 

6.  Property  of  the  clear  value  of  five  hundred  dollars  transferred  to  each  of  the 
persons  and  corporations  described  in  the  fifth  subdivision  of  section  1875  shall 
be  exempt. 

Tax  on  Future  and  Contingent  Estates, 

S.  1878.  When  any  grant,  gift,  legacy  or  succession  upon  which  a  tax  is  imposed 
by  section  1873  shall  be  an  estate,  income  or  interest  for  a  term  of  years,  or  for  life, 
or  determinable  upon  any  future  or  contingent  event,  or  shall  be  a  remainder, 
reversion,  or  other  expectancy,  real  or  personal,  the  entire  property  or  fund  by 
which  such  estate,  income  or  interest  is  supported,  or  of  which  it  is  a  part,  shall  be 
appraised  immediately  after  the  death  of  the  decedent,  and  the  market  value 
thereof  determined,  in  the  manner  provided  in  section  1886,  the  tax  prescribed 
by  t)iis  chapter  shall  be  immediately  due  and  payable  to  the  treasurer  of  the 
proper  county,  and,  together  with  the  interest  thereon,  shall  be  and  remain  a  lien 
on  said  property  until  the  same  is  paid:  Provided,  that  the  person  or  persons, 
or  body  politic  or  corporate,  beneficially  interested  in  the  property  chargeable 
with  said  tax,  may  elect  not  to  pay  the  same  until  they  shall  come  into  the  actual 
possession  or  enjoyment  of  such  property,  and  in  that  case  such  person  or  persons 
or  body  politic  or  corporate,  shall  execute  a  bond  to  the  people  of  the  state  of 
Idaho,  in  a  penalty  of  twice  the  amount  of  the  tax  arising  upon  personal  estate, 
with  such  sureties  as  the  said  probate  court  may  approve,  conditioned  for  the 
payment  of  said  tax,  and  interest  thereon,  at  such  time  or  period  as  they  or  their 
representatives  may  come  into  the  actual  possession  or  enjoyment  of  such  prop- 
erty, which  bond  shall  be  filed  in  the  office  of  the  county  recorder  of  the  proper 
county:  Provided,  further,  that  such  person  shall  make  a  full  and  verified  return 
of  such  property  to  said  court,  and  file  the  same  in  the  office  of  the  county  recorder 
within  one  year  from  the  death  of  the  decedent,  and  within  that  period  enter  into 
such  security,  and  renew  the  same  every  five  years. 

Tax  on  Gift  to  Executor. 

S.  1879.  Whenever  a  decedent  appoints  or  names  one  or  more  executors 
or  trustees,  and  makes  a  bequest  or  devise  of  property  to  them  in  lieu  of  com- 
missions or  allowances,  which  otherwise  would  be  liable  to  said  tax,  or  appoints 
them  his  residuary  legatees,  and  said  bequests,  devises  or  residuary  legacies  exceed 
what  would  be  a  reasonable  compensation  for  their  services,  such  excess  over  and 
above  the  exemptions  herein  provided  for  shall  be  liable  to  said  tax;  and  the 
probate  court  in  which  the  probate  proceedings  are  pending  shall  fix  the  com- 
.  pensation. 


Title  10,  c.  5.J  IDAHO.  397 

Time  of  Payment.  —  Extension.  —  Interest. 

S.  1880.  All  taxes  imposed  by  this  chapter,  except  as  hereinafter  provided, 
shall  be  due  and  payable  at  the  death  of  the  person  rendering  such  property  sub- 
ject to  such  taxation,  and  interest  at  the  same  rate  as  is  now  provided  by  law  for 
delinquent  taxes  shall  be  charged  and  collected  thereon  for  such  time  as  said 
tax  is  not  paid:  Provided,  that  if  said  tax  is  paid  within  one  year  from  the 
accruing  thereof,  no  interest  shall  be  charged  or  collected  thereon,  and  if  said  tax 
is  paid  within  six  months  from  the  accruing  thereof,  a  discount  of  five  per  centum 
shall  be  allowed  and  deducted  from  said  tax:  Provided,  further,  that  if,  by 
reason  of  claims  made  upon  the  estate,  necessary  litigation  or  other  unavoidable 
cause  of  delay,  the  estate  of  the  decedent  or  any  part  thereof  cannot  be  settled 
up  at  the  end  of  the  year  from  his  or  her  decease,  the  probate  court,  or  the  judge 
thereof,  may  make  necessary  extensions  of  time  for  the  payment  of  such  taxes, 
but  no  single  extension  shall  exceed  one  year,  and  in  such  cases  only  six  per  centum 
per  annum  shall  be  charged  upon  the  said  tax  from  the  death  of  the  decedent  to 
the  expiration  of  the  period  for  which  the  extension  of  time  was  granted,  after 
which  interest  at  the  same  rate  as  is  now  provided  by  law  for  delinquent  taxes 
shall  be  charged  and  in  all  such  cases  the  tax  on  real  estate  shall  remain  a  lien 
on  the  real  estate  on  which  the  same  is  chargeable  until  paid,  and  the  executors, 
administrators  or  trustees  shall  give  a  bond,  to  the  people  of  the  state  of  Idaho, 
in  a  penalty  of  three  times  the  amount  of  the  said  tax,  with  such  sureties  as  the 
probate  judge  of  the  proper  county  may  approve,  conditioned  for  the  payment  of 
said  tax  and  interest  thereon  at  the  expiration  of  such  period,  which  bond  shall 
be  filed  in  the  office  of  said  probate  judge. 

Collection  of  Tax  by  Administrator. 

S.  1881.  Any  administrator,  executor  or  trustee  having  in  charge  or  trust  any 
legacy  or  property  for  distribution,  subject  to  the  said  tax,  shall  deduct  the  tax 
therefrom,  or  if  the  legacy  or  property  be  not  money,  he  shall  collect  the  tax  there- 
on, upon  the  market  value  thereof,  from  the  legatee  or  person  entitled  to  such  prop- 
erty and  he  shall  not  deliver,  or  be  compelled  to  deliver,  any  specific  legacy  or 
property  subject  to  tax  to  any  person  until  he  shall  have  collected  the  tax  thereon; 
and  whenever  any  such  legacy  shall  be  charged  upon,  or  payable  out  of,  real 
estate,  the  executor,  administrator  or  trustee  shall  collect  said  tax  from  the  dist- 
ributee thereof ,  and  the  same  shall  remain  a  charge  on  such  real  estate  until  paid: 
if,  however,  such  legacy  be  given  in  money  to  any  person  for  a  limited  period,  the 
executor,  administrator  or  trustee  shall  retain  the  tax  upon  the  whole  amount; 
but  if  it  be  not  in  money  he  shall  make  application  to  the  probate  court  to  make 
an  apportionment,  if  the  case  requires  it,  of  the  sum  to  be  paid  into  his  hands 
by  such  legatees,  and  tor  such  further  order  relative  thereto  as  the  case  may 
require. 

Sale  of  Property  to  Pay  Tax. 

S.  1882.  All  executors,  administrators  and  trustees  shall  have  full  power  to 
sell  so  much  of  the  property  of  the  decedent  as  will  enable  them  to  pay  said  tax, 
in  the  same  manner  as  they  may  be  enabled  by  law  to  do  for  the  payment  of 
debts  of  the  estate,  and  the  amount  of  said  tax  shall  be  paid  as  hereinafter 
directed. 


398  STATUTES  ANNOTATED.  [Idaho  Rev.  Cds. 

Payment  of  Tax  by  Administrator, 

S.  1883.  Every  sum  of  money  retained  by  an  executor,  administrator  or 
trustee,  or  paid  into  his  hands,  for  any  tax  on  property,  shall  be  paid  by  him, 
within  thirty  days  thereafter,  to  the  treasurer  of  the  county  in  which  the  probate 
proceedings  are  pending,  and  the  said  treasurer  shall  give,  and  every  executor, 
administrator  or  trustee  shall  take,  duplicate  receipts  for  such  payment,  one 
of  which  receipts  said  executor,  administrator  or  trustee  shall  immediately  send 
to  the  state  auditor,  whose  duty  it  shall  be  to  charge  the  treasurer  so  receiving  the 
tax  with  the  amount  thereof,  and  said  auditor  shall  seal  said  receipt  with  the  seal  of 
his  office,  and  countersign  the  same,  and  return  it  to  the  executor,  administrator  or 
trustee,  whereupon  it  shall  be  a  proper  voucher  in  the  settlement  of  his  accounts; 
and  an  executor,  administrator  or  trustee  shall  not  be  entitled  to  credit  in  his 
accounts,  nor  be  discharged  from  liability  for  such  tax,  nor  shall  said  estate  be 
distributed,  unless  he  shall  produce  a  receipt  so  sealed  and  countersigned  by  the 
state  auditor,  or  a  copy  thereof,  certified  by  him,  and  file  the  same  with  the  court. 

Refund  of  Excess  Tax. 

S.  1884.  Whenever  any  debts  shall  be  proven  against  the  estate  of  a  decedent 
after  the  payment  of  legacies  or  distribution  of  property  from  which  the  said 
tax  has  been  deducted  or  upon  which  it  has  been  paid,  and  a  refund  is  made  by 
the  legatee,  devisee,  heir  or  next  of  kin,  a  proportion  of  the  tax  so  deducted  or 
paid  shall  be  repaid  to  him  by  the  executor,  administrator  or  trustee,  if  the  said 
tax  has  not  been  paid  to  the  county  treasurer  or  to  the  state  auditor,  or  by  them, 
if  it  has  been  so  paid. 

Collection  of  Tax  from  Non-Resident  Administrator. 

S^.  1885.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  transfer 
any  stock  or  obligations  in  this  state  standing  in  the  name  of  a  decedent,  or  in  trust 
for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the  treasurer  of  the 
proper  county  on  the  transfer  thereof.  No  safe  deposit  company,  trust  company, 
corporation,  bank  or  other  institution,  person  or  persons,  having  in  possession 
or  under  control  securities,  deposits  or  other  assets  of  a  decedent,  including  the 
shares  of  the  capital  stock  of,  or  other  interests  in,  the  safe  deposit  corr  pany,  trust 
company,  corporation,  bank  or  other  institution  making  the  delivery  or  transfer 
herein  provided,  shall  deliver  or  transfer  the  same  to  the  executors,  administrators, 
or  legal  representatives  of  said  decedent,  or  upon  their  order  or  request,  unless 
notice  of  the  time  and  place  of  such  intended  delivery  or  transfer  be  served  upon 
the  county  treasurer  at  least  ten  days  prior  to  said  delivery  or  transfer;  nor  shall 
any  such  safe  deposit  company,  trust  company,  corporation,  bank  or  other  in- 
stitution, person  or  persons,  deliver  or  transfer  any  securities,  deposits  or  other 
assets  of  the  estate  of  a  non-resident  decedent  including  the  shares  of  the  capital 
stock  of,  or  other  interest  in,  the  safe  deposit  company,  trust  company,  corpora- 
tion, bank  or  other  institution,  making  the  delivery  or  transfer,  without  retaining 
a  sufficient  portion  or  amount  thereof  to  pay  any  tax  and  penalty  which  may 
thereafter  be  assessed  on  account  of  the  delivery  or  transfer  of  such  securities, 
deposits  or  other  assets,  including  the  shares  of  the  capital  stock  of  or  other 
interests  in  the  safe  deposit  company,  trust  company,  corporation,  bank  or  other 
institution  making  the  delivery  or  transfer,  under  the  provisions  of  this  chapter, 
unless  the  county  treasurer  consents  thereto  in  writing.  And  it  shall  be  lawful  for 
the  said  county  treasurer,  personally,  or  by  representative,    to  examine  said 


Title  10,  c.  5.]  IDAHO.  399 

securities,  deposits  or  assets  at  the  time  of  such  delivery  or  transfer.  Failure  to 
serve  such  notice  and  to  allow  such  examination,  and  to  retain  a  sufficient  portion 
or  amount  to  pay  such  tax  and  penalty  as  herein  provided,  shall  render  said  safe 
deposit  company,  trust  company,  corporation,  bank  or  other  institution,  person 
or  persons,  liable  to  the  payment  of  two  times  the  amount  of  the  tax  and  penalty 
due  or  thereafter  to  become  due  upon  said  securities,  deposits  or  other  assets, 
including  the  shares  of  the  capital  stock  of,  or  other  interests  in,  the  safe  deposit 
company,  trust  company,  corporation,  bank  or  other  institution  making  the 
delivery  or  transfer;  and  the  payment  as  herein  provided  shall  be  enforced  in  an 
action  brought  in  accordance  with  the  provisions  of  section  1891  of  this  chapter. 

Appraisal. 

S.  1886.  When  the  value  of  any  inheritance,  devise,  bequest  or  other  interest 
subject  to  the  payment  of  said  tax  is  uncertain,  the  probate  court  in  which  the 
probate  proceedings  are  pending,  on  the  application  of  any  interested  party, 
or  upon  its  own  motion,  shall  appoint  some  competent  person  as  appraiser,  as 
often  as  and  whenever  occasion  may  require,  whose  duty  it  shall  be  forthwith  to 
give  such  notice,  by  mail,  to  all  persons  known  to  have  or  claim  an  interest  in  such 
property,  and  to  such  persons  as  the  court  may  by  order  direct,  of  the  time  and 
place  at  which  he  wi  1  appraise  such  property,  and  at  such  time  and  place  to  ap- 
praise the  same  and  make  a  report  thereof,  in  writing,  to  said  court,  together  with 
such  other  facts  in  relation  thereto  as  said  court  may  by  order  require  to  be  filed 
with  the  clerk  of  said  court;  and  from  this  report  the  said  court  shall,  by  order, 
forthwith  assess  and  fix  the  market  value  of  all  inheritances,  devises,  bequests 
or  other  interest,  and  the  tax  to  which  the  same  is  liable,  and  shall  immediately 
cause  notice  thereof  to  be  given,  by  mail,  to  all  parties  known  to  be  interested 
therein;  and  the  value  of  every  future  or  contingent  or  limited  estate,  income 
or  interest  shall,  for  the  purposes  of  this  chapter,  be  determined  by  the  rule, 
method  and  standard  of  mortality  and  of  value  that  are  set  forth  in  the  actuaries' 
combined  experience  tables  of  mortality  for  ascertaining  the  value  of  policies 
of  life  insurance  and  annuities,  and  for  the  determination  of  the  liabilities  of  life 
insurance  companies,  save  that  the  rate  of  interest  to  be  assessed  in  computing 
the  present  value  of  all  future  interests  and  contingencies  shall  be  five  per  centum 
per  annum;  and  the  insurance  commissioner  shall,  on  the  application  of  said 
court,  determine  the  value  of  such  future  or  contingent  or  limited  estate,  income 
or  interest,  upon  the  facts  contained  in  such  report,  and  certify  the  same  to  the 
court,  and  his  certificate  shall  be  conclusive  evidence  that  the  method  of  compu- 
tation adopted  therein  is  correct.  The  said  appraiser  shall  be  paid  by  the  county 
treasurer  out  of  any  funds  that  he  may  have  in  his  hands  on  account  of  said  tax, 
on  presentation  of  a  sworn  itemized  account,  and  on  the  certificate  of  the  court, 
at  the  rate  of  five  dollars  per  day  for  every  day  actually  and  necessarily  employed 
in  said  appraisement,  together  with  his  actual  and  necessary  traveling  expenses. 

Acceptance  of  Bribe  by  Appraiser. 

S.  1887.  Any  appraiser  appointed  by  virtue  of  this  chapter,  who  shall  take 
any  fee  or  reward  from  any  executor,  administrator,  trustee,  legatee,  next  of  kin 
or  heir  of  any  decedent,  or  from  any  other  person  liable  to  pay  said  tax,  or  any 
portion  thereof,  shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  thereof 
shall  be  punished  by  a  fine  of  not  less  than  two  hundred  and  fifty  dollars  nor  more 


400  STATUTES  ANNOTATED.  [Idaho  Rev.  Cds. 

than  five  hundred  do  lars,  or  by  imprisonment  in  the  county  jail  ninety  days 
or  by  both  such  fine  and  imprisonment,  and  in  addition  thereto  the  court  shall 
dismiss  him  from  such  service. 

Jurisdiction  Over  Estate  of  Non-Resident. 

S.  1888.  The  probate  court  in  the  county  in  which  is  situate  the  real  property 
of  a  decedent  who  was  not  a  resident  of  the  state,  or  if  there  be  no  real  property, 
then  in  the  county  in  which  any  of  the  personal  property  of  such  non-resident  is 
situate,  or  in  the  county  of  which  the  decedent  was  a  resident  at  the  time  of  his 
death,  shall  have  jurisdiction  to  hear  and  determine  a  1  questions  in  relation  to 
the  tax  arising  under  the  provisions  of  this  chapter,  except  as  hereinafter  provided, 
and  the  court  first  acquiring  jurisdiction  hereunder  shall  retain  the  same  to  the 
exclusion  of  every  other. 

Definitions. 

S.  1889.  The  words  "estate"  and  "property"  as  used  in  this  chapter  shall  be 
taken  to  mean  the  real  and  personal  property  or  interest  therein  of  the  testator, 
intestate,  grantor,  bargainor,  vendor  or  donor  passing  or  trans  erred  to  individual 
legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees,  vendees  or  successors,  and 
shall  include  all  personal  property  within  or  without  the  state.  The  word  "trans- 
fer" as  used  in  this  chapter  shall  be  taken  to  include  the  passing  of  property  or 
any  interest  therein,  in  possession  or  enjoyment,  present  or  future,  by  inheritance, 
descent,  devise,  succession,  bequest,  grant,  deed,  bargain,  sale,  gift  or  appoint- 
ment in  the  manner  herein  described.  The  word  "decedent"  as  used  in  this 
chapter,  shall  include  the  testator,  intestate,  grantor,  bargainor,  vendor  or 
donor. 

Collection  of  Delinquent  Tax. 

S.  1890.  If  it  shall  appear  to  the  probate  court,  or  judge  thereof,  that  any  tax 
accruing  under  this  chapter  has  not  been  paid  according  to  law,  it  shall  issue  a 
citation,  citing  the  persons  known  to  own  any  interest  in  or  part  of  the  property 
liable  to  the  tax,  or  any  person  or  corporation  liable  under  the  law  for  the  pay  ment 
of  said  tax,  to  appear  before  the  court  on  a  day  certain,  not  more  than  ten  weeks 
after  the  date  of  such  citation,  and  show  cause  why  said  tax  should  not  be  paid. 
The  service  of  such  citation,  and  the  time,  manner  and  proof  thereof,  and  the 
hearing  and  determination  thereof,  and  the  enforcement  of  the  determination  or 
decree,  shall  conform  as  near  as  may  be  to  the  provisions  now  established  by  the 
laws  of  this  state  in  similar  proceedings  in  the  probate  courts;  and  the  clerk  of  the 
court  shall,  upon  the  request  of  the  county  attorney  or  treasurer  of  the  county, 
furnish,  without  fee,  one  or  more  transcripts  of  such  decree,  and  the  same  shall  be 
docketed  and  filed  by  the  county  recorder  of  any  county  in  the  state,  without  fee, 
in  the  same  manner  and  with  the  same  effect  as  provided  by  section  4460  of  these 
Codes  for  filing  a  transcript  of  an  original  docket. 

Same.  —  County  Attorney  to  Institute  Proceedings. 

S.  1891.  Whenever  the  treasurer  of  any  county  shall  have  reason  to  believe 
that  any  tax  is  due  and  unpaid  under  this  chapter,  after  the  refusal  or  neglect  of 
the  persons  interested  in  the  property  liable  to  said  tax  to  pay  the  same,  he  shall 
notify  the  county  attorney  of  the  proper  county,  in  writing,  of  such  failure  to  pay 


Title  10,  c.  5.]  IDAHO.  401 

such  tax,  and  the  county  attorney  so  notified,  if  he  have  probable  cause  to  believe 
a  tax  is  due  and  unpaid,  shall  prosecute  the  proceeding  in  the  probate  court, 
as  provided  in  the  preceding  section  for  the  enforcement  and  collection  of  such  tax. 

Record  of  Estates.  —  Entries.  —  Report  *of  Probate  Judge. 

S.  1892.  The  secretary  of  state  shall  furnish  to  each  probate  judge  a  book, 
which  shall  be  a  public  record,  and  in  which  he  shall  enter  the  name  of  every 
decedent  upon  whose  estate  an  application  has  been  made  to  the  probate  court 
for  the  issuance  of  letters  of  administration,  or  letters  testamentary,  or  ancillary 
letters,  the  date  and  place  of  death  of  such  decedent,  the  estimated  value  of  his 
real  and  personal  property,  the  names,  places  of  residence  and  relationship  to  him 
of  his  heirs-at-law,  the  names  and  places  of  residence  of  the  legatees  and  devisees 
in  any  will  of  any  such  decedent,  the  amount  of  each  legacy  and  the  estimated 
value  of  any  real  property  devised  therein,  and  to  whom  devised.  These  entries 
shall  be  made  from  the  data  contained  in  the  papers  filed  on  any  such  application, 
or  in  any  proceeding  relating  to  the  estate  of  the  decedent.  The  probate  judge 
shall  also  enter  in  such  book  the  amount  of  personal  property  of  any  such  decedent, 
as  shown  by  the  inventory  thereof  when  made  and  filed  in  his  office,  and  the 
returns  made  by  any  appraiser  appointed  by  the  court  under  this  chapter,  and  the 
value  of  annuities,  life  estates,  terms  of  years,  and  other  property  of  such  decedent, 
or  given  by  him  in  his  will  or  otherwise,  as  fixed  by  the  probate  court,  and  the  tax 
assessed  thereon,  and  the  amounts  of  any  receipts  for  payment  of  any  tax  on  the 
estate  of  such  decedent  under  this  chapter  filed  with  him.  The  probate  judge 
shall,  on  the  first  day  of  January,  April,  July  and  October  of  each  year,  make  a 
report  in  duplicate,  upon  forms  to  be  furnished  by  the  state  auditor,  containing 
all  the  data  and  matters  required  to  be  entered  in  such  book,  and  also  of  the 
property  from  which,  or  the  party  from  whom,  he  has  reason  to  believe  the  tax 
under  this  chapter  is  due  and  unpaid,  one  of  which  shall  be  immediately  delivered 
to  the  county  treasurer  and  the  other  transmitted  to  the  state  auditor. 

Expenses  of  Collecting  Tax. 

S.  1893.  Whenever  the  probate  court  of  any  county  shall  certify  that  there 
was  probable  cause  for  issuing  a  citation  and  taking  the  proceedings  specified  in 
section  1890,  the  state  treasurer  shall  pay,  or  allow,  to  the  treasurer  of  any  county, 
all  expenses  incurred  for  service  of  citation,  and  his  other  lawful  disbursements 
that  have  not  otherwise  been  paid. 

Settlements  and  Reports  of  County  Treasurer. 

S.  1894.  The  treasurer  of  each  county  shall  collect  and  pay  to  the  state 
treasurer  all  taxes  that  may  be  due  and  payable  under  this  chapter,  who  shall  give 
him  a  receipt  therefor;  of  which  collection  and  payment  he  shall  make  a  report, 
under  oath,  to  the  state  auditor,  between  the  first  and  fiiteenth  days  of  May  and 
December  of  each  year,  stating  for  what  estate  paid,  and  in  such  form  and  con- 
taining such  particulars  as  the  state  auditor  may  prescribe;  and  for  all  such  taxes 
collected  by  him  and  not  paid  to  the  state  treasurer  by  the  first  day  of  June  and 
January  of  each  year,  he  shall  pay  interest  at  the  rate  of  ten  per  centum  per  annum. 

Receipts  for  Taxes  Paid. 

S.  1895.  Any  person,  or  body  politic  or  corporate,  shall,  upon  payment  of 
the  sum  of  fifty  cents,  be  entitled  to  a  receipt  from  the  county  treasurer  of  any 


402  STATUTES  ANNOTATED.  [Idaho  Rev.  Cds. 

county,  or  a  copy  of  the  receipt,  at  his  option,  that  may  have  been  given  by  said 
treasurer  for  the  payment  of  any  tax  under  this  chapter,  to  be  sealed  with  the 
seal  of  his  office,  which  receipt  shall  designate  on  what  real  property,  if  any,  of 
which  any  decedent  may  have  died  seized,  said  tax  has  been  paid,  and  by  whom 
paid,  and  whether  or  not  it  is  in  full  of  said  tax;  and  said  receipt  may  be  recorded 
in  the  recorder's  office  in  the  county  in  which  said  property  is  situated,  in  a  book 
to  be  kept  by  said  recorder  for  such  purpose,  which  shall  be  labeled  "Inheritance 
Tax." 

Failure  of  Officers  to  Perform  Duties. 

S.  1896.  Every  officer  who  fails  or  refuses  to  perform,  within  a  reasonable 
time,  any  and  every  duty  required  by  the  provisions  of  this  chapter,  or  who  fails 
or  refuses  to  make  and  deliver,  within  a  reasonable  time,  any  statement  or  record 
required  by  this  chapter,  shall  forfeit  to  the  state  of  Idaho,  the  sum  of  one  thousand 
dollars,  to  be  recovered  in  an  action  brought  by  the  attorney  general  in  the  name 
of  the  people  of  the  state,  on  the  relation  of  the  state  auditor. 

Suits  to  Enforce  Collection,  and  to  Quiet  Title  Against  Tax. 

S.  1897.  In  all  cases  where  any  tax  has  become  or  shall  hereafter  become  a 
lien  upon  any  property  under  or  by  virtue  of  any  of  the  provisions  of  this  chapter, 
the  county  attorney  of  the  county  in  which  the  estate  of  the  decedent  mentioned 
in  this  chapter  is  being  administered  or  has  been  administered  in  probate  pro- 
ceedings, may,  whenever  any  property  of  said  estate  has  been  distributed  without 
the  payment  to  the  state  of  all  or  any  part  of  the  taxes  payable  on  account  thereof 
under  this  chapter,  bring  and  prosecute  an  action  or  actions  in  the  name  of  the 
state  as  plaintiff,  for  the  purpose  of  enforcing  such  lien  or  liens,  against  all  or  any 
of  the  property  subject  thereto.  In  any  such  action  the  owner  of  any  property  or 
of  any  interest  in  property  against  which  the  lien  of  any  such  tax  is  sought  to  be 
enforced,  and  any  predecessor  in  interest  of  any  such  owner  whose  title  or  interest 
was  derived  through  any  such  decedent  by  will  or  succession  or  by  decree  of  dis- 
tribution of  the  estate  of  such  decedent, and  any  lienor  or  incumbrancer  subsequent 
to  the  lien  of  such  tax  may  be  made  a  party  defendant.  The  enumeration  in 
this  section  of  the  persons  who  may  be  made  defendants  shall  not  be  deemed  to  be 
exclusive,  but  the  joinder  or  non- joinder  of  parties,  except  when  otherwise  herein 
provided,  shall  be  governed  by  the  rules  in  equity  in  similar  cases. 

(a)  Actions  may  be  brought  against  the  state  for  the  purpose  of  quieting  the 
title  to  any  property,  against  the  lien  or  claim  of  lien  of  any  tax  or  taxes  under 
this  chapter,  or  for  the  purpose  of  having  it  determined  that  any  property  is  not 
subject  to  any  lien  for  taxes  under  this  chapter.  In  any  such  action,  the  plaintiffs 
may  be  any  administrator  or  executor  of  the  estate  or  will  of  any  decedent, 
whether  the  said  estate  shall  have  been  fully  administered  and  the  estate  settled 
and  closed  or  not,  and  any  heir,  legatee  or  devisee  of  any  such  decedent,  or  trustee 
of  the  estate  or  of  any  part  of  the  estate  of  such  decedent,  or  distributee  of  the 
estate  or  of  any  part  of  the  estate  of  any  such  decedent,  and  any  assignee,  grantee, 
or  successor  in  interest  of  any  such  persons,  and  all  or  any  other  persons  who  might 
be  made  parties  defendant  in  any  action  brought  by  the  state  under  the  provisions 
of  this  section,  and  notwithstanding  that  all  or  any  of  the  persons  enumerated  in 
this  section  shall  or  may  have  assigned,  granted,  conveyed  or  otherwise  parted 
with  all  or  any  interest  in  or  title  to  the  property,  or  any  part  thereof,  involved  in 
any  such  claim  of  lien  before  the  commencement  of  such  action.    All  or  any  of  the 


Title  10,  c.  5.]  IDAHO.  403 

persons  in  this  section  enumerated  may  be  joined  or  united  as  parties  plaintiff. 
The  enumeration  in  this  section  of  the  persons  who  may  be  made  parties  shall  not 
be  deemed  to  be  exclusive,  but  the  joinder  or  non- joinder  of  parties,  except  when 
otherwise  herein  provided,  shall  be  governed  by  the  rules  in  equity  in  similar  cases. 
In  all  cases  any  person  who  might  properly  be  a  party  plaintiff  in  any  such  action 
who  refuses  to  join  as  plaintiff  may  be  made  a  defendant. 

(b)  All  actions  under  this  section  shall  be  commenced  in  the  district  court  of 
the  county  in  which  is  situated  any  part  of  any  real  property  against  which  any 
lien  is  sought  to  be  enforced,  or  to  which  title  is  sought  to  be  quieted  against 
any  lien,  or  claim  of  liens. 

(c)  Service  of  summons  in  the  actions  brought  against  the  state  shall  be  made 
on  the  secretary  of  state  and  on  the  county  attorney  of  the  county  in  which  the 
estate  of  the  decedent  mentioned  herein  is  being  administered,  or  has  been 
administered  in  probate  proceedings,  and  it  shall  be  the  duty  of  said  county 
attorney  to  defend  all  such  actions. 

(d)  The  procedure  and  practice  in  all  actions  brought  under  this  section,  except 
as  otherwise  provided  in  this  chapter,  shall  be  governed  by  the  provisions  of  the 
code  of  civil  procedure  in  relation  to  civil  actions,  so  far  as  the  same  shall  or 
may  be  applicable,  including  all  provisions  relating  to  motions  for  new  trials  and 
appeals. 

(e)  The  remedies  provided  in  this  section  shall  be  in  addition  to  and  not  ex- 
clusive of  any  remedies  provided  in  the  sections  preceding  this  section. 


404  STATUTES  ANNOTATED.  [111.  Sf 


ILLINOIS. 


In  General. 

Illinois  adopted  a  tax  on  all  kinds  of  inheritances  in  1895, 
which  included  progressive  rates  applying  to  distant  relatives  and 
strangers,  with  a  maximum  of  six  per  cent.  The  constitutionality 
of  the  statute  was  sustained  in  the  Illinois  supreme  court. 
Later  the  question  was  raised  in  the  supreme  court  of  the 
United  States,  which,  in  a  very  far-reaching  decision,  held  that 
progressive  taxation  and  substantial  exemptions  do  not  infringe 
the  equal  protection  of  the  law  guaranteed  by  the  fourteenth 
amendment. 

The  exemptions  apply  to  the  individual  shares,  not  to  the  estate 
as  a  whole.  The  exemption  of  $20,000  is  the  most  liberal  given  to 
direct  heirs  in  any  state. 

Illinois  taxes  stock  in  Illinois  corporations  owned  by  non-residents 
wherever  held.  If  the  corporation  transfers  the  stock  without 
notifying  the  tax  authorities,  it  is  made  liable  for  the  tax  and  is 
subject  to  a  penalty  as  well. 

Illinois  requires  the  executor  or  administrator  of  a  non-resident 
estate  to  answer,  under  oath,  a  printed  list  of  questions  before 
consent  is  given  to  the  transfer  of  any  Illinois  stocks;  but  this  does 
not  necessarily  involve  setting  forth  an  inventory  of  the  entire 
estate. 

Illinois  is  taxing  stock,  owned  by  non-residents,  of  foreign  cor- 
porations that  own  property  in  Illinois.  We  are  informed  by  the 
tax  authorities  "that  it  depends  upon  the  conditions  under  which 
the  property  is  held  here  as  to  whether  a  claim  would  be  made." 
We  have  yet  to  learn,  however,  of  any  condition  under  which  such 
stock  would  not  be  taxed. 

There  seems  to  be  more  complaint  made  against  the  treatment 
of  non-resident  estates  by  Illinois  than  in  the  case  of  any  other 
of  the  states,  not  even  excepting  New  York.  It  refuses  to  apportion 
the  tax  on  such  stocks  as  Illinois  Central,  organized  under  the  laws 
of  Illinois  and  extending  through  several  other  states,  while  at  the 
same  time  insisting  on  an  apportionment  of  such  stocks  as  Rock 
Island,  which  are  incorporated  in  other  states  but  have  some  of 
their  line  in  Illinois. 


,*4ll: 


111.  St.]  ILLINOIS.  405 

On  this  subject  the  inheritance  tax  attorney  for  Illinois  says: 
"The  rates  of  taxation  in  New  York,  New  Jersey  and  all  other 
eastern  states,  as  well  as  all  states  in  the  Union  which  have  inheri- 
tance tax  laws,  embody  rates  of  taxation  greatly  in  excess  of  those 
provided  in  the  inheritance  tax  laws  of  this  state.  The  exemptions 
provided  by  our  law  are  so  large  and  liberal  that  90  per  cent  at 
least  of  all  of  the  securities  transferred  (owned  at  death  by  non- 
resident decedent)  are  not  taxable  at  all." 

Constitutional  Limitations. 

Illinois  Constitution,  1870,  a.  9,  s.  1. 

The  general  assembly  shall  provide  such  revenue  as  may  be  needful  by  levying 
a  tax,  by  valuation,  so  that  every  person  and  corporation  shall  pay  a  tax  in 
proportion  to  the  value  of  his,  her  or  its  property  —  such  value  to  be  ascertained 
by  some  person  or  persons  to  be  elected  or  appointed  in  such  manner  as  the 
general  assembly  shall  direct,  and  not  otherwise;  but  the  general  assembly  shall 
have  power  to  tax  pedlers,  auctioneers,  brokers,  hawkers,  merchants,  commission 
merchants,  showmen,  jugglers,  inn-keepers,  grocery-keepers,  liquor-dealers,  toll- 
bridges,  ferries,  insurance,  telegraph  and  express  interests  or  business,  venders 
of  patents  and  persons  or  corporations  owning  or  using  franchises  and  privileges, 
in  such  manner  as  it  shall  from  time  to  time  direct  by  general  law,  uniform  as  to  the 
class  upon  which  it  operates. 

List  of  Statutes. 

1887.     Statutes  of  Illinois,  p.  183. 

1891.     "    "    "   p.  137. 

1895.     "'    "   "   p.  301. 

1901.     "    "   "   p.  268. 

1901.     "    "    "   p.  269. 

1909.     "    "   "   p.  311. 

Meyer's  Revised  Statutes  of  Illinois,  p.  1304,  s.  307. 

Kurd's  Revised  Statutes  of  Illinois,  1898,  p.  1367,  s.  366-388,  inc. 

"       "        1901,  p.  1511,  s.  366. 

"       "        1903,  p.  1576,  s.  366. 

"       "        1908,  p.  1819,  s.  366. 
Jones  &  Addington's  Supplement,  pp.  1104-1105,  ss.  70-74,  inc. 
1909.     Revised  Statutes  of  Illinois,  c.  120,  ss.  366-388. 

Early  Probate  Duties. 

III.  St.  1887,  p.  183,  approved  June  6,  1887,  relates  to  fees  and 
salaries  of  clerks  of  probate  courts  in  counties  in  the  third  class ;  and 
also  provides  a  fee  on  a  grant  of  probate,  .administration,  guardian- 
ship or  conservatorship,  when  the  estate  does  not  exceed  five 
thousand  dollars,  of  five  dollars ;  from  five  thousand  dollars  to  twenty 


406  STATUTES  ANNOTATED.  llll.  St- 

thousand  dollars,  ten  dollars;  twenty  thousand  dollars  to  fifty 
thousand  dollars,  twenty  dollars;  fifty  thousand  dollars  to  one 
hundred  thousand  dollars,  fifty  dollars;  one  hundred  thousand 
dollars  to  three  hundred  thousand  dollars,  one  hundred  dollars; 
three  hundred  thousand  dollars  to  a  million  dollars,  two  hundred  and 
fifty  dollars ;  in  all  cases  of  a  million  dollars  and  upwards,  a  thousand 
dollars.  The  law  also  provides  an  exemption  where  the  deceased 
leaves  a  surviving  widow  or  children  resident  in  this  state  and 
where  the  entire  estate  of  the  deceased  person  did  not  exceed  two 
thousand  dollars. 

111.  St.  1891,  p.  137,  approved  June  19,  1891,  provides  for  the  fees 
of  clerks  in  probate  in  counties  of  the  third  class,  in  cases  of  pro- 
bate, administration,  guardianship  or  survivorship,  where  the 
estate  does  not  exceed  five  thousand  dollars,  five  dollars;  and  one 
dollar  for  every  additional  thousand  dollars.  It  also  provides  an 
exemption  where  the  deceased  leaves  a  surviving  widow  or  children 
resident  in  this  state  and  his  entire  estate  does  not  exceed  two 
thousand  dollars.  It  also  authorizes  the  judge  in  all  estates  not 
exceeding  five  hundred  dollars  in  value  to  suspend  and  modify  or 
remit  the  costs. 

THE  ACT  OF  1895. 

Follows  New  York  Act  in  Language  and  Construction. 

The  Illinois  statute  is  one  of  the  most  objectionable  acts  upon 
the  subject  to  be  found,  and  it  was  evidently  modeled  after  the 
New  York  statute  in  many  respects.  In  re  Inheritance  Tax,  23 
Colo.  392,  493,  48  P.  535.  It  is  a  substantial  copy  of  the  New 
York  statute  of  1885  as  amended  in  1887.  People  v.  Griffith,  245 
111.  532,  92  N.  E.  313. 

The  general  rule  applies  to  inheritance  laws  that  where  a  statute 
is  adopted  from  another  state  it  will  be  presumed  that  the  legislature 
intended  it  to  receive  the  construction  given  by  the  courts  of  that 
state  if  it  had  been  previously  construed  unless  in  conflict  with  the 
spirit  and  policy  of  the  laws  of  the  second  state.  People  v.  Griffith, 
245  111.  532,  92  N.  E.  313. 

The  New  York  decisions  are  not  of  value  in  construing  the  Illinois 
statute  as  to  the  taxation  of  remainder  interests.  One  of  the  main 
differences  between  the  Illinois  act  and  the  New  York  act  is  that 
the  former  taxes  all  successions  excepting  life  estates  and  terms 
for  years  mentioned  in  section  2,  while  the  latter  taxes  only  succes- 


1895,  p.  301.]  ILLINOIS.  407 

sions  to  collaterals  or  strangers  in  blood.      In  re  Kingman,  220  111. 
563,  77  N.  E.  135. 

Nature  of  Inheritance  Tax. 

The  statute  of  1895  was  in  effect  an  assertion  of  sovereignty 
in  the  estate  of  deceased  persons. 

The  laws  of  descent  and  the  right  to  devise  and  take  under  a  will 
in  Illinois  owe  their  existence  to  the  statute  law  of  the  state.  The 
laws  of  descent  and  devise  being  the  creation  of  statute,  the  power 
which  creates  may  regulate  and  may  impose  conditions  or  burdens 
on  a  right  of  succession  to  property  of  which  there  has  ceased  to 
be  an  owner  because  of  death.  Kochersperger  v.  Drake,  167  111.  122, 
47  N.  E.  321,  41 L.  R.  A.  446,  affirmed  in  Magoun  v.  Illinois  Trust 
and  Savings  Bank,  170  U.  S.  283,  18  S.  Ct.  594,  42  L.  Ed.  1037. 

An  inheritance  tax  is  not  upon  the  property  itself  but  upon  the 
right  to  succeed  to  the  property.  The  succession  to  the  ownership 
of  the  property  being  by  permission  of  the  state,  the  state  can  im- 
pose conditions  regarding  such  privilege  or  permission.  The  courts 
therefore  have  upheld  the  imposition  of  the  inheritance  tax  whenever 
the  state  had  jurisdiction  of  the  beneficiary  or  the  subject  matter, 
regardless  of  the  actual  location  of  the  personal  property  or  the 
domicile  of  the  decedent.  People  v.  Griffith,  245  111.  532,  92  N.  E. 
313. 

"Inheritance  or  succession  taxes  are  not  laid  on  the  property 
inherited  or  taken  by  devise  or  bequest,  but  on  the  right  to  inherit 
or  to  take  ^uch  property.  The  right  to  take  property  in  pursuance 
of  the  statute  of  descent  or  of  the  statute  pertaining  to  wills  is 
property,  but  only  for  the  reason  that  the  law-making  body  of  the 
state  has  seen  fit  to  create  the  right  to  so  take  by  inheritance  or  by 
devise  or  bequest.  No  person  or  corporation  can  inherit  property 
or  can  take  by  devise  or  bequest  except  when  authorized  so  to  do 
by  an  act  of  the  legislature.  Such  right  may  at  any  time  be  abro- 
gated prospectively,  at  the  will  of  the  legislature,  or,  in  the  exercise 
of  the  same  power  in  quality  though  lesser  in  degree  the  law-making 
department  of  the  state  may  modify,  regulate  or  impose  conditions 
on  the  right  to  succeed  by  inheritance  or  devise  to  property  which 
was  owned  by  a  person  who  has  died.  Thus,  the  power  of  the 
legislature  to  lay  a  tax  on  the  right  of  any  person  or  corporation  to 
take  property  by  inheritance  or  by  devise  or  bequest  is  found  to 
be  clear  and  undoubted.  In  laying  such  a  tax  the  legislature  may 
consider  the  relation  which  the  person  or  corporation  given  the 


408  STATUTES  ANNOTATED.  [111.  St. 

right  of  succession  sustains  to  the  deceased,  to  the  property  or  to 
the  state,  and  may  regulate  the  amount  of  the  tax  to  be  required  in 
view  of  such  relation,  and  in  exercising  this  power  may  lay  a  tax 
on  the  right  of  one  class  of  persons  or  corporations  to  take  and  may 
deem  it  wise  to  impose  no  tax  upon  the  right  of  other  classes  of 
persons  or  corporations  to  take.  Embraced  within  the- power 
possessed  by  the  legislature  to  abrogate  the  right  to  take  is  the  power 
to  qualify  that  right  and  to  impose  conditions  and  burdens  upon  it. 
If  a  burden  in  the  nature  of  taxation  is  laid  upon  the  right,  the 
constitutional  principle  that  taxes  must  be  uniform  as  to  the  classes 
upon  which  they  operate  must  be  observed.  Subject  to  this  re- 
striction the  legislature  may  lay  taxes  upon  the  right  of  one  class 
of  persons  and  corporations  to  succeed  to  property  of  deceased 
persons  and  exempt  the  right  of  other  classes  of  persons  or  corpora- 
tions from  such  taxation."  Per  Boggs,  J.,  in  In  re  Speed,  216  111.  23, 
74  N.  E.  809,  108  Am.  St.  Rep.  189,  affirmed  203  U.  S.  553,  27 
S.  Ct.  171,  51  L.  Ed.  314. 

111.  St.  1895,  p.  301.     Approved  June  15,  1895. 
Transfers  Taxable.  —  Rate. 

S.  1.  All  property,  real,  personal  and  mixed  which  shall  pass  by  will 
or  by  the  intestate  laws  of  this  state  from  any  person  who  may  die  seized 
or  possessed  of  the  same  while  a  resident  of  this  state  or,  if  decedent  was  not  a 
resident  of  this  state  at  the  time  of  his  death,  which  property  or  any  part  thereof 
shall  be  within  this  state  or  any  interest  therein  or  income  therefrom,  which  shall 
be  transferred  by  deed,  grant,  sale  or  gift  made  in  contemplation  of  the  death 
of  the  grantor  or  bargainor  or  intended  to  take  effect,  in  possession  or  enjoyment 
after  such  death,  to  any  person  or  persons  or  to  any  body  politic  or  corporate  in 
trust  or  otherwise,  or  by  reason  whereof  any  person  or  body  politic  or  corporate 
shall  become  beneficially  entitled  in  possession  or  expectation  to  any  property 
or  income  thereof,  shall  be,  and  is,  subject  to  a  tax  at  the  rate  hereinafter  specified 
to  be  paid  to  the  treasurer  of  the  proper  county  for  the  use  of  the  state,  and  all 
heirs,  legatees  and  devisees,  administrators,  executors  and  trustees  shall  be  liable 
for  any  and  all  such  taxes  until  the  same  shall  have  been  paid  as  hereinafter 
directed.  When  the  beneficial  interests  to  any  property  or  income  therefrom  shall 
pass  to  or  for  the  use  of  any  father,  mother,  husband,  wife,  child,  brother,  sister, 
wife  or  widow  of  the  son  or  the  husband  of  the  daughter,  or  any  child  or  children 
adopted  as  such  in  conformity  with  the  laws  of  the  state  of  Illinois,  or  to  any 
person  to  whom  the  deceased,  for  not  less  than  ten  years  prior  to  death,  stood 
in  the  acknowledged  relation  of  a  parent,  or  to  any  lineal  descendant  born  in 
lawful  wedlock,  in  every  such  case  the  rate  of  tax  shall  be  one  dollar  on  every 
hundred  dollars  of  the  clear  market  value  of  such  property  received  by  each  person 
and  at  and  after  the  same  rate  for  every  less  amount,  provided  that  any  estate 
which  may  be  valued  at  a  less  sum  than  twenty  thousand  dollars  shall  not  be 
subject  to  any  such  duty  or  taxes,  and  the  tax  is  to  be  levied  in  above  cases  only 
upon  the  excess  of  twenty  thousand  dollars  received  by  each  person.    When  the 


1895,  p.  301.]  ILLINOIS.  409 

beneficial  interests  to  any  property  or  income  therefrom  shall  pass  to  or  for  the 
use  of  any  uncle,  aunt,  niece,  nephew  or  any  lineal  descendant  of  the  same,  in 
every  such  case  the  rate  of  such  tax  shall  be  two  dollars  on  every  one  hundred 
dollars  of  the  clear  market  value  of  such  property  received  by  each  person  on  the 
excess  of  two  thousand  dollars  so  received  by  each  person.  In  all  other  cases  the 
rate  shall  be  as  follows:  On  each  and  every  hundred  dollars  of  the  clear  market 
value  of  all  property  and  at  the  same  rate  for  any  less  amount;  on  all  estates  of 
ten  thousand  dollars  and  less,  three  dollars,  on  all  estates  of  over  ten  thousand 
dollars  and  not  exceeding  twenty  thousand  dollars,  four  dollars;  on  all  estates 
over  twenty  thousand  dollars  and  not  exceeding  fifty  thousand  dollars,  five 
dollars,  and  on  all  estates  over  fifty  thousand  dollars,  six  dollars:  Provided,  that 
an  estate  in  the  above  case  which  may  be  valued  at  a  less  sum  than  five  hundred 
dollars  shall  not  be  subject  to  any  duty  or  tax. 

Progressive  Feature  and  Classification  by  Relationship  Up- 
held. 

Illinois  Constitution,  1870,  article  9,  section  1,  provides  that  taxes 
shall  be  in  proportion  to  the  value  of  property.  The  act  of  1895  is 
not  void  under  this  provision  on  the  ground  that  it  provides  cer- 
tain classes  of  property  depending  on  relationship  and  the  size  of 
the  property  with  a  different  rate  of  taxation  for  each  class.  The 
class  on  which  a  tax  is  thus  levied  is  general  and  uniform  and  per- 
tains to  all  species  of  property  included  within  that  class.  A  tax 
which  affects  the  property  within  a  specific  class  is  uniform  as  to 
that  class  and  there  is  no  provision  of  the  constitution  which  pre- 
cludes a  tax  on  that  particular  class.  No  want  of  uniformity  with 
one  living  who  owns  property  can  be  urged  as  a  reason  why  the 
statute  makes  an  inconsistent  rule.  No  person  inherits  nor  can 
take  by  devise  except  by  statute,  and  the  state  having  power  to 
regulate  this  question  may  create  classes  and  provide  for  uni- 
formity with  reference  to  classes  which  were  before  unknown. 
Kochersperger  v.  Drake,  167  111.  122,  47  N.  E.  321,  41  L.  R.  A.  446, 
affirmed  in  Magoun  v.  Illinois  Trust  &  Savings  Bank,  170  U.  S.  283, 
18  S.  Ct.  594,  42  L.  Ed.  1037. 

The  Illinois  St.  1895,  page  301,  is  constitutional  and  is  not  void 
as  providing  an  arbitrary  or  unreasonable  classification.  There  are 
three  main  classes  in  the  Illinois  statute,  the  first  and  second  being 
composed  respectively  of  lineal  and  collateral  relationship  and  the 
third  being  composed  of  strangers  to  the  blood  and  distant  rela- 
tives. The  latter  is  again  divided  into  four  sub-classes  depending 
upon  the  amount  of  the  estate  received.  The  first  two  classes, 
therefore,  depend  upon  substantial  differences  which  bear  a  just 
and  proper  relation  to  the  attempted  classification. 


410  STATUTES  ANNOTATED.  [111.  St. 

The  court  says  that  it  is  true  that  the  amount  of  the  exemption 
is  greater  in  the  Illinois  law  than  in  any  other,  but  the  right  to 
exempt  cannot  depend  on  that,  as  that  is  a  legislative  and  not  a 
judicial  function. 

As  to  the  progressive  feature  of  the  act,  there  are  four  classes 
created  and  there  is  equality  between  the  members  of  eachv  class. 
It  was  pointed  out  that  the  tax  is  not  in  proportion  to  the  amount, 
but  varies  with  the  amount  arbitrarily  fixed,  and  hence  that  one 
who  is  given  a  legacy  of  $10,001  by  the  deduction  of  the  tax  re- 
ceives $99.04  less  than  one  who  is  given  a  legacy  of  $10,000.  But 
the  court  holds  that  this  is  not  contrary  to  the  rule  of  equality 
of  the  fourteenth  amendment  and  "that  rule  does  not  require,  as 
we  have  seen,  exact  equality  of  taxation.  It  only  requires  that  the 
law  imposing  it  shall  operate  on  all  alike,  under  the  same  circum- 
stances. The  tax  is  not  on  money,  it  is  on  the  right  to  inherit; 
and  hence  a  condition  of  inheritance,  and  it  may  be  graded  accord- 
ing to  the  value  of  that  inheritance.  The  condition  is  not  arbitrary 
because  it  is  determined  by  that  value;  it  is  not  unequal  in  opera- 
tion because  it  does  not  levy  the  same  percentage  on  every  dollar; 
does  not  fail  to  treat  all  "alike  under  like  circumstances  and  con- 
ditions, both  in  the  privilege  incurred  and  the  liabilities  imposed.'* 
P^r^McKenna,  J.,  in  Magoun  v.  Illinois  Trust  &f  Savings  Banky 
170  U.  S.  283,  298,  300,  18,  S.  Ct.  594,  42  L.  Ed.  1037,  affirming 
Kochersperger  v.  Drake,  167  111.  122,  47  N.  E.  321;  41  L.  R.  A.  446. 

The  Illinois  statute  was  also  attacked  before  the  supreme  court 
on  the  ground  that  the  tax  was  a  property  tax  and  that  the  right 
of  inheritance  and  of  testamentary  disposition  were  natural 
rights  beyond  the  power  of  the  legislature  to  take  away.  The  su- 
preme court  had  within  two  years  expressed  the  contrary  opinion 
on  both  these  points  in  United  States  v.  Perkins,  163  U.  S.  625, 
and  the  court  cites  these  decisions,  but  a  determination  of  these 
points  was  not  necessary  to  the  decision.  The  real  basis  of  the 
decisions  was  simply  the  principle  that  progressive  taxation  and 
generous  exemptions  are  not  in  violation  of  the  rule  of  equality  of 
the  fourteenth  amendment.  Magoun  v.  Illinois  Trust  and  Sav- 
ings Bank,  170  U.  S.  283,  18  S.  Ct.  594,  42  L.  Ed.  1037,  affirming 
Kochersperger  V.Drake,  167  111.,  122,  47  N.  E.  321,  41  L.  R.  A.  446. 

"All  Property."  —  Expenses  Deducted. 

Lawful  expenditures  and  expenses  incurred  by  the  executors  in 
defending  a  will  against  the  heirs  at  law  should  be  deducted  in 


1895,  p.  301.]  ILLINOIS.  411 

determining  the  amount  on  which  to  compute  the  inheritance  tax 
under  the  act  of  1895.  Connell  v.  Crosby,  210  111.  380,  71  N.  E. 
350,  distinguishing  In  re  Lines  155,  Pa.  St.  378, 26  A.  728,  where  the 
expenses  of  legatees  assisting  the  trustees  were  not  deducted,  and 
In  re  Westurn,  152  N.  Y.  93,  46  N.  E.  315,  where  the  expenses 
of  heirs  who  had  successfully  contested  the  will  were  not  allowed. 

Marshaling  Assets  to  pay  Debts.  —  Foreign  Land  not  Taxed. 

Where  the  estate  of  the  testator  consisted  of  real  and  personal 
property  in  Illinois  and  real  estate  outside  the  state  and  a  large 
indebtedness,  the  lower  court  held  erroneously  that  in  order  to  as- 
certain the  amount  on  which  to  compute  the  tax  the  value  of  the 
personal  property  should  be  deducted  from  the  total  indebtedness 
of  the  estate  and  the  remaining  indebtedness  should  be  appor- 
tioned upon  all  the  real  estate  both  foreign  and  domestic  and  that 
the  tax  should  be  laid  upon  the  amount  so  apportioned  on  the 
value  of  the  lands  in  Illinois.  This  resulted  by  indirection  in  laying 
a  tax  on  the  foreign  lands  and  was  erroneous.  Connell  v.  Crosby, 
210  111.  380,  392,  71  N.  E.  350. 

**Pass    ...    by  the  Intestate  Laws  of  this  State." —  Land 
in  another  State  not  Taxed,  although  Directed  to  be  Sold. 

A  tax  is  laid  on  all  property  which  shall  pass  by  will  or  by  the  in- 
testate laws  of  the  state.  This  does  not  include  land  owned  by  the 
testator  in.  other  states,  as  such  lands  do  not  pass  under  the  intes- 
tate laws  of  Illinois,  but  under  the  statutes  of  the  state  where  the 
land  is  situated.  The  statute  never  intended  to  distinguish  be- 
tween the  case  of  land  passing  under  the  intestate  laws  and  land 
passing  by  will.  (This  result  was  reached  in  New  York  in  In  re 
Swift,  137  N.  Y.  77,  32  N.  E.  1096.) 

Land  in  another  state  cannot  be  taxed  although  the  will  directs 
it  to  be  converted  into  money,  as  the  doctrine  of  equitable  conver- 
sion cannot  be  applied  in  proceedings  for  the  collection  of  inheri- 
tance taxes.     Connell  v.  Crosby,  210  III.  380,  71  N.  E.  350. 

**Pas8  ...  by  the  Intestate  Laws  of  this  State."  —  Dower. 

Dower  less  the  exemption  provided  by  statute  is  subject  to  the 
inheritance  tax.  People  v.  Field,  248  III.  147,  93N.  E.  721 ;  Billings 
V.  People,  189  III.  472,  59  N.  E.  798,  59.  L.  R.  A.  507. 

Under  the  statute  of  1895,  "intestate  laws"  include  the  widow's 
dower.    It  was  contended  that  dower  is  of  great  antiquity  and  was 


412  STATUTES  ANNOTATED.  [111.  St. 

not  created  by  statute  but  by  the  common  law ;  but  the  court  holds 
that  the  institution  of  dower  is  subject  to  full  legislative  control 
and  may  be  changed  or  modified  at  any  time.  The  court  holds 
that  the  ''intestate  laws"  referred  to  are  those  laws  of  the  state  which 
cover  the  devolution  of  estates  and  of  persons  dying  intestate  and 
include  all  applicable  rules  of  the  common  law  in  force  in  thi^  state 
and  they  regulate  and  control  the  interest  which  the  widow  took 
in  her  husband's  property  at  his  death.  Billings  v.  People,  189  111. 
472, 477, 59  L.  R.  A.  807. 

Where  the  testator  signed  an  ante-nuptial  agreement  by  which 
the  wife  took  a  certain  sum  in  lieu  of  her  dower  rights  on  his  death, 
the  court  holds  that  this  sum  taken  under  the  agreement  is  not 
exempt  from  the  inheritance  tax.  Being  in  lieu  of  dower  it  is 
subject  to  tax  as  dower  is.  The  amount  received  by  the  widow 
should  not  be  deducted  in  estimating  the  market  value  of  the  estate. 
People  V.  Field,  248  111.  147,  93  N.  E.  721. 

"A  Resident  of  this  State." 

"The  terms  'residence,'  'abode,'  ^domicile'  and  kindred  terms 
differ  somewhat  in  meaning,  but  when  used  in  statutes  similar  to 
the  Illinois  inheritance  statute  have  frequently  been  held  to  be 
synonymous." 

A  man  is  a  resident  of  Illinois  who  has  lived  in  Illinois  for  some 
years  but  who  has  declared  his  intention  of  moving  out  of  the  state 
as  soon  as  his  business  is  settled,  when  he  is  taken  ill  and  goes  to  the 
house  of  his  daughter  in  the  other  state  where  he  dies.  The  facts 
show  that  he  went  to  his  daughter's  house  for  a  temporary  purpose 
only.    In  re  Moir,  207  111.  180,  69  N.  E.  905,  99  Am.  St.  Rep.  205. 

"Which  Property  shall  be  Within  this  State."  —  Situs  of 
Personal  Property. 

Rulings  as  to  the  situs  of  personal  property  under  the  general 
tax  law  are  not  controlling  on  a  construction  of  the  inheritance  law, 
as  the  inheritance  laws  are  not  taxes  in  the  strict  sense  of  the  term. 

The  liability  of  property  to  inheritance  tax  does  not  depend  upon 
its  location,  but  upon  whether  the  beneficiary  came  into  its  posses- 
sion through  the  exercise  of  a  privilege  conferred  by  the  state. 

Where  personal  property  of  a  non-resident  is  left  in  Illinois  solely 
for  safe  keeping  and  not  for  investment,  stocks  and  bonds  of  domes- 
tic corporations,  cash  on  deposit  and  the  tangible  personal  property 
in  Illinois  are   subject   to  tax,  and   stocks   and  bonds  of  foreign 


1895,  p.  301.]  ILLINOIS.  413 

corporations  are  not  subject  to  tax.  The  counsel  for  the  state 
conceded  that  if  this  was  so  bonds  of  a  railroad  company  organized 
under  the  laws  of  Illinois  and  Iowa  and  located  partly  in  both  states 
are  not  property  within  the  meaning  of  the  statute  subject  to  the 
tax.    People  v.  Griffith,  245  111.  532,  542,  92  N.  E.  313. 

*'The  tendency  of  modern  legislation  in  this  country  is  to  extend 
the  state's  taxing  power  to  all  property  within  its  jurisdiction 
(27  Am.  &  Eng.  Ency.  of  Law,  2d  ed.,  650),  and  this  is  especially 
true  as  to  inheritance  taxes  on  the  right  of  succession  to  all  property, 
whether  real  or  personal,  tangible  or  intangible,  which  passes  testate 
or  intestate  from  decedents  to  other  persons.'* 

"The  ancient  maxim  that  movables  follow  the  domicile  of  the 
person  was  an  outgrowth  of  conditions  which  have  long  since 
ceased  to  exist,  and  the  rule  has  been  greatly  limited  in  certain 
matters,  such  as  taxation  and  the  subjecting  of  personal  property 
of  non-residents  to  the  claims  of  local  creditors.  It  is  usually, 
however,  the  law  that  personal  property  is  sold,  transmitted  or 
obtained  under  the  will  or  intestate  law  according  to  the  law  of 
the  domicile  and  not  that  of  the  situs  of  the  property."  People  v. 
Griffith,  245  111.  532,  92  N.  E.  313. 

"Deed  ...  in  Contemplation  of  the  Death.  .  .  ." 

The  question  whether  a  gift  was  made  in  contemplation  of  death 
is  a  question  of  fact.    People  v.  Kelley,  218  111.  509,  75  N.  E.  1038. 

''A  gift  is  made  in  contemplation  of  an  event  when  it  is  made  in 
the  expectation  of  that  event  and  having  it  in  view,  and  a  gift 
when  the  donor  is  looking  forward  to  his  death  as  impending  and 
in  view  of  that  event  is  within  the  language  of  the  statute."  Per 
Cartwright,  J.,  in  Rosenthal  v.  People,  211  111.  306,  71  N.  E.  1121. 

Where  a  parent  makes  a  deed  in  trust  for  the  sole  benefit  of  the 
cestuis  but  reserves  unto  himself  a  certain  income  for  life,  the  court 
may  divide  the  property  and  levy  an  inheritance  tax  on  that  portion 
of  it  necessary  to  raise  the  income  stipulated.  People  v.  Kelley, 
218  III.  509,  75  N.  E.  1038,  following  People  v.  Moir,  207  111.  180, 
69  N.  E.  905,  99  Am.  St.  Rep.  205. 

Under  this  statute  a  gift  may  be  subject  to  tax  if  made  in  con- 
templation of  the  death  of  the  donor  although  the  transfers  were 
absolute  and  were  accepted  by  the  donees  who  entered  into  posses- 
sion and  ownership  of  the  property  transferred,  and  after  the 
transfers  the  donor  had  no  interest  in  the  property.  It  was  claimed 
that  a  gift  causa  mortis  is  a  transfer  of  property  made  without 


414  STATUTES  ANNOTATED.  [111.  St- 

consideration  in  contemplation  of  death,  and  that  the  stipulation 
that  the  gift  was  absolute  prevents  it  from  being  a  gift  causa 
mortis.  But  the  court  finds  that  as  the  gifts  were  made  in  con- 
templation of  death  they  were  gifts  inter  vivos  made  in  contempla- 
tion of  death  and  within  the  designation  of  gifts  causa  mortis. 
Merrifield  v.  People,  212  111.  400,  72  N.  E.  446. 

It  was  argued  in  In  re  Benton,  234  111.  366, 84  N.  E.  1026,  that  the 
reasoning  by  which  the  inheritance  tax  law  is  declared  constitu- 
tional cannot  be  applied  to  gifts  inter  vivos  and  the  court  remarks 
that  the  contention  that  a  gift  made  "in  contemplation  of  death" 
should  be  construed  as  a  gift  causa  mortis  is  more  plausible  than 
sound,  and  dismisses  the  contention  without  further  discussion. 

The  tax  is  due  in  a  case  where  the  grantor  suffered  from  spinal 
trouble  with  a  malignant  growth  and  became  rapidly  worse,  and 
where  three  days  after  the  making  of  the  grant  he  made  his  will  and 
died  at  the  end  of  a  month,  although  no  evidence  appeared  of  his 
intent  to  defraud  the  state  of  his  inheritance  tax.  No  such  intention 
needs  to  appear.  The  statute  covers  all  gifts  made  in  contemplation 
of  death  and  that  language  does  not  naturally  nor  necessarily  in- 
volve a  fraudulent  intent.  Rosenthal  V.  People,  211  111.  306,  71  N.  E. 
1121.  Where  an  old  man  suffering  from  an  incurable  disease  makes 
gifts  of  a  large  portion  of  his  property  to  various  relatives  because 
he  is  afraid  that  his  wife  will  claim  her  statutory  dower  in  his 
property  which  on  her  death  would  go  to  his  stepson,  and  where 
the  object  of  the  gifts  to  relatives  is  to  avoid  this  result  by  reducing 
the  estate  so  that  the  wife  by  self  interest  will  desire  to  take  under 
his  will  and  not  her  statutory  interest,  this  gift  is  made  "in  con- 
templation of  death"  within  the  language  of  the  Illinois  statute. 
In  re  Benton,  234  111.  366,  84  N.  E.  1026.  Where  the  deed  and 
partnership  agreement  between  a  father  and  his  sons  were  executed 
simultaneously  and  where  the  real  estate  was  not  a  partnership 
asset  but  the  profits  from  the  real  estate  were  carried  into  the  part- 
nership account,  and  where  the  father  received  one-half  the  rents 
on  the  land  until  his  death,  one-half  of  the  lands  are  subject  to 
inheritance  tax,  as  their  possession  and  enjoyment  was  postponed 
during  the  life  of  the'  grantor.  A  conveyance  must  part  with  the 
possession,  the  title  and  the  enjoyment  in  the  grantor's  lifetime. 
People  v.  Moir,  207  111.  180,  69  N.  E.  905,  99  Am.  St.  Rep.  205. 

A  conveyance  did  not  take  effect  in  contemplation  of  death  where 
the  grantor  was  not  in  immediate  danger  of  death  at  the  time  the 
deed  was  delivered,  and  the  conveyance  was  made  as  a  provision  for 


1895,  p.  301.]  ILLINOIS.  415 

the  grantor's  two  sons  and  the  deed  was  withheld  from  record  by 
mutual  arrangement  between  the  parties,  but  was  fully  delivered 
to  the  trustee  and  possession  of  the  premises  turned  over  to  the 
trustees  at  the  time  of  the  delivery  of  the  trust  deed.  It  is  not 
the  object  of  the  Illinois  statute  to  prevent  a  parent  from  giving 
the  whole  or  any  portion  of  his  property  to  his  children  in  his  life- 
time if  he  so  desire.    People  v.  Kelley,  218  111.  509,  75  N.  E.  1038. 

The  testator's  wife  died  in  1897,  leaving  a  daughter  thirty-five 
years  old,  who  was  a  deaf  mute.  After  the  death  of  the  mother 
a  companion  for  the  daughter  who  had  lived  in  the  family  married, 
and  thereafter  the  testator  entered  into  a  contract  with  another 
companion  whereby,  in  consideration  of  her  continuing  to  act  as 
companion  of  and  caring  for  the  daughter  as  long  as  the  daughter 
lived,  the  testator  undertook  to  convey  and  transfer  to  her  all  the 
property  he  possessed. 

The  comrade  faithfully  performed  her  part  of  the  contract  until 
1904  when  the  daughter  died,  and  the  testator  conveyed  from  time 
to  time  various  parts  of  his  property  to  the  companion.  It  appeared 
that  the  companion  had  exclusive  dominion  over  the  property. 
The  testator  was  seventy-four  years  old  when  he  made  the  agree- 
ment, but  he  was  in  good  health  though  not  strong.  The  testator 
might  well  expect  the  daughter  to  outlive  him;  but  he  did  not 
transfer  his  property  to  his  daughter  or  in  trust  for  her.  Instead 
he  sold  it  in  consideration  of  a  contract  for  her  care,  the  performance 
of  which  began  and  was  finished  in  her  lifetime.  The  motive  for 
transferring  the  property  was  not  his  impending  death  but  his  de- 
sire to  provide  for  his  daughter's  future,  whether  he  lived  or  died, 
and  hence  no  tax  can  be  collected.  The  contemplation  of  death 
must  be  the  impelling  motive,  without  which  the  conveyance  would 
not  be  made,  in  order  to  subject  a  transfer  of  property  to  the 
inheritance  tax.    People  v.  Burkhalter,  247  111.  600,  93  N.  E.  379. 

^'Entitled  ...  in  Expectation.'' 

Expectation  does  not  include  a  future  defeasible  interest  but 
means  a  vested  remainder  not  subject  to  any  contingency.  The 
statute  contemplates,  to  authorize  the  imposition  of  the  tax  on 
practical  and  actual  ownership,  possession  of  a  title  to  something 
that  can  be  conveyed.  "The  right  to  tax  is  based  upon  the  right 
to  succeed.  The  amount  of  the  tax  is  fixed  by  the  amount  of  the 
property  which  as  a  result  of  the  right  to  succeed  passes  to 
the  beneficiary.  The  tax  is  levied  on  the  succession  and  not  on  the 
property  as  such.  ...    When  the  basis  of  the  tax,  the  rate  and  the 


416  STATUTES  ANNOTATED.  [111.  St. 

exemption,  if  any,  cannot  be  fixed,  the  tax  itself  cannot  be  fixed. 
No  other  course  is  left  open  in  the  practical  administration  of  the 
statute  than  to  postpone  the  assessing  and  collecting  of  the  tax 
upon  such  remote  contingent  interests  as  are  incapable  of  valuation 
and  as  to  which  the  rate  and  the  exemptions  cannot  be  determined." 
People  V.  McCormick,  208  111.  437,  70  N.  E.  350,  64  L.  R.  A.  775. 

Estates  in  expectation  are  subject  to  tax  under  this  section,  and 
remainders  whether  vested  or  contingent  are  estates  in  expectation 
within  the  meaning  of  the  statute  and  they  are  taxable  at  once  on 
the  death  of  the  testator.  Ayers  v.  Chicago  Title  &'  Trust  Co.,  187 
111.  42,  58  N.  E.  318.  The  language  in  Ayers  v.  Chicago  Title  & 
Trust  Co.,  187  111.  42,  58  N.  E.  318,  to  the  effect  that  whether  or 
not  the  remainders  were  vested  or  contingent  is  not  material,  is 
only  dictum,  and  the  court  declines  to  follow  it  in  People  v. 
McCormick,  208  111.  437,  70  N.  E.  350,  64  L.  R.  A.  775. 

"Beneficial  Interests." 

The  tax  provided  on  the  "beneficial  interests"  to  property  passing 
to  or  for  any  child  of  the  testator  is  on  the  value  given  to  the  child 
after  deducting  the  cash  value  of  the  widow's  dower.  The  court 
distinguishes  In  re  Kingman,  220  111.  563,  77  N.  E.  135,  as  in 
that  case  the  estate  was  for  years  and  not  for  life. 

"Obviously,  under  sections  1  and  2  of  the  inheritance  tax  law 
as  construed  by  this  court  in  the  cases  heretofore  cited,  the  legisla- 
ture intended  that  a  person  should  be  taxed  only  on  the  beneficial 
interest  that  he  receives.  The  only  beneficial  interest  in  the  real 
estate  that  passed  to  the  daughter  in  this  case  from  her  father's 
estate  was  the  value  of  this  real  estate  less  the  value  of  the  dower 
interest  of  the  mother.  The  county  court  decided  rightly  in  de- 
ducting the  cash  value  of  said  dower  when  fixing  the  beneficial 
interest  received  by  and  taxed  against  the  daughter."  Per  Carter, 
J.,  in  People  v.  Nelms,  241  111.  571,  89  N.  E.  683. 

"Clear  Market  Value." 

"Clear  market  value"  does  not  mean  the  selling  price  of  property 
at  a  forced  or  involuntary  sale,  so  the  appraisal  may  be  made  at  the 
price  at  which  small  blocks  of  stock  held  by  the  estate  were  sold  at 
or  about  the  date  of  the  death  of  the  decedent,  and  the  appraiser 
should  not  consider  the  fact  that  the  estate  held  large  blocks  of 
stock  which  if  all  forced  on  the  market  at  the  death  of  the  decedent 
would  have  depressed  the  market  price  of  the  stock.  Walker  v. 
People,  192  111.  106,  61  N.  E.  489. 


1895,  p.  301.]  ILLINOIS.  417 

Exemptions. 

In  Murphy  v.  People,  213  III.  164,  72  N.  E.  779,  the  court  imposed 
a  tax  of  three  per  cent  on  a  legacy  to  one  who  claimed  she  was  a 
niece  of  the  testator  and  therefore  entitled  to  two  thousand  dollars 
of  the  legacy  free  from  tax.  The  court  discusses  the  questions  only 
arising  out  of  the  legality  of  the  marriage  claimed  by  the  party 
taxed. 

Exemption  to  Life  Tenants  with  Remainder  to  Collaterals 
is  Valid. 

Section  1  as  construed  places  a  tax  upon  life  tenants  with  re- 
mainder to  lineal  descendants,  and  no  tax  on  life  tenants  with 
remainder  to  collateral  heirs.  This  is  not  an  arbitrary  or  warranted 
discrimination  between  life  tenants.  A  life  estate  with  the  fee 
descending  in  lineal  life  might  well  be  more  desirable  than  a  life 
estate  with  remainder  to  collateral  heirs  or  strangers  to  the  blood. 
The  exemption  may  be  regarded  as  a  concession  to  beneficiaries 
of  the  first  class  while  the  last  of  their  line  to  hold  and  enjoy  prop- 
erty.  Billings  V.  People,  189  111.  472,  59  L.  R.  A.  807. 

Particular  Estates  and  Remainders. 

S.  2.  When  any  person  shall  bequeath  or  devise  any  property  or  interest 
therein  or  income  therefrom  to  mother,  father,  husband,  wife,  brother  and  sister, 
the  widow  of  the  son,  or  a  lineal  descendant  during  the  life  or  for  a  term  of  years 
or  remainder  to  the  collateral  heir  of  the  decedent,  or  to  stranger  in  blood  or  to 
body  politic  or  corporate  at  their  decease,  or  on  the  expiration  of  such  term,  the 
said  life  estate- or  estates  for  a  term  of  years  shall  not  be  subject  to  any  tax  and 
the  property  so  passing  shall  be  appraised  immediately  after  the  death  at"  what 
was  the  fair  market  value  thereof  at  the  time  of  the  death  of  the  decedent  in  the 
manner  hereinafter  provided,  and  after  deducting  therefrom  the  value  of  said 
life  estate,  or  term  of  years,  the  tax  transcribed  by  this  act  on  the  remainder  shall 
be  immediately  due  and  payable  to  the  treasurer  of  the  proper  county,  and, 
together  with  the  interests  thereon,  shall  be  and  remain  a  lien  on  said  property 
until  the  same  is  paid:  Provided,  that  the  person  or  persons  or  body  politic  or 
corporate  beneficially  interested  in  the  property  chargeable  with  said  tax  elect 
not  to  pay  the  same  until  they  shall  come  into  the  actual  possession  of  such  prop- 
erty, or,  in  that  case  said  person  or  persons  or  body  politic  or  corporate  shall 
give  a  bond  to  the  people  of  the  state  of  Illinois  in  the  penalty  three  times  the 
amount  of  the  tax  arising  upon  such  estate  with  such  sureties  as  the  county  judge 
may  approve,  conditioned  for  the  payment  of  the  said  tax,  and  interest  thereon, 
at  such  time  or  period  as  they  or  their  representatives  may  come  into  the  actual 
possession  or  enjoyment  of  said  property,  which  bond  shall  be  filed  in  the  office  of 
the  county  clerk  of  the  proper  county:  Provided,  further,  that  such  person  shall 
make  a  full,  verified  return  of  said  property  to  said  county  judge,  and  file  the  same 
in  his  office  within  one  year  from  the  death  of  the  decedent,  and  within  that 
period  enter  into  such  securities  and  renew  the  same  for  five  years 


418  STATUTES  ANNOTATED.  [111.  St. 

Constitutionality. 

This  section  in  effect  provided  that  a  life  estate  should  be  tax- 
able when  the  remainder  was  to  lineal  descendants  and  not  tax- 
able where  the  remainder  was  to  collateral  descendants  or  strangers. 
It  was  claimed  that  this  was  void,  as  unreasonable  classifica- 
tion ;  that  life  tenants  constitute  but  a  single  class,  as  the  inci- 
dents of  such  an  estate  are  the  same  irrespective  of  the  ultimate 
vesting  of  the  remainder.  The  court  holds,  however,  that  this  was 
entirely  within  the  discretion  of  the  state  legislature ;  that  the 
power  of  the  state  to  impose  conditions  upon  the  transfer  or  devo- 
lution of  estates  is  complete  where  no  discrimination  is  exercised 
in  the  creation  of  a  class.  "Crossing  the  lines  of  classes  created 
by  the  statute  discriminations  may  be  exhibited,  but  within  the 
classes  there  is  equality."  The  court  relies  on  the  case  of  Magoun 
V.  Illinois  Trust  &f  Savings  Bank,  170  U.  S.  283,  18  Sup.  Ct.  594, 
42  L.  Ed.  1037;  Billings  v.  People,  188  U.  S.  97,  104,  23  S.  Ct.  272, 
47  L.  Ed.  400;  affirming  189  111.  472. 

"To  .  .  .  Wife  .  .  .  During  the  Life." 

The  language  exempting  the  life  estate  in  any  property  devised 
or  bequeathed  to  the  wife  of  the  testator  does  not  apply  when  the 
wife  renounces  the  will  and  elects  to  take  her  statutory  rights. 
Connell  v.  Crosby,  210  111.  380,  71  N.  E.  350. 

**0r  remainder  to  the  collateral  heir"  should  be  read 
"and  remainder,"  etc.  Billings  v.  People,  189  111.  472,  59 
L.  R.  A.  807.  The  word  "or"  before  the  word  "remainder" 
in  this  section  can  have  no  other  meaning  than  "and."  It 
follows  that  the  life  estate  or  estate  for  a  term  of  years  referred 
to  in  section  2  is  only  exempt  from  the  inheritance  tax  when 
the  remainder  following  upon  the  expiration  of  such  an  estate 
is  to  the  collateral  heir  or  stranger  in  blood,  or  to  the  body 
politic  or  corporate.  Ayers  v.  Chicago  Title  &  Trust  Co.,  187  111.  42, 
56,  58  N.  E.  318. 

Where  a  will  creates  a  trust  estate  for  a  period  of  ten  years  and 
provides  that  the  full  estate  at  the  expiration  of  that  time  shall 
be  turned  over  to  the  wife  and  children  they  get  a  vested  remainder, 
and  as  there  are  none  of  them  collateral  heirs  or  strangers 
the  exception  provided  in  111.  St.  Hurd's  Sts.  1903,  p.  1576, 
s,  2,  does  not  apply;  and  therefore  the  estate  was  immediately 
taxable  under  section  1.  In  re  Kingman,  220  111.  563,  565,  77 
N.  E.  135. 


1895,  p.  301.]  ILLINOIS.  419 

**At  Their  Decease.'' 

The  words  "at  their  decease"  refer  back  to  the  first  clause  of 
section  2,  and  the  word  "their"  refers  to  the  persons  or  classes 
mentioned  in  that  clause.  In  other  words  the  remainder  referred 
to  is  a  remainder  at  the  decease  of  "mother,  father,  husband,  wife, 
brother  and  sister,  the  widow  of  the  son  or  a  lineal  descendant." 
Ayers  v.  Chicago  Title  df  Trust  Co.,  187  111.  42,  55,  58  N.  E.  318. 

**Property  so  Passing  shall  be  Appraised  Immediately  After 
the  Death." 

The  words  "after  the  death"  refer  to  the  death  of  the  testator 
and  not  to  the  death  of  the  life  tenant.  Ayers  v.  Chicago  Title  &f 
Trust  Co.,  187  111.  42,  58  N.  E.  318. 

"Deducting  Therefrom  the  Value  of  said  Life  Estate.'' 

The  only  provision  for  deduction  of  the  primary  estate  in  assess- 
ing the  value  of  the  remainder  interest  is  in  section  2  and  that  where 
the  remainder  goes  to  the  collateral  heirs,  to  a  stranger  to  the  blood, 
or  to  a  body  politic  or  corporate,  in  which  case  the  value  of  the 
preceding  estate  is  first  to  be  deducted  and  the  tax  extended  on 
the  remainder  only.    In  re  Kingman,  220  111.  563,  77  N.  E.  135. 

"Provided  that  the  .  .  .  Persons  .  .  .  Interested  .  .  .  Elect 
Not  to  Pay  the  Same  until  they  come  into  Actual 
Possession." 

Under  this  section  the  right  to  succession  under  a  will  to  an 
estate  in  remainder  is  liable  to  be  taxed  and  the  valuation  to  be  made 
as  of  the  date  of  the  death  of  the  testator,  and  the  value  to  be  taken 
on  the  estate  of  the  decedent  less  the  value  of  the  life  estate ;  and 
where  the  remaindermen  do  not  or  cannot  (as  where  they  are  un- 
certain) make  an  election  not  to  pay  the  tax  until  they  come  into 
actual  enjoyment  as  provided  by  section  2  the  tax  must  be  paid 
at  once.  And  the  court  further  holds  that  where  there  is  no  pro- 
vision for  the  remainder  going  to  collateral  relatives,  a  stranger  to 
the  blood  or  to  a  corporation,  there  is  no  one  to  make  an  election 
and  the  tax  on  the  remainder  becomes  due  under  section  2  and  sec- 
tion 3  of  the  statute.  Ayers  v.  Chicago  Title  &  Trust  Co.,  187  111.  42, 
58  N.  E.  318. 

''Shall  Give  a  Bond." 

The  right  of  remaindermen  to  file  a  bond  for  the  payment  of 
the  tax  is  not  decided,  as  it  did  not  appear  that  any  request  to  file 


420  STATUTES  ANNOTATED.  [111.  St. 

such  a  bond  had  been  made  in  the  lower  court.    In  re  Kingman,  220 
111.  563,  77  N.  E.  135. 

When  Tax  is  Due.  —  Interest.  —  Discount. 

S.  3,  All  taxes  imposed  by  this  act,  unless  otherwise  herein  provided  for, 
shall  be  due  and  payable  at  the  death  of  the  decedent,  and  interest  at  the  rate  of 
six  per  cent  per  annum  shall  be  charged  and  collected  thereon  for  such  time  as 
said  taxes  is  not  paid:  Provided,  that  if  said  tax  is  paid  within  six  months  from 
the  accruing  thereof,  interest  shall  not  be  charged  or  collected  thereon,  but  a 
discount  of  five  per  cent  shall  be  allowed  and  deducted  from  said  tax,  and  in  all 
cases  where  the  executors,  administrators  or  trustees  do  not  pay  such  tax  within 
one  year  from  the  death  of  the  decedent,  they  shall  be  required  to  give  a  bond  in 
the  form  and  to  the  effect  prescribed  in  section  two  of  this  act  for  the  payment  of 
said  tax,  together  with  interest. 

'*A11  Taxes  .  .  .  Shall  be  Due  and  Payable  at  the  Death  of 
the  Decedent." 

It  is  the  intention  of  the  Illinois  inheritance  law  as  appears  from 
sections  1,  2  and  3  that  all  the  estates  subject  to  taxation  under  the 
act  shall  be  appraised  in  value  and  the  taxes  thereon  fixed  promptly 
upon  the  death  of  the  testator  or  within  a  reasonable  time  thereafter. 
In  re  Kingman,  220  111.  563,  77  N.  E.  135. 

The  act  provides  that  the  tax  shall  be  due  and  payable  on  the 
death  of  testator,  but  it  also  provides  that  the  tax  shall  be  laid  on 
the  market  value  of  the  property  received  by  the  beneficiary.  Where 
a  future  estate  depends  on  such  possibilities  as  the  marriage  or 
having  children  of  life  tenants  it  is  a  mere  possible  interest  which 
could  not  have  a  market  value ;  and  the  courts  in  order  to  enforce 
immediate  collection  of  the  tax  cannot  change  the  tax  from  one  on 
succession  to  one  on  property.  No  other  course  is  left  open  in  the 
practical  administration  of  the  statute  than  to  postpone  the  assess- 
ing and  collecting  of  tax  upon  such  remote  contingent  interests 
as  are  incapable  of  valuation  and  as  to  which  the  rate  and  the 
exceptions  cannot  be  determined.  Billings  v.  People,  189  111.  472, 
59  L.  R.  A.  807. 

Where  a  will  provides  for  many  contingencies  that  may  arise 
in  twenty  years  next  succeeding  the  death  of  the  testator,  the  im- 
position of  the  inheritance  tax  is  properly  deferred  until  it  can  cer- 
tainly be  known  who  is  the  beneficiary  entitled  to  the  fund.  Then 
the  legatee  will  get  his  property  and  the  state  will  get  its  tax  under 
111.  Kurd's  Rev.  Sts.  1901,  c.  120,  s.  366.  People  v.  McCormick, 
208  111.  437,  448,  70  N.  E.  350,  64  L.  R.  A.  775. 


H^ 


1895,  p.  301.]  ILLINOIS.  421 

The  right  to  impose  the  tax  presently  depends  not  upon  the  char- 
acter of  the  estate  devised  with  reference  to  its  being  a  contingent 
or  vested  remainder,  but  upon  the  question  whether  the  person 
who  will  ultimately  be  entitled  to  a  beneficial  interest  in  the  re- 
mainder can  be  now  identified,  or  whether  the  proportion  to  which 
he  will  succeed  can  be  now  determined.  People  v.  McCormick, 
208  111.  437,  70  N.  E.  350,  64  L.  R.  A.  775. 

"Unless  Otherwise  Provided  For." 

The  only  provisions  referring  to  "unless  otherwise  provided  for" 
are  the  provisions  of  section  2  with  reference  to  remainders  to 
collateral  heirs,  strangers  to  the  blood  and  the  body  politic  or 
corporate.  Ayers  v.  Chicago  Title  &  Trust  Co.,  187  111.  42,  58  N.  E. 
318. 

Deduction  of  Tax  from  Shares  of  Beneficiaries. 

S.  4.  Any  administrator,  executor  or  trustee  having  any  charge  or  trust  in 
legacies  or  property  for  distribution  subject  to  the  said  tax  shall  deduct  the  tax 
therefrom,  or  if  the  legacy  or  property  be  not  money  he  shall  collect  a  tax  thereon 
upon  the  appraised  value  thereof  from  the  legatee  or  person  entitled  to  such 
property,  and  he  shall  not  deliver  or  be  compelled  to  deliver  any  specific  legacy 
or  property  subject  to  tax  to  any  person  until  he  shall  have  collected  the  tax 
thereon,  and  whenever  any  such  legacy  shall  be  charged  upon  or  payable  out  of 
real  estate,  the  heir  or  devisee,  before  paying  the  same,  shall  deduct  said  tax 
therefrom  and  pay  the  same  to  the  executor,  administrator  or  trustee,  and  the 
same  shall  remain  a  charge  on  such  real  estate  until  paid,  and  the  payment  thereof 
shall  be  enforced  by  the  executor,  administrator  or  trustee  in  the  same  manner 
that  the  said  payment  of  said  legacies  might  be  enforced,  if,  however,  such  legacy 
be  given  in  money  to  any  person  for  a  limited  period,  he  shall  retain  the  tax 
upon  the  whole  amount,  but  if  it  be  not  in  money,  he  shall  make  application  to 
the  court  having  jurisdiction  of  his  accounts  to  make  an  apportionment,  if  the  case 
requires  it,  of  the  sum  to  be  paid  into  his  hands  by  such  legatees,  and  for  such 
further  order  relative  thereof  as  the  case  may  require. 

The  statute  of  1895  gives  the  county  court  jurisdiction  to  deter- 
mine the  inheritance  tax,  but  where  the  judge  of  the  county  court 
is  one  of  the  parties  in  interest  he  may  certify  the  question  to  the 
circuit  court.  Section  4  of  the  statute  of  1895,  providing  that  the 
executor  shall  apply  to  the  court  having  jurisdiction  over  his  ac- 
counts to  make  an  apportionment  of  the  sum  to  be  paid  by  the 
legatees  and  for  such  further  order  as  the  case  may  require,  does  not 
oust  the  county  court  of  jurisdiction  given  it  under  sections  13,  14 
and  15.  Section  4  relates  not  to  the  collection  of  the  tax  but  only 
to  questions  which  may  arise  as  to  the  apportionment  of  taxes 


422  STATUTES  ANNOTATED.  [111.  St. 

in  the  course  of  the  settlement  of  the  affairs  of  the  estate,  with  no 
intent  to  deprive  the  county  court  of  jurisdiction  of  the  proceedings 
on  the  part  of  the  state  to  collect  the  taxes.  Connell  v.  Crosby,  210 
III.  380,  71  N.  E.  350. 

Appraisal. 

S.  11.  In  order  to  fix  the  value  of  property  of  persons  whose  estate  shall  be 
subject  to  the  payment  of  said  tax,  the  county  judge,  on  the  application  of  any 
interested  party,  or  upon  his  own  motion,  shall  appoint  some  competent  person 
as  appraiser  as  often  as,  or  whenever,  occasion  may  require,  whose  duty  it  shall 
be  forthwith  to  give  such  notice  by  mail  to  all  persons  known  to  have  or  claim  an 
interest  in  such  property,  and  to  such  persons  as  the  county  judge  may  by  order 
direct,  of  the  time  and  place  he  will  appraise  such  property,  and  at  such  time  and 
place  to  appraise  the  same  at  a  fair  market  value,  and  for  that  purpose  the 
appraiser  is  authorized  by  leave  of  the  county  judge  to  use  subpoenas  for  and  to 
compel  the  attendance  of  witnesses  before  him,  and  to  take  the  evidence  of  such 
witnesses  under  oath  concerning  such  property  and  the  value  thereof,  and  he  shall 
make  a  report  thereof  and  of  such  value  in  writing  to  said  county  judge,  with 
the  depositions  of  the  witnesses  examined  and  such  other  facts  in  relation  thereto, 
and  to  said  matter  as  said  county  judge  may  by  order  require  to  be  filed  in  the 
office  of  the  clerk  of  said  county  court,  and  from  this  report  the  said  county  judge 
shall  forthwith  use  and  fix  the  then  cash  value  of  all  estates,  annuities  and  life 
estates  or  terms  of  years  growing  out  of  said  estate,  and  the  tax  to  which  the  same 
is  liable,  and  shall  immediately  give  notice  by  mail  to  all  parties  known  to  be 
interested  therein.  Any  person  or  persons  dissatisfied  with  the  appraisement  or 
assessment  may  appeal  therefrom  to  the  county  court  of  the  proper  county  within 
sixty  days  after  the  making  and  filing  of  such  appraisement  or  assessment,  on 
paying  the  given  security  proof  to  the  county  judge  to  pay  all  costs,  together  with 
whatever  taxes  that  shall  be  fixed  by  said  court.  The  said  appraiser  shall  be  paid 
by  the  county  treasurer  out  of  any  funds  he  may  have  in  his  hands  on  account  of 
said  tax,  on  the  certificate  of  the  county  judge,  at  the  rate  of  three  dollars  per  day 
for  every  day  actually  and  necessarily  employed  in  said  appraisement,  together 
with  his  actual  and  necessary  traveling  expenses. 

**Fair  Market  Value.*' 

Appraisers  are  not  limited  in  the  valuation  of  property  to  the 
market  quotation  of  the  same,  but  may  use  the  quotations  of  the 
same  on  public  exchanges,  private  sales  of  such  property,  testimony 
as  to  the  actual  value  of  the  same  and  their  own  knowledge  of  the 
subject  matter. 

'The  quotation  .'of  the  stock  exchange  may  be  temporarily 
uncertain  and  untrustworthy,  if  the  sales  thereon  are  suddenly 
affected  for  speculative  purposes,  or  by  the  forcing  upon  the  market 
and  to  sale  of  large  blocks  of  stock  in  an  extraordinary  manner  with 
no  explanation  of  such  action,  and  where  the  purpose  of  it  is  left 
to  the  conjecture  of  those  dealing  in  the  stocks ;  but  such  quotations 


1895.  p.  301.]  ILLINOIS.  423 

may  be  a  fair  and  safe  guide  when  they  are  taken  for  a  reasonable 
period  of  sales  made  in  the  usual  and  ordinary  course  of  business." 
Per  Magruder,  J.,  in  Walker  v.  People,  192  111.  106,  112,  61  N.  E. 
489. 

"From  This  Report." 

The  appraiser  should  show  the  value  of  the  estate  received  by 
each  residuary  legatee  under  the  will  and  in  doing  so  should  deduct 
the  gifts  and  legacies  preceding  the  residuary  clause  of  the  will. 
An  appraisement  should  not  be  made  on  the  basis  of  the  entire 
value  of  a  decedent's  property  at  the  time  of  his  death  but  rather 
on  the  value  of  the  estate  received  by  each  person  under  the  will. 
Ayers  v.  Chicago  Title  &  Trust  Co.,  187  111.  42,  58  N.  E.  318. 

Jurisdiction  of  County  Court. 

S.  13.  The  county  court  in  the  county  in  which  the  real  property  is  situated* 
of  the  decedent  who  was  not  a  resident  of  the  state,  or  in  the  county  of  which  the 
deceased  was  a  resident  at  the  time  of  his  death,  shall  have  jurisdiction  to  hear 
and  determine  all  questions  in  relation  to  the  tax  arising  under  the  provisions  of 
this  act,  and  the  county  court  first  acquiring  jurisdiction  hereunder  shall  retain 
the  same  to  the  exclusion  of  every  other. 

S.  14.  If  it  shall  appear  to  the  county  court  that  any  tax  accruing  under  this 
act  has  not  been  paid  according  to  law,  it  shall  issue  a  summons  summoning  the 
persons  interested  in  the  property  liable  to  the  tax  to  appear  before  the  court 
on  a  day  certain  not  more  than  three  months  after  the  date  of  such  summons,  to 
show  cause  why  said  tax  should  not  be  paid.  The  process,  practice  and  pleadings 
and  the  hearing  and  determination  thereof,  and  the  judgment  in  said  court  in 
such  cases  shall  be  the  same  as  those  now  provided  or  which  may  hereafter  be 
provided  in  probate  cases  in  the  county  courts  in  this  state  and  the  fees  and  costs 
in  such  cases  shall  be  the  same  as  in  probate  cases  in  the  county  courts  of  this  state. 

S.  15.  Whenever  the  treasurer  of  any  county  shall  have  reason  to  believe 
that  any  tax  is  due  and  unpaid  under  this  act,  after  the  refusal  or  neglect  of  the 
person  interested  in  the  property  liable  to  pay  said  tax,  to  pay  the  same,  he  shall 
notify  the  state's  attorney  of  the  proper  county,  in  writing,  of  such  refusal  to 
pay  said  tax,  and  the  state's  attorney  so  notified,  if  he  has  proper  cause  to  believe 
a  tax  is  due  and  unpaid,  shall  prosecute  the  proceeding  in  the  county  court  in  the 
proper  county,  as  provided  in  section  14  of  this  act,  for  the  enforcement  and 
collection  of  such  tax,  and  in  such  case  said  court  shall  allow  as  costs  in  the  said 
case  such  fees  to  said  attorney  as  he  may  deem  reasonable. 

Amendment  of  Petition. 

Where  the  treasurer  in  his  original  application  claims  a  tax  of 
three  per  cent  after  the  expiration  of  the  period  within  which  the 
right  to  sue  for  the  tax  is  limited,  the  application  may  be  amended 
by  asking  that  the  tax  be  computed  at  different  rates,  depending 


424  STATUTES  ANNOTATED.  [111.  St 

on  the  finding  of  the  court  as  to  the  facts,  as  this  amendment  does 
not  set  up  a  new  or  different  cause  of  action  but  merely  corrects 
the  statement  in  the  original  application  as  to  the  rate  at  which  the 
tax  should  be  computed.  Connell  v.  Crosby,  210  111.  380,  71  N.  E. 
350. 

Inventory. 

Under  the  Illinois  administration  statute,  section  51,  the  court 
and  the  people  have  a  right  to  compel  the  filing  of  the  inventories 
required  by  the  statute.  The  statute  confers  no  discretion  upon  the 
executors  and  the  state  has  a  right  to  an  order  that  the  executor's 
inventory  be  filed,  and  a  judgment  rendered  in  the  absence  of  the 
inventory  should  be  reversed  even  though  it  is  claimed  that  the 
state  obtained  all  necessary  information  in  its  examination  of 
witnesses.    People  v.  Sholem,  244  111.  502,  91  N.  E.  704. 

Where  a  party  makes  a  motion  that  an  inventory  be  filed  in  a 
tax  inheritance  case  and  the  judge  says  that  he  will  take  the  motion 
under  advisement  but  does  not  either  then  nor  afterward  make 
an  order  for  the  inventory,  but  hears  the  case  and  enters  final  judg- 
ment without  doing  so,  this  amounts  to  a  denial  of  the  motion. 
People  V.  Sholem,  244  111.  502,  91  N.  E.  704. 

Refunding. 

111.  St.  1895,  p.  303,  ss.  10  and  19,  do  not  authorize  the  county 
treasurer  to  repay  taxes  erroneously  paid  to  him.  It  was  intended 
that  the  state  treasurer  alone  should  have  this  power.  People  v. 
Griffith,  245  111.  532,  92  N.  E.  313. 

THE  ADMINISTRATIVE  AMENDMENTS   OF   1901. 

111.  St.  1901,  p.  269.     Approved  May  10,  1901. 

S.  1.  Be  it  enacted  by  the  People  of  the  State  of  Illinois,  represented  in  the 
General  Assembly :  That  section  11  of  an  act  entitled,  "An  Act  to  tax  gifts,  legacies 
and  inheritances  in  certain  cases,  and  to  provide  for  the  collection  of  the  same," 
approved  June  15,  1895,  in  force  July  1,  1895,  be,  and  the  same  are  hereby, 
amended,  and  that  additional  sections  to  be  known  as  section  113^  and  section 
213^,  be,  and  they  are  hereby,  added  so  as  to  read  as  follows:  — 

S.  11.  In  prder  to  fix  the  value  of  property  of  persons  whose  estate  shall  be 
subject  to  the  payment  of  said  tax,  the  county  judge,  on  application  of  any 
interested  party,  or  upon  his  own  motion,  shall  appoint  some  competent  person 
as  appraiser  as  often  as,  or  whenever  occasion  may  require,  whose  duty  it  shall  be 
forthwith  to  give  such  notice  by  mail  to  all  persons  known  to  have  or  claim  an 
interest  in  such  property,  and  to  such  persons  as  the  county  judge  may,  by  order. 


1901,  p.  269.]  ILLINOIS.  425 

direct,  of  the  time  and  place  he  will  appraise  such  property,  and  at  such  time  and 
place  to  appraise  the  same  at  a  fair  market  value,  and  for  that  purpose  the  ap- 
praiser is  authorized,  by  leave  of  the  county  judge,  to  use  subpoenas  for  and  to 
compel  the  attendance  of  witnesses  before  him,  and  to  take  the  evidence  of  such 
witnesses  under  oath  concerning  such  property  and  the  value  thereof,  and  he  shall 
make  a  report  thereof  and  of  such  value,  in  writing,  to  said  county  judge,  with  the 
depositions  of  the  witnesses  examined  and  such  other  facts  in  relation  thereto 
and  to  said  matters  as  said  county  judge  may,  by  order,  require  to  be  filed  in  the 
office  of  the  clerk  of  said  county  court  and  from  this  report  the  said  county  judge 
shall  forthwith  assess  and  fix  the  then  cash  value  of  all  estates,  annuities  and  life 
estates  or  terms  of  years  growing  out  of  said  estate,  and  the  tax  to  which  the  same 
is  liable,  and  shall  immediately  give  notice  by  mail  to  all  parties  known  to  be 
interested  therein.  Any  person  or  persons  dissatisfied  with  the  appraisement  or 
assessment  may  appeal  therefrom  to  the  county  court  of  the  proper  county  within 
sixty  days  after  the  making  and  filing  of  such  appraisement  or  assessment,  on 
paying  or  giving  security  satisfactory  to  the  county  judge  to  pay  all  costs,  together 
with  whatever  taxes  shall  be  fixed  by  said  court.  The  said  appraiser  shall  be  paid 
by  the  county  treasurer  out  of  any  funds  he  may  have  in  his  hands  on  account  of 
the  inheritance  tax,  as  by  law  provided,  on  the  certificate  of  the  county  judge,  such 
compensation  as  such  judge  may  deem  just  for  said  appraiser's  services  as  such 
appraiser,  not  to  exceed  ten  dollars  per  day  for  each  day  actually  and  necessarily 
employed  in  said  appraisement  together  with  his  actual  and  necessary  traveling 
expenses  and  disbursements,  including  such  witness  fees  paid  by  him. 

"Any  Person  .  .  .  May  Appeal." 

The  provision  that  any  person  dissatisfied  with  the  appraisement 
or  assessment  may  appeal  was  intended  to  include  the  state,  and 
the  people  may  appeal  'under  this  section  from  the  action  of  the 
county  judge  in  appraising  property  directly  to  the  supreme  court. 
The  fact  that  section  11  provides  for  appeal  only  on  paying  or  giving 
security  satisfactory  to  the  county  judge  and  that  the  state  is  not 
required  to  give  a  bond  does  not  affect  the  matter.  In  Illinois  it 
would  be  unconstitutional  to  permit  an  appeal  only  by  the  persons 
interested  in  the  property  of  the  estate  and  not  by  the  state  itself. 
People  V.  Sholem,  238  111.  203,  87  N.  E.  390. 

S.  IIH-  The  fees  of  the  clerk  of  the  county  court  in  inheritance  tax  matters 
in  the  respective  counties  of  this  state,  as  classified  in  the  act  concerning  fees  and 
salaries,  shall  be  as  follows:  — 

In  counties  of  the  first  and  second  class,  for  services  in  all  proceedings  in  each 
estate  before  the  county  judge,  the  clerk  shall  receive  a  fee  of  five  dollars.  In  all 
such  proceedings  in  counties  of  the  third  class,  the  clerk  shall  receive  a  fee  of  ten 
dollars.  Such  fees  shall  be  paid  by  the  county  treasurer,  on  the  certificate  of  the 
county  judge,  out  of  any  money  in  his  hands  on  account  of  said  tax.  In  counties 
of  the  third  class,  the  attorney  general  of  state  may  aopoint  an  attorney  who 
shall  be  known  as  the  "inheritance  tax  attorney,"  and  whose  salary  shall  be  not 
to  exceed  three  thousand  dollars  per  year,  payable  month  y,  out  of  the  state 
treasury  upon  warrants  drawn  by  the  auditor  of  public  accounts,  on   vouchesr 


426  STATUTES  ANNOTATED.  [111.  St- 

approved  by  the  attorney  general.  In  counties  of  the  third  class,  the  clerk  of  the 
county  court  may  appoint  a  clerk  in  the  office  of  the  clerk  of  said  court,  to  be 
known  as  the  "inheritance  tax  clerk,"  whose  compensation  shall  be  fixed  by  the 
county  judge,  not  to  exceed  fifteen  hundred  dollars  per  year,  and  not  to  exceed  the 
fee  earned  in  said  office  in  inheritance  tax  matters,  the  surplus  of  such  fees  over 
said  compensation  so  fixed  to  be  turned  into  the  county  treasury.  In  addition 
to  the  above,  the  clerk  of  the  county  court  shall  be  entitled,  in  all  suits  .brought 
for  the  collection  of  delinquent  inheritance  tax,  and  all  contested  inheritance  tax 
cases  appealed  from  the  county  judge  to  the  county  court,  and  in  all  appeals  from 
the  county  court  to  the  supreme  court,  the  same  fees  as  are  now,  or  which  may 
hereafter  be,  allowed  by  law  in  suits  at  law,  or  in  the  matter  of  appeals  at  law, 
to  or  from  the  county  court,  which  fees  shall  be  taxed  as  costs  and  paid  as  in  other 
cases  at  law;  and  in  all  cases  arising  under  this  act,  including  certified  copies  of 
documents  or  records  in  his  office,  for  which  no  specific  fees  are  provided,  the 
clerk  of  the  county  court  shall  charge  against  and  collect,  from  the  person  applying 
for  or  entitled  to,  such  services,  or  certified  copies,  the  same  fees  as  are  now,  or 
which  may  hereafter  be  allowed  for  similar  services  or  certified  copies  in  other 
cases  in  said  court,  and  for  recording  inheritance  tax  receipts  required  to  be  re- 
corded in  his  office,  he  shall  receive  the  same  fees  which  now  are,  or  hereafter  may 
be,  allowed  by  law  to  the  recorder  of  deeds  for  recording  similar  instruments. 

S.  21^.  When  any  person  interested  in  any  property,  in  this  state,  which 
shall  pass  by  will  or  the  intestate  laws  of  this  state,  shal.  deem  the  same  not  subject 
to  any  tax  under  this  act,  he  may  file  his  petition  in  the  county  court  of  the  proper 
county  to  determine  whether  said  property  is  subject  to  the  tax  herein  provided 
in  which  petition  the  county  treasurer  and  all  persons  known  to  have  or  claim 
any  interest  in  said  property  shall  be  made  parties.  The  county  court  may  hear 
the  said  cause  upon  the  relation  of  the  parties  and  the  testimony  of  witnesses, 
and  evidence  produced  in  open  court  and,  if  the  court  shall  find  said  property 
is  not  subject  to  any  tax,  as  herein  provided,  the  court  shall,  by  order,  so  determine; 
but  if  it  shall  appear  that  said  property,  or  any  part  thereof,  is  subject  to  any  such 
tax,  the  same  shall  be  appraised  and  taxed  as  in  other  cases.  An  adjudication 
by  the  county  court,  as  herein  provided,  shall  be  conclusive  as  to  the  lien  of  the 
tax  herein  provided  upon  said  property,  subject  to  appeal  to  the  supreme  court 
of  the  state  by  the  county  treasurer,  or  attorney  general  of  the  state,  in  behalf 
of  the  people,  or  by  any  party  having  an  interest  in  said  property.  The  fees  and 
costs  in  all  cases  arising  under  this  section  shall  be  the  same  as  are  now,  or  may 
hereafter  be,  allowed  by  law  in  cases  at  law  in  the  county  court. 

Previous  to  the  insertion  by  the  amendment  of  1901  of  section 
213^  there  was  no  provision  in  the  Illinois  inheritance  law  per- 
mitting an  appeal  from  the  order  of  the  county  court  fixing  the  tax. 
People  V.  Sholem,  238  111.  203,  87  N.  E.  390. 

THE   CHARITABLE   EXEMPTIONS  OF   1901. 

111.  St.  1901,  p.  268.     Approved  May  10,  1901. 

S.  1.  Be  it  enacted  by  the  People  of  the  State  of  Illinois,  represented  in  the 
General  Assembly:  That  an  act  entitled,  "An  Act  to  tax  gifts,  legacies  and  in- 
heritances in  certain  cases,  and  to  provide  for  the  collection  of  the  same,"  approved 


1901,  p.  268.]  ILLINOIS.  427 

June  15,  1895,  in  forte  July  1, 1895,  be  and  the  same  is  hereby,  amended  by  adding 
thereto  an  additional  and  new  section,  exempting  certain  grants,  gifts  and  be- 
quests therein  named,  to  be  known  as  section  23^,  as  follows:  — 

S.  23^.  When  the  beneficial  interests  of  any  property  or  income  therefrom 
shall  pass  taor  for  the  use  of  any  hospital,  religious,  educational,  bible,  missionary, 
tract,  scientific,  benevolent  or  charitable  purpose,  or  to  any  trustee,  bishop  or 
minister  of  any  church  or  religious  denomination,  held  and  used  exclusively  for 
the  religious,  educational  or  charitable  uses  and  purposes  of  such  church  or  re- 
ligious denomination,  institution  or  corporation,  by  grant  gift,  bequest  or  other- 
wise, the  same  shall  not  be  subject  to  any  such  duty  or  tax,  but  this  provision 
shall  not  apply  to  any  corporation  which  has  the  right  to  make  dividends  or 
distribute  profits  or  assets  among  its  members. 

Prospective  Only. 

Amendments  to  the  inheritance  laws  must  be  treated  as  prospec- 
tive in  the  absence  of  language  indicating  they  are  retrospective 
in  character;  so  this  statute  had  no  effect  upon  the  jurisdiction  of 
the  court  to  collect  taxes  due  under  the  act  of  1895,  but  merely 
extended  the  exemptions  in  an  estate  where  death  occurred  after 
the  passage  of  the  act  of  1901.  Where  the  testator  died  a  month 
before  the  statute  of  1901  went  into  effect,  it  had  no  application  to 
the  estate,  as  the  right  to  a  tax  had  accrued  to  the  state  under  the 
former  statute  on  the  death  of  the  testator.  The  amendment  did 
not  deprive  the  court  of  jurisdiction  to  collect  the  tax.  Provident 
Hospital  &  Training  Assn.  v.  People,  198  111.  495,  64  N.  E.  1031. 
This  statute  does  not  affect  the  right  to  collect  a  tax  on  bequests 
taxable  under  the  statute  of  1895  and  exempt  by  this  statute. 
The  act  of  1901  does  not  in  terms  repeal  the  former  act.  Connell 
V.  Crosby,  210  111.  380,  71  N.  E.  350. 

Charitable  bequests  should  be  upheld  and  given  effect  whenever 
possible,  and  because  the  statute  now  exempts  these  bequests  from 
the  payment  of  the  inheritance  tax  is  no  reason  for  departing  from 
or  modifying  this  ancient  rule  of  construction  favoring  charitable 
gifts.  So  a  certain  gift  to  the  public  authorities  for  the  erection  of  a 
drinking  fountain  or  drinking  basin  for  horses  and  in  connection 
therewith  a  bronze  statue  of  a  certain  horse,  together  with  a  record 
of  his  performances,  is  exempt  from  the  inheritance  tax  as  a  chari- 
table gift.  The  courts  in  determining  whether  or  not  a  gift  is 
charitable  will  not  look  to  the  motives  of  the  donor,  but  rather 
to  the  nature  of  the  gift  and  the  object  which  will  be  attained  by  it. 
In  re  Graves,  242  III.  23,  89  N.  E.  672,  134  Am.  S.  R.  302. 

Exemptions  Confined  to  Domestic  Corporations. 

The  statute  of  1901  gives  an  exemption  to  charitable  corporations 
which  pay  no  dividends,  but  confines  the  exemption  to  corpora- 


428  STATUTES  ANNOTATED.  [111.  St. 

tions  organized  under  the  laws  of  Illinois.  This  distinction  is  valid 
and  one  which  the  state  has  a  right  to  make.  This  distinction 
is  not  contrary  to  the  fourteenth  amendment  to  the  federal 
constitution;  as  if  a  state  exempt  property  bequeathed  for 
charitable  and  educational  purposes  from  taxation  it  is  not 
unreasonable  or  arbitrary  to  require  the  charity  to  be  exerqised  or 
education  to  be  bestowed  within  her  borders  and  for  her  people 
whether  exercised  through  persons  or  corporations.  Board  of 
Education  v.  Illinois,  203  U.  S.  553,  563,  27  S.  Ct.  171,  51  L.  Ed. 
314;  affirming  In  re  Speed,  216  111.  23,  74  N.  E.  809,  108  Am. 
St.  Rep.  189. 

THE  PRESENT  ACT. 

An  Act  to  tax  gifts,  legacies,  inheritances,  transfers,  appointments 
and  interests  in  certain  cases,  and  to  provide  for  the  collection  of  the  same, 
and  repealing  certain  acts  therein  named.     Approved  June  14,  1909.    (p.  311.) 

What  Property  is  Subject  to  Tax.  —  Rates.  —  Exemptions. 

S.  1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  property, 
real,  personal  or  mixed,  or  of  any  interest  therein  or  income  therefrom,  in  trust 
or  otherwise,  to  persons,  institutions  or  corporations,  not  hereinafter  exempted, 
in  the  following  cases:  — 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state,  from  any 
person  dying,  seized  or  possessed  of  the  property  while  a  resident  of  the  state. 

2.  When  the  transfer  is  by  will  or  intestate  laws  of  property  within  the  state 
and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

3.  When  the  transfer  is  of  property  made  by  a  resident,  or  by  a  non-resident 
when  such  non-resident's  property  is  within  this  state,  by  deed,  grant,  bargain, 
sale  or  gift,  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  donor,  or 
intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such  death.  When 
any  such  person,  institution  or  corporation  becomes  beneficially  entitled  in  posses- 
sion or  expectancy  to  any  property  or  the  income  therefrom,  by  any  such  transfer, 
whether  made  before  or  after  the  passage  of  this  act. 

4.  Whenever  any  person,  institution  or  corporation  shall  exercise  a  power  of 
appointment  derived  from  any  disposition  of  property  made  either  before  or  after 
the  passage  of  this  act,  such  appointment,  when  made,  shall  be  deemed  a  taxable 
transfer  under  the  provisions  of  this  act,  in  the  same  manner  as  though  the  prop- 
erty to  which  such  appointment  relates  belonged  absolutely  to  the  donee  of  such 
power  and  had  been  bequeathed  or  devised  by  such  donee  by  will ;  and  whenever 
any  person  or  corporation  possessing  such  a  power  of  appointment  so  derived  shall 
omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole  or  in 
part,  a  transfer  taxable  under  the  provisions  of  this  act  shall  be  deemed  to  take 
place  to  the  extent  of  such  omission  or  failure,  in  the  same  manner  as  though  the 
persons  or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoyment 
of  the  property  to  which  such  power  related  had  succeeded  thereto  by  a  will  of 
the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at  the  time 
of  such  omission  or  failure. 


1909,  p.  311.]  ILLINOIS.  429 

When  the  beneficial  interest  to  any  property  or  income  therefrom  shall  pass  to 
or  for  the  use  of  any  father,  mother,  husband,  wife,  child,  brother,  sister,  wife  or 
widow  of  the  son,  or  the  husband  of  the  daughter,  or  any  child  or  children  adopted 
as  such  in  conformity  with  the  laws  of  the  state  of  Illinois,  or  to  any  person  to 
whom  the  deceased,  for  not  less  than  ten  years  prior  to  death,  stood  in  the  acknowl- 
edged relation  of  a  parent:  Provided,  however,  such  relationship  began  at  or  before 
said  person's  fifteenth  birthday  and  was  continuous  for  said  ten  years  thereafter: 
And,  provided,  also,  that  the  parents  of  such  person  so  standing  in  such  relation 
shall  be  deceased  when  such  relationship  commenced,  or  to  any  lineal  descendant 
of  such  decedent  born  in  lawful  wedlock.  In  every  such  case  the  rate  of  tax  shall 
be  two  dollars  on  every  one  hundred  dollars  of  the  clear  market  value  of  such 
property  received  by  each  person,  when  the  amount  so  received  exceeds  in  amount 
the  sum  of  one  hundred  thousand  dollars,  and  one  dollar  on  each  one  hundred 
dollars  of  the  clear  market  value  of  such  property  received  by  each  person  when 
the  amount  so' received  is  one  hundred  thousand  dollars  or  less;  and  at  and  after 
the  same  rates,  respectively,  for  every  less  amount:  Provided,  that  any  gift, 
legacy,  inheritance,  transfer,  appointment  or  interest  which  may  be  valued  at  a 
less  sum  than  twenty  thousand  dollars  shall  not  be  subject  to  any  such  duty  or 
taxes,  and  the  tax  is  to  be  levied  in  the  above  cases  only  upon  the  excess  of  twenty 
thousand  dollars  received  by  each  person.  When  the  beneficial  interest  to  any 
property  or  income  therefrom  shall  pass  to  or  for  the  use  of  any  uncle,  aunt,  niece 
or  nephew  or  any  lineal  descendant  of  the  same,  in  any  such  case  the  rate  of  such 
tax  shall  be  four  dollars  on  every  one  hundred  dollars  of  the  clear  market  value 
of  such  property  received  by  each  person  on  the  excess  of  two  thousand  dollars 
so  received  by  each  person  when  the  amount  so  received  exceeds  the  sum  of 
twenty  thousand  dollars;  and  two  dollars  on  every  one  hundred  dollars  of  the 
clear  market  value  of  such  property  received  by  each  person  on  the  excess  of  two 
thousand  dollars  so  received  by  each  person  when  the  amount  so  received  is 
twenty  thousand  dollars  or  less.  In  all  other  cases  the  rate  shall  be  as  follows: 
On  each  and  every  one  hundred  dollars  of  the  clear  market  value  of  all  property 
and  at  the  same  rate  for  any  less  amount;  on  a  1  transfers  of  ten  thousand  dollars 
and  less^  three  dollars;  on  all  transfers  over  ten  thousand  dollars  and  not  exceeding 
twenty  thousand  dollars,  four  dollars;  on  all  transfers  over  twenty  thousand 
dollars  and  not  exceeding  fifty  thousand  dollars,  five  dollars;  on  all  transfers  over 
fifty  thousand  dollars  and  not  exceeding  one  hundred  thousand  dollars,  six  dollars; 
and  on  all  transfers  over  one  hundred  thousand  dollars,  ten  dollars:  Provided, 
that  any  gift,  legacy,  inheritance,  transfer,  appointment  or  interest  which  may  be 
valued  at  a  less  sum  than  five  hundred  dollars  shall  not  be  subject  to  any  duty  or 
tax. 

[See  notes  to  the  Act  of  1895,  ante,  p.  406  et  seq.] 

Appraisal  of  Life  Interests.  —  Lien.  —  Bond. 

S.  2.  When  any  property  or  interest  therein  or  income  therefrom  shall  pass 
or  be  limited  for  the  life  of  another,  or  for  a  term  of  years,  or  to  terminate  on  the 
expiration  of  a  certain  period  the  property  of  the  decedent  so  passing  shall  be 
appraised  immediately  after  the  death  of  the  decedent,  and  the  value  of  the  said 
life  estate,  term  of  years  or  period  of  limitation  shall  be  fixed  upon  mortality 
tables,  using  the  interest  rate  or  income  rate  of  five  per  cent;  and  the  value  of  the 
remainder  in  said  property  so  limited  shall  be  ascertained  by  deducting  the  value 
of  the  life  estate,  term  of  years  or  period  of  limitation  from  the  fair  market  value  of 


430  STATUTES  ANNOTATED.  [111.  Sf 

the  property  so  limited,  and  the  tax  on  the  several  estate  or  estates,  remainder  or 
remainders,  or  interests  shall  be  immediately  due  and  payable  to  the  treasurer 
of  the  proper  county,  together  with  interest  thereon,  and  said  tax  shall  accrue 
as  provided  in  section  three  (3)  of  this  act,  and  remain  a  lien  upon  the  entire 
property  limited  until  paid:  Provided,  that  the  person  or  persons,  body  politic 
or  corporate,  beneficially  interested  in  property  chargeable  with  said  tax,  elect 
not  to  pay  the  same  until  they  shall  come  into  actual  possession  or  enjoyment 
of  such  property,  then  in  that  case  said  person  or  persons,  or  body  politic  or 
corporate,  shall  give  bond  to  the  people  of  the  state  of  Illinois  in  a  penal  sum  three 
times  the  amount  of  the  tax  arising  from  such  property,  limited  with  such  sureties 
as  the  county  judge  may  approve,  conditioned  for  the  payment  of  the  said  tax 
and  interest  thereon  at  such  time  or  period  as  they  or  their  representatives  may 
come  into  the  actual  possession  or  enjoyment  of  said  property;  which  bond  shall 
be  filed  in  the  office  of  the  county  clerk  of  the  proper  county:  Provided,  further, 
that  such  person  or  persons,  body  politic  or  corporate,  shall  make  a  full  verified 
return  of  said  property  to  said  county  judge  and  file  the  same  in  his  office  within 
one  year  from  ihe  death  of  the  decedent,  with  the  bond  and  sureties  as  above 
provided;  and  further,  said  person  or  persons,  body  politic  or  corporate  shall 
renew  said  bond  every  five  years  after  the  date  of  the  death  of  decedent. 
[See  notes  to  the  Act  of  1895,  ante,  p.  418.] 

Interest.  —  Bond. 

S.  3.  All  taxes  imposed  by  this  act,  unless  otherwise  herein  provided  for,  shall 
be  due  and  payable,  at  the  death  of  the  decedent,  and  interest  at  the  rate  of  six 
per  cent  per  annum  shall  be  charged  and  collected  thereon  for  such  time  as  said 
taxes  are  not  paid:  Provided,  that  if  said  tax  is  paid  within  six  months  from  the 
accruing  thereof,  interest  shall  not  be  charged  or  collected  thereon,  but  a  discount 
of  five  per  cent  shall  be  allowed  and  deducted  from  said  tax;  and  in  all  cases  where 
the  executors,  administrators  or  trustees  do  not  pay  such  tax  within  one  year  from 
the  death  of  the  decedent,  they  shall  be  required  to  give  a  bond  in  the  form  and 
to  the  effect  prescribed  in  section  2  of  this  act,  for  the  payment  of  said  tax,  together 
with  interest. 

[See  notes  to  the  Act  of  1895,  ante,  p.  420.] 

Duties  of  Executors  and  Administrators. 

S.  4.  Any  administrator,  executor  or  trustee  having  any  charge  or  trust  in 
legacies  or  property  for  distribution  subject  to  the  said  tax  shall  deduct  the  tax 
therefrom,  or  if  the  legacy  or  property  be  not  money  he  shall  collect  a  tax  thereon 
upon  the  appraised  value  thereof  from  the  legatee  or  person  entitled  to  such 
property,  and  he  shall  not  deliver  or  be  compelled  to  deliver  any  specific  legacy 
or  property  subject  to  tax  to  any  person  until  he  shall  have  collected  the  tax 
thereon;  and  whenever  any  such  legacy  shall  be  charged  upon  or  payable  out  of 
real  estate  the  heir  or  devisee  before  paying  the  same,  shall  deduct  said  tax 
therefrom,  and  pay  the  same  to  the  executor,  administrator  or  trustee,  and  the 
same  shall  remain  a  charge  on  such  real  estate  until  paid,  and  the  payment  thereof 
shall  be  enforced  by  the  executor,  administrator  or  trustee  in  the  same  manner 
that  the  said  payment  of  said  legacies  might  be  enforced,  if,  however,  such  legacy 
be  given  in  money  to  any  person  for  a  limited  period,  he  shall  retain  the  tax  upon 
the  whole  amount,  but  if  it  be  not  in  money  he  shall  make  application  to  the  court 


1909.  p.  311.1  ILLINOIS.  431 

having  jurisdiction  of  his  accounts,  to  make  an  apportionment  if  the  case  requires 
it  of  the  sum  to  be  paid  into  his  hands  by  such  legatees,  and  for  such  further  order 
relative  thereof  as  the  case  may  require. 
[See  notes  to  the  Act  of  1895,  ante,  p.  421. 

Liability  of  Executors  and  Others. 

S.  5.  All  executors,  administrators  and  trustees  shall  be  personally  liable  for 
the  payment  of  taxes  and  interest,  and  where  proceedings  for  collection  of  taxes 
assessed  be  had,  said  executors,  administrators  and  trustees  shall  be  personally 
liable  for  the  expenses,  costs  and  fees  of  collection.  They  shall  have  full  power 
to  sell  so  much  of  the  property  of  the  decedent  as  will  enable  them  to  pay  said 
tax,  in  the  same  manner  as  they  may  be  enabled  to  do  by  law,  for  the  payment  of 
duties  of  their  testators  and  intestates,  and  the  amount  of  said  tax  shall  be  paid 
as  hereinafter  directed. 

Payments.  -^  Receipts. 

S.  6.  Every  sum  of  money  retained  by  any  executor,  administrator  or  trustee, 
or  paid  into  his  hands  for  any  tax  on  any  property,  shall  be  paid  by  him  within 
thirty  days  thereafter  to  the  treasurer  of  the  proper  county,  and  the  said  treasurer 
or  treasurers  shall  give,  and  every  executor,  administrator  or  trustee  shall  take 
duplicate  receipts  from  him  of  said  payments,  one  of  which  receipts  he  shall 
immediately  send  to  the  state  treasurer,  whose  duty  it  shall  be  to  charge  the 
treasurer  so  receiving  the  tax  with  the  amount  thereof,  and  shall  seal  said  receipt 
with  the  seal  of  his  office  and  countersign  the  same  and  return  it  to  the  executor, 
administrator  or  trustee,  whereupon  it  shall  be  a  proper  voucher  in  the  settlement 
of  his  accounts;  but  the  executor,  administrator  or  trustee  shall  not  be  entitled 
to  credit  in  his  accounts  or  be  discharged  from  liability  for  such  tax  unless  he  shall 
purchase  a  receipt  so  sealed  and  countersigned  by  the  treasurer  and  a  copy  thereof 
certified  by  him. 

Duty  to  Give  Information - 

S.  7.  Whenever  any  of  the  real  estate  of  which  any  decedent  may  die  seized 
shall  pass  to  any  body  politic  or  corporate,  or  to  any  person  or  persons,  or  in  trust 
for  them,  it  shall  be  the  duty  of  the  executor,  administrator  or  trustee  of  such 
decedent  to  give  information  thereof  in  writing  to  the  treasurer  of  the  county 
where  said  real  estate  is  situated,  within  six  months  after  they  undertake  the 
execution  of  their  expected  duties,  or  if  the  fact  be  not  known  to  them  within  that 
period,  then  within  one  month  after  the  same  shall  have  come  to  their  knowledge. 

[As  to  inventory  see  notes  to  the  Act  of  1895,  s.  15,  ante,  p.  424.] 

Refund  to  Pay  Debts. 

S.  8.  Whenever  debts  shall  be  proved  against  the  estate  of  the  decedent  after 
distribution  of  legacies  from  which  the  inheritance  tax  has  been  deducted  in  com- 
pliance with  this  act,  and  the  legatee  is  required  to  refund  any  portion  of  the 
legacy,  a  proportion  of  the  said  tax  shall  be  repaid  to  him  by  the  executor  or 
administrator  if  the  said  tax  has  not  been  paid  into  the  state  or  county  treasury,  or 
by  the  county  treasurer  if  it  has  been  so  paid. 

Foreign  Executors  Transferring  Stocks. 

S.  9.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  transfer 
any  stock  or  obligations  in  this  state  standing  in  the  name  of  a  decedent  or  in  trust 


432  STATUTES  ANNOTATED.  fill.  St. 

for  a  decedent,  liable  to  any  such  tax  the  tax  shall  be  paid  to  the  treasurer  of  the 
proper  county  on  the  transfer  thereof.  No  safe  deposit  company,  trust  company, 
corporation,  bank  or  other  institution,  person  or  persons  having  in  possession  or 
under  control  securities,  deposits,  or  other  assets  belonging  to  or  standing  in  the 
name  of  a  decedent  who  was  a  resident  or  non-resident  or  belonging  to,  or  standing 
in  the  joint  names  of  such  a  decedent  and  one  or  more  persons,  including  the  shares 
of  the  capital  stock  of,  or  other  interests  in,  the  safe  deposit  company,  trust  com- 
pany, corporation,  bank  or  other  institution  making  the  delivery  or  transfer  herein 
provided,  shall  deliver  or  transfer  the  same  to  the  executors,  administrators  or 
legal  representatives  of  said  decedent,  or  to  the  survivor  or  survivors  when  held 
in  the  joint  names  of  a  decedent  and  one  or  more  persons,  or  upon  their  order  or 
request,  unless  notice  of  the  time  and  place  of  such  intended  delivery  or  transfer 
be  served  upon  the  state  treasurer  and  attorney  general  at  least  ten  days  prior 
to  said  delivery  or  transfer;  nor  shall  any  such  safe  deposit  company,  trust  com- 
pany, corporation,  bank  or  other  institution,  person  or  persons  deliver  or  transfer 
any  securities,  deposits  or  other  assets  belonging  to  or  standing  in  the  name  of  a 
decedent,  or  belonging  to,  or  standing  in  the  joint  names  of  a  decedent  and  one  or 
more  persons,  including  the  shares  of  the  capital  stock  of,  or  other  interests  in, 
the  safe  deposit  company,  trust  company,  corporation,  bank  or  other  institution 
making  the  delivery  or  transfer,  without  retaining  a  sufficient  portion  or  amount 
thereof  to  pay  any  tax  or  interest  which  may  thereafter  be  assessed  on  account 
of  the  delivery  or  transfer  of  such  securities,  deposits  or  other  assets,  including 
the  shares  of  the  capital  stock  of,  or  other  interests  in,  the  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution  making  the  delivery  or 
transfer  under  the  provisions  of  this  article,  unless  the  state  treasurer  and  attorney 
general  consent  thereto  in  writing.  And  it  shall  be  lawful  for  the  state  treasurer, 
together  with  the  attorney  general,  personally  or  by  representatives,  to  examine 
said  securities,  deposits  or  assets  at  the  time  of  such  delivery  or  transfer.  Failure 
to  serve  such  notice  or  failure  to  allow  such  examination,  or  failure  to  retain  a 
sufficient  portion  or  amount  to  pay  such  tax  and  interest  as  herein  provided  shall 
render  said  safe  deposit  company,  trust  company,  corporation,  bank  or  other 
institution,  person  or  persons  liable  to  the  payment  of  the  amount  of  the  tax  and 
interest  due  or  thereafter  to  become  due  upon  said  securities,  deposits  or  other 
assets,  including  the  shares  of  the  capital  stock  of,  or  other  interests  in,  the  safe 
deposit  company,  trust  company,  corporation,  bank  or  other  institution  making 
the  delivery  or  transfer,  and  in  addition  thereto,  a  penalty  of  one  thousand  dollars; 
and  the  payment  of  such  tax  and  interest  thereon,  or  of  the  penalty  above  pre- 
scribed, or  both,  may  be  enforced  in  an  action  brought  by  the  state  treasurer  in 
any  court  of  competent  jurisdiction. 

Refunding  Excess  of  Tax  Paid. 

S.  10.  When  any  amount  of  said  tax  shall  have  been  paid  erroneously  to  the 
state  treasury,  it  shall  be. lawful  for  him  on  satisfactory  proof  rendered  to  him 
by  said  county  treasurer- of  said  erroneous  payments  to  refund  and  pay  to  the 
executor,  administrator  or  trustee,  person  or  persons  who  have  paid  any  such 
tax  in  error  the  amount  of  such  tax  so  paid:  Provided,  that  all  applications  for  the 
repayment  of  said  tax  shall  be  made  within  two  years  from  the  date  of  said  pay- 
ment. 

[See  notes  to  the  Act  of  1895,  ante,  p.  424.] 


1909,  p.  311.1  ILLINOIS.  433 

AppraisaL 

S.  11.  In  order  to  fix  the  value  of  property  of  persons  whose  estate  shall  be 
subject  to  the  payment  of  said  tax,  the  county  judge,  on  application  of  any 
interested  party,  or  upon  his  own  motion  shall  appoint  some  competent  person 
as  appraiser  as  often  as  or  whenever  occasion  may  require,  whose  duty  it  shall  be 
forthwith  to  give  such  notice  by  mail,  to  all  persons  known  to  have  or  claim 
an  interest  in  such  property ,and  to  such  persons  as  the  county  judge  may,  by  order, 
direct,  of  the  time  and  place  he  will  appraise  such  property,  and  at  such  time  and 
place  to  appraise  the  same  at  a  fair  market  value,  and  for  that  purpose  the  appraiser 
is  authorized,  by  leave  of  the  county  judge,  to  use  subpoenas  for  and  to  compel 
the  attendance  of  witnesses  before  him,  and  to  take  the  evidence  of  such  witnesses 
under  oath  concerning  such  property  and  the  value  thereof,  and  he  shall  make 
a  report  thereof  and  of  such  value  in  writing,  to  said  county  judge,  with  the 
depositions  of  the  witnesses  examined  and  such  other  facts  in  relation  thereto 
and  to  said  nlatters  as  said  county  judge  may,  by  order,  require  to  be  filed  in  the 
office  of  the  clerk  of  said  county  court,  and  from  this  report  the  said  county  judge 
shall  forthwith  assess  and  fix  the  then  cash  value  of  all  estates,  annuities  and  life 
estates  or  terms  of  years  growing  out  of  said  estate,  and  the  tax  to  which  the  same 
is  liable,  and  shall  immediately  give  notice  by  mail  to  all  parties  known  to  be 
interested  therein.  Any  person  or  persons  dissatisfied  with  the  appraisement  or 
assessment  may  appeal  therefrom  to  the  county  court  of  the  proper  county  within 
sixty  days  after  the  making  and  filing  of  such  appraisement  or  assessment  on 
paying  or  giving  security  satisfactory  to  the  county  judge  to  pay  all  costs,  together 
with  whatever  taxes  shall  be  fixed  by  said  court.  The  said  appraiser  shall  be  paid 
by  the  county  treasurer  out  of  any  funds  he  may  have  in  his  hands  on  account  of 
the  inheritance  tax  collected  in  said  appraisement,  as  by  law  provided,  on  the 
certificate  of  the  county  judge,  such  compensation  as  such  judge  may  deem  just 
for  said  appraiser's  services  as  such  appraiser,  not  to  exceed  ten  dollars  per  day 
for  each  day  actually  and  necessarily  employed  in  said  appraisement,  together 
with  his  actual  and  necessary  traveling  expenses  and  disbursements,  including 
such  witness  fees  paid  by  him. 

[See  notes  to  the  Acts  of  1895  and  1901,  ante,  pp.  422,  425.] 

Fees.  —  Attorneys. 

S.  12.  The  fees  of  the  clerk  of  the  county  court  in  inheritance  tax  matters  in 
the  respective  counties  of  this  state,  as  classified  in  the  act  concerning  fees  and 
salaries,  shall  be  as  follows:  — 

In  counties  of  the  first  and  second  class,  for  services  in  all  proceedings  in  each 
estate  before  the  county  judge  the  clerk  shall  receive  a  fee  of  five  dollars.  In  all 
such  proceedings  in  counties  of  the  third  class,  the  clerk  shall  receive  a  fee  of  ten 
dollars.  Such  fees  shall  be  paid  by  the  county  treasurer,  on  the  certificate  of  the 
county  judge,  out  of  any  money  in  his  hands,  on  account-  of  said  tax.  In  counties 
of  the  third  class,  the  attorney  general  of  the  state  may  appoint  an  attorney,  who 
shall  be  known  as  the  "inheritance  tax  attorney,"  and  whose  salary  shall  be  not 
to  exceed  three  thousand  dollars  per  year,  payable  monthly  out  of  the  state 
treasury  upon  warrants  drawn  by  the  auditor  of  public  accounts,  on  vouchers 
approved  by  the  attorney  general.  In  counties  of  the  third  class,  the  clerk  of  the 
county  court  may  appoint  a  clerk  in  the  office  of  the  clerk  of  said  court,  to  be 
known  as  the  "inheritance  tax  clerk,"  whose  compensation  shall  be  fixed  by  the 


434  STATUTES  ANNOTATED.  [111.  St 

county  judge,  not  to  exceed  fifteen  hundred  dollars  per  year,  and  not  to  exceed 
the  fee  earned  in  said  office  in  inheritance  tax  matters,  the  surplus  of  such  fees 
over  said  compensation  so  fixed  to  be  turned  into  the  county  treasury.  In  addi- 
tion to  the  above,  the  clerk  of  the  county  court  shall  be  entitled,  in  all  suits 
brought  for  the  collection  of  delinquent  inheritance  tax,  and  all  contested  inheri- 
tance tax  cases  appealed  from  the  county  judge  to  the  county  court,  and  in  all 
appeals  from  the  county  court  to  the  supreme  court,  the  same  fees  as  are  now, 
or  which  may  hereafter  be,  allowed  by  law  in  suits  at  law,  or  in  the  matter  of 
appeals  at  law,  to  or  from  the  county  court,  which  fees  shall  be  taxed  as  costs  and 
paid  as  in  other  cases  at  law;  and  in  all  cases  arising  under  this  act,  including 
certified  copies  of  documents  or  records  in  his  office,  for  which  no  specific  fees  are 
provided,  the  clerk  of  the  county  court  shall  charge  against  and  collect  from  the 
person  applying  for,  or  entitled  to  such  services,  or  certified  copies,  the  same  fees 
as  are  now,  or  which  may  hereafter  be,  allowed  for  similar  services  or  certified 
copies  in  said  court,  and  for  recording  inheritance  tax  receipts  required  to  be 
recorded  in  his  office,  he  shall  receive  the  same  fees  which  now  are  or  hereafter  may 
be  allowed  by  law  to  the  recorder  of  deeds  for  recording  similar  instruments. 

Appraiser.  —  Penalty  for  Receiving  Reward. 

S.  13.  Any  appraiser  appointed  by  this  act,  who  shall  take  any  fee  or  reward 
from  any  executor,  administrator,  trustee,  legatee,  next  of  kin  or  heir  of  any 
decedent,  or  from  any  other  person  liable  to  pay  said  tax  or  any  portion  thereof, 
shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  in  any  court  having  juris- 
diction of  misdemeanors,  he  shall  be  fined  not  less  than  two  hundred  and  fifty 
dollars  nor  more  than  five  hundred  dollars  and  imprisoned  not  exceeding  ninety 
days;  and  in  addition  thereto  the  county  judge  shall  dismiss  him  from  such  service. 

Jurisdiction  of  County  Court  Over  Property  of  Non-Residents. 

S.  14.  The  county  court  in  the  county  in  which  the  property  is  situated  of  the 
decedent,  who  was  not  a  resident  of  the  state  or  in  the  county  of  which  the  de- 
ceased was  a  resident  at  the  time  of  his  death,  shall  have  jurisdiction  to  hear  and 
determine  all  questions  in  relation  to  the  tax  arising  under  the  provisions  of  this 
act,  and  the  county  court  first  acquiring  jurisdiction  hereunder  shall  retain  the 
same  to  the  exclusion  of  every  other. 

[See  notes  to  the  Act  of  1895,  ante,  p.  423.] 

Proceedings  for  Collection. 

S.  15.  If  it  shall  appear  to  the  county  court  that  any  tax  accruing  under  this 
act  has  not  been  paid  according  to  law,  it  shall  issue  a  summons  summoning  the 
persons  interested  in  the  property  liable  to  the  tax  to  appear  before  the  court  on 
a  day  certain,  not  more  than  three  months  after  the  date  of  such  summons,  to 
show  cause  why  said  tax  should  not  be  paid.  The  process,  practice  and  pleadings, 
and  the  hearing  and  determination  thereof,  and  the  judgment  in  said  court  in 
such  cases  shall  be  the  same  as  those  now  provided,  or  which  may  hereafter  be 
provided  in  probate  cases  in  the  county  courts  in  this  state,  and  the  fees  and  costs 
in  such  cases  shall  be  the  same  as  in  probate  cases  in  the  county  courts  of  this  state. 

[See  notes  to  the  Act  of  1895,  ante,  p.  423.] 

State's  Attorney  to  Enforce  Payment.  —  Fees. 

S.  16.  Whenever  it  appears  that  any  tax  is  due  and  unpaid  under  this  act,  and 
the  persons,  institutions  or  corporations  liable  for  said  tax  have  refused  or  neglected 


1909,  p.  311.]  ILLINOIS.  43o 

to  pay  the  same,  it  shall  be  the  duty  of  the  state's  attorney,  in  counties  of  the  first 
and  second  class,  and  the  inheritance  tax  attorney,  in  counties  of  the  third  class, 
if  he  has  proper  cause  to  believe  a  tax  is  due  and  unpaid,  to  prosecute  the  collection 
of  same  in  the  county  court  in  the  proper  county,  in  the  manner  provided  in 
section  fifteen  of  this  act,  for  the  enforcement  and  collection  of  such  tax;  and  in 
every  such  case  said  court  shall  allow  as  costs  in  said  case,  such  fees  to  said 
attorney  as  the  court  may  deem  reasonable. 
[See  notes  to  the  Act  of  1895,  ante,  p.  423.] 

Reports. 

S.  17.  The  county  judge  and  county  clerk  of  each  county  shall,  every  three 
months,  make  a  statement  in  writing  to  the  county  treasurer  of  the  county  of  the 
property  from  which  or  the  party  from  whom  he  has  reason  to  believe  a  tax  under 
this  act  is  due  and  unpaid. 

Expenses. 

S.  18.  Whenever  the  county  judge  of  any  county  shall  certify  that  there  was 
probab  e  cause  for  issuing  a  summons  and  taking  the  proceedings  specified  in 
sections  15  and  16  of  this  act,  the  state  treasurer  shall  pay  or  allow  to  the  treasury 
of  any  county  all  expenses  incurred  for  service  of  summons  and  his  other  lawful 
disbursements  that  has  not  otherwise  been  paid. 

Records. 

S.  19.  The  treasurer  of  the  state  shall  furnish  to  each  county  judge  a  book, 
in  which  he  shall  enter  the  returns  made  by  appraisers,  the  cash  value  of  annuities, 
life  estates  and  terms  of  years  and  other  property  fixed  by  him,  and  the  tax  assessed 
thereon  and  the  amounts  of  any  receipts  for  payments  thereof  filed  with  him, 
which  books  shall  be  kept  in  the  office  of  the  county  judge  as  a  public  record. 

Reports. 

S.  20.  The  treasurer  of  each  county  shall  collect  and  pay  to  the  state  treasurer 
all  taxes  that  may  be  due  and  payable  under  this  act,  who  shall  give  him  a  receipt 
therefor,  of  which  collection  and  payment  he  shall  make  a  report  under  oath  to 
the  auditor  of  public  accounts,  on  the  first  JVIonday  in  IVlarch  and  September  of 
each  year,  stating  for  what  estate  paid,  and  in  such  form  and  containing  such 
particulars  as  the  auditor  may  prescribe;  and  for  all  said  taxes  collected  by  him 
and  not  paid  to  the  state  treasurer  by  the  first  day  of  October  and  April  of  each 
year,  he  shall  pay  interest  at  the  rate  of  ten  per  cent  per  annum. 

Fees  of  County  Treasurer. 

S.  21.  The  treasurer  of  each  county  shall  be  allowed  to  retain  two  per  cent 
on  all  taxes  paid  and  accounted  for  by  him  under  this  act  in  full  for  his  services  in 
collecting  and  paying  the  same,  in  addition  to  his  salary  or  fees  now  allowed  by  law. 

Receipts. 

S.  22.  Any  person  or  body  politic  or  corporate  shall,  upon  the  payment  of 
the  sum  of  fifty  cents,  be  entitled  to  a  receipt  from  the  county  treasurer  of  any 
county  or  the  copy  of  the  receipt  at  his  option  that  may  have  been  given  by  said 
treasurer  for  the  payment  of  any  tax  under  this  act,  to  be  sealed  with  the  seal  of 


436  STATUTES  ANNOTATED.  [111.  St. 

his  office,  which  receipt  shall  designate  on  what  real  property,  if  any,  of  which  any 
deceased  may  have  died  seized,  said  tax  has  been  paid  and  by  whom  paid,  and 
whether  or  not  it  is  in  full  of  said  tax;  and  said  receipt  may  be  recorded  in  the 
clerk's  office  of  said  county  in  which  the  property  may  be  situated,  in  a  book  to 
be  kept  by  said  clerk  for  such  purpose. 

Assessment  on  Petition  of  Owner. 

S.  23.  When  any  person  interested  in  any  property  in  this  state,  which'shall 
have  been  transferred  within  the  meaning  of  this  act  shall  deem  the  same  not 
subject  to  any  tax  under  this  act,  he  may  file  his  petition  in  the  county  court  of 
the  proper  county  to  determine  whether  said  property  is  subject  to  the  tax  herein 
provided,  in  which  petition  the  county  treasurer  and  all  persons  known  to  have  or 
claim  any  interest  in  said  property  shall  be  made  parties.  The  county  court  may 
hear  the  said  cause  upon  the  relation  of  the  parties  and  the  testimony  of  witnesses, 
and  evidence  produced  in  open  court,  and,  if  the  court  shall  find  said  property  is 
not  subject  to  any  tax,  as  herein  provided,  the  court  shall,  by  order,  so  determine; 
but  if  it  shall  appear  that  said  property,  or  any  part  thereof,  is  subject  to  any  such 
tax,  the  same  shall  be  appraised  and  taxed  as  in  other  cases.  An  adjudication  by 
the  county  court,  as  herein  provided,  shall  be  conclusive  as  to  the  lien  of  the  tax 
herein  provided  upon  said  property,  subject  to  appeal  to  the  supreme  court  of  the 
state  by  the  county  treasurer,  or  attorney  general  of  the  state,  in  behalf  of  the 
people,  or  by  any  party  having  an  interest  in  said  property.  The  fees  and  costs 
in  all  cases  arising  under  this  section  shall  be  the  same  as  are  now  or  may  hereafter 
be  allowed  by  law  in  cases  at  law  in  the  county  court. 

[See  notes  to  the  Act  of  1901,  ante,  p.  426.] 

Lien.  —  Limitations. 

S.  24.  The  lien  of  the  collateral  inheritance  tax  shall  continue  until  the  said 
tax  is  settled  and  satisfied:  Provided,  that  said  lien  shall  be  limited  to  the  property 
chargeable  therewith:  And,  provided,  further,  that  all  inheritance  taxes  shall  be 
sued  for  within  five  years  after  they  are  due  and  legally  demandable,  otherwise 
they  shall  be  presumed  to  be  paid  and  cease  to  be  a  lien  as  against  any  purchaser 
of  real  estate. 

Contingent  or  Defeasible  Interests. 

S.  25.  When  property  is  transferred  or  limited  in  trust  or  otherwise,  and  the 
rights,  interest  or  estates  of  the  transferees  or  beneficiaries  are  dependent  upon 
contingencies  or  conditions  whereby  they  may  be  wholly  or  in  part  created,  de- 
feated, extended  or  abridged,  a  tax  shall  be  imposed  upon  said  transfer  at  the 
highest  rate  which,  on  the  happening  of  any  of  the  said  contingencies  or  conditions, 
would  be  possible  under  the  provisions  of  this  article,  and  such  tax  so  imposed 
shall  be  due  and  payable  forthwith  by  the  executors  or  trustees  out  of  the  property 
transferred:  Provided,  however,  that  on  the  happening  of  any  contingency  whereby 
the  said  property,  or  any  part  thereof  is  transferred  to  a  person,  corporation  or 
institution  exempt  from  taxation  under  the  provisions  of  the  inheritance  tax  laws 
of  this  state,  or  to  any  person,  corporation  or  institution  taxable  at  a  rate  less  than 
the  rate  imposed  and  paid,  such  person,  corporation  or  institution  shall  be  entitled 
to  a  return  of  so  much  of  the  tax  imposed  and  paid  as  is  the  difference  between  the 
amount  paid  and  the  amount  which  said  person,  corporation  or  institution  should 


^fi^rn^. 


1909,  p.  311.1  ILLINOIS.  437 

pay  under  the  inheritance  tax  laws,  with  interest  thereon  at  the  rate  of  three  per 
centum  per  annum  from  the  time  of  payment.  Such  return  of  over-payment  shall 
be  made  in  the  manner  provided  for  refunds  under  section  eight. 

Estates  or  interests  in  expectancy  which  are  contingent  or  defeasible  and  in 
which  proceedings  for  the  determination  of  the  tax  have  not  been  taken  or  where 
the  taxation  thereof  has  been  held  in  abeyance,  shall  be  appraised  at  their  full, 
undiminished  value  when  the  persons  entitled  thereto  shall  come  into  the  bene- 
ficial enjoyment  or  possession  thereof,  without  diminution  for  or  on  account  of 
any  valuation  theretofore  made  of  the  particular  estates  for  the  purposes  of  taxa- 
tion, upon  which  said  estates  or  interests  in  expectancy  may  have  been  limited. 

Where  an  estate  for  life  or  for  years  can  be  divested  by  the  act  or  omission  of 
the  legatee  or  devisee  it  shall  be  taxed  as  if  there  were  no  possibility  of  such 
divesting. 

Compromise  of  Tax. 

S.  26.  The  state  treasurer,  by  and  with  the  consent  of  the  attorney  genera 
expressed  in  writing,  is  hereby  empowered  and  authorized  to  enter  into  an  agree 
ment  with  the  trustees  of  any  estate  in  which  remainders  or  expectant  estates  have 
been  of  such  a  nature,  or  so  disposed  and  circumstanced  that  the  taxes  therein 
were  held  not  presently  payable,  or  where  the  interests  of  the  legatees  or  devisees 
were  not  ascertainable  under  an  act  to  tax  gifts,  legacies,  and  inheritances,  etc., 
in  force  July  1, 1885,  and  amendments  thereto;  and  to  compound  such  taxes  upon 
such  terms  as  may  be  deemed  equitable  and  expedient;  and  to  grant  discharge  to 
said  trustees  upon  the  payment  of  the  taxes  provided  for  in  such  composition: 
Provided^  however,  that  no  such  composition  shall  be  conclusive,  in  favor  of  said 
trustees  as  against  the  interests  of  such  cestuis  que  trust  as  may  possess  either 
present  rights  of  enjoyment,  or  fixed,  absolute  or  indefeasible  rights  of  future 
enjoyment,  or  of  such  as  would  possess  such  rights  in  the  event  of  the  immediate 
termination  of  particular  estates,  unless  they  consent  thereto,  either  personally, 
when  competent,  or  by  guardian.  Composition  or  settlement  made  or  effected 
under  the  provisions  of  this  section  shall  be  executed  in  triplicate,  and  one  copy 
•filed  in  the  office  of  the  state  treasurer,  one  copy  in  the  office  of  the  clerk  of  the 
county  court  wherein  the  appraisement  was  had  or  the  tax  was  paid,  and  one  copy 
delivered  to  the  executors,  administrators  or  trustees  who  shall  be  parties  thereto. 

Guardians  ad  litem. 

S.  27.  If  it  appears  at  any  stage  of  an  inheritance  tax  proceeding  that  any 
j)erson  known  to  be  interested  therein  is  an  infant  or  person  under  disability,  the 
county  judge  may  appoint  a  special  guardian  of  such  infant  or  person  under 
disability. 

Exemptions  to  Churches,  etc. 

S.  28.  When  the  beneficial  interests  of  any  property  or  income  therefrom  shall 
pass  to  or  for  the  use  of  any  hospital,  religious,  educational,  bible,  missionary, 
tract,  scientific,  benevolent  or  charitable  purpose,  or  to  any  trustee,  bishop  or 
minister  of  any  church  or  religious  denomination,  held  and  used  exclusively  for 
the  religious,  educational  or  charitable  uses  and  purposes  of  such  church  or 
religious  denomination,  institution  or  corporation,  by  grant,  gift,  bequest  or  other- 
wise, the  same  shall  not  be  subject  to  any  such  duty  or  tax,  but  this  provision 


438  STATUTES  ANNOTATED.  [111.  St- 

shall  not  apply  to  any  corporation  which  has  the  right  to  make  dividends  or 
distribute  profits  or  assets  among  its  members. 
[See  notes  to  the  Act  of  1901,  ante,  p.  427.] 

Transfer  Defined. 

S.  29.  When  property,  or  any  interest  therein  or  income  therefrom,  shall  pass 
to  or  for  the  use  of  any  person,  institution  or  corporation  by  the  death  of  another 
by  deed,  instrument  or  memoranda,  such  passing  shall  be  deemed  a  transfer  within 
the  meaning  of  this  act,  and  taxable  at  the  same  rates,  and  be  appraised  in  the 
same  manner  and  subjected  to  the  same  duties  and  liabilities  as  any  other  form  of 
transfer  provided  in  this  act. 

Certified  Copies.  —  Fees. 

S.  30.  On  the  written  request  of  the  county  treasurer  or  county  judge,  in  the 
county  wherein  an  appraisement  has  been  initiated,  the  clerk  of  the  county  court 
and  in  counties  having  a  probate  court,  the  clerk  of  the  probate  court  and  the 
recorder  of  deeds  shall  furnish  certified  copies  of  all  papers  within  their  care  or 
custody,  or  records  material  in  the  particular  appraisement,  and  the  said  clerk 
and  recorder  shall  receive  the  same  fee  or  compensation  for  such  certified  copies 
as  they  would  be  entitled  by  law  in  other  cases,  which  shall  be  paid  to  them  by  the 
county  treasurer  of  the  proper  county,  out  of  moneys  in  his  hands  on  account  of 
inheritance  tax  collections,  on  the  presentation  of  itemized  bills  therefor,  approved 
by  the  county  judge  of  the  proper  county. 

Repeal. 

V 

S.  31.  That  "An  Act  to  tax  gifts,  legacies  and  inheritances  in  certain  cases, 
and  to  provide  for  the  collection  of  the  same,"  approved  June  15,  1895,  in  force 
July  1,  1895,  as  amended  by  act  approved  May  10,  1901,  in  force  July  1,  1901, 
and  all  laws  or  parts  of  laws  inconsistent  herewith  be  and  the  same  are  hereby 
repealed:  Provided,  however,  that  such  repeal  shall  in  no  wise  affect  any  suit,  prose- 
cution or  court  proceeding  pending  at  the  time  this  act  shall  take  effect,  or  any 
right  which  the  state  of  Illinois  may  have  at  the  time  of  the  taking  effect  of  this 
act,  to  claim  a  tax  upon  any  property  under  the  provisions  of  the  act  or  acts 
hereby  repealed,  for  which  no  proceeding  has  been  commenced;  and  all  appeals 
and  rights  of  appeal  in  all  suits  pending,  or  appeals  from  assessments  of  tax  made 
by  appraisers'  reports,  orders  fixing  tax  or  otherwise  existing  in  this  state  at  the 
time  of  the  taking  effect  of  this  act. 


Ind.  Const.]  INDIANA.  439 


INDIANA, 


Constitutional   Limitations. 

The  proposed  Indiana  constitution  of  1911  contains  no  specific 
reference  to  inheritance  taxes. 


Indiana  Constitution,  1851,  a.  10,  s.  1. 

The  general  assembly  shall  provide,  by  law,  for  a  uniform  and  equal  rate  of 
assessment  and  taxation;  and  shall  prescribe  such  regulations  as  shall  secure  a 
just  valuation  for  taxation  of  all  property,  both  real  and  personal,  excepting  such 
only  for  municipal,  educational,  literary,  scientific,  religious  or  charitable  pur- 
poses, as  may  be  specially  exempted  by  law. 


The  Present  Situation. 

Indiana  has  no  inheritance  tax  and  has  never  had  an  inheri- 
tance tax.     An  attempt  to  pass  such  a  law  in  1911  failed. 


440  STATUTES  ANNOTATED.  llowa  St. 


IOWA, 


In  General. 

Iowa  adopted  a  collateral  inheritance  tax  in  1896.  Inheritances 
to  father,  mother,  husband,  wife,  lineal  descendant,  adopted  child, 
step  child,  lineal  descendant  of  adopted  child  or  step  child  are 
exempt.  The  exemption  applies  to  the  estate  as  a  whole  rather 
than  to  the  individual  shares. 

A  heavy  special  tax  on  non-resident  aliens  was  added  to  the  act 
in  1904,  the  validity  of  which  has  not  been  passed  upon  by  the 
courts,  but  it  would  be  very  surprising  if  it  should  not  be  held  that 
it  is  in  violation  of  most  of  the  present  treaties  with  the  important 
foreign  countries.     (See  antCy  p.  49.) 

The  act  of  1911  compiled  the  existing  law,  improving  its  form  and 
arrangement,  and  omitting  a  proposed  graduated  direct  inheri- 
tance tax. 

Iowa  taxes  stock  of  an  Iowa  corporation  owned  by  a  non-resi- 
dent, and  the  corporation  is  held  responsible  for  the  tax.  Iowa 
also  claims  a  tax  on  the  stock  of  a  non-resident  in  a  foreign  cor- 
poration which  owns  property  in  Iowa.  Safe  deposit  companies 
and  kindred  institutions  are  made  liable  for  the  tax  unless  they 
notify  the  state  treasurer  before  delivering  over  securities  to  the 
representative  of  an  estate.  This  tax  has  been  producing  between 
$150,000  and  $200,000  annually. 

List  of  Statutes. 

1896.     Statutes  of  Iowa,  26  G.  A.,  c.  28. 

1898. 

1900. 

1902. 

1902. 

1904. 

1906. 

1909. 

1911.  '     34  G.  A.,  c.  68. 

Code  of  Iowa,  1897,  c.  4,  ss.  1467-1481  inc.,  p.  650. 

Supplement  to  Code  of  Iowa,  1902,  pp.  145-158.  This  includes  amendments 
to  the  code  and  rules  and  regulations  relating  to  the  assessment  and  collection 
of  the  collateral  inheritance  tax. 


27  G.  A. 

c.  37. 

28  G.  A. 

c.  51. 

29  G.  A. 

c.  55,  s. 

29  G.  A. 

c.  63. 

30  G.  A. 

c.  51. 

31  G.  A. 

c.  54-55 

33  G.  A. 

c.  92. 

1896,  c.  28.]  IOWA.  441 

Supplement  to  the  Code  of  Iowa,  1907,  c.  4,  pp.  307-322.  This  includes 
amendments  to  the  code  and  rules  and  regulations  relating  to  the  assessment 
and  collection  of  the  collateral  inheritance  tax. 

The  code  and  supplements  above  referred  to  contain  the  general  laws  cited 
above  with  the  addition  of  the  rules  and  regulations  aforesaid. 

Constitutional  Limitations. 
Iowa  Constitution,  1857,  a.  1,  s.  6. 

All  laws  of  a  general  nature  shall  have  a  uniform  operation;  the  general  assembly 
shall  not  grant  to  any  citizen  or  class  of  citizens,  privileges  or  immunities,  which 
upon  the  same  terms  shall  not  equally  belong  to  all  citizens. 

A.  3,  8.  30. 

The  general  assembly  shall  not  pass  local  or  special  laws  in  the  following 
cases:  — 

For  the  assessment  and  collection  of  taxes  for  state,  county,  or  road  purposes; 

For  laying  out,  opening,  and  working  roads  for  highways; 

For  changing  the  names  of  persons; 

For  the  incorporation  of  cities  and  towns; 

For  vacating  roads,  town  plats,  streets,  alleys,  or  public  squares; 

For  locating  or  changing  county  seats. 

In  all  the  cases  above  enumerated,  and  in  all  other  cases  where  a  general  law  can 
be  made  applicable,  all  laws  shall  be  general,  and  of  uniform  operation  through- 
out the  state;  and  no  law  changing  the  boundary  lines  of  any  county  shall  have 
effect  until  upon  being  submitted  to  the  people  of  the  counties  affected  by  the 
change,  at  a  general  election,  it  shall  be  approved  by  a  majority  of  the  votes  in 
each  county,  cast  for  and  against  it. 


THE  ACT  OF  1896. 
Nature  of  Statute. 

This  statute  is  not  a  tax  upon  property  but  a  tax  upon  the 
succession.     McGhee  v.  State,  105  Iowa  9,  74  N.  W.  695. 

Constitutionality. 

This  statute  is  unconstitutional  on  account  of  the  omission  of 
any  provision  for  notice  to  the  heirs  or  devisees  before  appraisal 
of  the  property  for  the  purposes  of  inheritance  tax.  The  court 
relies  upon  In  re  McPherson,  104  N.  Y.  321,  10  N.  E.  685,  and  con- 
cludes that  the  statute  is  a  deprivation  of  property  without  due 
process  of  law,  in  that  it  gives  the  party  to  be  taxed  no  right  to  be 
heard  as  to  the  amount  of  tax.  The  court  notices  the  claim  that 
the  tax  is  against  the  estate  alone  and  remarks  that  the  claim  is 
not  against  the  estate  alone  but  as  a  rule  the  administrator  has 


442  STATUTES  ANNOTATED.  [Iowa  St. 

nothing  to  do  with  the  real  estate.  Section  15,  giving  the  district 
court  jurisdiction  to  hear  and  determine  questions  relating  to  the 
tax,  does  not  afford  such  hearing  as  avoids  the  constitutional  objec- 
tion, as  it  does  not  give  the  court  authority  to  attack  the  valuation 
for  the  purposes  of  taxation.  Ferry  v.  Campbell,  110  Iowa  290,  81 
N.  W.  604,  50  L.  R.  A.  92.  ^     • 

Retroactive. 

There  is  nothing  to  prevent  the  state  from  taxing  estates  undis- 
tributed even  if  the  act  is  passed  subsequently  to  the  date  of  death. 
Attorney  General  v.  Middleton,  3  Hurl.  &  N.  124,  Lacy  v.  State 
Treasurer  (Iowa  1909),  121 N.  W.  179, 184,   (McClain,  J., dissenting.) 

A  constitutional  defect  in  the  statute  consisting  of  want  of  notice 
on  appraisal  can  be  cured  after  the  death  of  the  testator  by  a 
retroactive  amendment  providing  for  notice.  Ferry  v.  Campbell, 
110  Iowa  290,  81  N.  W.  604,  50  L.  R.  A.  92. 

Retroactive  effect  of  the  act  of  1898,  see  further,  infra,  p.  452, 

When  Law  Became  Effective. 

Where  the  testator  died  in  1895  and  the  estate  was  not  dis- 
tributed before  July  4,  1896,  the  Iowa  collateral  inheritance  tax, 
which  took  effect  July  4,  1896,  could  not  apply  to  it.  The  right  to 
the  property  attached  eo  instante  upon  the  decedent's  death  and  is 
not  within  the  terms  of  the  statute.  Gilbertson  v.  Ballard,  125 
Iowa  420,  101  N.  W.  108. 

The  testator  died  in  1897  after  the  passage  of  the  collateral 
inheritance  law,  but  before  it  had  been  made  valid  and  enforce- 
able by  amending  the  unconstitutional  provision  as  to  appraise- 
ment. Before  this  amendatory  act  went  into  effect  the  executors 
were  appointed  and  distributed  the  estate  without  any  authority 
from  the  probate  court  and  before  the  executors  had  filed  proof  of 
notice  of  their  appointment  or  an  inventory  and  before  the  expira- 
tion of  the  time  for  filing  claims.  The  probate  court  still  had 
jurisdiction  of  the  estate  and  the  payment  could  not  affect  the 
inheritance  law  where  no  final  accounting  was  made  until  after 
the  amendatory  act  ^ent  into  effect.  Montgomery  v.  Gilbertson, 
134  Iowa  291,  111  N:  W.  964,  10  L.  R.  A.  N.  S.  986. 

When  Law  Effective  on  Agreement  Dependent  on  Death. 

The  testator  died  before  1892  and  in  that  year  the  devisee  of  cer- 
tain land  entered  into  an  agreement  with  the  collateral  heirs  by 
which  the  devisee  was  to  have  the  use  of  the  land  for  his  life  and  on 


1896,  c.  28.]  IOWA.  443 

his  death  that  it  should  go  over  to  the  collateral  heirs,  this  agree- 
ment being  made  in  consideration  that  the  collateral  heirs  would  not 
contest  the  will.  The  devisee  died  in  1906  and  the  court  holds 
that  the  interest  acquired  by  the  collateral  heirs  is  subject  to  the 
tax,  as  the  statute  is  very  clear  and  applies  to  all  cases  where  wills, 
grants,  deeds,  etc.,  are  made  or  intended  to  take  effect  in  posses- 
sion or  enjoyment  after  the  death  of  the  grantor  or  donor.  Here, 
even  if  the  title  passed  either  mediately  or  immediately  from 
testator,  it  did  not  take  effect  either  in  possession  or  enjoyment 
until  after  the  death  of  the  devisee,  the  estate  of  the  testator  was 
subject  to  the  control  of  the  district  court  in  virtue  of  the  contract 
for  a  long  time  after  the  collateral  inheritance  law  went  into  effect, 
and  by  reason  of  that  fact  the  land  was  subject  to  the  tax.  The 
collateral  heirs  by  making  a  contract  with  the  devisee  sur- 
rendered their  right  to  take  immediate  possession  and  enjoyment 
of  the  property  and  if  they  now  have  title  through  the  testator 
they  by  their  own  acts  delayed  the  determination  of  their  rights 
until  after  the  collateral  inheritance  tax  law  went  into  effect. 
Whether  the  collateral  heirs  took  under  the  will  of  the  testator 
or  not  it  is  very  clear  that  the  property  did  not  pass  by  will,  deed, 
grant,  etc.,  to  take  effect  in  possession  or  enjoyment  immediately. 
Possession  and  enjoyment  were  clearly  postponed  until  the  death 
of  the  devisee.  The  payment  of  a  tax  can  only  be  defeated  by 
such  a  bona  fide  conveyance  as  parts  absolutely  with  the  title, 
possession-  and  enjoyment  during  the  grantor's  lifetime.  The 
court  considered  the  suggestion  that  as  the  contract  was  made 
before  the  passage  of  the  collateral  inheritance  law  this  law  cannot 
apply,  for  the  reason  that  it  impairs  the  obligations  of  a  contract 
and  deprives  the  collateral  heirs  of  their  property  without  due 
process  of  law.  The  court  answers  this  suggestion  by  showing 
that  until  the  death  of  the  devisee  it  was  entirely  unsettled  as  to 
who  would  get  the  property  at  the  time  of  his  death,  as  it  depended 
on  the  survival  of  the  collateral  heirs.  The  time  of  possession 
and  enjoyment  was  postponed  until  the  death  of  the  devisee,  and 
the  estate  of  the  original  testator  was  still  undistributed.  It  was 
therefore  entirely  competent  for  the  legislature  to  impose  a  tax 
upon  the  right  to  receive  in  possession  and  enjoyment  although 
the  right  was  given  by  a  contract. 

The  majority  of  the  court  finds,  however,  that  certain  land 
which  was  not  devised  directly  to  the  devisee  but  which  was 
covered  by  the  contract  is  not  subject  to  the  tax,  for  the  reason 


444  STATUTES  ANNOTATED.  [Iowa  St. 

that  it  vested  immediately  upon  the  death  of  the  testator  in  the 
collateral  heirs,  and  cannot  be  made  subject  to  a  tax  created  by  a 
subsequent  act  of  the  legislature. 

Deemer,  J.,  who  writes  the  majority  opinion,  dissents  from  this 
last  conclusion,  believing  that  by  the  contract  the  vesting  in  pos- 
session and  enjoyment  was  postponed  until  the  death  of  the  dQvisee 
and  that  until  that  event  it  was  uncertain  who  might  take.  Lacy  v. 
State  Treasurer  (Iowa  1909),  121  N.W.  179.  (McClain,  J.,  dis- 
senting.) 

Iowa  St.  1896,  c.  28.     Approved  April  14,  1896,  in  effect  July  4,  1896. 

S.  1.  Transfers  taxable.  —  Rates.  —  Exemptions.  All  property  within 
the  jurisdiction  of  this  state,  and  any  interest  therein,  whether  belonging  to  the 
inhabitants  of  this  state  or  not,  and  whether  tangible  or  intangible,  which  shall 
pass  by  will  or  by  the  intestate  laws  of  this  or  any  other  state,  or  by  deed,  grant, 
sale,  or  gift  made  or  intended  to  take  effect  in  possession  or  in  enjoyment  after 
the  death  of  the  grantor,  or  donor,  to  any  person  in  trust  or  otherwise,  other  than 
to  or  for  the  use  of  the  father,  mother,  husband,  wife,  lineal  descendant,  adopted 
child,  the  lineal  descendant  of  an  adopted  child  of  a  decedent, or  to  or  for  charitable, 
educational  or  religious  societies  or  institutions  within  this  state,  shall  be  subject 
to  a  tax  of  five  per  centum  of  its  value,  above  the  sum  of  one  thousand  dollars, 
after  the  payment  of  all  debts,  for  the  use  of  the  state;  and  all  administrators, 
executors  and  trustees,  and  any  such  grantee  under  a  conveyance,  and  any  such 
donor  \inder  a  gift,  made  during  the  grantor's  or  donor's  life,  shall  be  respectively 
liable  for  all  such  taxes  to  be  paid  by  them  respectively,  except  as  herein  otherwise 
provided,  with  lawful  interest  as  hereinafter  set  forth,  until  the  same  shall  have 
been  paid.  The  tax  aforesaid  shall  be  and  remain  a  lien  on  such  estate  from  the 
death  of  the  decedent  until  paid.     (Code,  s.  1467.) 

Levied  on  Death. 

The  inheritance  tax  is  levied  at  the  date  of  the  testator's  death. 
In  re  Wells,  142  Iowa  255,  120  N.  W.  713. 

**A11  Property  within  the  Jurisdiction."  —  Situs  of  Tangible 
Personal  Property. 

Under  the  Iowa  code  in  force  in  1901,  section  1467,  where  a  resi- 
dent of  Iowa  died  owning  cattle  outside  the  state,  the  estate  was 
not  required  to  pay  an  inheritance  tax  on  these  cattle  on  the  ground 
that  tangible  property  like  this  may  have  a  situs  other  than  that  of 
the  domicile  of  the  owner,  and  that  there  may  be  a  distinction 
between  tangible  property  such  as  horses  and  cattle  and  intangible 
property  such  as  debts  and  choses  in  action.  Cattle  belonging  to 
the  deceased  were  not  within  the  jurisdiction  of  the  state  unless  it 
be  constructively. 


1896,  c.  28.]  IOWA.  445 

The  fact  that  the  cattle  were  sold  about  four  months  after  the 
death  of  testator  and  the  proceeds  brought  within  the  state  later 
does  not  affect  the  matter.  The  death  of  the  testator  seems  to 
fix  the  time  when  the  property  became  subject  to  the  tax,  and  at 
the  death  of  the  testator  the  cattle  were  not  in  the  state.  When 
this  property  passed  to  the  collateral  heirs  it  was  clearly  not  sub- 
ject to  the  tax.  If  the  property  had  been  distributed  in  the  state 
of  Missouri  there  would  be  no  doubt  that  it  would  not  have  been 
subject  to  the  tax  imposed  by  our  law,  and  the  bringing  of  the 
proceeds  into  this  state  for  the  purpose  of  distribution  would  not 
make  it  subject  to  the  tax.  Weaver  v.  State,  110  Iowa  328,  81  N.  W. 
603.  (The  statute  has  been  amended,  however,  since  this  decision 
to  include  such  property.) 

**A11  Property  within  the  Jurisdiction.''  —  Situs  of  Intan- 
gible Personal  Property. 

The  court  does  not  determine  whether  a  non-resident  creditor 
by  placing  intangible  property  in  the  hands  of  an  agent  within 
this  state  for  management  and  control  for  business  purposes  may 
fix  its  situs  for  taxation. 

Money  deposited  in  banks  in  Iowa  by  a  non-resident  who  took 
out  a  certificate  of  deposit  therefor  which  she  owned  and  had  in 
possession  in  New  Hampshire  at  the  time  of  her  decease,  is  not 
subject  to  the  Iowa  collateral  inheritance  tax. 

Intangible  choses  in  action  held  by  a  non-resident  in  her  possession 
at  the  date  of  her  death  in  New  Hampshire  where  she  resided  are 
not  taxable  under  the  Iowa  collateral  inheritance  tax  where  the 
debtor  was  a  resident  of  Iowa.  The  court  holds  that  the  situs  of 
the  choses  in  action  attaches  to  the  owner,  that  any  debt  has  its 
situs  at  the  residence  of  the  creditor.  The  court  remarks  that 
Bridges  v.  Griffin,  33  Ga.  113,  is  the  only  case  it  has  been  able  to 
find  which  holds  that  the  residence  of  the  debtor  fixes  the  situs  of 
the  property.    See,  however,  In  re  Joyslin,  76  Vt.  88,  56  A.  281. 

Gilhertson  v.  Oliver,  129  Iowa  568,  105  N.  W.  1002,  4  L.  R.  A. 
N.  S.  953,  is  said  m  In  re  Culver,  145  Iowa  1,  123  N.  W.  743,  not 
to  apply  to  bank  or  other  corporation  stock,  as  the  inheritance  tax 
on  such  shares  was  paid  without  a  contest  and  the  entire  discussion 
related  to  evidences  of  debt  and  securities  therefor  other  than 
corporate  shares  of  stock. 

Under  Iowa  code,  section  1467,  the  inheritance  tax  is  applicable 
to  the  estate  of    a  non-resident   owner  of    stock  in  a  domestic 


446  STATUTES  ANNOTATED.  [Iowa  St. 

corporation.  A  share  of  stock  in  a  corporation  may  be  defined 
as  a  right  which  its  owner  has  in  the  management,  profits  and 
ultimate  assets  of  the  corporation.  The  shares  of  stock  rep- 
resented an  interest  in  the  earnings  of  the  property  of  the  corpora- 
tion, and  a  certificate  is  not  stock  itself,  but  only  a  convenient 
representation  of  it,  though  one  may  be  a  stockholder  without  Jiav- 
ing  a  certificate  issued  to  him.  The  court  finds  that  the  decedent 
owned  an  "interest"  in  the  property  of  the  bank  within  the  meaning 
of  the  inheritance  statute  and  that  such  interest  is  property  within 
the  jurisdiction  of  the  state.  In  re  Culver,  145  Iowa  1,  123  N.  W. 
743,  citing  inter  alia,  Faxton  v.  McCosh,  12  Iowa  527. 

'*Deed." 

Where  the  testator  in  1900  joined  with  his  wife  in  making  a  deed 
of  real  estate  to  the  son  of  his  adopted  child  in  consideration  of 
support  for  himself  and  his  wife  for  the  rest  of  their  lives,  and  the 
son  carried  out  the  contract  faithfully,  and  the  testator  died  in 
1906  having  by  his  will  provided  that  certain  expenses  should  be 
paid  out  of  the  personal  estate  and  not  by  the  son,  as  the  contract 
required,  the  court  holds  that  the  property  so  transferred  is  not 
subject  to  the  inheritance  tax.  The  son  took  immediate  possession 
of  thejand  and  continued  to  occupy  the  same  down  to  the  date  of 
trial.  The  son  paid  the  taxes  on  the  land,  had  full  possession  and 
the  testator  never  claimed  ownership  after  the  conveyance,  in  fact 
expressly  disclaimed  any  interest  in  the  land,  and  many  times 
asserted  that  it  belonged  exclusively  to  the  son,  and  it  was  not  sug- 
gested that  these  arrangements  were  for  the  purpose  of  defeating 
the  inheritance  tax.  Lamb  v.  Morrow,  140  Iowa  89,  117  N.  W. 
1118,  18  L.  R.  A.  N.  S.  226. 

*'Deed."  —  Consideration. 

Where  a  deed  to  a  son  of  an  adopted  daughter  is  made  in  consid- 
eration of  support,  reserving  a  life  estate  in  the  grantor,  it  is  proper 
to  show  by  parol  a  cancellation  of  the  written  contract  and  a  waiver 
of  life  estate  reserved  by  the  deed.  This  modification  of  the  obliga- 
tion of  the  written  contract  remaining  executory  is  sufficient  con- 
sideration for  the  subsequent  oral  one.  Lamb  v.  Morrow,  140 
Iowa  89,  117  N.  W.  1118,  18  L.  R.  A.  N.  S.  226. 

"Deed  .  .  .  to  Take  Effect  .  .  .  After  the  Death." 

Where  a  grantor  made  a  deed  of  an  undivided  three-fourths  inter- 
est of  land  to  a  brother  and  two  sisters,  reserving  a  one-fourth 


1896,  c.  28.]  IOWA.  447 

interest  to  himself  and  delivered  it  to  a  third  person  with  instructions 
to  record  it  and  sell  the  land  and  divide  the  proceeds  equally 
among  the  grantees  and  himself,  and  he  died  before  it  was  recorded 
or  the  land  sold,  the  deed  is  not  one  taking  effect  in  possession  or 
enjoyment  after  the  death  of  the  grantor  and  is  therefore  not  sub- 
ject to  the  inheritance  tax.  The  statute  relates  plainly  to  estates 
granted  in  deeds  or  conveyances  which  in  some  way  make  the 
estate  granted  dependent  on  the  grantor's  death ;  that  is,  to  inter- 
ests in  real  estate  the  possession  or  enjoyment  of  which  is  postponed 
until  after  the  death  of  the  grantor.  The  deed  in  question  con- 
tained no  reference  to  the  death  of  the  grantor,  and  there  was 
nothing  in  the  conveyance  which  indicates  that  it  was  the 
grantor's  purpose  to  postpone  possession  or  enjoyment  of  the  in- 
terests granted  until  after  his  death.  In  re  Bell,  146  Iowa  617, 
130  N.  W.  798. 

'*To  Any    Person."  —  Effect    of    Renunciation   by   Benefi- 
ciary.—  Evasion  of  Tax. 

The  words  in  Iowa  inheritance  tax  law,  St.  1896,  chapter  28, 
section  1,  provide  a  tax  on  property  which  shall  pass  "to  any  per- 
son." The  phrase  "to  any  person"  does  not  necessarily  mean  one 
person  only,  but  will  include  more  than  one  when  that  is  required 
to  give  the  statute  the  effect  it  was  intended  to  have.  McGhee  v. 
State,  105  Iowa  9,  74  N.  W.  695. 

No  tax  can  be  levied  where  the  collateral  beneficiaries  under  a 
will  renounce  all  interest  in  the  will  and  allow  the  property  to  be 
distributed  in  accordance  with  the  intestate  laws.  In  this  case  the 
court  on  the  agreement  of  all  parties  revoked  the  probate  of  the  will, 
and  the  estate  was  distributed  as  if  intestate.  This  deprived  the 
state  of  any  interest  in  the  estate  and  relieved  the  administrators 
from  any  obligation  to  file  an  inventory,  as  there  were  direct  heirs 
who  took  all  the  property  and  the  Iowa  statute  taxed  only  col- 
laterals.    In  re  Stone,  132  Iowa  136, 109  N.  W.  455. 

Classes  Exempted.  —  Effect  of  Death  of  Devisee. 

Iowa  code,  section  3281,  provides  that  where  a  devisee  dies 
before  the  testator  his  heirs  inherit  directly  from  the  testator, 
and  the  property  does  not  go  to  the  children  of  the  devisee  as  though 
he  had  survived  the  testator,  and  therefore  the  property  passes 
directly  from  the  decedent  to  the  persons  who  are  determined 
to  be  his  heirs  by  the  application  of  these  rules  construing  the  statute. 


448  STATUTES  ANNOTATED.  [Iowa  St. 

Therefore  where  a  testator  dies  devising  property  to  his  mother, 
who  died  before  the  testator,  leaving  as  heirs  a  brother  and  sister 
of  decedent,  the  succession  to  these  heirs  is  subject  to  a  collateral 
inheritance  tax.  In  re  Hulett,  121  Iowa  423,  96  N.  W.  952.  The 
court  relies  upon  Suydam  v.  Voorhees,  58  N.  J.  Eq.  157,  43  A.  4. 

"Adopted  Child." 

Where  certain  adoption  proceedings  did  not  comply  with  the 
statute,  it  was  urged  that  the  attempt  to  adopt  should  be  con- 
sidered equitably  as  though  it  had  been  properly  consummated. 
But  the  court  says  that  the  proceeding  for  the  collection  of  an 
inheritance  tax  is  not  in  equity  and  that  one  cannot  be  made  an 
heir  of  another  by  any  such  considerations.  Lamb  v.  Morrow, 
140  Iowa  89,  117  N.  W.  1118,  18  L.  R.  A.  N.  S.  226. 

"Charitable,  Educational  or  Religious  Societies." 

The  exemption  clause  in  the  Iowa  inheritance  statute  is  to  be 
liberally  construed  to  permit  the  benevolent  purpose  of  the  exemp- 
tion. Morrow  v.  Smith,  145  Iowa  514, 124  N.  W.  316;  In  reSpangler 
(Iowa  1910),  127  N.  W.  625. 

A  Masonic  lodge,  a  part  of  the  activities  of  which  is  engaged  in 
helping  the  families  of  members  who  become  in  want,  is  exempt 
under  this  statute.     Morrow  v.  Smith,  145  Iowa  514,  124  N.  W.  316. 

The  exemption  does  not  apply  to  a  gift  or  bequest  to  the  Salva- 
tion Army  or  other  religious  or  charitable  institutions  organized 
under  the  corporation  laws  of  another  state.  In  re  Crawford 
(Iowa  1910),  126  N.  W.  774,  citing  In  re  Prime,  136  N.  Y.  347, 
32  N.  E.  1091,  18  L.  R.  A.  713;  Humphreys  v.  State,  70  Ohio  St.  67, 
70  N.  E.  957,  65  L.  R.  A.  776;  People  v.  Society,  87  111.  246. 

The  will  devised  certain  land  in  perpetuity  to  the  dependent 
poor  persons  of  a  certain  county,  constituting  the  supervisors  of 
said  county  trustees  to  carry  a  trust  into  effect.  This  is  clearly 
a  charitable  gift  and  exempt  from  the  inheritance  tax  even  though 
given  to  the  supervisors  of  the  county.  Any  society  or  institution 
is  within  the  terms  of  the  law  charitable  when  by  the  law  of  its 
organization  or  by  usage  it  has  the  duty  of  providing  and  adminis- 
tering charitable  relief  even  though  it  has  and  exercises  other 
functions  of  a  totally  different  character. 

The  county  being  charged  by  the  statute  with  the  duty  of  reliev- 
ing and  supporting  the  poor  is  to  that  extent  a  charitable  organiza- 
tion, and  a  gift  made  specifically  in  aid  of  this  feature  of  its  work 


1896.  c.  28.]  IOWA.  449 

is  to  all  reasonable  intents  and  purposes  a  gift  to  or  for  a  charitable 
institution.     In  re  Spangler  (Iowa  1910),  127  N.  W.  625. 

Although  a  gift  is  made  nominally  to  a  charitable  corporation 
organized  under  the  laws  of  another  state,  still  where  the  gift  is  not 
to  or  for  the  corporation  itself  and  where  the  corporation  is  given 
no  power  or  authority  to  take  it  out  of  the  jurisdiction  of  the  state 
or  to  expend  it  for  any  other  than  the  local  purposes  mentioned  in 
the  will,  it  is  exempt  from  the  inheritance  tax.  The  court  distin- 
guishes between  a  gift  made  generally  to  or  for  a  charitable  society 
organized  in  another  state  and  a  gift  made  to  aid  the  work  of  a 
strictly  legal  charity  with  which  the  foreign  society  may  be  asso- 
ciated. The  court  regards  it  as  a  trust  in  which  the  existence  of 
the  trustee  is  not  material.  In  re  Crawford  (Iowa  1910),  126 
N.  W.  774. 

"Value." 

The  Iowa  statute  of  1896  uses  in  sections  1,  3,  4  and  5  for  the 
appraisal  of  the  property  the  expressions  'Value,"  "appraised 
value"  and  "actual  market  value,"  and  the  court  holds  that  the 
statute  means  in  each  case  a  fair  market  value  and  not  the  assessed 
value  of  the  property  fixed  for  the  purpose  of  ordinary  taxation. 
McGhee  v.  State,  105  Iowa  9,  74  N.  W.  695. 

* 'Above  the  Sum  of  One  Thousand  Dollars  After  the  Payment 
of  AH  Debts." 

This  statute  means  that  the  thousand  dollars  exemption  applies 
to  the  property  of  the  estate  and  not  to  the  share  of  each  heir. 
The  court  remarks  on  the  expression  "after  the  payment  of  all 
debts,"  and  says  that  this  must  mean  the  debts  of  the  estate,  as  the 
officer  charged  with  the  duties  of  settling  the  estate  cannot  have 
official  knowledge  of  the  debts  of  the  heirs  or  devisees  and  there 
does  not  appear  to  be  any  good  reason  for  granting  such  a  person 
because  he  is  in  debt  an  exemption  at  the  expense  of  the  state  which 
is  not  granted  to  a  person  of  the  same  class  who  is  not  in  debt. 
The  exemption  of  one  thousand  dollars  does  not  invalidate  the  tax. 
McGhee  v.  State,  105  Iowa  9,  74  N.  W.  695.  The  court  declines  to 
follow  In  re  Howe,  112  N.  Y.  100,  19  N.  E.  513. 

The  effect  of  the  law  is  that  all  estates  of  less  value  than 
one  thousand  dollars  shall  be  exempt,  and  when  exceeding  in 
value  such  sum  all  property  passing  to  the  collateral  heirs  is  subject 


450  STATUTES  ANNOTATED.  [Iowa  St. 

to  the  inheritance  tax.  The  court  relies  on  the  words  of  sections 
1470,  1471,  which  provide  for  any  estate  exceeding  one  thousand 
dollars  and  on  the  fact  that  many  years  will  usually  intervene 
between  the  collection  of  the  tax  on  the  remainder  and  other  por- 
tions of  the  estate  and  it  would  be  utterly  impossible  to  apportion 
one  thousand  dollars  of  the  exemption  among  the  collateral  heirs 
equitably.  Heriott  v.  Bacon,  110  Iowa  342,  81  N.  W.  701.  The 
court  distinguishes  State  v.  Hamlin,  86  Me.  495,  30  A.  76,  41  Am. 
St.  Rep.  569  n.,  25  L.  R.  A.  632,  as  in  that  state  other  provisions 
of  the  statute  unequivocably  indicate  the  opposite  result. 

The  Iowa  code,  sections  1467,  1470  and  1471,  must  be  read  to- 
gether and  the  court  declines  to  construe  section  1467  separately 
as  meaning  that  the  first  thousand  dollars  of  the  estate  are  exempt 
and  providing  that  a  collateral  inheritance  tax  must  be  paid  on  all 
property  in  excess  of  that  thousand  dollars.  The  court  afhrms 
Heriott  v.  Bacon,  110  Iowa  342,  81  N.  W.  701,  and  concludes  that 
there  is  no  exemption  whatever  where  the  value  of  an  estate  after 
the  payment  of  debts  exceeds  a  thousand  dollars.  Gilbertson  v. 
McAuley,  117  Iowa  522,  91  N.  W.  788. 

S.  2.  Lien.  It  shall  be  the  duty  of  the  executor,  administrator  or  trustee, 
immediately  upon  his  appointment,  to  make  and  file  a  separate  inventory,  any 
will  to  the  contrary  notwithstanding,  of  all  the  real  estate  of  the  decedent  liable 
to  such  tax,  and  to  cause  the  lien  of  the  same  to  be  entered  upon  the  lien  book 
in  the  office  of  the  clerk  of  the  court  in  each  county  where  each  particular  part  of 
said  real  estate  is  situated,  and  no  conveyance  of  said  estate  or  interest  therein, 
which  is  subject  to  such  tax  before  or  after  the  entering  of  said  lien,  shall  discharge 
the  estate  so  conveyed  from  the  operation  thereof.    (Code,  s.  1468.) 

S.  3.  Appraisal.  All  the  real  estate  of  the  decedent  subject  to  such  tax  shall, 
except  as  hereinafter  provided,  be  appraised  within  thirty  days  next  after  the 
appointment  of  an  executor,  administrator  or  trustee,  and  the  tax  thereon,  calcu- 
lated upon  the  appraised  value,  shall  be  paid  by  the  person  entitled  to  said  estate 
within  fifteen  months  from  the  approval  by  the  court  of  such  appraisement;  and 
in  default  thereof  the  court  shall  order  the  same,  or  so  much  thereof  as  may  be 
necessary  to  pay  such  tax,  to  be  sold.     (Code,  s.  1469.) 

These  sections  as  to  appraisal  were  void  for  lack  of  notice  to 
parties.  See  Ferry  y.  Campbell,  ante,  p.  441.  As  to  the  effect  of  the 
amending  act  of  1898  see  post,  p.  452. 

Second  Appraisal. 

The  district  court  may  order  a  second  appraisement  of  the 
property  where  the  state  was  not  a  party  to  the  first  appraisement 


1896,  c.  28.]  IOWA.  451 

and  on  showing  error  in  proceedings  theretofore  had  to  correct  the 
error  by  means  of  a  new  appraisement.  McGhee  v.  State,  105  Iowa 
9,  74  N.  W.  695. 

"Appraised  value"  means  fair  market  value.  McGhee  v.  State, 
105  Iowa  9,  74  N.  W.  695. 

S.  4.  Remainders.  When  any  person  whose  estate,  over  and  above  the 
amount  of  his  just  debts,  exceeds  the  sum  of  one  thousand  dollars,  shall  bequeath 
or  devise  any  real  property  to  or  for  the  use  of  the  father,  mother,  husband,  wife, 
lineal  descendant,  adopted  child  or  lineal  descendant  of  such  child,  during  life 
or  for  a  term  of  years,  and  the  remainder  to  a  collateral  heir  or  to  a  stranger  to 
the  blood,  the  court,  upon  the  determination  of  such  estate  for  life  or  years,  shall, 
upon  its  own  motion  or  upon  the  application  of  the  treasurer  of  state,  cause  such 
estate  to  be  appraised  at  its  then  actual  market  value,  from  which  shall  be  de- 
ducted the  value  of  any  improvements  thereon,  or  betterments  thereto,  if  any, 
made  by  the  remainderman  during  the  time  of  the  prior  estate  to  be  ascertained 
and  determined  by  the  appraisers,  and  the  tax  on  the  remainder  shall  be  paid  by 
such  remainderman  within  sixty  days  from  the  approval  by  the  court  of  the 
report  of  the  appraisers.  If  such  tax  is  not  paid  within  said  time  the  court  shall 
then  order  said  real  estate,  or  so  much  thereof  as  shall  be  necessary  to  pay  such 
tax  to  be  sold. 

"Actual  market  value"  means  fair  market  value  and  not  tne 
value  assessed  for  annual  tax.  McGhee  v.  State,  105  Iowa  9,  74 
N.  W.  695. 

Sections  5  to  15  provide  for  appraisal  and  collection  of  taxes. 


THE  AMENDMENTS  OF  1898. 

Iowa  St.  1898,  c.  37,  approved  April  7,  1898,  s.  1,  provided 
additional  regulations  as  to  the  appraisal  of  property.  The  statute 
of  1896  was  amended  as  follows:  — 

Code  S.  1476.     Method  of  appraisement. — Notice. — Hearing. — Appeal. 

All  appraisements  of  real  estate  subject  to  such  tax  shall  be  made  and  filed  in 
the  manner  provided  for  appraisement  of  personal  property.  When  such  real 
estate  is  situated  in  another  county,  the  same  appraisers  may  serve,  or  others 
may  be  appointed.  It  shall  be  the  duty  of  all  appraisers  appointed  under  the 
provisions  of  this  chapter  to  forthwith  give  notice  to  the  treasurer  of  state  and 
other  persons  known  to  be  interested  in  the  property  to  be  appraised,  of  the  time 
and  place  at  which  they  will  appraise  such  property,  which  time  shall  not  be  less 
than  ten  days  from  the  date  of  such  notice.  The  notice  shall  be  served  in  the 
same  manner  as  is  prescribed  for  the  commencement  of  civil  actions  unless  a 
different  one  is  ordered  by  the  court  or  judge,  and  the  notice  with  the  proof  of 


'452  STATUTES  ANNOTATED.  [Iowa  St. 

service  thereof,  shall  be  returned  to  the  court,  with  the  appraisement.  The 
treasurer  of  state,  or  any  person  interested  in  the  estate  appraised,  may  file 
exceptions  to  the  appraisement,  on  the  hearing  of  which,  as  an  action  in  equity, 
either  party  may  produce  evidence  competent  or  material  to  the  matters  therein 
involved.  If,  upon  such  hearing,  the  court  finds  the  amount  at  which  the  property 
'-  is  appraised  is  its  value  on  the  market  in  the  ordinary  course  of  trade,  and  the 
appraisement  was  fairly  and  in  good  faith  made,  it  shall  approve  such  appraise- 
ment; but  if  it  finds  that  the  appraisement  was  made  at  a  greater  or  less  sum  than 
the  value  of  the  property  in  the  ordinary  course  of  trade,  or  that  the  same  was  not 
fairly  or  in  good  faith  made,  it  shall  set  aside  the  appraisement,  appoint  new 
appraisers  and  so  proceed  until  a  fair  and  good  appraisement  of  the  property  is 
made  at  its  value  in  the  market  in  the  ordinary  course  of  trade.  The  treasurer  of 
state,  or  any  one  interested  in  the  property  appraised  may  appeal  to  the  supreme 
court  from  the  order  of  the  district  court  approving  or  setting  aside  any  appraise- 
ment to  which  exceptions  have  been  filed.  Notice  of  appeal  shall  be  served  within 
thirty  days  from  the  date  of  the  order  appealed  from,  and  the  appeal  shall  be 
perfected  in  the  time  now  provided  for  appeals  in  equitable  actions.  In  case  of 
appeal  the  appellant,  if  he  is  not  the  treasurer  of  state,  shall  give  bond  to  be 
approved  by  the  clerk  of  the  court,  to  pay  the  tax,  which  bond  shall  provide  that 
the  said  appellant  and  sureties  shall  pay  the  tax  for  which  the  property  may  be 
liable,  with  costs  of  the  appeal.    (26  G.  A.,  c.  28,  s.  10.)    (27  G.  A.,  c.  37,  s.  1.) 

[See  Montgomery  v.Gilbertson,  and  Ferry  v.  Campbell,  reported  ante,  pp.  441, 442.] 

S.  2  covers  the  payment  of  taxes  on  real  estate. 

S.  3  provides  for  the  payment  of  taxes  on  corporate  stock. 

S.  4  gives  a  lien  on  corporate  securities  and  assets. 

S.  5Vequires  the  collection  of  a  list  of  heirs. 

S.  6  provides  for  the  framing  of  rules  and  regulations  relating  to  assessment 
and  collection  of  the  collateral  inheritance  tax. 

S.  7  covers  the  duty  and  compensation  of  the  county  attorney  and  collection 
of  the  tax. 

This  statute  was  passed  in  part  for  the  purpose  of  making  the 
act  valid  by  providing  adequate  notice  to  parties  of  the  assessment 
of  the  tax.  See  Montgomery  v.  Gilbertson,  reported  ante,  p.  442,  and 
Ferry  v.  Campbell,  reported  ante^  p.  441. 

S.  8.  In  Effect.  This  act,  being  deemed  of  immediate  importance,  shall 
take  effect  and  be  in  force  from  and  after  its  publication  in  the  Iowa  State  Register 
and  Des  Moines  Leader,  newspapers  published  at  Des  Moines,  Iowa. 

Retroactive  Effect  of  the  Act  of  1898. 

Although  a  judgment  restraining  the  collection  of  an  inheritance 
tax  on  the  ground  that  the  Iowa  statute  1896,  chapter  28,  was  un- 
constitutional, has  been  obtained,  still  the  legislature  may  thereupon 
cure  the  defect  in  the  statute  by  a  retroactive  amendment  to  it, 
(Iowa  statute  1898,  chapter  37),  and  the  supreme  court  may  then 


1898,  c.  37.]  IOWA.  453 

reverse  the  judgment  and  permit  the  tax  to  be  collected.  A  judg- 
ment is  not  of  itself  a  contract  in  a  constitutional  sense  so  that  its 
effect  cannot  be  taken  away  by  legislation.  Ferry  v.  Campbell, 
110  Iowa  290,  81  N.  W.  604,  50  L.  R.  A.  92. 

Where  the  testator  died  after  the  enactment  of  Iowa  statute 
1896,  chapter  28,  and  before  the  amendment  enacted  by  Iowa  statute 
1898,  chapter  37,  and  where  the  first  statute  was  void  for  lack  of 
notice  on  appraisal  the  court  holds  that  the  amendment  although 
retroactive  in  form  cannot  authorize  a  legal  inheritance  tax  on  real 
estate  of  the  testator.  The  court  distinguishes  the  case  of  Ferry  v. 
Campbell,  110  Iowa  290,  81  N.  W.  604,  50  L.  R.  A.  92,  as  that  case 
applied  solely  to  personal  property.  The  court  shows  that  title 
to  personal  property  does  not  pass  to  the  legatees  or  distributees 
until  actual  distribution,  while  real  estate  passes  at  once  on  the 
death  of  testator  without  any  further  action  by  the  administrator. 
The  amending  statute  is  not  in  the  nature  of  a  curative  act  but 
purports  only  to  aid  in  the  collection  of  a  valid  tax.  If  then  the 
land  is  not  subject  to  or  liable  for  the  payment  of  the  tax  the  act 
has  no  application.  At  the  death  of  the  testator  there  was  no 
remedy  by  which  a  tax  could  be  fixed  or  enforced.  A  tax  that  cannot 
be  enforced  by  any  remedy  is  no  tax  at  all.  If  a  tax  on  succession, 
the  amount  of  which  cannot  be  ascertained,  may  relate  back  one 
year,  it  may  stretch  back  over  a  period  of  twenty  or  any  number  of 
years  and  the  citizens  never  know  with  any  degree  of  certainty 
what  burdens  are  to  be  imposed .  The  court  distinguishes  the  case  of 
Gelsthorpe  v.  Furnell,  20  Mont.  299,  51  P.  267,  39  L.  R.  A.  170,  as 
it  appears  from  that  case  that  real  estate  in  Montana  is  subject 
to  the  control  of  the  court  and  held  in  possession  by  the  adminis- 
trator until  the  order  of  distribution.  Heriott  v.  Potter,  115  Iowa 
648,  89  N.  W.  91. 


Iowa  St.  1900,  c.  51.     Approved  April  7,  1900. 

S.  1.  Debts  deducted.  The  term  "debts"  in  the  eleventh  line  of  section 
fourteen  hundred  and  sixty-seven  (1467)  of  the  code  shall  include,  in  addition  to 
debts  owing  by  decedent  at  the  time  of  his  death,  the  local  or  state  taxes  due  from 
the  estate  prior  to  his  death,  and  a  reasonable  sum  for  funeral  expenses,  court 
costs,  including  the  costs  of  appraisement  made  for  the  purpose  of  assessing  the 
collateral  inheritance  tax,  the  statutory  fees  of  executors,  administrators,  or 
trustees,  and  no  other  sum ;  but  said  debts  shall  not  be  deducted  unless  the  same 
are  approved  and  allowed,  within  fifteen  months  from  the  death  of  decedent,  as 
established  claims  against  the  estate,  unless  otherwise  ordered  by  the  judge  or 
court  of  the  proper  county.     (Code,  s.  1467a.) 


454  STATUTES  ANNOTATED.  [Iowa  St- 

Purpose  of  Section. 

The  purpose  of  the  Iowa  code,  section  1467a,  is  that  an  estate 
whose  value  is  near  the  dividing  line  shall  not  be  carried  into  the 
exempt  class  by  extraordinary  charges  under  the  guise  of  funeral 
expenses  or  by  presentation  of  stale  or  fictitious  claims  which  are 
not  allowed  within  fifteen  months.  Morrow  v.  Durant,  140  Iowa  437, 
118  N.  W.  781,  23  L.  R.  A.  (N.  S.)  474  n. 

When  State  can  Invoke  this  Section. 

Where  the  residuary  legatees  concede  the  propriety  and  reason- 
ableness of  the  fund  for  erecting  a  tomb  to  the  testator  the  state  in 
the  absence  of  fraud  or  collusion  cannot  interfere  nor  has  it  a  right 
to  try  the  question  of  the  reasonableness  of  an  expense  under 
section  1467a  except  for  the  purposes  of  determining  the  classi- 
fication of  an  estate  as  exempt  or  non-exempt  from  taxation. 
Neither  section  1467  relating  to  a  tax  on  estates  whose  value  is 
above  one  thousand  dollars  after  payment  of  all  debts,  nor  1467a 
is  applicable  to  a  case  where  it  is  admitted  that  the  estate  is  of  a 
value  above  the  sum  of  one  thousand  dollars  after  the  payment 
of  debts.  Morrow  v.  Durant,  140  Iowa  437,  118  N.  W.  781,  23 
L.  R.  A.  (N.  S.)  474  n. 

** Funeral  Expenses." 

The  question  whether  the  amount  reserved  by  a  will  for  the  erec- 
tion of  a  tomb  is  "reasonable"  is  a  question  of  mixed  law  and  fact 
on  which  it  is  very  important  that  the  will  of  the  decedent  expressly 
provided  for  this  expenditure  and  this  provision  of  the  will  raises 
the  presumption  of  reasonableness.  The  court  refuses  to  consider 
from  the  lack  of  evidence  the  question  whether  a  provision  of 
two  thousand  dollars  for  a  tomb  is  reasonable,  especially  where  the 
residuary  legatees  concede  its  reasonableness.  Morrow  v.  Durante 
140  Iowa  437, 118  N.  W.  781,  23  L.  R.  A.  (N.  S.)  474  n. 

Payments  to  Compromise  Contest. 

The  testator  made  two  wills,  and  a  legatee  under  the  first  will 
who  was  omitted  from'  the  second  contested  the  second  will.  The 
parties  then  made  a  compromise  by  which  the  contestant  was  paid 
a  sum  of  money  in  settlement  of  his  claim.  The  court  holds  that 
payments  in  adjustment  of  conflicting  claims  to  an  estate  by  those 
asserting  title  thereto  cannot  be  construed  as  debts  nor  treated 
as  expenses  in  its  settlement.    The  entire  estate,  including  the  sums 


e  entire  e 

1^ 


1900,  c.  51.]  IOWA.  465 

to  be  paid  the  contestant,  passed  to  the  legatees  of  the  deceased 
upon  his  death,  and  payments  in  settlement  are  in  law  by  the 
legatees  rather  than  an  expense  of  the  estate.  In  re  Wells,  142 
Iowa  255,  120  N.  W.  713.  The  court  relies  on  In  re  Westburn, 
152  N.  Y.  93,  46  N.  E.  315.  The  court  distinguishes  the  case 
of  In  re  Hawley,  214  Pa.  St.  525,  as  in  that  case  the  daugh- 
ters who  took  the  property  under  the  will  and  paid  over  in  compro- 
mise were  direct  descendants  and  therefore  no  tax  was  due,  while 
in  the  Wells  case  the  estate  was  acquired  by  the  heirs,  and  as  they 
were  collaterals  was  subject  to  the  tax,  and  in  paying  it  out  they 
were  handed  their  own  property.  The  court  also  distinguishes 
In  re  Kerr,  159  Pa.  St.  512,  28  A.  354,  as  there  the  compromise 
was  of  a  contest  over  the  testator's  title. 

Where  under  an  agreement  of  compromise  executed  by  the 
parties,  it  was  agreed  that  contestants  were  to  "pay  C.  the  legacy 
given  her  under  said  [second]  will,"  the  court  was  evenly  divided 
on  the  question  whether  this  payment  was  subject  to  the  inheritance 
tax.  If  the  payment  was  made  under  the  will  it  was  subject  to  the 
tax  and  if  the  payment  went  under  the  agreement  it  was  not.  In  re 
Wells,  142  Iowa  255,  120  N.  W.  713. 

S.  2.  Property  subject  to  tax.  Except  as  to  property  passing  to  the 
persons,  corporations  and  societies  exempted  by  section  fourteen  hundred 
and  sixty-seven  (1467)  of  the  code  from  the  collateral  inheritance  tax,  and  real 
property  located  outside  of  the  state  passing  in  fee  from  the  decedent  owner, 
the  tax  imposed  under  chapter  four  (4)  of  title  seven  (7)  of  the  code  shall 
hereafter  be  assessed  against,  and  be  collected  from,  property  of  every  kind, 
which,  at  the  death  of  the  decedent  owner,  is  subject  to,  or  thereafter,  for  the 
purpose  of  distribution,  is  brought  into  this  state  and  becomes  subject  to  the 
jurisdiction  of  the  courts  of  this  state  for  distribution  purposes,  or  which  was 
owned  by  any  decedent  domiciled  within  the  state  at  the  time  of  the  death 
of  such  decedents  even  though  the  property  of  said  decedent  so  domiciled  was 
situated  outside  of  the  state.    (Code,  s.  14676.) 

This  section  alters  the  law  as  laid  down  in  In  re  Weaver,  reported 
ante  J  p.  444. 

"Property  of  Every  Kind." 

These  words  do  not  render  property  reserved  by  the  will  for  a 
tomb  subject  to  tax.  The  court  remarks  that  that  interpretation 
would  make  the  statute  unconstitutional  as  it  is  only  upheld  on  t  he 
theory  that  it  is  not  a  tax  upon  the  property  itself  but  on  the  right 
to  succession  to  property.  Morrow  v.  Durante  140  Iowa  437,  118 
N.  W.  781,  23  L.  R.  A.  (N.  S.)  474  n. 


456  STATUTES  ANNOTATED.  [Iowa  St. 

Effect  of  Collateral  Adjudication  of  Title. 

A  decree  of  a  district  court  passing  upon  a  title  to  land  involved 
in  an  agreement  of  compromise  of  a  will  is  of  no  effect  on  the  question 
of  inheritance  tax,  as  the  state  treasurer  was  not  a  party  to  that 
suit  and  was  in  no  way  interested  therein.  Lacy  v.  State  Treasurer 
(Iowa  1909),  121  N.AV.  179.     (McClain,  J.,  dissenting.) 

S.  3.  Foreign  estates  and  deduction  of  debts.  Whenever  any  property 
belonging  to  a  foreign  estate,  which  estate,  in  whole  or  in  part,  is  liable  to  pay  a 
collateral  inheritance  tax  in  this  state,  the  said  tax  shall  be  assessed  upon  the 
market  value  of  said  property  remaining  after  the  payment  of  such  debts  and 
expenses  as  are  chargeable  to  the  property  under  the  laws  of  this  state;  in  the 
event  that  the  jexecutor,  administrator  or  trustee  of  such  foreign  estate  files 
with  the  clerk  of  the  court  having  ancillary  jurisdiction,  and  with  the  treasurer 
of  state,  duly  certified  statements  exhibiting  the  true  market  value  of  the  entire 
estate  of  the  decedent  owner,  and  the  indebtedness  for  which  the  said  estate  has 
been  adjudged  liable,  which  statements  shall  be  duly  attested  by  the  judge  of 
the  court  having  original  jurisdiction,  the  beneficiaries  of  said  estate  shall  then 
be  entitled  to  have  deducted  such  proportion  of  the  said  indebtedness  of  the 
decedent  from  the  value  of  the  property  as  the  value  of  the  property  within  this 
state  bears  to  the  value  of  the  entire  estate.    (Code,  s.  14Sld.) 

S.  4.  Foreign  estates  and  direct  and  collateral  beneficiaries.  Whenever 
any  property,  real  or  personal,  within  this  state  belongs  to  a  foreign  estate,  and 
isaid  foreign  estate  passes  in  part  exempt  from  the  collateral  inheritance  tax, 
and  in  part  subject  to  said  collateral  inheritance  tax,  and  it  is  within  the  authority 
or  discretion  of  the  foreign  executor,  administrator  or  trustee  administering  the 
estate  to  dispose  of  the  property,  not  specifically  devised  to  direct  heirs  or  devisees 
in  the  payment  of  the  debts  owing  by  decedent  at  the  time  of  his  death,  or  in  the 
satisfaction  of  legacies,  devises,  or  trusts  given  to  direct  and  collateral  legatees 
or  devisees  or  in  payment  of  the  distributive  shares  of  any  direct  and  collateral 
heirs,  then  the  property  within  the  jurisdiction  of  this  state,  belonging  to  such 
foreign  estate,  shall  be  subject  to  the  collateral  inheritance  tax  imposed  by  chapter 
four  (4)  of  title  seven  (7)  of  the  code,  and  the  tax  due  thereon  shall  be  assessed 
as  provided  in  the  next  preceding  section  of  this  act,  and  with  the  same  proviso 
respecting  the  deduction  of  the  proportionate  share  of  the  indebtedness,  as  therein 
provided.     (Code,  s.  1467e.) 

S.  5  applies  to  appraisements. 

S.  6  allows  the  court  to  extend  the  time  for  filing  the  inventory. 

S.  7  provides  for  the  valuation  of  life  estates  and  remainders. 

S.  8  provides  for  compromise. 

S.  9  covers  reports  to  be  filed  with  the  treasurer. 

S.  10  covers  the  payment  of  costs,  and 

S.  11  the  fees  of  county  attorneys. 

S.  12.  Construction.  In  the  construction  of  this  statute,  the  words  "col- 
lateral heirs"  shall  be  held  to  mean  all  persons  who  are  not  excepted  from  the 
provisions  of  the  collateral  inheritance  tax  by  section  fourteen  hundred  and  sixty- 


"^^ 


1900,  c.  51.]  IOWA.  457 

seven  (1467)  of  the  code,  and  this  act,  except  section  two  (2)  thereof,  shall  apply 
to  all  pending  estates  which  are  not  closed,  and  the  property  subjected  by  this 
act  to  the  said  tax  is  liable  to  the  provisions  incorporated  in  chapter  four  (4)  of 
title  seven  (7)  of  the  code,  as  to  the  amount  and  lien  thereof,  and  the  manner  of 
enforcement  and  collection  thereof,  except  as  herein  specifically  provided  other- 
wise. 

LATER  AMENDMENTS. 
Appraisers'  Fees. 

Iowa  St.  1902,  c.  55,  approved  April  4,  1902,  covers  the  com- 
pensation of  appraisers  —  provides  that  it  shall  be  two  dollars 
per  day. 

Refund. 

Iowa  St.  1902,  c.  63,  approved  April  10,  1902,  provides  for  the 
refunding  of  surplus  collateral  inheritance  tax  paid  above  the 
amount  legally  due. 

Alien  Non-Residents. 

Iowa  St.  1904,  c.  51,  approved  April  6,  1904,  amends  section  1467 
of  the  Iowa  Code  by  adding  the  following:  — 

"Whenever  property,  or  any  interest  therein,  shall  pass  to  heirs,  devisees  or 
other  beneficiaries,  as  contemplated  in  the  foregoing  provisions,  who  are  aliens, 
non-residents  of  the  United  States,  the  same  shall  be  subject  to  a  tax  of  twenty 
per  centum  (20%)  of  its  true  value,  except  where  such  foreign  beneficiaries  are 
brothers  or  sisters  of  the  decedent  owner,  when  the  rate  of  tax  to  be  assessed  and 
collected  therefrom  shall  be  ten  per  centum  (10%)  of  the  value  of  the  property 
or  interest  so  passing." 

Stepchild  or  Descendants. 

Iowa  St.  1906,  c.  54.     Approved  February  26,  1906. 

S.  1.  Exemptions.  Section  one  thousand  four  hundred  and  sixty-seven 
,(1467)  of  the  code  is  hereby  amended  by  inserting  after  the  word  "decedent"  at 
the  end  of  the  eighth  line  of  said  section,  and  before  the  word  "or"  at  the  beginning 
of  the  ninth  line  of  said  section,  the  following:  "stepchild,  or  the  lineal  descendant 
of  a  stepchild  of  a  decedent." 

Hospitals,  Public  Libraries  and  Art  Galleries  Exempted. 

Iowa  St.  1906,  c.  55.     Approved  March  10,  1906. 

S.  1.  Exemptions.  That  section  fourteen  hundred  and  sixty-seven  (1467) 
of  the  code  be  amended  by  inserting  a  comma  after  the  word  "institutions"  in 
the  ninth  line  of  said  section  and  the  following  words,  to  wit:  "including  hospitals, 
public  libraries  and  public  art  galleries  kept  open  to  the  free  use  of  the  public 
not  less  than  three  days  of  each  week." 


458  STATUTES  ANNOTATED  [Iowa  St. 

Religious  Services  or  Cemetery  Associations. 

Iowa  St.  1909,  c.  92,  approved  April  7,  1909,  amends  section  1467  of  the  Sup- 
plement to  the  Code  of  1907  by  inserting  after  the  word  "week":  — 

"Or  any  bequest,  not  to  exceed  $500.00,  to  and  in  favor  of  any  person,  having 
for  its  purpose  the  performance  of  any  religious  service  to  be  performed  for  and 
in  behalf  of  decedent  or  any  person  named  in  his  or  her  last  will  and  testament, 
or  any  cemetery  associations;". 

THE  PRESENT  ACT. 

Iowa  St.  1911,  c.  68. 

An  Act  relating  to  the  assessment  and  collection  of  a  tax  upon 
COLLATERAL  ESTATES,  annuities,  legacies,  bequests,  gifts,  transfers  and 
inheritances,  and  repealing  the  law  as  it  appears  in  chapter  four  (4),  of 
title  seven  (7),  of  the  Supplement  to  the  Code,  1907,  and  chapter  ninety-two 
(92)  of  the  Acts  of  the  Thirty-Third  (33)  General  Assembly  and  to  enact  a 
substitute  therefor.     (In  effect  July  4,  1911.) 

Transfers  Taxable.  —  Rate.  —  Lien.  —  Liabilities. 

S.  1.  The  estates  of  all  deceased  persons,  whether  they  be  inhabitants  of  this 
state  or  not,  and  whether  such  estate  consists  of  real,  personal  or  mixed  property, 
tangible  or  intangible,  and  any  interest  in,  or  income  from  any  such  estate  or 
property,  which  property  is,  at  the  death  of  the  decedent  owner,  within  this  state 
or  is  subject  to,  or  thereafter,  for  the  purpose  of  distribution,  is  brought  within 
this  state  and  becomes  subject  to  the  jurisdiction  of  the  courts  of  this  state,  or 
the  prbperty  of  any  decedent,  domiciled  within  this  state  at  the  time  of  the  death 
of  such  decedent,  even  though  the  property  of  such  decedent  so  domiciled  was 
situated  outside  of  the  state,  except  real  estate  located  outside  of  the  state  passing 
in  fee  from  the  decedent  owner,  which  shall  pass  by  will  or  by  the  statutes  of 
inheritance  of  this  or  any  other  state  or  country,  or  by  deed,  grant,  sale,  gift  or 
transfer  made  in  contemplation  of  the  death  of  the  donor,  or  made  or  intended  to 
take  effect  in  possession  or  enjoyment  after  the  death  of  the  grantor  or  donor, 
to  any  person,  or  for  any  use  in  trust  or  otherwise,  other  than  to  or  for  the  use 
of  persons,  or  uses  exempt  by  this  act  shall  be  subject  to  a  tax  of  five  (5)per  centum, 
provided,  however,  that  when  property  or  any  interest  therein  shall  pass  to  heirs, 
devisees  or  other  beneficiaries  subject  to  the  tax  imposed  by  this  act  who  are 
aliens,  non-residents  of  the  United  States,  the  same  shall  be  subject  to  a  tax  of 
twenty  (20)  per  centum  of  its  true  value  except  when  such  foreign  beneficiaries 
are  brothers  or  sisters  of  the  decedent  owner,  when  the  rate  of  tax  to  be  assessed 
and  collected  therefrom  shall  be  ten  (10)  per  centum  of  the  value  of  the  property 
or  interest  so  passing.  Any  person  beneficially  entitled  to  any  property  or  interest 
therein  because  of  any  sueh  gift,  legacy,  devise,  annuity,  transfer  or  inheritance, 
and  all  administrators,  executors,  referees  and  trustees,  and  any  such  grantee 
under  a  conveyance,  and  any  such  donee  under  a  gift,  and  any  such  legatee, 
annuitant,  devisee,  heir  or  beneficiary,  shall  be  respectively  liable  for  all  such  taxes 
to  be  paid  by  them  respectively.  The  tax  aforesaid  shall  be  for  the  use  of  the 
state,  shall  accrue  at  the  death  of  the  decedent  owner,  and  shall  be  paid  to  the 
treasurer  of  state  within  eighteen  (18)  months  thereafter,  except  when  otherwise 
provided  in  this  act,  and  shall  be  and  remain  a  legal  charge  against  and  a  lien 


1911,  c.  68.]  IOWA.  459 

upon  such  estate,  and  any  and  all  of  the  property  thereof  from  the  death  of  the 
decedent  owner  until  paid. 

[See  notes  to  the  Statute  of  1896,  ante,  p.  441  et  seq.] 

Exemptions. 

S.  2.     The  tax  imposed  by  this  act  shall  not  be  collected, 

1st  —  When  the  entire  estate  of  the  decedent  does  not  exceed  the  sum  of  one 
thousand  dollars  ($1,000.00)  after  deducting  the  debts  as  defined  in  this  act. 

2d  —  When  the  property  passes  to  the  husband  or  wife. 

3d  —  When  the  property  passes  to  the  father,  mother,  lineal  descendant, 
adopted  child  or  the  lineal  descendant  of  an  adopted  child  of  decedent. 

4th  —  When  the  property  passes  to  educational  and  religious  societies  or 
institutions,  public  Hbraries  and  public  art  galleries  within  this  state  and  open  to 
the  free  use  of  the  public. 

5th  —  Property  passing  to  or  for  hospitals  withm  this  state  open  to  the  public 
and  not  operated  for  gain,  or  to  societies  within  this  state  organized  for  purposes 
of  public  charity,  including  cemetery  associations,  but  not  including  societies 
maintained  by  fees,  dues  or  assessments  in  whose  benefits  the  public  may  not 
share. 

6th  —  Bequests  for  the  care  and  maintenance  of  the  cemetery  or  burial  lot 
of  decedent  and  his  family,  and  bequests  not  to  exceed  five  hundred  dollars 
($500.00)  in  any  estate,  to  or  for  the  performance  of  a  religious  service  or  services 
by  some  person  regularly  ordained,  authorized  or  licensed  by  any  religious  society 
to  perform  such  service  to  be  performed  for  or  in  behalf  of  the  testator,  or  some 
person  named  in  his  last  will,  provided  such  person  so  named  is,  or  would  be 
exempt  from  the  tax  imposed  by  this  act. 

7th  —  When  the  property  passes  to  a  municipal  or  political  corporation  within 
this  state  for  a  purely  public  purpose. 

[See  notes  to  the  Act  of  1896,  ante,  p.  447.J 

Debts. 

S.  3.  The  term  "debts"  as  used  in  this  act  shall  include,  in  addition  to  debts 
owing  by  the  decedent  at  the  time  of  his  death,  the  local  or  state  taxes  due  from 
the  estate  in  January  of  the  year  of  his  death,  a  reasonable  sum  for  funeral  ex- 
penses, court  costs,  the  cost  of  appraisement  made  for  the  purpose  of  assessing 
the  collateral  inheritance  tax,  the  statutory  fees  of  executors,  administrators 
or  trustees  estimated  upon  the  appraised  value  of  the  property,  the  amount  paid 
by  the  executor  or  administrator  for  a  bond,  the  attorney  fee  in  a  reasonable 
amount  to  be  approved  by  the  court,  for  the  ordinary  probate  proceedings  in  said 
estate,  and  no  other  sum;  but  said  debts  shall  not  be  deducted  unless  the  same  are 
approved  and  allowed  by  the  court  within  eighteen  (18)  months  from  the  death 
of  the  decedent,  as  established  claims  against  the  estate,  unless  otherwise  ordered 
by  the  judge  or  court  of  the  proper  county. 

[See  notes  to  the  Act  of  1896,  ante,  p.  449.] 

Petition   by   State  Treasurer   for   Administration.  —  Non-Residents. 

S.  4.  If,  upon  the  death  of  any  person  leavihg  an  estate  that  may  be  liable  to 
a  tax  under  the  provisions  of  this  act,  a  will  disposing  of  such  estate  is  not  offered 
for  probate,  or  an  application  for  administration  made  within  four  months 
from  the  time  of  such  decease,  the  treasurer  of  state  may,  at  any  time  thereafter, 


460  STATUTES  ANNOTATED.  [Iowa  St. 

make  application  to  the  proper  court,  setting  forth  such  fact  and  praying  that  an 
administrator  may  be  appointed,  and  thereupon  said  court  shall  appoint  an 
administrator  to  administer  upon  such  estate.  When  the  heirs  or  persons  entitled 
to  inherit  the  property  of  an  estate  subject  to  the  tax  hereby  imposed,  desire  to 
avoid  the  appointment  of  an  administrator  as  provided  in  this  section,  they  or 
one  of  them  shall,  before  the  expiration  of  four  months  from  the  death  of  the 
decedent,  file  under  oath  the  inventories  and  reports  and  perform  all  the  dyties 
required  by  this  act,  of  administrators,  including  the  filing  of  the  lien ;  proceedings 
for  the  collection  of  the  tax  when  no  administrator  is  appointed,  shall  conform  as 
nearly  as  may  be  to  the  provisions  of  this  act  in  other  cases. 

A  non-resident  of  this  state  shall  not  be  appointed  as  executor,  administrator 
or  trustee  of  any  estate  that  may  be  subject  to  the  tax  imposed  by  this  act,  unless 
such  non-resident  first  file  a  bond  conditioned  upon  the  payment  of  all  tax, 
interest  and  costs  for  which  the  estate  may  be  liable,  such  bond  to  be  signed 
by  not  less  than  two  resident  freeholders  or  by  an  approved  surety  company  and 
in  an  amount  not  less  than  twenty-five  per  cent  (25  per  cent)  of  the  total  value  of 
the  estate,  or  of  the  property  within  this  state  if  the  estate  is  a  foreign  estate. 

Appraisers. 

S.  5.  In  each  county,  the  court  shall  annually  at  the  first  time  of  the  court 
therein  appoint  three  competent  residents  and  freeholders  of  said  county,  to  act 
as  appraisers  of  all  property  within  its  jurisdiction  which  is  charged  or  sought  to 
be  charged  with  the  collateral  inheritance  tax.  Said  appraisers  shall  serve  for 
one  year,  and  until  their  successors  are  appointed  and  qualified.  They  shall  each 
take  an  oath  to  faithfully  and  impartially  perform  the  duties  of  the  office,  but 
shall  not  be  required  to  give  bond.  They  shall  be  subject  to  removal  at  any  time 
at  the  discretion  of  the  court,  and  the  court  or  judge  thereof  in  vacation,  may  also 
in  its  discretion,  either  before  or  after  the  appointment  of  the  regular  appraisers, 
appoint  other  appraisers  to  act  in  any  given  case.  Vacancies  occurring  otherwise 
than  by  expiration  of  term,  shall  be  filled  by  the  appointment  of  the  court  or  by  a 
judge  in  vacation.  No  person  interested  in  any  manner  in  the  estate  to  be 
appraised  may  serve  as  an  appraiser  of  such  estate 

Comtnission  to  Appraisers. 

S.  6.  Whenever  it  appears  that  an  estate  or  any  property  or  interest  therein 
is  or  may  be  subject  to  the  tax  imposed  by  this  act,  the  clerk  shall  issue  a  com- 
mission to  the  appraisers,  who  shall  fix  a  time  and  place  for  appraisement,  except 
that  if  the  only  interest  that  is  subject  to  such  tax  is  a  remainder  or  deferred 
interest  upon  which  the  tax  is  not  payable  until  the  determination  of  a  prior  estate 
or  interest  for  life  or  term  of  years,  he  shall  not  issue  such  commission  until  the 
determination  of  such  prior  estate,  except  at  the  request  of  parties  in  interest 
who  desire  to  remove  the  lien  thereon. 

Notice  by  Appraisers. 

S.  7.  It  shall  be  the  duty  of  all  appraisers  appomted  under  the  provisions  of 
this  act,  upon  receiving  a  commission  as  herein  provided,  to  forthwith  give  notice 
to  the  treasurer  of  state  and  other  persons  known  to  be  interested  in  the  property 
to  be  appraised,  of  the  time  and  place  at  which  they  will  appraise  such  property, 
which  time  shall  not  be  less  than  ten  days  from  the  date  of  such  notice.  The 
notice  shall  be  served  in  the  same  manner  as  is  prescribed  for  the  commencement 


1911,  c.  68.]  IOWA.  461 

of  civil  actions,  and  if  not  practicable  to  serve  the  notice  provided  for  by  statute, 
they  shall  apply  to  the  court  or  a  judge  thereof  in  vacation  for  an  order  as  to 
notice  and  upon  service  of  such  notice  and  the  making  of  such  appraisement,  the 
said  notice,  return  thereon  and  appraisement  shall  be  filed  with  the  clerk,  and 
a  copy  of  such  appraisement  shall  at  once  be  filed  by  the  clerk  with  the  treasurer 
of  state.  When  property  is  located  in  more  than  one  county,  the  appraisers  of 
the  county  in  which  the  estate  is  being  administered  may  appraise  the  whole 
estate,  or  those  of  the  several  counties  may  serve  for  the  property  within  their 
respective  counties  or  other  appraisers  be  appointed  as  the  district  'court  if  in 
session,  or  judge  thereof  in  vacation  may  direct.  • 

[See  notes  to  the  Act  of  1896  and  1898,  ante,  pp.  441,  450.1 

Objections  and  Appeal  from  Appraisal. 

S.  8.  The  treasurer  of  state  or  any  person  interested  in  the  estate  or  property 
appraised,'  may,  within  twenty  (20)  days  thereafter,  file  objections  to  said  ap- 
praisement and  give  notice  thereof  a:s  in  beginning  civil  actions,  on  the  hearing 
of  which  as  an  action  in  equity  either  party  may  produce  evidence  competent 
or  material  to  the  matters  therein  involved.  If  upon  such  hearing  the  court  finds 
the  amount  at  which  the  property  is  appraised  is  its  value  on  the  market  in  the 
ordinary  course  of  trade,  and  the  appraisement  was  fairly  and  in  good  faith  made, 
it  shall  approve  such  appraisement;  but  if  it  finds  that  the  appraisement  was  made 
at  a  greater  or  less  sum  than  the  value  of  the  property  in  the  ordinary  course  of 
trade,  or  that  the  same  was  not  fairly  or  in  good  faith  made,  it  shall  set  aside  the 
appraisement,  appoint  new  appraisers  and  so  proceed  until  a  fair  and  good  ap- 
praisement of  the  property  is  made  at  its  value  in  the  market  in  the  ordinary  course 
of  trade.  The  treasurer  of  state  or  anyone  interested  in  the  property  appraised, 
may  appeal  to  the  supreme  court  from  the  order  of  the  district  court  approving 
or  setting  aside  any  appraisement  to  which  exceptions  have  been  filed.  Notice 
of  appeal  shall  be  served  within  sixty  days  from  the  date  of  the  order  appealed 
from,  and  the  appeal  shall  be  perfected  in  the  time  now  provided  for  appeals  in 
equitable  actions.  In  case  of  appeal  the  appellant,  if  he  is  not  the  treasurer  of 
state,  shall  give  bond  to  be  approved  by  the  clerk  of  the  court,  which  bond  shall 
provide  that  the  said  appellant  and  sureties  shall  pay  the  tax  for  which  the 
property  may  be  liable  with  cost  of  appeal.  If  upon  the  hearing  of  objections  to 
the  appraisement,  the  court  finds  that  the  property  is  not  subject  to  the  tax, 
the  court  shall  upon  expiration  of  time  for  appeal,  when  no  appeal  has  been 
taken,  order  the  clerk  to  enter  upon  the  lien  book  a  cancellation  of  any  claim 
or  lien  for  taxes.  If  at  the  end  of  twenty  (20)  days  from  the  filing  of  the  appraise- 
ment with  the  clerk,  no  objections  are  filed,  the  appraisement  shall  stand  approved. 

Appraisal. 

*  S.  9.  Within  ninety  (90)  days  after  the  transfer  of  ^ny  property  that  may  be 
liable  for  a  tax  under  the  provision  of  this  act,  except  as  herein  otherwise  provided, 
the  clerk  of  the  proper  county  upon  his  own  motion  or  upon  the  application  of  the 
treasurer  of  state,  county  attorney,  or  person  interested  in  the  property,  shall  cause 
the  property  to  be  appraised  as  provided  herein.  If  there  be  an  estate  or  property 
subject  to  said  tax  wherein  the  records  in  the  clerk's  office  do  not  disclose  that  there 
may  be  a  tax  due  under  the  provisions  of  this  act,  the  person  or  persons  interested 
in  the  property  shall  report  the  matter  to  the  clerk  with  an  application  that  the 
property  be  appraised.     The  appraised  value  of  the  property  shall  in  all  cases 


462  STATUTES  ANNOTATED.  [Iowa  St. 

be  its  market  value  in  the  ordinary  course  of  trade,  and  in  domestic  estates  the 
tax  shall  be  calculated  thereon  after  deducting  the  debts  as  defined  herein; 
provided,  however,  that  the  debt  of  a  domestic  estate  owing  for  or  secured  by 
property  outside  of  the  state,  shall  not  be  deducted  before  estimating  the  tax, 
except  when  the  property  for  which  the  debt  is  owing  or  by  which  it  is  secured  is 
subject  to  the  tax  imposed  by  this  act,  or  when  the  foreign  debt  exceeds  the  value 
of  the  property  securing  it  or  for  which  it  was  contracted,  then  the  excess  may  be 
deducted  provided  that  satisfactory  proof  of  the  value  of  the  foreign  property 
and  the  amount  of  such  debt  is  furnished  to  the  treasurer  of  state. 

Appraisal,  cofitinued. 

S.  10.  All  estates  subject  in  whole  or  in  part  to  the  tax  imposed  by  this  act 
shall  be  appraised  for  the  purpose  of  computing  said  tax  by  the  regular  collateral 
inheritance  tax  appraisers;  provided,  that  estates  liable  for  the  payment  of  the 
inheritance  tax  upon  specific  legacies,  annuities,  bequests  of  money  or  other 
property,  the  value  of  which  may  be  determined  without  appraisement,  and 
estates  which  consist  of  money,  book  accounts,  bank  deposits,  notes,  mortgages 
and  bonds,  need  not  be  appraised  by  the  collateral  inheritance  tax  appraisers  if 
the  administrator,  executor  or  trustee  or  the  persons  entitled  to  or  claiming  such 
property  are  willing  to  charge  themselves  with  the  full  face  value  of  such  bequests 
or  property,  together  with  the  interest,  earnings,  or  undivided  profits  which  may 
be  due  on  said  properties,  at  the  time  of  death  of  the  testator  or  intestate,  as 
the  basis  for  the  assessment  of  said  tax,  but  in  all  cases  the  relief  from  appraise- 
ment for  the  collateral  inheritance  tax  is  dependent  upon  the  consent  of  the 
treasurer  of  state,  and  the  subsequent  approval  thereof  by  the  court  or  judge 
thereof  in  vacation.  In  the  event  that  the  estate  has  been  duly  appraised  under 
the  orciinary  statutes  of  inheritance  or  the  property  has  been  sold  and  such  ap- 
praisement or  selling  price  is  accepted  by  the  treasurer  of  state  as  satisfactory 
for  collateral  inheritance  tax  purposes,  the  court  or  judge  thereof  in  vacation  may, 
upon  proper  application,  relieve  the  estate  from  the  appraisement  by  the  collateral 
inheritance  tax  appraisers;  but  in  order  to  obtain  such  relief,  the  administrator, 
executor,  trustee  or  other  party  interested  must  file  an  application  for  relief  with 
the  consent  of  the  treasurer  of  state  thereto  in  the  office  of  the  clerk  of  the  court 
before  said  clerk  issues  a  commission  to  the  collateral  inheritance  tax  appraisers. 
The  court  or  judge  thereof  in  vacation  may,  upon  application  of  the  representatives 
of  the  estate  or  parties  interested,  relieve  the  estate  of  the  appraisement  for 
collateral  tax  purposes  if  it  be  shown  to  said  court  that  the  market  value  of  the 
entire  estate  will  not  exceed  one  thousand  dollars;  provided,  that  prior  to  the 
application  to  said  court  or  judge  the  written  consent  of  the  treasurer  of  state  to 
such  relief  is  procured.  In  all  cases  where  an  estate  is  relieved  from  an  appraise- 
ment for  collateral  inheritance  tax  purposes,  the  order  granting  relief  shall  be 
recorded  in  the  clerk's  office,  and  the  fact  of  such  relief  and  reasons  therefor  shall 
be  duly  noted  in  the  decree  or  order  of  final  settlement  made  by  the  court. 

Appraisal.  —  Remainders  in  Real  Estate. 

S.  11.  When  any  person,  whose  estate  over  and  above  the  amount  of  his 
debts,  as  defined  in  this  act,  exceeds  the  sum  of  one  thousand  dollars,  shall  be- 
queath or  devise  any  real  property  to  or  for  the  use  of  persons  exempt  from  the 
tax  imposed  by  this  act,  during  life  or  for  a  term  of  years,  and  the  remainder  to  a 
collateral  heir,  said  property  upon  the  determination  of  such  estate  for  life  or 


1911,  c.  68.]  IOWA.  463 

years,  shall  be  appraised  at  its  then  actual  market  value  from  which  shall  be 
deducted  the  value  of  any  improvements  thereon,  or  betterments  thereto,  if  any, 
made  by  the  remainderman  during  the  time  of  the  prior  estate,  to  be  ascertained 
and  determined  by  the  appraisers  and  the  tax  on  the  remainder  shall  be  paid  by 
such  remainderman  as  provided  in  the  next  succeeding  section. 

Same. 

S.  12.  Whenever  any  real  property  of  a  decedent  shall  be  subject  to  such  tax 
and  there  be  an  estate  or  interest  for  life  or  term  of  years  given  to  a  party  other 
than  those  especially  exempt  by  this  act,  the  clerk  shall  cause  such  property  to 
be  appraised  at  the  actual  market  value  thereof,  as  is  provided  in  ordinary  cases, 
and  the  party  entitled  to  such  estate  or  interest  shall  within  one  (1)  year  from  the 
death  of  decedent  owner  pay  such  tax,  and  in  default  thereof  the  court  shall  order 
such  interest  in  said  estate,  or  so  much  thereof  as  shall  be  necessary  to  pay  such 
tax  and  interest,  to  be  sold.  Upon  the  determination  of  any  prior  estate  or 
interest,  when  the  remainder  or  deferred  estate  or  interest  or  any  part  thereof 
is  subject  to  such  tax  and  the  tax  upon  such  remainder  or  deferred  interest  has 
not  been  paid,  the  person  or  persons  entitled  to  such  remainder  or  deferred 
interest  shall  immediately  report  to  the  clerk  of  the  proper  court  the  fact  of  the 
determination  of  the  prior  estate,  and  upon  receipt  of  such  report,  or  upon  in- 
formation from  any  source,  of  the  determination  of  any  such  prior  estate  when 
the  remainder  interest  has  not  been  appraised  for  the  purpose  of  assessing  such 
tax,  the  clerk  shall  forthwith  issue  a  commission  to  the  collateral  inheritance  tax 
appraisers,  who  shall  immediately  proceed  to  appraise  the  property  as  provided 
in  like  cases  in  the  next  preceding  section,  and  the  tax  upon  such  remainder  in- 
terest shall  be  paid  by  the  remainderman  within  one  (1)  year  next  after  the 
determination  of  the  prior  estate.  If  such  tax  is  not  paid  within  said  time  the 
court  shall  then  order  said  property,  or  so  much  thereof  as  may  be  necessary  to 
pay  such  tax,  and  interest  to  be  sold. 

Appraisal.  -^  Interests  in  Personal  Property. 

S.  13.  Whenever  any  personal  property  shall  be  subject  to  the  tax  imposed 
by  this  act  and  there  be  an  estate  or  interest  for  life  or  term  of  years  given  to  one 
or  more  persons  and  remainder  or  deferred  estate  to  others,  the  clerk  shall  cause 
the  property  so  devised  or  conveyed  to  be  appraised  as  provided  herein  in  ordinary 
estates  and  the  value  of  the  several  estates  or  interests  so  devised  or  conveyed 
shall  be  determined  as  provided  in  section  seventeen  (17)  of  this  act,  and  the 
tax  upon  such  estates  or  interests  as  are  liable  for  the  tax  imposed  by  this  act 
shall  be  paid  to  the  treasurer  of  state  from  the  property  appraised  or  by  the 
persons  entitled  to  such  estate  or  interest  within  eighteen  (18)  months  from  the 
death  of  the  testator,  grantor,  or  donor,  provided,  however,  that  payment  of 
the  tax  upon  any  deferred  estate  or  remainder  interest  may  be  deferred  until  the 
determination  of  the  prior  estate  by  the  giving  of  a  good  and  sufficient  bond 
as  provided  in  the  next  succeeding  section. 

Remainder  Interests.  —  Bond.  —  When  Tax  Payable. 

S.  14.  When  in  case  of  deferred  estates  or  remainder  interests  in  personal 
property  or  in  the  proceeds  of  any  real  estate  that  may  be  sold  during  the  time 
of  a  life,  term  or  prior  estate,  the  persons  interested  who  may  desire  to  defer  the 
payment  of  the  tax  until  the  determination  of  the  prior  estate,  shall  file  with  the 


464  STATUTES  ANNOTATED.  [Iowa  St. 

clerk  of  the  proper  district  court  a  bond  as  provided  herein  in  other  cases,  such 
bond  to  be  renewed  every  two  years  until  the  tax  upon  such  deferred  estate  is 
paid.  If  at  the  end  of  any  two  year  period  the  bond  is  not  promptly  renewed 
as  herein  provided  and  the  tax  has  not  been  paid,  the  bond  shall  be  declared 
forfeited. 

When  the  estate  of  a  decedent  consists  in  part  of  real  and  in  part  of  personal 
property,  and  there  be  an  estate  for  life  or  for  a  term  of  years  to  one  or  more 
persons  and  a  deferred  or  remainder  estate  to  others,  and  such  deferred  or  remain- 
der estate  is  in  whole  or  in  part  subject  to  the  tax  imposed  by  this  act,  if  the 
deferred  or  remainder  estates  or  interests  are  so  disposed  that  good  and  sufficient 
security  for  the  payment  of  the  tax  for  which  such  deferred  or  remainder  estates 
may  be  liable  can  be  had  because  of  the  lien  imposed  by  this  act  upon  the  real 
property  of  such  estate,  then  payment  of  the  tax  upon  such  deferred  or  remainder 
estates  may  be  postponed  until  the  determination  of  the  prior  estate  without 
giving  bond  as  herein  required  to  secure  payment  of  such  tax,  and  the  tax  shall 
remain  a  lien  upon  such  real  estate  until  this  tax  upon  such  deferred  estate  or 
interest  is  paid. 

Bonds.  —  Form  and  Amount. 

S.  15.  All  bonds  required  by  this  act  shall  be  payable  to  the  treasurer  of  state 
and  shall  be  conditioned  upon  the  payment  of  the  tax,  interest  and  costs  for  which 
the  estate  may  be  liable,  and  for  the  faithful  performance  of  all  the  duties  hereby 
imposed  upon  and  required  of  the  person  whose  acts  are  by  such  bond  to  be  guaran- 
teed, and  shall  be  in  an  amount  equal  to  twice  the  amount  of  the  tax  interest 
and  costs  that  may  be  due,  but  in  no  case  less  than  five  hundred  dollars 
($500.00)  and  must  be  secured  by  not  less  than  two  resident  freeholders  or 
by  a  fidelity  or  surety  company  authorized  by  the  auditor  of  state  to  do  business 
in  this  state. 

Removing  Property  from  State  without  Paying  Tax. 

S.  16.  It  shall  be  unlawful  for  any  person  to  remove  from  this  state  any 
property,  or  the  proceeds  thereof,  that  may  be  subject  to  the  tax  imposed  by 
this  act,  without  paying  the  said  tax  to  the  treasurer  of  state.  Any  person 
violating  the  provisions  of  this  section  shall  be  guilty  of  a  felony  and  upon  con- 
viction shall  be  fined  an  amount  equal  to  twice  the  amount  of  tax,  interest  and 
costs  for  which  the  estate  may  be  liable,  but  in  no  case  less  than  two  hundred 
dollars  ($200.00)  and  imprisoned  as  the  court  shall  direct,  until  the  fine  is  paid. 
Provided,  however,  that  the  penalty  hereby  imposed  shall  not  be  enforced,  if 
prior  to  the  removal  of  such  property  or  the  proceeds  thereof  the  person  desiring 
to  effect  such  removal  files  with  the  clerk  a  bond  conditioned  upon  the  payment 
of  the  tax,  interest  and  costs,  as  is  provided  in  the  preceding  section  hereof. 

Annuity  Tables  Used. 

S.  17.  The  value  of  any  annuity,  deferred  estate  or  interest,  or  any  estate  for 
life  or  term  of  years,  subject  to  the  collateral  inheritance  tax,  shall  be  determined 
for  the  purpose  of  computing  said  tax  by  the  rule  of  standards  of  mortality  and  of 
value  commonly  used  in  actuaries'  combined  experience  tables  as  now  provided 
by  law.  The  taxable  value  of  annuities,  life  or  term,  deferred  or  future  estates, 
shall  be  computed  at  the  rate  of  four  (4)  per  cent  per  annum  of  the  appraised 
value  of  the  property  in  which  such  estate  or  interest  exists  or  is  founded.    When- 


1911,  c.  68.]  IOWA.  465 

ever  it  is  desired  to  remove  the  lien  of  the  collateral  inheritance  tax  on  remainders, 
reversions,  or  deferred  estates,  parties  owning  the  beneficial  interest  may  pay  at 
any  time  the  said  tax  on  the  present  worth  of  such  interests  determined  according 
to  the  rules  herein  fixed. 


Duty  of  Executors,  etc.,  to  Pay  Tax.  —  Power  of  Sale.  —  Actions. 

S.  18.  It  is  hereby  made  the  duty  of  all  executors,  administrators,  trustees 
or  other  persons  charged  with  the  management  or  settlement  of  any  estate  subject 
to  the  tax  provided  for  in  this  act,  to  collect  and  pay  to  the  treasurer  of  state  the 
amount  of  tax  due  from  any  devisee,  grantee,  donee,  heir  or  beneficiary  of  the 
decedent,  except  in  cases  where  payment  of  the  tax  is  deferred  until  the  determina- 
tion of  a  prior  estate  in  which  cases  the  treasurer  of  state  shall  collect  the  same. 
Executors,  administrators,  trustees  or  the  state  treasurer,  shall  have  power  to 
sell  so  much  of  the  property  of  the  decedent  as  will  enable  them  to  pay  said  tax, 
in  the  same  manner  as  is  now  provided  by  law  for  the  sale  of  such  property  for 
the  payment  of  debts  of  testators  or  intestates.  The  treasurer  of  state  may  bring 
or  cause  to  be  brought  in  his  name  of  office,  suit,  for  the  collection  of  said  tax, 
interest  and  costs,  against  the  executor,  administrator  or  trustee,  or  against  the 
person  entitled  to  property  subject  to  said  tax,  or  upon  any  bond  given  to  secure 
payment  thereof,  either  jointly  or  severally,  and  obtaining  judgment  may  cause 
execution  to  be  issued  thereon  as  is  provided  by  statute  in  other  cases.  The 
proceedings  shall  conform  as  nearly  as  may  be  to  those  for  the  collection  of  ordi- 
nary debt  by  suit. 

If  because  of  necessary  litigation  or  other  unavoidable  cause  of  delay  enforced 
payment  of  the  tax  hereby  imposed,  by  suit  and  execution,  would  result  in  loss 
or  be  to  the  de'triment  of  the  best  interests  of  the  estate,  the  court  may  extend  the 
time  for  the  payment  of  the  tax.  Such  extensions  of  time  shall  not  be  granted 
except  in  cases  where  security  is  given  for  payment  of  the  tax,  interest  and  costs. 

Tax  to  be  Deducted  by  Executors,  etc. 

S.  19.  Every  executor,  administrator,  referee  or  trustee  having  in  charge  or 
trust  any  property  of  an  estate  subject  to  said  tax,  and  which  is  made  payable 
by  him,  shall  deduct  the  tax  therefrom  or  shall  collect  the  tax  thereon  from  the 
legatee  or  person  entitled  to  said  property  and  pay  the  same  to  the  treasurer  of 
state,  and  he  shall  not  deliver  any  specific  legacy  or  property  subject  to  said  tax 
to  any  person  until  he  has  collected  the  tax  thereon. 

Probate  Accounts  not  Settled  till  Tax  Paid. 

S.  20.  No  final  settlement  of  the  account  of  any  executor,  administrator 
or  trustees  shall  be  accepted  or  allowed  unless  it  shall  show,  and  the  court  shall 
find,  that  all  taxes  imposed  by  the  provisions  of  this  act  upon  any  property  or 
interest  therein,  that  is  hereby  made  payable  by  such  executors,  administrators 
or  trustees,  and  to  be  settled  by  said  account,  shall  have  been  paid,  and  the 
receipt  of  the  treasurer  of  state  for  such  tax  shall  be  the  proper  voucher  for  such 
payment.  Any  order  contravening  the  provision  of  this  section  shall  be  void. 
Upon  the  filing  of  such  receipt  showing  payment  of  the  tax,  the  clerk  shall  record 
the  same  upon  the  collateral  inheritance  tax  lien  book  in  his  office. 


466  STATUTES  ANNOTATED.  [Iowa  St. 

Jurisdiction  of  District  Court. 

S.  21.  The  district  court  in  the  county  in  which  some  part  of  the  property  is 
situated,  of  the  decedent  who  was  not  a  resident,  or  such  court  in  the  county  of . 
which  the  deceased  was  a  resident  at  the  time  of  his  death  or  where  such  estate  is 
administered,  shall  have  jurisdiction  to  hear  and  determine  all  questions  regularly 
brought  before  it  in  relation  to  said  tax  that  may  arise  affecting  any  devise,  legacy, 
annuity,  transfer,  grant,  gift  or  inheritance,  subject  to  appeal  as  in  other  cases, 
and  the  treasurer  of  state  shall  in  his  name  of  office,  with  all  the  rights  and  privi- 
leges of  a  party  in  interest,  represent  the  state  in  any  such  proceedings. 

Bequests  to  Executors,  etc. 

S.  22.  Whenever  a  decedent  appoints  one  or  more  executors  or  trustees  and 
in  lieu  of  their  allowance  or  commission,  makes  a  bequest  or  devise  of  property 
to  them  which  would  otherwise  be  liable  to  said  tax,  or  appoints  them  his  residuary 
legatees,  and  said  bequests,  devises  or  residuary  legacies  exceed  the  statutory 
fees  as  compensation  for  their  services,  such  excess  shall  be  liable  to  such  tax. 

Legacies  Charged  on  Real  Estate. 

S.  23.  Whenever  any  legacies  subject  to  said  tax  are  charged  upon  or  payable 
out  of  any  real  estate,  the  heir  or  devisee,  before  paying  the  same,  shall  deduct  said 
tax  therefrom  and  pay  it  to  the  executor,  administrator,  trustee  or  treasurer  of 
state,  and  the  same  shall  remain  a  charge  against  and  be  a  lien  upon  said  real 
estate  until  it  is  paid;  and  payment  thereof  shall  be  enforced  by  the  executor, 
administrator,  trustee  or  treasurer  of  state  in  his  name  of  office  as  herein  provided. 

Paynient.  —  Interest. 

S.  24.  All  taxes  imposed  by  this  act  shall  be  payable  to  the  treasurer  of  state, 
and  except  when  otherwise  provided  in  this  act,  shall  be  paid  within  eighteen  (18) 
months  from  the  death  of  the  testator  or  intestate.  All  taxes  not  paid  within 
the  time  prescribed  in  this  act  shall  draw  interest  at  the  rate  of  eight  per  centum 
per  annum  thereafter  until  paid. 

Information  to  be  Furnished. 

S.  25.  Before  issuing  his  receipt  for  the  tax,  the  treasurer  of  state  may  de- 
mand from  administrators,  executors,  trustees  or  beneficiaries  such  information 
as  may  be  necessary  to  verify  the  correctness  of  the  amount  of  the  tax  and  in- 
terest, and  when  such  demand  is  made  they  shall  send  to  said  treasurer  certified 
copies  of  wills,  deeds,  or  other  papers,  or  of  such  parts  of  their  reports  as  he  may 
demand,  and  upon  the  refusal  or  neglect  of  said  parties  to  comply  with  the  demand 
of  the  treasurer  of  state,  it  is  the  duty  of  the  clerk  of  the  court  to  comply  with 
such  demand,  and  the  expenses  of  making  such  copies  and  transcripts  shall  be 
charged  against  the  estate,  as  are  other  costs  in  probate,  or  the  tax  may  be  assessed 
without  deducting  the  debts  for  which  the  estate  may  be  liable. 

Records. 

S.  26.  The  clerk  of  the  district  court  in  and  for  each  county  shall  provide  and 
keep  a  suitable  book,  substantially  bound  and  suitably  ruled,  to  be  known  as  the 
collateral  inheritance  tax  and  lien  book,  in  which  shall  be  kept  a  full  and  accurate 


1911,  c.  68.]  IOWA.  467 

record  of  all  proceedings  in  cases  where  property  is  charged  or  sought  to  be  charged 
with  the  payment  of  a  collateral  inheritance  tax  under  the  laws  of  this  state,  to 
be  printed  and  ruled  so  as  to  show  upon  one  page:  — 

(1)  The  name,  place  of  residence,  and  date  of  death  of  the  decedent. 

(2)  Whether  the  decedent  died  testate,  or  intestate,  and  if  testate,  the  record 
and  page  where  the  will  was  probated  and  recorded. 

(3)  The  name  and  post-office  address  of  the  executor,  administrator,  trustee 
or  grantee,  with  date  of  appointment  or  transfer. 

(4)  The  names,  post-office  address  and  relationship,  if  known,  of  all  the  heirs, 
devisees  and  grantees. 

(5)  The  appraised  valuation  of  the  personal  property. 

(6)  The  amount  of  inheritance  tax  due  upon  said  personal  property. 

(7)  A  record  of  payment  with  amount  and  date. 

(8)  Date  of, filing  objections  and  names  of  objectors. 

(9)  Blank  for  index  and  reference  to  all  proceedings  and  for  memorandum 
entries  of  the  court  or  judge  in  relation  thereto. 

Upon  the  opposite  page  of  such  record  shall  be  printed: 

(1)  "Real  estate  derived  from  (naming  decedent) 
which  is  subject  to  the  lien  prescribed  by  the  statute  for  collateral  inheritance 
tax." 

(2)  A  full  and  accurate  description  of  such  real  estate,  by  forty-acre  or  frac- 
tional tracts,  or  by  lots,  or  other  complete  individual  description. 

(3)  The  appraised  valuation  as  reported  by  the  appraisers,  with  a  reference 
to  the  record  of  their  report,  as  to  each  piece  of  such  real  estate. 

(4)  The  amount  of  the  inheritance  tax  due  upon  each  such  piece. 

(5)  A  record  of  payments,  with  dates  and  amounts. 

Report  by  Executors,  etc. 

S.  27.  Upon  the  appointment  and  qualification  of  such  executor,  administrator 
and  testamentary  trustee,  the  clerk  issuing  the  letters  shall  at  the  same  time 
deliver  to  him  a  blank  form  upon  which  he  shall  be  required  to  make  detailed 
report  of  the  following  facts:  — 

(1)  Name  and  last  residence  of  decedent. 

(2)  Date  of  death. 

(3)  Whether  or  not  he  left  a  will. 

(4)  Name  and  post-office  of  executor,  administrator  or  trustee. 

(5)  Name  and  post-office  of  surviving  wife  or  husband  if  any. 

(6)  If  testate,  name  and  post-office  of  each  beneficiary  under  will. 

(7)  Relationship  of  each  beneficiary  to  the  testator. 

(8)  If  intestate,  name  and  postoffice  of  each  heir  at  law. 

(9)  Relationship  of  each  heir  at  law  to  decedent. 

(10)  Inventory  of  all  real  estate  of  the  decedent  giving  amount  and  description 
of  each  tract. 

(11)  Whether  the  property  passes  in  possession  and  enjoyment  in  fee  for  life 
or  for  a  term  of  years. 

Within  thirty  days  after  his  qualification,  each  executor,  administrator  and 
testamentary  trustee  shall  make  and  return  to  the  clerk,  under  oath,  a  full  and 
detailed  report  as  indicated  in  the  preceding  paragraph,  any  will  to  the  contrary 
notwithstanding,  and  upon  his  failure  to  do  so,  the  clerk  shall  forthwith  report 


468  STATUTES  ANNOTATED.  [Iowa  St. 

his  delinquency  to  the  district  court  if  in  session,  or  to  a  judge  of  said  court 
if  in  vacation,  for  such  order  as  may  be  necessary  to  enforce  an  observ- 
ance of  this  section.  If  it  appears  from  the  inventory  or  report  so  filed 
that  the  real  estate  or  any  part  of  it  is  subject  to  an  inheritance  tax  it 
shall  be  the  duty  of  the  executor  or  administrator  or  of  any  person  interested 
in  the  property  if  there  be  no  administration,  to  cause  the  lien  of  the  same  to  be 
entered  upon  the  lien  book  in  the  office  of  the  clerk  of  the  court  in  each  county 
where  each  particular  tract  of  said  real  estate  is  situated,  and  when  said  real 
estate  or  any  interest  therein,  is  subject  to  such  tax,  no  conveyance  either  before 
or  after  the  entering  of  said  lien,  shall  discharge  the  real  estate  so  conveyed  from 
said  lien,  no  final  settlement  of  the  account  of  any  executor,  administrator  or 
trustee  shall  be  accepted  or  allowed  unless  a  strict  compliance  with  the  provisions 
of  this  section  has  been  had  by  such  person.  Upon  the  filing  of  such  report,  the 
clerk  of  the  court  shall  immediately  forward  a  true  copy  thereof  to  the  treasurer 
of  state. 

Extending  Time  for  Inventories. 

S.  28.  Whenever,  by  reason  of  the  complicated  nature  of  an  estate,  or  by  reason 
of  the  confused  condition  of  the  decedent's  affairs,  it  is  impracticable  for  the 
executor,  administrator,  trustee  or  beneficiary  of  said  estate  to  file  with  the 
clerk  of  the  court  a  full,  complete  and  itemized  inventory  of  the  personal  assets 
belonging  to  the  estate,  within  the  time  required  by  statute  for  filing  inventories 
of  the  estates,  the  court  may,  upon  the  application  of  such  representatives  or 
parties  in  interest,  extend  the  time  for  making  the  collateral  inheritance  appraise- 
ment for  a  period  not  to  exceed  three  months  beyond  the  time  fixed  by  this  act. 

Report  by  Person  Entitled. 

S.  29.  Whenever  any  property  passing  under  the  intestate  laws  may  be  sub- 
ject to  the  tax  imposed  by  this  act,  the  person  or  persons  entitled  to  such  property 
shall  make  or  cause  to  be  made  to  the  clerk  of  the  courts  of  the  county  wherein 
such  property  is  located,  within  ninety  (90)  days  next  following  the  death  of  such 
intestate,  a  report  in  writing  embodying  therein  substantially  the  information 
required  by  the  second  preceding  section  of  this  act.  Failure  to  furnish  such 
report  or  to  probate  the  will  in  a  testate  estate  shall  not  relieve  the  estate  from 
the  lien  created  hereby  or  the  persons  entitled  to  the  property  of  such  decedent 
from  payment  of  the  tax,  interest  or  other  penalties  imposed  by  this  act. 

Records  by  Clerk. 

S.  30.  The  clerk  shall  enter  upon  the  collateral  inheritance  tax  and  lien  book, 
the  title  of  all  estates  subject  to  the  inheritance  tax  as  shown  by  the  inventories 
or  lists  of  heirs  filed  in  his  office,  or  as  reported  to  him  by  the  county  attorney, 
treasurer  of  state,  or  other  person,  and  shall  enter  in  said  book  as  against  each 
estate  or  title  at  the  appropriate  place,  all  such  information  relating  to  the  situ- 
ation and  condition  of  the  estate  as  he  may  be  able  to  obtain  from  the  papers 
filed  in  his  office,  or  from  any  other  source,  as  may  be  necessary  to  the  collection 
and  enforcement  of  the  tax.  He  shall  also  immediately  index  in  the  book  kept  in 
his  office  for  that  purpose,  all  liens  entered  upon  the  collateral  inheritance  tax 
and  lien  book.  Failure  to  make  such  entries  as  are  herein  required,  shall  not 
operate  to  relieve  the  estate  from  the  lien  or  defeat  the  collection  of  the  tax. 


1911,  c.  68.]  IOWA.  469 

Same. 

S.  31.  In  all  cases  entered  upon  the  inheritance  tax  and  lien  book,  the  clerk 
shall  make  a  complete  record  in  the  proper  probate  record,  of  all  the  proceedings, 
orders,  reports,  inventory,  appraisements  and  all  other  matters  and  proceedings 
therein. 

Reports  by  Clerks. 

S.  32.  It  shall  be  the  duty  of  each  clerk  of  the  district  court  to  make  examina- 
tion from  time  to  time  of  all  reports  filed  with  him  by  administrators,  executors  and 
trustees,  pursuant  to  law;  also  to  make  examination  of  all  foreign  wills  offered  for 
probate  or  recorded  within  his  county,  as  well  as  of  the  record  of  deeds  and  convey- 
ances in  the  recorder's  office  of  said  county,  and  if  from  such  examination  or  from 
information  or  knowledge  coming  to  him  from  any  other  source,  he  finds  or  believes 
that  any  property  within  his  county,  or  within  the  jurisdiction  of  the  district 
court  of  said  county  has,  since  July  4,  1896,  passed  by  will  or  by  the  intestate 
laws  of  this  or  any  other  state,  or  by  deed  or  other  method  of  conveyance,  made 
in  anticipation  of  or  intended  to  take  effect,  in  possession  or  in  enjoyment  after 
the  death  of  the  testator,  donor  or  grantor,  to  any  person  other  than  to  or  for  the 
use  of  the  persons,  societies,  or  organizations  exempt  from  the  tax  hereby  imposed, 
he  shall  make  report  thereof  in  writing  to  the  treasurer  of  state,  embodying  in 
such  report  such  information  as  he  may  be  able  to  obtain  as  to  the  name  and  resi- 
dence of  decedent,  date  of  death,  name  and  address  of  administrator,  executor  or 
trustee,  the  description  of  any  property  liable  to  said  tax  and  the  county  in  which 
it  is  located  and  name  and  relationship  of  all  beneficiaries  or  heirs.  Any  citizen 
of  the  state  having  knowledge  of  property  liable  to  such  tax,  against  which  no 
proceeding  for  enforcing  collection  thereof  is  pending,  may  report  the  same  to 
the  clerk  and  it  shall  be  the  duty  of  such  officer  to  investigate  the  case,  and  if 
he  has  reason  to  believe  the  information  to  be  true,  he  shall  forthwith  enter  the 
estate  and  report  the  same  substantially  as  above  indicated.  For  reporting  such 
estates  or  property  the  clerk  shall  receive  a  compensation  of  one  dollar  ($1.00) 
for  each  one  hundred  dollars  ($100.00)  or  fraction  thereof  of  tax  paid,  but  not  to 
exceed  the  sum  of  five  dollars  ($5.00)  in  any  one  estate,  the  same  to  be  in  addition 
to  the  compensation  now  allowed  him  by  law.  Except  when  this  information 
has  first  been  received  from  another  source,  the  treasurer  of  state,  when  he  has 
issued  his  receipt  for  the  tax  in  such  estate,  shall  certify  to  the  auditor  of  state 
the  amount  due  the  clerk  for  such  service  and  the  auditor  of  state  shall  issue  his 
warrant  on  the  treasurer  of  state  in  favor  of  said  clerk  for  the  sum  due  as  herein 
provided. 

County  Attorney.  —  Fees. 

S.  33.  It  shall  be  the  duty  of  the  county  attorney  of  each  county,  when  directed 
by  the  treasurer  of  state,  to  perform  such  legal  services  as  shall  be  necessary  in  the 
enforcement  of  said  tax,  but  such  attorney  shall  have  no  authority  to  receipt  for 
or  receive  any  of  such  tax.  He  shall  advise  and  assist  the  clerk  and  appraisers 
in  the  discharge  of  their  duties  in  collateral  inheritance  tax  matters,  and  see 
that  the  notices  required  by  law  are  properly  made  and  returned.  In  each  estate 
where  the  county  attorney  has  performed  such  legal  services,  he  shall  receive  a 
compensation  as  follows,  viz.:  on  the  first  one  hundred  dollars  ($100.00)  or  frac- 
tion thereof  of  tax  paid,  ten  per  cent;  on  the  excess  of  one  hundred  dollars 
($100.00)  to  five  hundred  dollars  ($500.00)  five  per  cent;   on  the  excess  of  five 


470  STATUTES  ANNOTATED.  [Iowa  St. 

hundred  dollars  ($500.00)  to  one  thousand  dollars  ($1,000.00)  three  per  cent; 
on  all  sums  in  excess  of  one  thousand  dollars  ($1,000.00)  one  per  cent  but  not  to 
exceed  one  hundred  and  fifty  dollars  ($150.00)  from  any  one  estate.  Provided, 
however,  that  except  in  cases  of  litigation  requiring  the  filing  of  a  petition  or 
answer  in  court,  the  fee  in  any  case  shall  not  exceed  the  sum  of  fifty  dollars 
($50.00).  When  the  treasurer  of  state  has  issued  his  receipt  for  the  tax  in  an  estate, 
in  which  the  county  attorney  has  been  directed  to  render  legal  services,  arid  has 
performed  such  services,  the  treasurer  of  state  shall  certify  the  amount  due  for 
such  services  to  the  auditor  of  state,  who  shall  issue  his  warrant  on  the  treasurer 
of  state  in  favor  of  said  county  attorney  for  the  sum  due.  If  the  county  attorney 
is  attorney  for  the  executor,  administrator  or  other  person  interested  in  the  estate, 
the  treasurer  of  state  may  employ  another  attorney  to  represent  the  state. 

Same. 

S.  34.  In  the  event  of  uncertainty  or  of  conflicting  claims  as  to  fees  due  county 
attorneys  or  clerks  under  this  act,  the  treasurer  of  state  is  empowered  to  determine 
the  amount  of  fees,  to  whom  payable,  and  when  the  same  are  due,  and  as  far  as 
possible,  such  determination  shall  be  in  accord  with  fixed  rules  made  by  the 
treasurer  of  state. 

Reports  to  Court. 

S.  35.  On  the  first  day  of  each  regular  term,  the  court  shall  require  the  clerk 
to  present  for  its  inspection  the  inheritance  tax  and  lien  book  hereinbefore  pro- 
vided for,  together  with  all  reports  of  administrators,  executors  and  trustees 
which  have  been  filed  pursuant  to  this  act,  since  the  last  preceding  term.  The 
county  attorney  shall  also  attend  and  make  report  to  the  court  concerning  the 
progress  of  all  cases  pending  for  the  collection  of  such  taxes,  together  with  any 
other  facts,  which  in  his  judgment  may  aid  the  court  in  enforcing  the  general 
observance  of  the  collateral  inheritance  tax  law.  If  from  information  obtained 
from  the  records  or  reports,  or  from  any  other  source,  the  court  has  reason  to 
believe  that  there  is  property  within  its  jurisdiction  liable  to  the  payment  of  an 
inheritance  tax,  against  which  proceedings  for  collection  are  not  already  pending, 
it  shall  enter  an  order  of  record,  directing  the  county  attorney  to  institute  such 
proceedings  forthwith.  Should  any  estate,  or  the  name  of  any  grantee  or  grantees 
be  placed  upon  the  book  at  the  suggestion  of  the  county  attorney,  the  treasurer 
of  state,  or  other  person,  in  which  the  papers  already  on  file  in  the  clerk's  office 
do  not  disclose  that  an  inheritance  tax  is  due  or  payable,  the  county  attorney  shall 
forthwith  give  to  all  parties  in  interest  such  notice  as  the  court  or  judge  may 
prescribe,  requiring  them  to  appear  on  a  day  to  be  fixed  by  the  said  court  or  judge, 
and  show  cause  why  the  property  should  not  be  appraised  and  subjected  to  said 
tax.  At  any  such  hearing  any  person  may  be  required  to  appear  and  answer  as 
to  his  knowledge  of  any  such  estate  or  property.  If  upon  any  such  hearing  the 
court  is  satisfied  that  'any  property  of  the  decedent  or  any  property  devised, 
granted  or  donated  by  him,  is  subject  to  the  tax,  the  same  proceedings  shall  be 
had  as  in  other  cases,  so  far  as  applicable. 

Costs. 

S.  36.  In  all  cases  where  an  estate  or  interest  therein  so  passes  as  to  be  liable 
to  taxation  under  this  act,  all  costs  of  the  proceedings  had  for  the  assessment  of 
such  tax  shall  be  chargeable  to  such  estate  as  other  costs  in  probate  proceedings 


X^ 


1911,  c.  68.]  IOWA.  471 

and  to  discharge  the  lien,  all  costs,  as  well  as  the  taxes  must  be  paid.  In  all  other 
cases  the  costs  are  to  be  paid  as  ordered  by  the  court.  When  a  decision  adverse 
to  the  state  has  been  rendered,  with  an  order  that  the  state  pay  the  costs,  it  shall 
be  the  duty  of  the  clerk  of  the  court  in  which  such  action  was  pending  to  certify 
the  amount  of  such  costs  to  the  treasurer  of  state,  who  shall,  if  said  costs  be 
correctly  certified,  and  the  case  has  been  finally  terminated,  and  the  tax  if  any 
due  has  been  paid,  present  the  claim  to  the  executive  council  to  audit,  and  said 
claim  being  allowed  by  said  council,  the  auditor  of  state  is  directed  to  issue  a 
warrant  on  the  treasurer  of  state  in  payment  of  such  costs. 

Transfers  Forbidden  till  Tax  Paid. 

S.  37.  No  safe  deposit  company,  trust  company,  bank  or  other  institution, 
person  or  persons  holding  securities  or  assets  of  the  decedent  shall  deliver  or 
transfer  the  same  to  the  executor,  administrator  or  legal  representative  of  said 
decedent  unless  the  tax  for  which  such  securities  or  assets  are  liable  under  this 
act  shall  be  first  paid,  or  the  payment  thereof  is  secured  by  bond  as  herein  pro- 
vided. It  shall  be  lawful  for  and  the  duty  of  the  treasurer  of  state  personally, 
or  by  any  person  by  him  duly  authorized,  to  examine  such  securities  or  assets  at 
the  time  of  any  proposed  delivery  or  transfer.  Failure  to  serve  ten  days  notice 
of  such  proposed  transfer  upon  the  treasurer  of  state  or  to  allow  such  examination 
on  the  delivery  of  such  securities  or  assets  to  such  executor,  administrator  or 
legal  representative  shall  render  such  safe  deposit  company,  trust  company,  bank 
or  other  institution,  person  or  persons  liable  for  the  payment  of  the  tax  upon  such 
securities  or  assets  as  provided  in  this  act. 

Foreign  Executor,  etc.,  to  Pay  Tax  Before  Transfer. 

S.  38.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  transfer 
any  corporate  stock  or  obligations  in  this  state  standing  in  the  name  of  a  decedent, 
or  in  trust  for  a  decedent,  liable  to  such  tax,  the  tax  shall  be  paid  to  the  treasurer 
of  state  on  or* before  the  transfer  thereof;  otherwise  the  corporation  permitting 
its  stock  to  be  so  transferred  shall  be  liable  to  pay  such  tax,  interest  and  costs, 
and  it  is  the  duty  of  the  treasurer  of  state  to  enforce  the  payment  thereof. 

Reports  by  Domestic  Corporations. 

S.  39.  All  Iowa  corporations  organized  for  pecuniary  profit,  shall  on  July  1st 
of  each  year,  by  its  proper  officers  under  oath  make  a  full  and  correct  report  to  the 
treasurer  of  state  of  all  transfers  of  its  stocks  made  during  the  preceding  year  by  any 
person  who  appears  on  the  books  of  such  corporation  as  the  owner  of  such  stock, 
when  such  transfer  is  made  to  take  effect  at  or  after  the  death  of  the  owner  or 
transferor,  and  all  transfers  which  are  made  by  an  administrator,  executor,  trustee, 
referee,  or  any  person  ocher  than  the  owner  or  person  in^  whose  name  the  stocks 
appeared  of  record  on  the  books  of  such  corporation,  prior  to  the  transfer  thereof. 
Such  report  shall  show  the  name  of  the  owner  of  such  stocks  and  his  place  of 
residence,  the  name  of  the  person  at  whose  request  the  stock  was  transferred,  his 
place  of  residence  and  the  authority  by  virtue  of  which  he  acted  in  making  such 
transfer,  the  name  of  the  person  to  whom  the  transfer  was  made,  and  the  residence 
of  such  person;  together  with  such  other  information  as  the  officers  reporting 
may  have  relating  to  estates  of  persons  deceased  who  may  have  been  owners  of 
stock  in  such  corporation.     If  it  appears  that  any  such  stock  so  transferred  is 


472  STATUTES  ANNOTATED.  [Iowa  St. 

subject  to  tax  under  the  provisions  of  this  act,  and  the  tax  has  not  been  paid,  the 
treasurer  of  state  shall  notify  the  corporation  in  writing  of  its  liability  for  the  pay- 
ment thereof,  and  shall  bring  suit  against  such  corporation  as  in  other  cases  herein 
provided  unless  payment  of  the  tax  is  made  within  sixty  (60)  days  from  the  date 
of  such  notice. 

Foreign  Estate.  —  Indebtedness. 

S.  40.  Whenever  any  property  belonging  to  a  foreign  estate,  which  estate 
in  whole  or  in  part  passes  to  persons  not  exempt  herein  from  such  tax,  the  said  tax 
shall  be  assessed  upon  the  market  value  of  said  property  remaining  after  the 
payment  of  such  debts  and  expenses  as  are  chargeable  to  the  property  under  the 
laws  of  this  state.  In  the  event  that  the  executor,  administrator  or  trustee  of 
such  foreign  estate  files  with  the  clerk  of  the  court  having  ancillary  jurisdiction, 
and  with  the  treasurer  of  state,  duly  certified  statements  exhibiting  the  true 
market  value  of  the  entire  estate  of  the  decedent  owner,  and  the  indebtedness  for 
which  the  said  estate  has  been  adjudged  liable,  which  statements  shall  be  duly 
attested  by  the  judge  of  the  court  having  original  jurisdiction,  the  beneficiariesof 
said  estate  shall  then  be  entitled  to  have  deducted  such  proportion  of  the  said 
indebtedness  of  the  decedent  from  the  value  of  the  property  as  the  value  of  the 
property  within  this  state  bears  to  the  value  of  the  entire  estate. 

Foreign  Estate.  —  Assessment  of  Tax. 

S.  41.  Whenever  any  property,  real  or  personal,  within  this  state  belongs 
to  a  foreign  estate  and  said  foreign  estate  passes  in  part  exempt  from  tht  ax 
imposed  by  this  act  and  in  part  subject  to  said  tax  and  there  is  no  specific  devise 
of  th^  property  within  this  state  to  direct  heirs  or  if  it  is  within  the  authority 
or  discretion  of  the  foreign  executor,  administrator  or  trustee  administering  the 
estate  to  dispose  of  the  property  not  specifically  devised  to  direct  heirs  or  devisees 
in  the  payment  of  debts  owing  by  the  decedent  at  the  time  of  his  death,  or  in  the 
satisfaction  of  legacies,  devises,  or  trusts  given  to  direct  or  collateral  legatees  or 
devisees  or  in  payment  of  the  distributive  shares  of  any  direct  and  collateral  heirs, 
then  the  property  within  the  jurisdiction  of  this  state,  belonging  to  such  foreign 
estate,  shall  be  subject  to  the  tax  imposed  by  this  act,  and  the  tax  due  thereon 
shall  be  assessed  as  provided  in  the  next  preceding  section  of  this  act  relating  to 
the  deduction  of  the  proportionate  share  of  indebtedness.  Provided,  however, 
that  if  the  value  of  the  property  so  situated  exceeds  the  total  amount  of  the 
estate  passing  to  other  persons  than  those  exempt  hereby  from  the  tax  imposed 
by  this  act  such  excess  shall  not  be  subject  to  said  tax. 

Compromise  of  Tax. 

S.  42.  Whenever  an  estate  charged  or  sought  to  be  charged  with  the  collateral 
inheritance  tax  is  of  such-a  nature,  or  is  so  disposed,  that  the  liability  of  the  estate 
is  doubtful,  or  the  value  thereof  cannot  with  reasonable  certainty  be  ascertained 
under  the  provisions  of  law,  the  treasurer  of  state  may,  with  the  written  approval 
of  the  attorney  general,  which  approval  shall  set  forth  the  reasons  therefor,  com- 
promise with  the  beneficiaries  or  representatives  of  such  estates,  and  compound  the 
tax  thereon;  but  said  settlement  must  be  approved  by  the  district  court  or  judge 
of  the  proper  court,  and  after  such  approval  the  payment  of  the  amount  of  the 
taxes  so  agreed  upon  shall  discharge  the  lien  against  the  property  of  the  estate. 


1911,  c.  68.]  IOWA.  473 

Payment  When  Persons  Entitled  are  Unknown. 

S.  43.  Whenever  the  heirs  or  persons  entitled  to  any  estate,  or  any  interest 
therein,  are  unknown  or  their  place  of  residence  cannot  with  reasonable  certainty 
be  ascertained,  a  tax  of  5  per  cent  shall  be  paid  to  the  treasurer  of  state  upon  all 
such  estates  or  interests,  subject  to  refund  as  provided  herein  in  other  cases; 
provided,  however,  that  if  it  be  afterwards  determined  that  any  estate  or  interest 
passes  to  aliens,  there  shall  be  paid  within  sixty  (60)  days  after  such  determination 
and  before  delivery  of  such  estate  or  property  an  amount  equal  to  the  difference 
between  five  per  centum,  the  amount  paid,  and  the  amount  which  such  person 
should  pay  under  the  provisions  of  this  act. 

Refund. 

S.  44.  When  within  five  years  after  the  payment  of  the  tax,  a  court  of  compe- 
tent jurisdiction  may  determine  that  property  upon  which  a  collateral  inheritance 
tax  has  been  paid  is  not  subject  to  or  liable  for  the  payment  of  such  tax,  or  that 
the  amount  of  tax  paid  was  excessive,  so  much  of  such  tax  as  has  been  overpaid 
to  the  treasurer  of  state  shall  be  returned  or  refunded  to  the  executor  or  adminis- 
trator of  such  estate,  or  to  those  entitled  thereto,  when  a  certified  copy  of  the 
record  of  such  court  showing  the  fact  of  non-liability  of  such  property  to  the  pay- 
ment of  such  tax  has  been  filed  with  the  executive  council  of  the  state,  the  execu- 
tive council  shall  if  the  case  has  been  finally  determined  issue  an  order  to  the 
auditor  of  state  directing  him  to  issue  a  warrant  upon  the  treasurer  of  state  to 
refund  such  tax.  Such  order  of  court  shall  not  be  given  until  fifteen  days  notice 
of  the  application  therefor  shall  have  been  given  to  the  treasurer  of  state  of  the 
time  and  place  of  the  hearing  of  such  application,  which  notice  shall  be  served  in 
the  same  manner  as  provided  for  original  notices. 


Estates  in  Expectancy.  —  Defeasible.  —  Contingent. 

S.  45.  Estates  in  expectancy  which  are  contingent  or  defeasible  and  in  which 
proceedings  for  the  determination  of  the  tax  have  not  been  taken  or  where  the 
taxation  thereof  has  been  held  in  abeyance,  shall  be  appraised  at  their  full,  un- 
diminished value  when  the  persons  entitled  thereto  shall  come  into  the  beneficial 
enjoyment  or  possession  thereof,  without  diminution  for  or  on  account  of  any 
valuation  theretofore  made  of  the  particular  estates  for  purposes  of  taxation,  upon 
which  said  estates  in  expectancy  may  have  been  limited. 

When  an  estate,  devise,  or  legacy  can  be  divested  by  the  act  or  omission  of  the 
legatee  or  devisee,  it  shall  be  taxed  as  if  there  were  no  possibility  of  such  divesting. 

When  a  devise,  bequest  or  transfer  is  one  in  part  contingent,  and  in  part  vested 
so  that  the  beneficiary  will  come  into  possession  and  enjoyment  of  a  portion  of 
his  inheritance  on  or  before  the  happening  of  the  event  upon  which  the  possible 
defeating  contingency  is  based,  a  tax  shall  be  imposed  and  collected  upon  such 
bequest  or  transfer  as  upon  a  vested  interest,  at  the  highest  rate  possible  under 
the  terms  of  this  act  if  no  such  contingency  existed;  provided,  that  in  the  event 
such  contingency  reduces  the  value  of  the  estate  or  interest  so  taxed,  and  the 
amount  of  tax  so  paid  is  in  excess  of  the  tax  for  which  such  bequest  or  transfer  is 
liable  upon  the  removal  of  such  contingency,  such  excess  shall  be  refunded  as  is 
provided  in  section  forty-four  (44)  of  this  act  in  other  cases. 


474  STATUTES  ANNOTATED.  [Iowa 

Definitions. 

S.  46.  In  the  construction  of  this  act,  the  words  "collateral  heirs"  shall  be 
held  to  mean  all  persons  who  are  not  specifically  exempt  from  the  tax  imposed 
by  the  provisions  hereof.  The  word  "person"  shall  include  a  plural  as  well  as 
singular,  and  artificial  as  well  as  natural  persons.  This  act  shall  not  be  construed 
to  confer  upon  a  county  attorney  authority  to  represent  the  state  in  any  case, 
and  he  shall  represent  the  treasurer  of  state  only  when  especially  authorized  by 
him  to  do  so.  This  act  shall  apply  to  all  estates  subject  to  taxation  under  the 
law  repealed  by  this  act  if  the  tax  for  which  such  estates  are  liable  shall  not 
have  been  paid  prior  to  the  taking  effect  of  this  act. 

Records  by  State  Treasurer. 

S.  47.  The  treasurer  of  state  shall  record  in  a  book  kept  in  his  office  for  that 
purpose,  all  estates  reported  to  him  as  liable  for  a  tax  under  the  provisions  of  this 
act,  showing  — 

1.  The  name  of  the  decedent. 

2.  The  place  of  his  residence  or  county  from  which  such  estate  was  reported. 

3.  The  date  of  his  death. 

4.  The  name  of  the  administrator,  executor  or  trustee. 

5.  The  appraised  value  of  the  property,  or  the  value  of  any  taxable  pecuniary 
legacy. 

6.  The  amount  of  indebtedness  that  was  deducted  before  estimating  the  tax. 

7.  The  amount  of  tax  collected. 

8.  The  amount  of  fees  paid  for  reporting  and  collecting  such  tax. 

9.  The  amount  of  tax,  if  any  refunded. 

He  shall  also  keep  a  separate  record  of  any  deferred  estate  upon  which  the  tax 
due  is  not  paid  within  eighteen  (18)  months  froni  the  death  of  the  decedent, 
showing  substantially  the  same  facts  as  is  required  in  other  cases,  and  also  show- 
ing— 

(a)  The  date  and  amount  of  all  bonds  given  to  secure  the  payment  of  the 
tax  with  a  list  of  the  sureties  thereon. 

(b)  The  name  of  the  person  beneficially  entitled  to  such  estate  or  interest,  with 
place  of  residence. 

(c)  A  description  of  the  property  or  a  statement  of  conditions  upon  which  such 
deferred  estate  is  based  or  limited. 

Repeal. 

S.  48.  Chapter  four  (4),  of  title  seven  (7),  of  the  supplement  to  the  code,  1907, 
and  chapter  ninety-two  (92)  of  the  Acts  of  the  Thirty-Third  (33)  General  Assembly 
and  all  other  acts  or  parts  of  acts  in  conflict  herewith,  are  hereby  repealed. 

RULES  AND  REGULATIONS. 

The  following  rules  and  regulations  for  the  assessment  and  collection  of  the 
tax  on  collateral  inheritances  in  Iowa  were  drafted  and  adopted  in  accordance  with 
the  provisions  of  section  six,  chapter  thirty-seven,  of  the  acts  of  the  Twenty- 
Seventh  General  Assembly,  which  follow :  — 

The  chief  justice  of  the  supreme  court  shall,  prior  to  July  1,  1898,  appoint  five 
of  the  district  judges  of  the  state  to  meet  with  him  at  Des  Moines  on  a  date  to 


Rules.]  IOWA.  475 

be  by  him  fixed,  for  the  purpose  of  framing  uniform  rules  and  regulations  relative  to 
to  the  assessment  and  collection  of  the  collateral  inheritance  tax,  for  the  guidance 
of  the  district  judges,  officers  of  the  court,  executors  and  administrators.  Said 
rules  and  regulations  shall  aim  to  give  more  publicity  to  the  provisions  of  this 
chapter,  and  to  secure  the  strict  enforcement  of  the  same,  and  when  made  shall 
form  a  part  of  and  be  published  with  the  rules  of  the  district  courts  of  the  state. 
Pursuant  to  the  authority  conferred  in  the  above  section.  Judge  H.  E.  Deemer, 
chief  justice  of  the  supreme  court,  directed  Judges  S.  M.  Weaver,  of  the  eleventh 
judicial  district;  L.  E.  Fellows,  of  the  thirteenth;  H.  M.  Towner,  of  the  third; 
Z.  A.  Church,  of  the  sixteenth,  and  M.  J.  Wade,  of  the  eighth  judicial  district  of 
Iowa,  to  meet  with  him  in  Des  Moines.  The  rules  and  regulations  for  the  assess- 
ment and  collection  of  the  collateral  inheritance  tax  herewith  published  were 
adopted  June  11,  1898. 

Rules  and  Regulations  Relating  to  the  Assessment  and  Collection  of  the 

Collateral  Inheritance  Tax. 
Rule  1.  —  Lien  Book. 

The  clerk  of  the  district  court  in  and  for  each  county  shall  provide  and  keep  a 
suitable  book,  substantially  bound  and  suitably  ruled,  to  be  known  as  the  Col- 
lateral Inheritance  Tax  and  Lien  Book,  in  which  shall  be  kept  a  full  and  accurate 
record  of  all  proceedings  in  cases  where  property  is  charged  or  sought  to  be  charged 
with  the  payment  of  a  collateral  inheritance  tax  under  the  laws  of  this  state,  to  be 
printed  and  ruled  so  as  to  show,  upon  one  page  — 

1.  The  name,  place  of  residence,  and  date  of  death  of  the  decedent. 

2.  Whether  the  decedent  died  testate,  or  intestate,  and  if  testate  the  record 
and  page  where  the  will  was  probated  and  recorded. 

3.  The  name  and  post-office  address  of  the  executor,  administrator,  trustee  or 
grantee,  with  date  of  appointment  or  transfer. 

4.  The  name's,  post-office  addresses  and  relationship,  if  known,  of  all  the  heirs, 
devisees  and  grantees. 

5.  The  appraised  valuation  of  the  personal  property. 

6.  The  amount  of  inheritance  tax  due  upon  said  personal  property. 

7.  A  record  of  payment  with  amount  and  date. 

8.  Date  of  filing  objections  and  names  of  objectors. 

9.  Blank  for  index  and  reference  to  all  proceedings,  and  for  memorandum  entries 
of  the  court  or  judge  in  relation  thereto. 

Upon  the  opposite  page  of  such  record  shall  be  printed :  — 

1.  "Real   estate   derived    from (naming  decedent) 

which  is  subject  to  the  lien  prescribed  by  the  statute  for  collateral  inheritance  tax." 

2.  A  full  and  accurate  description  of  such  real  estate,  by  forty-acre  or  fractional 
tracts,  or  by  lots,  or  other  complete  individual  description. 

3.  The  appraised  valuation  as  reported  by  the  appraisers,  —  with  reference  to 
the  record  of  their  report,  —  as  to  each  piece  of  such  real  estate. 

4.  The  amount  of  the  inheritance  tax  due  upon  each  such  piece. 

5.  A  record  of  payments,  with  dates  and  amounts. 

6.  Date  of  filing  objections,  and  names  of  objectors. 

7.  Blank  for  index  and  reference  to  all  proceedings,  and  for  memorandum 
entries  of  court  or  judge  in  relation  thereto. 


476  STATUTES  ANNOTATED.  [Iowa 

Rule  2.  —  Report  by  Administrators,  etc. 

Upon  the  appointment  and  qualification  of  each  executor,  administrator  and 
testamentary  trustee,  the  clerk  issuing  the  letters  shall  at  the  same  time  deliver 
to  him  a  blank  form  upon  which  he  shall  be  required  to  make  detailed  report 
of  the   following   facts:  — 

1.  Name  and  last  residence  of  decedent. 

2.  Date  of  death. 

3.  Whether  or  not  he  left  a  will. 

4.  Name  and  post-office  of  executor,  administrator  or  trustee. 

5.  Name  and  post-office  of  surviving  wife  or  husband,  if  any. 

6.  If  testate,  name  and  post-office  of  each  beneficiary  under  will. 

7.  Relationship  of  each  beneficiary  to  the  testator. 

8.  If  intestate,  name  and  post-office  of  each  heir  at  law. 

9.  Relationship  of  each  heir  at  law  to  the  decedent. 

10.  Inventory  of  all  the  real  estate  of  the  decedent,  giving  amount  and  descrip- 
tion of  each  tract. 

Within  ten  days  after  his  qualification  each  executor,  administrator  and 
testamentary  trustee  shall  make  and  return  to  the  clerk,  under  oath,  a  full  and 
detailed  report  as  indicated  in  the  preceding  paragraph,  and  upon  his  failure  so 
to  do,  the  clerk  shall  forthwith  report  his  delinquency  to  the  district  court  if  in 
session,  or  to  a  judge  of  said  court  if  in  vacation,  for  such  order  as  may  be  necessary 
to  enforce  an  observance  of  these  rules. 

If  it  appears  from  the  inventory  or  report  so  filed,  that  the  real  estate,  or  any 
part  of  it,  is  subject  to  an  inheritance  tax,  it  shall  be  the  duty  of  the  executor  or 
adnjinistrator  to  cause  the  lien  of  the  same  to  be  entered  upon  the  lien  book  in  the 
office  of  the  clerk  of  the  court  in  each  county  where  each  particular  tract  of  said  real 
estate  is  situated. 

Rule  3.  —  Duties  of  the  Clerk. 

The  clerk  shall  from  time  to  time  enter  upon  the  collateral  inheritance  tax  and 
lien  book,  the  title  of  all  estates  subject  to  the  inheritance  tax,  as  shown  by  the 
inventories  or  lists  of  heirs  filed  in  this  office,  or  as  reported  to  him  by  the  county 
attorney  or  the  treasurer  of  state,  and  shall  enter  in  said  book  as  against  each 
estate  or  title  at  the  appropriate  place,  all  such  information  relating  to  the  situa- 
tion and  condition  of  the  estate  as  he  may  be  able  to  obtain  from  the  papers 
filed  in  his  office,  or  from  the  county  attorney  or  the  treasurer  of  state,  as  may  be 
necessary  to  the  collection  and  enforcement  of  the  tax.  He  shall  also  immediately 
index  all  liens  entered  upon  the  collateral  inheritance  tax  and  lien  book  in  the  book 
kept  in  his  office  for  that  purpose. 

Should  any  estate,  or  the  name  of  any  grantee  or  grantees,  be  placed  upon  the 
book  at  the  suggestion  of  the  county  attorney  or  the  treasurer  of  state,  in  which  the 
papers  already  on  file  in  the  clerk's  office  do  not  disclose  that  an  inheritance  tax 
is  due  or  payable,  the  county  attorney  shall  forthwith  give  to  all  parties  in  interest, 
such  notice  as  the  court  or  judge  may  prescribe,  requiring  them  to  appear  on  a 
day  to  be  fixed  by  the  said  court  or  judge,  and  show  cause  why  the  property 
should  not  be  appraised  and  subjected  to  said  tax.  If  upon  hearing  at  the  time 
so  fixed,  the  court  is  satisfied  that  any  property  of  the  decedent,  or  any  property 
devised,  granted  or  donated  by  him,  is  subject  to  the  tax,  the  same  proceedings 
shall  be  had  as  in  other  cases,  so  far  as  applicable. 


Rules.]  IOWA.  477 

Rule  4.  —  Appointment  of  Appraisers. 

At  the  first  term  of  court  in  each  county,  after  the  publication  of  these  rules, 
and  annually  thereafter,  the  court  shall  appoint  three  competent  residents  and 
freeholders  of  said  county,  to  act  as  appraisers  of  all  property  within  its  juris- 
diction, which  is  charged  or  sought  to  be  charged  with  a  collateral  inheritance  tax. 
Said  appraisers  shall  serve  for  one  year,  and  until  their  successors  are  appointed 
and  qualified.  They  shall  each  take  an  oath  to  faithfully  and  impartially  perform 
the  duties  of  the  office,  but  shall  not  be  required  to  give  bond.  They  shall  be 
subject  to  removal  at  any  time  at  the  discretion  of  the  court,  and  the  court,  or  a 
judge  thereof  in  vacation,  may  also,  in  its  discretion,  either  before  or  after  the 
appointment  of  the  regular  appraisers,  appoint  other  appraisers  to  act  in  any  given 
case.  Vacancies  occurring  otherwise  than  by  expiration  of  term,  shall  be  filled 
by  the  appointment  of  the  court,  or  by  a  judge  in  vacation. 

Rule  5.  —  Duties  of  Appraisers. 

When  an  estate  is  opened  in  which  there  is  property  which  may  be  subject 
to  the  inheritance  tax,  the  clerk  shall  forthwith  issue  a  commission  to  the  appraisers 
who  shall  fix  a  time  and  place  for  appraisement,  and  if  not  practicable  to  serve 
the  notice  provided  for  by  statute,  they  shall  apply  to  the  court  or  judge  for  an 
order  as  to  notice,  and  upon  service  of  such  notice  and  the  making  of  such  appraise- 
ment, the  said  notice  return  thereon  and  appraisement  shall  be  filed  with  the 
clerk,  and  a  copy  of  such  appraisement  shall  be  filed  by  the  clerk  with  the  treasurer 
of  state. 

Any  person  interested  may,  within  twenty  days  thereafter,  file  objections  to 
said  appraisement  or  taxation,  and  the  same  shall  then  stand  for  trial  and  further 
proceedings  as  provided  by  statute.  If  upon  such  hearing  the  court  finds  that 
the  property  is  not  subject  to  the  tax,  the  court  shall  upon  expiration  of  time  for 
appeal,  when  no  appeal  has  been  taken,  order  the  clerk  to  enter  upon  the  lien 
book  a  cancellation  of  any  claim  or  lien  for  taxes. 

Rule  6.  —  Duty  of  County  Attorney. 

It  shall  be  the  duty  of  each  county  attorney  to  make  examination  from  time 
to  time  of  all  reports  filed  with  the  clerk  by  administrators,  executors  and  trustees, 
pursuant  to  law  or  the  provisions  of  these  rules;  also  to  make  examination  of  all 
foreign  wills  offered  for  probate  or  recorded  within  his  county,  as  well  as  of  the 
records  of  deeds  and  conveyances  in  the  recorder's  office  of  said  county,  and  if 
from  such  examination,  or  from  information  or  knowledge  coming  to  him  from  any 
other  source,  he  finds  or  believes  that  any  property  within  his  county,  or  within 
the  jurisdiction  of  the  district  court  of  said  county,  has  since  July  4,  1896,  passed 
by  will  or  by  the  intestate  laws  of  this  or  any  other  state,  or  by  deed,  grant,  sale 
or  gift,  made  or  intended  to  take  effect,  in  possession  or  enjoyment  after  the  death 
of  the  testator,  donor  or  grantor,  to  any  person  other  than  to  or  for  the  use  of  the 
father,  mother,  husband,  wife,  lineal  descendant,  adopted  child,  the  lineal  de- 
scendant of  an  adopted  child  of  a  decedent,  or  to  or  for  charitable,  educational  or 
religious  societies,  or  institutions  within  this  state,  he  shall  make  report  thereof 
in  writing  to  the  clerk  of  the  district  court,  embodying  in  such  report,  so  far  as 
he  is  able,  all  the  facts  mentioned  in  rule  2  of  these  rules,  and  cause  the  notice 
required  by  rule  3  hereof  to  be  properly  given  and  returned. 

Any  citizen  of  the  state  having  knowledge  of  property  liable  to  such  tax 
against  which  no  proceeding  for  enforcing  collection  thereof  is  pending,  may  report 


478  STATUTES  ANNOTATED.  [Iowa 

the  same  to  the  county  attorney,  and  it  shall  be  the  duty  of  such  officer  to  investi- 
gate the  case,  and  if  he  has  reason  to  beUeve  the  information  to  be  true,  he  shall 
forthwith  institute  such  proceedings  substantially  as  above  indicated.  He  shall 
also  advise  and  assist  the  clerk  and  appraisers  in  the  discharge  of  their  duties 
in  cases  of  this  nature,  and  see  that  notices  required  by  law  and  these  rules  are 
properly  made,  served  and  returned. 

Rule  7.  —  Duty  of  Court. 

On  the  first  or  second  day  of  each  regular  term,  the  court  shall  require  the  clerk 
to  present  for  its  inspection,  the  inheritance  tax  and  lien  book  hereinbefore  pro- 
vided for,  together  with  all  reports  of  administrators,  executors  and  trustees  which 
have  been  filed  pursuant  to  these  rules,  since  the  last  preceding  term.  The  county 
attorney  shall  also  attend  and  make  report  to  the  court  concerning  the  progress 
of  all  cases  pending  for  the  collection  of  such  taxes,  together  with  any  other  facts, 
which,  in  his  judgment,  may  aid  the  court  in  enforcing  the  general  observance 
of  the  collateral  inheritance  tax  law.  If  from  information  obtained  from  the 
records  or  reports,  or  from  any  other  source,  the  court  has  reason  to  believe  that 
there  is  property  within  its  jurisdiction  liable  to  the  payment  of  an  inheritance  tax 
against  which  proceedings  for  collection  are  not  already  pending,  it  shall  enter  an 
order  of  record,  directing  the  county  attorney  to  institute  such  proceedings  forth- 
with. 

Rule  8.  —  Record. 

In  all  cases  entered  upon  the  inheritance  tax  and  lien  book,  the  clerk  shall  make 
a  complete  record  in  the  proper  probate  record,  of  all  the  proceedings,  orders, 
repbrts,  inventory,  appraisements  and  all  other  matters  and  proceedings  therein. 

Rule  9.  —  Costs. 

In  all  cases  where  property  is  found  to  be  liable  to  taxation  under  the  inheritance 
tax  law,  all  costs  of  the  proceedings  had  for  the  assessment  of  such  tax  shall  be 
chargeable  to  such  property,  and  to  discharge  the  lien  upon  such  property  all  costs, 
as  well  as  the  taxes,  must  be  paid.  In  all  other  cases  the  costs  are  to  be  paid  as 
ordered  by  the  court. 

Rule  10.  —  Books  and  Blanks. 

The  book  herein  provided  for,  and  all  blanks  to  be  used  in  carrying  out  the 
provisions  of  the  law  and  of  these  rules,  shall  be  in  form  to  be  approved  by  the 
chief  justice  of  the  supreme  court,  which  form  shall  be  furnished  to  the  clerk  of 
each  county  by  the  treasurer  of  state. 

It  shall  be  the  duty  of  the  state  treasurer  to  give  such  publicity  to  these  rules, 
and  the  provisions  of  the  statute  regarding  the  collection  of  such  tax,  as  may  by 
him  be  deemed  advisable  and  practicable. 

Rule  11.  —  Construction. 

These  rules  are  not  to  be  construed  as  in  any  manner  superseding  any  of  the 
requirements  of  the  statute  governing  the  levy  and  collection  of  collateral  in- 
heritance taxes,  or  as  relieving  executors,  administrators,  trustees  or  officers  of 
court,  or  any  of  them,  from  a  strict  observance  of  all  the  duties  which  such  statute 
imposes  upon  them. 


Tables.]  IOWA.  479 

These  rules  shall  be  in  full  force  and  effect  from  and  after  the  4th  day  of  July, 
1898. 

Be  it  Remembered,  That  the  above  and  foregoing  rules  were  adopted  this  11th 
day  of  June,  1898,  by  the  following:  H.  E.  Deemer,  chief  justice  of  the  supreme 
court  of  Iowa;  S.  M.  Weaver,  judge  of  the  eleventh  judicial  district  of  Iowa;  L. 
E.  Fellows,  judge  of  the  thirteenth  judicial  district  of  Iowa;  H.  M.  Towner,  judge 
of  the  third  judicial  district  of  Iowa;  Z.  A.  Church,  judge  of  the  sixteenth  judicial 
district  of  Iowa;  M.  J.  Wade,  judge  of  the  eighth  judicial  district  of  Iowa.  Said 
district  judges  having  been  appointed  by  the  said  chief  justice  of  the  supreme  court, 
pursuant  to  section  six,  chapter  thirty-seven  of  the  acts  of  the  Twenty-Seventh 
General  Assembly  of  the  state  of  Iowa. 

Witness  my  hand  the  11th  day  of  June,  1898, 

H.  E.  Deemer, 
Chief  Justice  of  the  Supreme  Court  of  Iowa. 
Attest:  M.  J.  Wade,  Secretary. 

Tables  for  Determining  the  Valuation  or  Present  Worth  of  Life  and  Term 
Estates  or  Annuities  and  Remainders  or  Reversionary  Interests 
Computed  at  Four  Per  Cent  Per  Annum,  for  the  Use  of  the  Courts 
of  Iowa  in  the  Assessment  of  Collateral  Inheritance  Tax. 

Section  seven  (7)  of  chapter  fifty-one  (51)  of  the  acts  of  the  Twenty-Eighth  (28) 
General  Assembly  provides:  — 

"The  treasurer  of  state  is  directed  to  obtain  and  publish  for  the  use  of  the  courts 
and  appraisers  throughout  the  state  tables  showing  the  average  expectancy  of 
life  and  the  value  of  annuities  or  life  and  term  estates,  and  the  present  worth  or 
value  of  remainders  and  reversions.  The  taxable  value  of  life  or  term,  deferred  or 
future  estates  shall  be  computed  at  the  rate  of  4  per  cent  interest." 

Pursuant  to  the  foregoing  provisions,  the  following  tables  for  determining  the 
taxable  value, —  namely,  the  present  worth,  of  life  estates  or  annuities  and 
remainders  or  reversionary  interests  are  hereby  published  and  promulgated  for 
the  use  of  the  courts  and  appraisers  of  the  state. 

Table  No.  1  gives  the  basis  for  valuing  "Life  Estates"  or  annuities,  the  proceeds 
of  which  the  beneficiary  enjoys  during  his  or  her  life. 

Table  No.  2  relates  to  "Term  Estates"  or  annuities  terminable  at  a  certain 
period,  definitely  stated  in  the  provisions  of  the  in^rument  creating  the  estate. 

The  tables  printed  herein  are  those  used  by  the  United  States  Government 
in  the  assessment  of  the  inheritance  tax  under  the  war  revenue  act  of  June  13, 

1898,  prepared  for  the  internal  revenue  service  under  the  direction  of  the  govern- 
ment actuary,  Mr.  J.  S.  McCoy.  They  are  based  upon  the  "Actuaries'  or  Com- 
bined Experience  Tables,"  money  being  considered  worth  four  (4)  per  cent  per 
annum.    Both  the  tables  and  notes  are  reproduced  from  circulars  No.  527,  March, 

1899,  and  No.  21,231,  Decembc,  1899,  issued  by  the  commissioner  of  internal 
revenue. 

The  treasurer  of  state  is  indebted  to  Hon.  G.  W.  Wilson,  commissioner  of 
internal  revenue  at  Washington,  D.  C,  for  permission  to  reprint  and  use  the  tables 
employed  by  the  national  government,  and  he  desires  here  to  acknowledge  the 
courtesy  and  the  very  valuable  favor  rendered  by  him. 


480 


STATUTES  ANNOTATED. 


[Iowa 


Table  No.  1. — Single-life,    4   per   cent,    showing    the   present    worth    of 
annuity,  or  life  interest,  and  of  a  reversionary  interest. 


w**   hccs 

*>  U>*-U-  I 

w*i  hoes 

♦.  i,>+-,^  1 

rt  o  c  o 

C  rt  o  o-G 

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C  rt  O  0*3 

11 -lit 

G 
o 

*■& 

c<*-  ^  5  « 

S^-O  C  S  S  4) 
S.2  OJ'o  4>  <n 

a 

JS. 

g5-§S5^ 

i 

|S. 

C  rt  3  d^'^ 

l^-Slc.^ 

< 

s 

< 

^ 

< 

s 

< 

Pi 

0 

23.179 

$14.72829 

$0.39507 

50 

18.113 

$12.47032 

$0.48191 

1 

30.552 

17.30771 

0.29586 

51 

17.527 

12.17919 

0.49311 

2 

35.626 

18.69578 

0.24247 

52 

16.947 

11.88408 

0.50446 

3 

37.572 

19.15901 

0.22465 

53 

16.372 

11.58531 

0.51595 

4 

38.702 

19.41226 

0.21491 

54 

15.804 

11.28325 

0.52757 

5 

39.352 

19.55301 

0.20950 

55 

15.243 

10.99789 

0.53931 

6 

39.654 

19.61731 

0.20703 

56 

14.689 

10.66982 

0.55116 

7 

39.691 

19.62502 

0.20673 

57 

14.143 

10.35931 

0.56310 

8 

39.625 

19.61097 

0.20727 

58 

13.603 

10.04630 

0.57514 

9 

39.264 

19.53413 

0.21022 

59 

13.072 

9.73131 

0.58726 

10 

38.891 

19.45359 

0.21332 

60 

12.549 

9.41474 

0.59943 

11 

38.507 

19.36943 

0.21656 

61 

12.029 

9.09765 

0.61163 

12 

38.113 

19.28184 

0.21993 

62 

11.532 

8.78052 

0.62382 

13 

37.710 

19.19065 

0.22344 

63 

11.039 

8.46412 

0.63600 

14 

37.298 

19.09590 

0.22708 

64 

10.557 

8.14888 

0.64812 

15 

36.877 

18.99764 

0.23086 

65 

10.088 

7.83552 

0.66017 

16 

36.447 

18.89569 

0.23478 

66 

9.630 

7.52476 

0.67212 

17 

36.010 

18.79010 

0.23884 

67 

9.185 

7.21699 

0.68396 

18 

35.565 

18.68070 

0.24305 

68 

8.753 

6.91298 

0.69565 

19 

-35.113 

18.56751 

0.24740 

69 

8.333 

6.61301 

0.70719 

20 

34.652 

18.45038 

0.25191 

70 

7.926 

6.31716 

0.71857 

21 

34.186 

18.32932 

0.25656 

71 

7.532 

6.02612 

0.72976 

22 

33.711 

18.20416 

0.26138 

72 

7.151 

5.74003 

0.74077 

23 

33.230 

18.07471 

0.26636 

73 

6.782 

5.45928 

0.75157 

24 

32.742 

17.94097 

0.27150 

74 

6.425 

5.18402 

0.76215 

25 

32.248 

17.80274 

0.27682 

75 

6.081 

4.91463 

0.77251 

26 

31.747 

17.65984 

0.28231 

76 

5.749 

4.65125 

0.78264 

27 

31.239 

17.51224 

0.28799 

77 

5.428 

4.39383 

0.79254 

28 

30.725 

17.35968 

0.29386 

78 

5.119 

4.14286 

0.80220 

29 

30.205 

17.20225 

0.29991 

79 

4.823 

3.89858 

0.81159 

30 

29.678 

17.03961 

0.30617 

80 

4.537 

3.66071 

0.82074 

31 

29.147 

16.87176 

0.31262 

81 

4.262 

3.42900 

0.82965 

32 

28.608 

16.69846 

0.31929 

82 

3.995 

3.20258 

0.83836 

33 

28.067 

16.51964 

•  0.32617 

83 

3.737 

2.98024 

0.84691 

34 

27.516 

16.33503 

0.33327 

84 

3.484 

2.76106 

0.85534 

35 

26.961 

16.14437 

0.34060 

85 

3.236 

2.54366 

0.86371 

36 

26.401 

15.94755 

0.34817 

86 

2.992 

2.32795 

0.87200 

37 

25.834 

15.74427 

0.35599 

87 

2.752 

2.11384 

0.88024 

38 

25.263 

15.53421 

0.36407 

88 

2.517 

1.90115 

0.88842 

39 

24.685 

15.31722 

0.37241 

89 

2.286 

1.69107 

0.89650 

40 

24.101 

15.09295 

0.38104 

90 

2.062 

1.48540 

0.90441 

41 

23.511 

14.86102 

0.38996 

91 

1.845 

1.28432 

0.91214 

42 

22.915 

14.62122 

0.39918 

92 

1.637 

1.09024 

0.91961 

43 

22.313 

14.37356 

0.40871 

93 

1.442 

0.90647 

0.92667 

44 

21.708 

14.11860 

0.41852 

94 

1.263 

0.73687 

0.93320 

45 

21.103 

13.85713 

0.42857 

95 

1.103 

0.58435 

0.93906 

46 

20.499 

13.58958 

0.43886 

96 

0.975 

0.46182 

0.94378 

47 

19.896 

13.31698 

0.44935 

97 

0.877 

0.36698 

0.94742 

48 

19.298 

13.03942 

0.46002 

98 

0.746 

0.24038 

0.95229 

49 

18.703 

12.75716 

0.47088 

99 

0.500 

0.00000 

0.96154 

Tables.]  IOWA.  481 

Explanatory  Notes  and  Examples. 

The  first  column  shows  the  age  of  the  person  under  consideration. 

The  second  column  shows  the  corresponding  "mean  redemption  period"  and 
represents  the  time  in  years  in  which  the  present  values  of  annuities  and  reversions 
certain  will  become  equal,  respectively,  to  the  present  value  of  annuities  and 
reversions  contingent  on  the  duration  of  life.  The  "mean  redemption  period" 
is  a  mean  between  the  last  payment  of  the  annuity  and  the  payment  of  the 
reversion,  averaging  six  months  later  than  the  former  payment  and  six  months 
earlier  than  the  latter  payment.  (This  period  is  ordinarily  designated  the  expect- 
ancy of  life  during  which  a  beneficiary  will  enjoy  the  life  estate.) 

The  third  column  shows  the  present  value  of  an  annuity  for  life  of  one  dollar 
per  annum,  the  last  payment  being  made  at  the  end  of  the  year  prior  to  the  one 
in  which  death  occurs. 

The  fourth  column  shows  the  present  worth  of  one  dollar  payable  at  the  end 
of  the  year  in  which  death  occurs. 

Example  1. 

A  person  dying  bequeaths  to  his  nephew,  aged  forty  years,  an  annuity  of  one 
thousand  dollars  during  life.    What  is  the  present  value  of  the  annuity? 

Reference  to  the  foregoing  table  shows  that  the  present  value  of  one  dollar 
a  year,  payable  at  the  end  of  each  year  during  the  life  of  a  person  aged  forty  years, 
is  fifteen  dollars,  nine  cents,  two  mills  and  ninety-five  one-hundredths  of  a  mill 
($15.09295) ;  therefore,  the  present  value  of  one  thousand  dollars  is  one  thousand 
times  as  much,  or  fifteen  thousand  and  ninety-two  dollars  and  ninety-five  cents 
the  amount  upon  which  tax  accrues. 

Example  2. 

A  person  dying  bequeaths  to  his  sister,  aged  thirty-five  years,  a  life  interest  in 
personal  property  amounting  to  fifty  thousand  dollars  ($50,000),  the  estate  to 
revert  absolutely  at  her  death  to  other  collateral  parties.  Required  the  present 
value,  at  the  date  of  death  of  the  testator,  of  the  life  interest  of  the  sister  in  the 
estate;  also,  required  at  the  same  date,  the  present  value  of  the  reversionary 
interest  of  said  other  parties  in  the  estate. 

At  a  net  interest  of  four  per  cent  per  annum,  the  assumed  rate,  the  estate  of 
$50,000  will  realize  an  income  or  annuity  of  $2,000  per  annum.  The  present 
value  of  the  sum  of  $1,  payable  at  the  end  of  each  year  during  the  life  of  a  person 
aged  thirty-five  years,  is  found  by  the  table  to  be  $16.14437,  and  the  present 
value  of  an*  annuity  of  $2,000  for  the  same  time  would  be  two  thousand  times  as 
much,  or  $32,288.74,  the  amount  upon  which  tax  accrues. 

The  reversion  or  present  value  of  $1.00,  due  at  the  end  of  the  year  of  death  of 
a  person  aged  thirty-five  years,  is  found  by  the  table -to  be  $0.34060,  and  such 
value  of  $50,000  would  be  fifty  thousand  times  as  much,  or  $17,030,  the  amount 
upon  which  tax  accrues. 


482 


STATUTES  ANNOTATED. 


[Iowa 


Table  No.  2.  —  Present  value  of  annuities  and  reversions  certain  upon  a 
4  per  cent  basis. 


a 

resent  worth  of  an 
annuity  of  one  dol 
lar.  payable  at  the 
end   of  each  year, 
for  a  certain  num- 
ber of  years. 

resent  worth  of  one 
dollar,   payable   at 
the  end  of  a  certain 
number  of  years. 

1 

3 

esent  worth  of  an 
annuity  of  one  dol- 
lar, payable  at  the 
end  of   each   year, 
for  a  certain  num- 
ber of  years. 

resent  worth  of  one 
dollar,   payable  at 
the  end  of  a  certain 
number  of  years. 

:? 

A. 

^                     1 

2 

!  £ 

^ 

Annuity. 

Reversion. 

Annuity. 

Reversion. 

1 

S  0.96154 

$0.961538 

16 

11.65229 

$0.533908 

2 

1.88609 

0.924556 

17 

12.16567 

0.513373 

3 

2.77509 

0.888996 

18 

12.65929 

0.493628 

4 

3.62989 

0.854804 

19 

13.13394 

0.474642 

5 

4.45182 

0.821927 

20 

13.59032 

0.456387 

6 

5.24214 

0.790314 

21 

14.02916 

0.438834 

7 

6.00205 

0.759918 

22 

14.45111 

0.421955 

8 

6.73274 

0.730690 

23 

14.85684 

0.405726 

9 

7.43533 

0.702587 

24 

15.24696 

0.390121 

10 

8.11089 

0.675564 

25 

15.62208 

0.375117 

11 

8.76047 

0.649581 

26 

15.98277 

0.360689 

12 

9.38507 

0.624597 

27 

16.32958 

0.346816 

13 

9.98565 

0.600574 

28 

16.66306 

0.333477 

14 

10.56312 

0.577475 

29 

16.98371 

0.320651 

15 

11.11839 

0.555265 

1 

30 

17.29203 

0.308319 

Example. 

A  man  dies  leaving  personal  property  to  the  amount  of  $50,000,  his  niece 
to  have  the  income  from  it  for  twenty  years,  it  then  to  revert  to  his  youngest 
brother.    What  is  the  present  worth  of  these  legacies? 

The  income  from  $50,000  would  be  $2,000  per  annum,  assuming  money  at 
4  per  cent. 


Kansas  St.]  KANSAS.  483 


KANSAS. 


In  General. 

Kansas  adopted  a  tax  on  all  inheritances  in  1909.  The  exemp- 
tions apply  to  each  individual  share,  not  to  the  estate  as  a  whole. 
If  the  Kansas  portion  of  the  inheritance  is  less  than  the  exemp- 
tion Kansas  collects  no  tax. 

Kansas  is  taxing  stock  of  a  Kansas  corporation  owned  by 
a  non-resident,  and  registered  bonds  as  well.  The  corpora- 
tion is  held  responsible  if  it  transfers  securities  before  the  tax 
is  paid. 

The  Kansas  statute  contains  the  same  reciprocal  clause  for 
avoiding  double  taxation  that  is  found  in  Massachusetts.  Per- 
sonal property  of  a  deceased  resident  outside  the  state  which 
is  taxed  by  another  state  or  country  is  not  taxed  by  Kansas 
unless  such  tax  is  less  than  the  Kansas  tax,  and  then  Kansas  collects 
only  the  difference.  Property  of  a  non-resident  in  Kansas,  including 
stock  wherever  situated  in  a  Kansas  corporation,  will  not  be  taxed 
(except  for  the  difference  if  Kansas  rates  are  higher)  if  owned  by 
a  resident  of  a  state  which  extends  similar  courtesies  to  residents 
of  Kansas.  Massachusetts,  Maine,  Vermont  and  New  York  seem 
to  be  the  only  states  that  do  so. 

It  is  the  practice  in  Kansas  to  require  a  complete  inventory  of 
the  estate  of  a  non-resident  which  has  any  property  subject  to 
Kansas  jurisdiction. 

Constitutional  Limitations. 

Kansas  Constitution  1859,  a.  11,  s.  1. 

The  legislature  shall  provide  for  a  uniform  and  equal  rate  of  assessment  and 
taxation;  but  all  property  used  exclusively  for  state,  county,  municipal,  literary, 
educational,  scientific,  religious,  benevolent  and  charitable  purposes  and  personal 
property  to  the  amount  of  at  least  two  hundred  dollars  for  each  family,  shall  be 
exempted  from  taxation. 


List  of  Statutes. 

1909.     Statutes  of  Kansas,  c.  248. 

1909.     General  Statutes,  c.  116,  a.  7,  ss.  9265  to  9291. 


484  STATUTES  ANNOTATED.  [Kansas  St. 

THE  PRESENT  ACT. 

Kansas  St.  1909,  c.  248,  approved  March  12,  1909,  published  in  official 
state  paper  March  16,  1909. 

General  Statutes  of  1909,  ss.  9265  to  9291. 

An  Act  to  provide  for  the  assessment  and  taxation  of  legacies 
AND  successions  and  to  prescribe  the  manner  and  method  by  which  to 
collect  the  taxes  for  which  such  provision  is  herein  made. 

S.  9265.     Legacies  and  successions   subject   to  taxation.     S.  52.     All 

property,  corporeal  or  incorporeal,  and  any  interest  therein,  within  the  jurisdiction 
of  the  state,  whether  belonging  to  the  inhabitants  of  the  state  or  not,  which  shall 
pass  by  will  or  by  the  laws  regulating  intestate  succession,  or  by  deed,  grant  or  gift 
made  in  contemplation  of  death,  or  made  or  intended  to  take  effect  in  possession 
or  enjoyment  after  the  death  of  the  grantor,  to  any  person,  absolutely  or  in  trust 
—  except  in  case  of  a  bona  fide  purchase  for  full  consideration  in  money  or  money's 
worth;  and  except  property  to  or  for  the  use  of  literary,  educational,  scientific, 
religious,  benevolent  and  charitable  societies  or  institutions:  Provided,  such  use 
entitles  the  property  so  passing  to  be  exempt  from  taxation;  and  except  property 
to  or  for  the  use  of  the  state,  a  county  or  a  municipality  for  public  purposes;  and 
except  property  to  or  for  the  use  of  a  class  herein  designated  as  class  A,  being  the 
husband,  wife,  lineal  ancestor,  lineal  descendant,  adopted  child,  the  lineal  de- 
scendant of  any  adopted  child,  the  wife  or  widow  of  a  son  or  the  husband  of  a 
daughter  of  a  decedent;  and  except  property  to  or  for  the  use  of  a  class  herein 
designated  as  class  B,  being  the  brother,  sister,  nephew  or  niece  of  a  decedent, 
not  tt)  exceed  twenty-five  thousand  dollars,  shall  be  subject  to  a  tax  of  five  per 
cent  of  its  value  and  all  such  property  which  shall  so  pass  in  excess  of  twenty-five 
thousand  dollars  and  not  to  exceed  fifty  thousand  dollars  shall  be  subject  to  a  tax 
of  seven  and  one-half  per  cent  of  its  value;  and  all  such  property  which  shall  so 
pass  in  excess  of  fifty  thousand  dollars  and  not  to  exceed  one  hundred  thousand 
dollars  shall  be  subject  to  a  tax  of  ten  per  cent  of  its  value;  and  all  such  property 
which  shall  so  pass  in  excess  of  one  hundred  thousand  dollars  and  not  to  exceed 
five  hundred  thousand  dollars  shall  be  subject  to  a  tax  of  twelve  and  one-half 
per  cent  of  its  value;  and  all  such  property  which  shall  so  pass  in  excess  of  five 
hundred  thousand  dollars  shall  be  subject  to  a  tax  of  fifteen  per  cent  of  its  value; 
and  all  such  property  which  shall  so  pass  to  or  for  the  use  of  a  member  of  class  A 
not  to  exceed  twenty-five  thousand  dollars  shall  be  subject  to  a  tax  of  one  per  cent 
of  its  value;  and  all  such  property  which  shall  so  pass  to  or  for  the  use  of  a  member 
of  class  A  in  excess  of  twenty-five  thousand  dollars  and  not  to  exceed  fifty  thousand 
dollars  shall  be  subject  to  a  tax  of  two  per  cent  of  its  value;  and  all  such  property 
which  shall  so  pass  to  or  for  the  use  of  a  member  of  class  A  in  excess  of  fifty  thou- 
sand dollars  and  not  to  exceed  one  hundred  thousand  dollars  shall  be  subject  to 
a  tax  of  three  per  cent  of  its  value;  and  all  such  property  which  shall  so  pass  to 
or  for  the  use  of  a  member  of  class  A  in  excess  of  one  hundred  thousand  dollars 
and  not  to  exceed  five  hundred  thousand  dollars  shall  be  subject  to  a  tax  of  four 
per  cent  of  its  value;  and  all  such  property  which  shall  so  pass  to  or  for  a  member 
of  class  A  in  excess  of  five  hundred  thousand  dollars  shall  be  subject  to  a  tax  of 
five  per  cent  of  its  value;  and  all  such  property  which  shall  so  pass  to  or  for  the 
use  of  a  member  of  class  B  not  to  exceed  twenty-five  thousand  dollars  shall  be 


1909,  c.  248.]  KANSAS.  485 

subject  to  a  tax  of  three  per  cent  of  its  value;  and  all  such  property  which  shall  so 
pass  to  or  for  the  use  of  a  member  of  class  B  in  excess  of  twenty-five  thousand 
dollars  and  not  to  exceed  fifty  thousand  dollars  shall  be  subject  to  a  tax  of  five 
per  cent  of  its  value;  and  all  such  property  which  shall  so  pass  to  or  for  the  use  of 
class  B  in  excess  of  fifty  thousand  dollars  and  not  to  exceed  one  hundred  thousand 
dollars  shall  be  subject  to  a  tax  of  seven  and  one-half  per  cent  of  its  value;  and  all 
such  property  which  shall  so  pass  to  or  for  the  use  of  a  member  of  class  B  in  excess 
of  one  hundred  thousand  dollars  and  not  to  exceed  five  hundred  thousand  dollars 
shall  be  subject  to  a  tax  of  ten  per  cent  of  its  value;  and  all  such  property 
which  shall  so  pass  to  or  for  a  member  of  class  B  in  excess  of  five  hundred  thousand 
dollars  shall  be  subject  to  a  tax  of  twelve  and  one-half  per  cent  of  its  value;  and  all 
taxes  hereinafter  provided  for  shall  be  for  the  use  of  the  state ;  and  administrators, 
executors  and  trustees,  and  any  grantees  under  any  such  conveyance  made  during 
the  grantor's  life,  shall  be  liable  for  such  taxes,  with  interest  at  the  legal  rate,  until 
the  same  shall  have  been  paid:  Provided,  that  no  bequest,  devise  or  distributive 
share  of  an  estate  which  shall  so  pass  to  or  for  the  use  of  a  husband,  wife,  father, 
mother,  child  or  adopted  child  of  the  deceased,  shall  be  subject  to  the  provisions 
of  this  act,  unless  its  value  exceeds  five  thousand  dollars:  And  provided  further 
that  no  bequest,  devise  or  distributive  share  of  an  estate  which  shall  so  pass  to 
or. for  the  use  of  a  brother,  sister,  nephew  or  niece  of  the  deceased  shall  be  subject 
to  the  provisions  of  this  act  unless  its  value  exceeds  one  thousand  dollars.  Property 
shall  be  deemed  to  have  been  transferred  by  grant  or  gift  in  contemplation  of 
death,  under  this  act,  when  such  grant  or  gift  shall  have  been  executed  within 
one  year  prior  to  the  death  of  the  grantor  or  donor.  (L.  1909,  c.  248,  s.  1 ;  March 
16.) 

S.  9266.    Property  out  of  state,  or  of  non-resident  within  state.    S.  53. 

Property  of  a  resident  of  the  state,  which  is  not  therein  at  the  time  of  his  death, 
shall  not  be  taxable  under  the  provisions  of  this  act  if  legally  subject  in  another 
state  or  country  to  a  tax  of  like  character  and  amount  to  that  hereby  imposed: 
Provided,  such  tax  be  actually  paid,  guaranteed  or  secured  in  such  other  state 
or  country.  If,  however,  such  property  be  legally  subject  in  another  state  or 
country  to  a  tax  of  like  character  but  of  less  amount  than  that  hereby  imposed, 
and  such  tax  be  actually  paid,  guaranteed  or  secured  as  aforesaid,  such  property 
shall  be  taxable  under  this  act  to  the  extent  of  the  excess  for  which  such  property 
would  otherwise  be  liable  hereunder  over  the  tax  thus  actually  paid,  guaranteed 
or  secured.  Property  of  the  estate  of  a  non-resident  decedent,  which  is  situated 
in  the  state  at  the  time  of  his  death,  if  subject  to  a  tax  of  like  character  with  that 
imposed  by  this  act  by  the  law  of  the  state  or  country  where  decedent  had  his 
residence,  shall  b§  subject  only  to  such  portion  of  the  tax  hereby  imposed  as  may  be 
in  excess  of  such  tax  imposed  by  the  laws  of  such  other  state  or  country:  Provided, 
that  a  like  exemption  is  made  by  the  laws  of  such  other  state  or  country  in  favor 
of  estates  of  citizens  of  this  state,  but  in  such  cases  no  exemption  shall  be  allowed 
until  the  tax  provided  for  by  the  law  of  such  other  state  or  country  shall  be  actually 
paid,  guaranteed  or  secured  in  accordance  with  law. 

S.  9267.  Payment  of  taxes  imposed  by  this  act.  S.  54.  Except  as  here- 
inafter provided,  taxes  imposed  by  the  provisions  of  this  act  shall  be  payable  to 
the  county  treasurer  of  the  county  in  which  is  situated  the  probate  court  having 
jurisdiction  as  in  this  act  provided,  by  the  executors,  administrators  or  trustees, 


486  STATUTES  ANNOTATED.  [Kansas  St. 

at  the  expiration  of  one  year  after  the  date  of  their  giving  bond;  but  if  legacies 
or  distributive  shares  are  paid  within  the  one  year,  the  taxes  thereon  shall  be 
payable  at  the  same  time.  In  cases  where  property  is  transferred  by  deed,  grant 
or  gift  made  in  contemplation  of  death,  the  tax  thereon  shall  be  due  and  payable 
at  the  time  of  such  transfer.  In  all  cases  where  there  shall  be  a  grant,  devise, 
descent  or  bequest,  to  take  effect  in  possession  or  come  into  actual  enjoyment  after 
the  expiration  of  one  or  more  life  estates  or  after  a  term  of  years,  the  taxes  thereon 
shall  be  payable  by  the  executors,  administrators  or  trustees  in  office  when  such 
right  of  possession  accrues,  or,  if  there  is  no  such  executor,  administrator  or 
trustee,  by  the  person  so  entitled  thereto,  at  the  date  when  the  right  of  possession 
accrues  to  the  person  or  persons  so  entitled.  If  the  taxes  contemplated  by  this 
act  are  not  paid  when  due,  interest  at  the  legal  rate  shall  be  charged  and  collected 
from  the  time  the  same  becomes  payable.  Property  of  which  a  decedent  died 
seized  or  possessed,  subject  to  taxes  as  aforesaid,  in  whatever  form  or  investment 
it  may  happen  to  be,  and  all  property  acquired  in  substitution  therefor,  shall  be 
charged  with  a  lien  for  all  taxes  and  interest  thereon  which  are  or  may  become  due 
on  such  property;  but  said  lien  shall  not  affect  any  personal  property  after  the 
same  has  been  sold  or  disposed  of  for  value  by  the  executors,  administrators  or 
trustees.  The  lien  charged  by  this  act  upon  any  real  estate  or  separate  parcel 
thereof  may  be  discharged  by  the  payment  of  all  taxes  due  and  to  become  due 
which  are  secured  by  such  lien  on  real  estate,  or  such  lien  for  taxes  may  be  satisfied, 
in  relation  to  any  real  estate  or  separate  parcel  thereof,  on  condition  that  the 
payment  of  the  tax  to  the  state  is  first  secured  by  bond  or  deposit  or  that  other 
real  estate  is  substituted  in  the  place  of  that  which  is  sought  to  be  released: 
Provided,  that  the  probate  court  having  jurisdiction  shall  first  approve  the  bond 
or  deposit  tendered  or  in  advance  thereof  shall  approve  of  the  substitution  of  other 
real  estate  as  security  for  the  taxes,  in  lieu  of  that  which  is  to  be  released. 

S.  9268.  Deposit  when  bequest  or  grant  is  contingent,  etc.  S.  55.  In 
every  case  where  there  shall  be  a  bequest  or  grant  of  personal  estate  made  or 
intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of  the  grantor, 
to  take  effect  in  possession  or  come  into  actual  enjoyment  after  the  expiration 
of  one  or  more  life  estates  or  a  term  of  years,  whether  conditioned  upon  the 
happening  of  a  contingency,  or  dependent  upon  the  exercise  of  a  discretion,  or 
subject  to  a  power  of  appointment  or  otherwise,  the  executor  or  administrator 
or  grantor  may  deposit  with  the  county  treasurer  a  sum  of  money  sufficient  in 
the  opinion  of  the  said  county  treasurer  to  pay  all  taxes  which  may  become  due 
upon  such  bequest  or  grant,  and  the  person  or  persons  having  the  righ  to  the  use 
or  income  of  such  personal  estate  shall  be  entitled  to  receive  from  the  said  county 
treasurer  interest  at  the  rate  of  four  per  cent  per  annum  upon  such  deposit,  and 
when  said  tax  shall  become  due  the  said  county  treasurer  shall  repay  to  the 
persons  entitled  thereto  the  difference  between  the  tax  certified  and  the  amount 
deposited ;  or  any  executor,  administrator,  trustee  or  grantee,  or  any  person  in- 
terested in  such  bequest  or  grant  may  give  bond  to  the  probate  court  having  juris- 
diction of  the  estate  of  the  decedent,  in  such  amount  and  with  such  sureties  as 
said  court  may  approve,  with  the  condition  that  the  obligor  shall  notify  the  tax 
commission  when  said  tax  becomes  due  and  shall  then  pay  the  same  to  the  county 
treasurer. 

S.  9269.  How  tax  assessed.  S.  56.  Except  as  hereinafter  provided,  said 
tax  shall  be  assessed  upon  the  actual  value  of  the  property  at  the  time  of  the 


1909,  c.  248.]  KANSAS.  487 

death  of  the  decedent.  In  every  case  where  property  is  transferred  by  deed, 
grant  or  gift  made  in  contemplation  of  death,  the  tax  thereon  shall  be  a  lien  on 
the  interest  of  the  beneficiary  therein  from  the  date  of  transfer  and  shall  be  assessed 
when  the  beneficiary  becomes  entitled  to  the  possession  and  enjoyment  thereof. 
In  every  case  where  there  shall  be  a  devise,  descent,  bequest  or  grant  to  take  effect 
in  possession  or  enjoyment  after  the  expiration  of  one  or  more  life  estates  or  a  term 
of  years,  the  tax  shall  be  assessed  on  the  actual  value  of  the  property  or  the 
interest  of  the  beneficiary  therein  at  the  time  when  he  becomes  entitled  to  the 
same  in  possession  or  enjoyment.  The  value  of  an  annuity  or  a  life  interest  in 
any  such  property,  or  any  interest  therein  less  than  an  absolute  interest,  shall  be 
determined  by  the  "American  Experience  Tables"  at  four  per  cent  compound 
interest. 

S.  9270.  Payment  on  future  interests.  S.  57.  Any  person  or  persons  en- 
titled to  a  future  interest  or  to  future  interests  in  any  property  may  pay  the  tax 
on  account  of  the  same  at  any  time  before  such  tax  would  be  due  in  accordance 
with  the  provisions  hereinbefore  contained,  and  in  such  cases  the  tax  shall  be 
assessed  upon  the  actual  value  of  the  interest  at  the  time  of  the  payment  of  the 
tax,  and  such  value  shall  be  determined  by  the  tax  commission  as  hereinafter 
provided.  In  every  case  in  which  it  is  impossible  to  compute  the  present  value 
of  the  future  interest  the  tax  commission  may,  with  the  approval  of  the  attorney 
general,  effect  such  settlement  of  the  tax  as  it  shall  deem  to  be  for  the  best  interests 
of  the  state,  and  payment  of  the  sum  so  agreed  upon  shall  be  a  full  satisfaction 
of  such  tax. 

S.  9271.  Bequests  in  lieu  of  compensation.  S.  58.  If  a  testator  gives 
bequeaths  or  devises  to  his  executors  or  trustees  any  property  otherwise  liable  to 
said  tax,  in  lieu  of  their  compensation,  the  value  thereof  in  excess  of  reasonable 
compensation,  as  determined  by  the  probate  court  upon  the  application  of  any 
interested  party  or  of  the  tax  commission,  shall  nevertheless  be  subject  to  the 
provisions  of  this  act. 

S.  9272.  Duty  of  executor,  etc.  S.  59.  An  executor,  administrator  or 
trustee  holding  property  subject  to  said  tax  shall  deduct  the  tax  therefrom  or 
collect  it  from  the  legatee  or  person  entitled  to  said  property;  and  he  shall  not 
deliver  property  or  a  specific  legacy  subject  to  said  tax  until  he  has  collected 
the  tax  thereon.  An  executor  or  administrator  shall  collect  taxes  due  upon  land 
which  is  subject  to  tax  under  the  provisions  hereof  from  the  heirs  or  devisees  en- 
titled thereto,  and  he  may  be  authorized  to  sell  said  land  according  to  the  pro- 
visions of  section  11  if  they  refuse  or  neglect  to  pay  said  tax. 

S.  9273.  Legacy  a  charge  on  real  estate.  S.  60.  If  a  legacy  subject  to 
said  tax  is  charged  upon  or  payable  out  of  real  estate,  the  heir  or  devisee,  before 
paying  it,  shall  deduct  said  tax  therefrom  and  pay  it  to  the  executor,  adminis- 
trator or  trustee,  and  the  tax  shall  remain  a  lien  upon  said  real  estate  until  it  is 
paid.  Payment  thereof  may  be  enforced  by  the  executor,  administrator  or  trustee 
in  the  same  manner  as  the  payment  of  the  legacy  itself  could  be  enforced. 

S.  9274.  Provision  in  will  for  tax.  S.  61.  When  provision  is  made  by  any 
will  or  other  instrument  for  payment  of  the  legacy  or  succession  tax  upon  any 


488  STATUTES  ANNOTATED.  [Kansas  St. 

gift  thereby  made  out  of  any  property  other  than  that  so  given,  no  tax  shall  be 
chargeable  upon  any  money  to  be  applied  in  payment  of  such  tax. 

S.  9275.  Sale  of  real  estate  to  pay  tax.  S.  62.  The  probate  court  of  the 
proper  county  may  authorize  executors,  administrators  and  trustees  to  sell  the 
real  estate  of  a  decedent  for  the  payment  of  such  tax  in  the  same  manner  as  it 
may  authorize  them  to  sell  real  estate  for  the  payment  of  debts. 

S.  9276.  Penalty,  failing  to  file  inventory.  S.  63.  An  inventory  and  ap- 
praisal under  oath  of  every  estate  shall  be  filed  in  the  probate  court  by  the 
executor,  administrator  or  trustee  within  three  months  after  his  appointment. 
If  he  neglects  or  refuses  to  file  such  inventory  and  appraisal  he  shall  be  liable  to  a 
penalty  of  not  more  than  five  thousand  dollars,  which  shall  be  recovered  in  the 
proper  district  court  by  the  attorney  general  or  county  attorney  of  the  proper 
county  at  the  instance  of  the  tax  commission,  in  the  name  of  the  state,  for  the 
use  of  the  state;  and  the  probate  judge  shall  notify  the  tax  commission  within 
thirty  days  after  the  expiration  of  said  three  months  of  the  failure  of  any  executor, 
administrator  or  trustee  to  file  an  inventory  and  appraisal  in  his  office. 

S.  9277.  Record  of  inventory;  transmission.  S.  64.  The  probate  judge 
shall  record  the  inventory  and  appraisal  of  every  estate  which  is  filed  in  his  office, 
and  he  shall,  within  thirty  days  after  the  same  has  been  filed,  send  by  mail  to 
the  tax  commission  such  inventory  and  appraisal  or  a  copy  thereof.  The  probate 
judge  shall  also,  within  the  same  period,  send  by  mail  to  the  tax  commission 
a  copy  of  the  will  of  the  decedent,  if  such  nas  been  allowed  by  the  probate  court. 
The^probate  judge  shall  also  furnish  such  copies  of  papers  in  his  office  as  the  tax 
commission  shall  require,  and  shall  furnish  information  as  to  the  records  and 
files  in  his  office  in  such  form  as  the  tax  commission  may  require.  The  tax  com- 
mission shall  excuse  the  probate  court  from  filing  inventories  or  copies  of  in- 
ventories and  of  wills  of  estates  no  part  of  which  appears  to  be  subject  to  a  tax 
under  the  provisions  of  this  chapter. 

S.  9278.    Payment  of  tax  on  stock  transferred  by  foreign  executor,  etc. 

S.  65.  If  a  foreign  executor,  administrator  or  trustee  assigns  or  transfers  any 
stock  in  any  national  bank  located  in  this  state  or  in  any  corporation  organized 
under  the  laws  of  this  state  owned  by  a  deceased  non-resident  at  the  date  of 
his  death  and  liable  to  a  tax  under  the  provisions  of  this  act,  the  tax  shall  be 
paid  to  the  county  treasurer  of  the  proper  county  at  the  time  of  such  assignment 
or  transfer;  and  if  it  is  not  paid  when  due,  such  executor,  administrator  or  trustee 
shall  be  personally  liable  therefor  until  it  is  paid.  A  bank  located  in  this  state  or 
a  corporation  organized  under  the  laws  of  this  state  which  shall  record  a  transfer 
of  any  share  of  its  stocl^:  made  by  a  foreign  executor,  adminis  rator  or  trustee,  or 
issue  a  new  certificate  for  a  share  of  its  stock  at  the  instance  of  a  foreign  executor, 
administi^ator  or  trustee,  before  all  taxes  imposed  thereon  by  the  provisions  of  this 
act  have  been  paid,  shall  be  liable  for  such  tax  in  an  action  of  contract  brought 
by  the  county  attorney  of  the  proper  county  or  the  attorney  general  in  the  name 
of  the  state  and  at  the  instance  of  either  the  probate  court  or  the  tax  commission. 

S.  9279.    Assets  of  estate  of  non-resident  not  delivered,  until.    S.  66. 

Securities  or  assets  belonging  to  the  estate  of  a  deceased  non-resident  shall  not  be 


1909,  c.  248.1  KANSAS.  489 

delivered  or  transferred  to  a  foreign  executor,  administrator  or  legal  representative 
of  said  decedent  without  serving  notice  upon  the  tax  commisson  of  the  time 
and  place  of  such  intended  delivery  or  transfer  seven  days  at  least  before  the 
time  of  such  delivery  or  transfer.  The  tax  commission,  by  any  member  or  by 
representative,  may  examine  such  securities  or  assets  prior  to  the  time  of  such 
delivery  or  transfer.  Failure  to  serve  such  notice  or  to  allow  such  examination 
shall  render  the  person  or  corporation  making  the  delivery  or  transfer  liable  to 
the  payment  of  the  tax  due  upon  said  securities  or  assets,  in  an  action  brought 
by  the  county  attorney  of  the  proper  county  or  the  attorney  general  in  the  name 
of  the  state. 

S.  9280.  Repayment  of  tax.  S.  67.  If  a  person  who  has  paid  such  tax 
afterward  refunds  a  portion  of  the  property  on  which  it  was  paid,  or  if  it  is  judi- 
cially determined  that  the  whole  or  any  part  of  such  tax  ought  not  to  have  been 
paid,  such  tax,  or  the  due  proportion  thereof,  shall  be  repaid  to  him  by  the  execu- 
tor, administrator  or  trustee. 

S.  9281.  Value  of  property,  how  determined.  S.  68.  The  value  of  the 
property  upon  which  the  tax  is  computed  shall  be  determined  by  the  tax  commis- 
sion and  notified  by  it  to  the  person  or  persons  by  whom  the  tax  is  payable  and 
to  the  probate  court  and  county  treasurer  of  the  proper  county,  and  such 
determination  shall  be  final  unless  the  value  so  determined  shall  be  reduced  by 
proceedings  as  herein  provided.  At  any  time  within  three  months  after  such  de- 
termination the  probate  court  shall,  upon  the  application  of  any  party  interested 
in  the  succession,  or  on  application  of  the  executor,  administrator  or  trustee, 
appoint  three  disinterested  appraisers,  who,  first  being  sworn,  shall  appraise  such 
property  at  its  actual  value  in  money  as  of  the  day  of  the  death  of  the  decedent, 
and  shall  make  return  thereof  to  said  court.  Such  return,  when  accepted  by  said 
court,  shall  be  final:  Provided,  that  any  party  aggrieved  by  such  appraisal  shall 
have  an  appeal  upon  matters  of  law.  One-half  of  the  fees  of  said  appraisers,  as 
determined  by  the  judge  of  said  court,  shall  be  paid  by  the  county  treasurer,  and 
one-half  of  said  fees  shall  be  paid  by  the  other  party  or  parties  to  said  proceedings. 

S.  9282.    Commission  determine  amount  of  tax  due.    S.  69.    The  tax 

commission  shall  determine  the  amount  of  tax  due  and  payable  upon  any  estate, 
or  upon  any  part  thereof,  and  shall  certify  the  amount  so  due  and  payable 
to  the  probate  court  and  to  the  county  treasurer  and  to  the  person  or  persons 
by  whom  the  tax  is  payable;  but  in  the  determination  of  the  amount  of  any 
tax  said  tax  commission  shall  not  be  required  to  consider  any  payments  on 
account  of  debts  or  expenses  of  administration  which  have  not  been  allowed 
by  the  probate  court  having  jurisdiction  of  said  estate.  Payment  of  the  amount 
so  certified  shall  be  a  discharge  of  the  tax.  An  executor,  administrator,  trustee 
or  grantee  who  is  aggrieved  by  any  determination  of  the  tax  commission  may 
within  one  year  after  the  payment  of  any  tax  to  the  county  treasurer,  apply 
by  a  petition  to  the  probate  court  having  jurisdiction  of  the  estate  of  the  decedent 
for  the  abatement  of  said  tax,  or  any  part  thereof,  and  if  the  court  adjudges  that 
said  tax,  or  any  part  thereof,  was  wrongly  exacted  it  shall  order  an  abatement 
of  such  portion  of  said  tax  as  was  assessed  without  authority  of  law.  Upon  a 
final  decision  ordering  an  abatement  of  any  portion  of  said  tax  the  county  treasurer 
shall  refund  the  amount  adjudged  to  have  been  illegally  exacted,  with  interest  at 
the  legal  rate,  without  any  further  act  or  resolve  making  appropriation  therefor. 


490  STATUTES  ANNOTATED.  [Kansas  St. 

S.  9283.  Jurisdiction  of  probate  court.  S.  70.  The  probate  court  having 
jurisdiction  of  the  settlement  of  the  estate  of  the  decedent,  subject  to  appeal 
as  in  other  cases,  shall  hear  and  determine  all  questions  relative  to  said  tax, 
and  the  county  attorney  of  the  proper  county,  at  the  request  of  the  tax  com- 
mission or  of  the  county  treasurer,  shall  represent  the  state  in  any  such  proceed- 
ings. If  the  court  shall  find  that  any  tax  remains  due,  it  shall  order  the  executor, 
administrator  or  trustee  to  pay  the  same,  with  interest  and  costs;  and  if  it  appears 
that  there  are  no  goods  or  assets  of  the  estate  in  his  hands,  the  court  may  assess 
the  amount  of  the  tax  against  the  executor,  administrator  or  trustee,  as  if  for 
his  own  debt,  and  may  enforce  compliance  with  such  order  by  proper  procedure 
as  now  authorized  by  probate  practice;  but  the  administrators,  executors,  trus- 
tees and  grantees  hereinbefore  mentioned  shall  be  personally  liable  only  for 
such  taxes  as  shall  be  payable  while  they  continue  in  the  said  offices  or  have  title 
as  such  grantees,  respectively.  In  the  cases  where  the  tax  is  due  and  payable 
by  and  collectible  from  the  beneficiary,  all  actions  shall  be  prosecuted  by  the 
attorney  general  or  the  county  attorney  of  the  proper  county  in  the  name  of  the 
state,  and  such  actions  may  be  brought  in  the  same  courts  as  other  actions  for 
money. 

S.  9284.  Administration  at  instance  of  commission.  S.  71.  If  upon 
the  decease  of  a  person  leaving  an  estate  liable  to  a  tax  under  the  provisions  of 
this  act  a  will  disposing  of  such  estate  is  not  offered  for  probate,  or  an  application 
for  administration  made  within  four  months  after  such  decease,  the  probate 
court,  upon  application  by  the  county  attorney  of  the  proper  county  or  the 
attorney  general  at  the  instance  of  the  tax  commission,  shall  appoint  an  adminis- 
trator if  it  then  appears  that  there  is  no  will  in  existence. 

S.  9285.  Final  account  not  allowed  unless  tax  paid.  S.  72.  No  final  ac- 
count of  an  executor,  admmistrator  or  trustee  shall  be  allowed  by  the  probate 
court  unless  such  account  shows,  and  the  judge  ot  said  court  finds,  that  all  taxes 
imposed  by  the  provisions  of  this  act  upon  any  property  or  interest  therein  belong- 
ing to  the  estate  to  be  settled  by  said  account  and  already  payable  have  been 
paid,  and  that  all  taxes  which  may  become  due  on  said  estate  have  been  paid 
or  settled  as  hereinbefore  provided,  or  that  the  payment  thereof  to  the  state  is 
secured  by  bond  or  deposit  or  by  lien  on  real  estate.  The  certificate  of  the  tax 
commission  and  the  receipt  of  the  county  treasurer  for  the  amount  of  the  tax 
therein  certified  shall  be  conclusive  as  to  the  payment  of  the  tax,  to  the  extent 
of  said  certification. 

S.  9286.  Proceedings  for  recovery  of  taxes.  S.  73.  The  county  attorney 
of  the  proper  county  or  the  attorney  general,  at  the  instance  of  the  county  treas- 
urer or  the  tax  commission,  shall  commence  proceedings  for  the  recovery  of  any 
of  said  taxes  within  six  months  after  the  same  become  payable,  and  also  whenever 
the  judge  of  a  probate  court  certifies  to  him  that  the  final  account  of  an  executor, 
administrator  or  trustee  has  been  filed  in  such  court  and  that  the  settlement  of 
the  estate  is  delayed  because  of  the  non-payment  of  said  tax.  The  probate  court 
shall  so  certify  upon  the  application  of  any  heir,  legatee  or  other  person  interested 
therein,  and  may  extend  the  time  of  payment  of  said  tax  whenever  the  circum- 
stances of  the  case  require. 


1909,  c.  248.1  KANSAS.  491 

S.  9287.  Act  not  apply.  S.  74.  This  act  shall  not  apply  to  estates  of  persons 
deceased  prior  to  the  date  when  it  takes  effect,  or  to  property  passing  by  deed, 
grant,  sale  or  gift  made  prior  to  said  date. 

S.  9288.  Report  of  county  treasurer.  S.  75.  Each  county  treasurer  shall 
make  a  report,  under  oath,  to  the  state  treasurer  on  the  1st  day  of  January, 
April,  July  and  October,  respectively,  of  each,  year,  of  all  taxes  received  by  him 
under  this  act,  which  report  shall  state  for  what  estate  and  by  whom  and  when 
paid.  The  form  of  such  report  may  be  prescribed  by  the  tax  commission,  and 
all  moneys  received  in  pursuance  of  this  act  by  such  treasurer  shall  be  turned 
over  to  the  state  treasurer  by  the  county  treasurer,  in  such  manner  as  the  laws 
at  the  time  in  force  in  relation  to  drawing  of  state  moneys  from  county  treasurers 
shall  direct. 

S.  9289.  Per  cent  retained  by  county  treasurer.  S.  76.  The  county 
treasurer  shall  retain,  for  the  use  of  the  county,  as  compensation  to  the  county 
for  services  of  county  officers,  out  of  all  taxes  paid  to  and  accounted  for  by  him 
each  year  under  this  act,  five  per  cent  of  the  tax  paid  on  the  first  fifty  thousand 
dollars,  three  per  cent  on  the  next  fifty  thousand  dollars,  and  two  per  cent  on 
all  additional  sums. 

S.  9290.  Tax  paid  to  state  treasury.  S.  77.  All  taxes  levied  and  collected 
under  this  act,  less  any  expenses  of  collection,  shall  be  paid  into  the  treasury  of 
the  state  for  the  benefit  of  the  general  revenue  fund,  and  shall  be  applicable 
to  such  purposes  as  the  legislature  by  law  may  direct. 

S.  9291.  Definitions  of  terms.  S.  78.  The  words  "estate"  and  "property," 
as  used  in  this  act,  shall  be  taken  to  mean  the  real,  personal  and  mixed  property 
or  interest  therein  of  the  testator,  intestate,  grantor,  bargainor,  vendor  or  donor 
which  shall  pass  or  be  transferred  to  legatees,  devisees,  heirs,  next  of  kin,  grantees, 
donees,  vendees  or  successors,  and  shall  include  all  personal  property  within  or 
without  the  state.  The  word  "transfer,"  as  used  in  this  act,  shall  be  taken  to 
include  the  passing  of  property  or  any  interest  therein  in  possession  or  enjoyment, 
present  or  future,  by  inheritance,  descent,  devise,  succession,  bequest,  grant, 
deed,  bargain,  sale,  gift  or  appointment  in  the  manner  herein  prescribed.  The 
word  "decedent,"  as  used  in  this  act  shall  include  the  testator,  intestate,  grantor, 
bargainor,  vendor  or  donor. 


492  STATUTES  ANNOTATED."  [Ky.  St. 


KENTUCKY. 


In  General. 

Kentucky  adopted  a  collateral  inheritance  tax  in  1906. 

The  attorney  general  has  ruled  that  stock  of  a  Kentucky  cor- 
poration owned  by  a  deceased  non-resident  is  subject  to  the  tax. 
Kentucky  claims  a  tax  on  stock  owned  by  a  non-resident  in  a  foreign 
corporation  which  owns  property  in  Kentucky  if  the  proportionate 
value  of  the  Kentucky  property  can  be  ascertained. 

Constitutional  Limitations. 

Kentucky  Constitution,  1890. 

S.  171.  The  general  assembly  shall  provide  by  law  an  annual  tax,  which, 
with  other  resources,  shall  be  sufficient  to  defray  the  estimated  expenses  of  the 
commonwealth  for  each  fiscal  year.  Taxes  shall  be  levied  and  collected  for  public 
purposes  only.  They  shall  be  uniform  upon  all  property  subject  to  taxation 
within  the  territorial  limits  of  the  authority  levying  the  tax;  and  all  taxes  shall 
be  levied  and  collected  by  general  laws. 

S.  172.  All  property,  not  exempted  from  taxation  by  this  constitution,  shall 
be  assessed  for  taxation  at  its  fair  cash  value,  estimated  at  the  price  it  would 
bring  at  a  fair  voluntary  sale;  and  any  officer,  or  other  person  authorized  to  assess 
values  for  taxation,  who  shall  commit  any  willful  error  in  the  performance  of  his 
duty,  shall  be  deemed  guilty  of  misfeasance,  and  upon  conviction  thereof  shall 
forfeit  his  office,  and  be  otherwise  punished  as  may  be  provided  by  law. 

List  of  Statutes. 

1906.     Statutes  of  Kentucky,  c.  22,  a.  19,  p.  240. 

1910.  "         "  "  c.  36,  p.  95. 

Statutes  of  Kentucky  (Russell  1909)  a.  6,  ss.  6117  to  6131,  inclusive.  (This 
is  the  Act  of  1906  above  referred  to.) 

Ky.  St.  1909,  s.  4281a  to  42815.     (The  act  of  1906.) 

[For  report  of  Sheriff  as  to  revenue  collected,  etc.,  see  section  6001  of  Statutes 
of  Kentucky,  1909.) 

Ky.  St.  1906,  c.  22,  a.  19,  p.  240,  covers  the  taxation  of  inheritances. 
This  statute  was  approved  March  15, 1906,  and  is  printed  post,  p.  495 
et  seq. 

Ky.  St.  1910,  c.  36,  p.  95,  approved  March  21,  1910,  provides 
that  any  money  that  has  been  paid  under  the  inheritance   tax, 


1906,  c.  22.]  KENTUCKY.  493 

section  4281a,  prior  to  October  27,  1908,  the  date  of  the  decision  in 
Booth  V.  Commonwealth,  where  the  amount  of  the  legacy  was  no 
more  than  five  hundred  dollars,  shall  be  refunded. 

History. 

No  inheritance  tax  was  ever  imposed  in  Kentucky  prior  to  the 
statute  of  1906.  Boothw.  Commonwealth,  130Ky.88, 113S.  W.61,63. 

Likeness  to  Maine  Statute. 

The  Kentucky  statute  is  practically  identical  with  that  of  Maine. 
Booth  V.  Commonwealth,  130  Ky.  88,  113  S.  W.  61. 

Nature. 

An  inheritance  tax  is  a  special  or  excise  tax.  Booth  v.  Common- 
wealth, 130  Ky.  88,  113  S.  W.  61. 

It  is  insisted  that  as  the  tax  is  a  certain  per  cent  of  the  value  of 
the  estate  and  the  property  pays  it,  it  is  therefore  a  tax  on  the 
property  itself.  But  the  court,  relying  on  Eyre  v.  Jacobs,  14  Gratt. 
422,  remarks  that  this  is  by  no  means  a  necessary  logical  conclusion, 
that  the  intention  of  the  legislature  was  plainly  to  tax  the  trans- 
mission of  property  by  devise  or  descent  to  collateral  kindred  and  to 
require  that  a  party  then  taking  the  benefit  of  a  civil  right  accrued 
to  him  under  the  law  should  pay  a  certain  premium  for  its  enjoy- 
ment, and  as  it  was  thought  just  and  reasonable  that  the  amount 
of  the  premium  should  bear  a  certain  proportion  to  the  value  of 
the  subject  enjoyed  it  is  fixed  at  a  certain  percentum  upon  the  value 
of  the  whole  estate  transmitted.  Booth  v.  Commonwealth,  130  Ky. 
88, 113S.W.61. 

What  Law  Applies  when  Remainder  Void. 

A  will  left  property  to  A.  B.  with  power  to  dispose  of  it 
absolutely  by  will  or  otherwise  and  further  provided  that  any  part 
of  the  property  undisposed  of  at  the  death  of  A.  B.  should  go  to 
the  heirs  of  the  testator.  The  provision  over  to  the  heirs  was  void 
under  Kentucky  law  and  therefore  the  heirs  took  by  descent  from 
A.  B.  and  not  under  the  will  of  the  testator,  and  therefore  the  suc- 
cession was  subject  to  an  inheritance  tax,  the  statute  of  1906  being 
passed  after  the  original  testator  died  and  before  the  death  of  A.  B. 
Commonwealth  v.  Stall,  132  Ky.  234,  116  S.  W.  687,  withdrawing 
opinion  114  S.  W.  279. 


494  STATUTES  ANNOTATED.  [Ky.  St- 

Source  of  Power  to  Tax  Inheritances. 

The  privilege  or  right  to  take  property  by  inheritance  or  devise 
is  not  a  natural  or  inherent  right  of  person  but  is  a  creature  of  the 
law  and  is  subject  to  regulation  by  statute.  Booth  v.  Commonwealth, 
130  Ky.  88,  113  S.  W.  61. 

"The  right  of  property,  however,  is  an  inherent  or  inalienable  right  of  the 
citizen,  and  'consists  in  the  free  use,  enjoyment,  and  disposal  of  his  acquisitions, 
without  any  control  or  diminution,  save  only  of  the  laws  of  the  land.'  Black- 
stone's  Com.,  Vol.  1,  p.  138.  But  we  venture  to  say  that  among  the  absolute 
rights  of  individuals  enumerated  by  Blackstone  no  mention  is  made  of  a  right 
to  inherit  property  from  another.  All  estates  derived  upon  the  death  of  another 
have  been  created  by  law,  and  are  for  that  reason  always  subject  to  regulation  by 
statute;  indeed,  frequent  changes  by  legislative  enactment  have  been  and  will 
doubtless  yet  be  made  in  the  law  of  descent  and  distribution.  It  is  patent,  there- 
fore, that  the  guaranty  in  the  bill  of  rights,  and  other  provisions  of  the  constitu- 
tion, with  respect  to  the  right  of  acquiring  and  protecting  property,  does  not 
include  the  mere  privilege,  right,  or  expectancy  of  inheritance."  Booth  v.  Com- 
monwealth, 130  Ky.  88, 113  S.  W.  61. 

The  power  of  the  legislature  to  tax  is  an  inherent  rather  than  a 
conferred  power  and  the  words  "the  legislative  power"  are  a  com- 
prehensive phrase  meaning  all  powers  that  appertain  to  or  are 
usually  exercised  by  a  legislative  body.  The  power  to  tax  is  incident 
to  and  arises  from  the  legislative  power  with  which  the  constitution 
clothed  the  general  assembly;  therefore  the  fact  that  the  power  to 
lay  an  inheritance  tax  is  not  expressly  conferred  in  the  sections 
of  the  constitution  of  Kentucky,  169  to  182,  relating  to  revenue 
and  taxation  does  not  prevent  the  legislature  from  passing  an 
inheritance  tax.   Booth  v.  Commonwealth,  130  Ky.  88,  113  S.  W.  61. 

The  only  case  which  questions  the  correctness  of  the  doctrine 
that  the  imposition  of  an  inheritance  tax  is  authorized  under  our 
governmental  system  when  not  expressly  forbidden  by  the  state 
constitution  is  Nunnemacher  v.  State,  129  Wis.  190,  108  N.  W.  627. 
SeeBooth  v.  Commonwealth,  130  Ky.  88,  113  S.  W.  61. 

Uniform  and  Equal.  —  Nature  of  Tax. 

An  inheritance  tax  is  not  a  tax  on  property  within  the  provision 
of  the  constitution  of  Kentucky,  section  171,  which  requires  taxes 
on  property  to  be  uniform  and  equal.  The  Kentucky  inheritance 
law  of  1906  is  not  invalid  as  violating  any  provision  of  the  state  or 
federal  constitution  requiring  uniformity  or  equality  of  taxation 
on  account  of  discriminations  between  relations  or  between  relations 


1910,  c.  36.]  KENTUCKY.  495 

and  strangers.  Kentucky  constitution,  section  171,  requiring 
equality  and  uniformity  in  taxation  applies  to  a  direct  tax  on 
property,  but  the  court  holds  that  the  provisions  of  the  Ken- 
tucky statute  of  1906  were  not  lacking  in  equality  or  uniformity 
because  the  tax  is  proportioned  to  the  value  of  the  interest  or 
because  of  the  exemption  where  the  estate  is  of  the  value  of  five 
hundred  dollars  or  less.  Booth  v.  Commonwealth,  130  Ky.  88, 
113S.  W.  61. 

As  the  court  decides  that  the  Kentucky  statute  of  1906  does  not 
violate  the  provision  of  the  constitution  with  respect  to  uniformity 
of  taxation,  it  does  not  decide  whether  or  not  the  rule  as  to  uni- 
formity applies  to  a  special  or  excise  tax  such  as  the  statute  of  1906. 
An  inheritance  tax  is  a  special  or  excise  tax.  Booth  v.  Commonwealth, 
130  Ky.  88,  113  S.  W.  61,  citing  State  v.  Switzler,  143  Mo.  287,  45 
S.  W.  245,  where  the  following  language  is  used:  "As  already 
remarked,  no  doubt  longer  exists  that  it  is  competent  for  the  legis- 
lature to  levy  a  tax  upon  the  succession  of  estates.  It  is  quite 
universally  held  that  such  a  tax  is  not  a  tax  upon  property,  in  the 
ordinary  sense,  but  is  in  the  nature  of  an  excise  or  bonus,  ex- 
acted by  the  state  upon  the  privilege  or  right  to  inherit  or  succeed 
to  an  estate." 

THE  PRESENT  ACT. 
Taxable  Transfers.  —  Rate. 

S.  1.  All  property  which  shall  pass,  by  will  or  by  the  intestate  laws  of  this 
state,  from  aily  person  who  may  die  seized  or  possessed  of  the  same  while  a  resident 
of  this  state,  or  if  such  decedent  was  not  a  resident  of  this  state  at  the  time  of 
death,  which  property,  or  any  part  thereof,  shall  be  within  this  state,  or  any  in- 
terest therein,  or  income  therefrom,  which  shall  be  transferred  by  deed,  grant, 
sale  or  gift,  made  in  contemplation  of  the  death  of  the  grantor  or  bargainor,  or 
intended  to  take  effect  in  possession  or  enjoyment  after  such  death,  to  any  person 
or  persons,  or  to  any  body  politic  or  corporate,  in  trust  or  otherwise,  or  by  reason 
whereof  any  person  or  body  politic  or  corporate  shall  become  beneficially  entitled 
in  possession  or  expectancy,  to  any  property,  or  to  the  income  thereof,  other  than 
to  or  for  the  use  of  his  or  her  father,  mother,  husband,  wife,  lawful  issue,  the  wife 
or  widow  of  a  son,  or  the  husband  of  a  daughter,  or  any  child  or  children  adopted 
as  such  in  conformity  with  the  laws  of  the  commonwealth  of  Kentucky,  and 
any  lineal  descendant  of  such  decedent  born  in  lawful  wedlock,  shall  be,  and  is, 
subject  to  a  tax  of  five  dollars  on  every  hundred  dollars  of  the  fair  cash  value  of 
such  property,  and  at  a  proportionate  rate  for  any  less  amount,  to  be  paid  to  the 
sheriff  or  collector  of  the  proper  county,  as  hereinafter  defined  for  the  general 
use  of  the  commonwealth ;  and  all  administrators,  executors  and  trustees  shall  be 
liable  for  any  and  all  taxes  until  the  same  shall  have  been  paid  as  hereinafter 
directed:  Provided,  that  the  first  five  hundred  dollars  of  every  estate  shall  not 
be  subject  to  such  duty  or  tax. 


496  STATUTES  ANNOTATED.  [Ky.  St. 

"All  Property." 

The  property  of  a  non-resident  which  is  not  physically  present 
in  the  state  is  not  taxable  in  Kentucky  simply  because  the  executor 
is  a  resident  of  Kentucky  and  he  cannot  be  forced  to  file  a  list  of 
such  property  for  taxation.  Commonwealth  v.  Peebles,  134  Ky  121, 
119  S.  W.  774. 

"By  Will."  —  Where  Will  is  Made  in  Pursuance  of  Contract. 

The  testator  devised  all  his  property  to  his  mother  and  entered 
into  a  written  contract  with  her  that  in  consideration  of  the  devise 
she  would  leave  by  will  one-half  of  the  property  she  received  to  A.  B. 
The  testator  died  leaving  his  mother  surviving  and  on  her  death  she 
devised  the  property  in  accordance  with  her  contract.  The  in- 
heritance tax  act  was  passed  after  the  making  of  the  contract  by 
the  mother  and  before  her  death,  and  the  court  holds  that  the 
property  passing  to  A.  B.  is  not  subject  to  the  tax.  The  court  says 
that  reading  the  will  and  contract  together  as  they  must  be  read, 
the  mother  took  a  life  estate  only  and  the  obligation  to  leave  by  will 
to  A.  B.  and  that  therefore  A.  B.  really  took  under  the  will  of  the 
testator  and  not  under  that  of  the  mother.  The  court  relies  on 
Emmons  v.  Shaw,  171  Mass.  410,  50  N.  E.  1033,  and  In  re  Lansing, 
182  N.  Y.  238,  74  N.  E.  882,  in  both  of  which  cases  the  exercise 
of  a  power  to  appoint  by  will  was  referred  to  the  original  will,  and 
no  tax  is  levied  where  the  statute  was  passed  after  the  original 
will  went  into  effect.  Winn  v.  Schenck,  33  Ky.  L.  Rep.  615,  110 
S.  W.  827. 

"The  First  Five  Hundred  Dollars  Shall  Not  be  Subject  to 
such  Duty  or  Ta]^." 

This  exemption  does  not  render  the  statute  void  as  lacking 
uniformity.  This  phrase  refers  to  the  estate  passing  by  will  to  the 
collateral  relative  or  stranger  or  under  the  statute  of  descent  and 
distribution  and  not  to  the  estate  of  the  testator  or  decedent,  and 
means  that  an  estate  passing  by  will  to  the  collateral  which  is 
valued  at  five  hundred  dollars  or  less  shall  not  be  subject  to  the  tax. 
The  tax  is  upon  the  individual  and  can  be  imposed  only  when  the 
particular  interest  in  the  decedent's  estate  passing  to  him  exceeds 
five  hundred  dollars.  Booth  v.  Commonwealth,  130  Ky.  88,  113  S. 
W.  61.  (The  collection  officers  had  previously  ruled  otherwise  and 
Ky.  St.  1910,  c.  36  was  passed  to  allow  refund  of  money  paid  in 
prior  to  this  decision  under  the  construction  of  the  statute  held  by 
those  officers.) 


1910,  c.  36.]  KENTUCKY.  497 

Exemptions. 

The  act  of  1906  makes  no  exception  in  favor  of  charitable  or 
religious  institutions.  Leavell  v.  Arnold,  131  Ky.  426,  115  S.  W.  232. 
The  Ky.  St.  1906  is  valid  although  its  effect  may  be  to  tax  prop- 
erty otherwise  exempt  from  taxation,  as  a  tax  may  be  levied  on  a 
religious  institution  receiving  a  devise  although  its  property  is  by 
law  exempt  from  taxation.  The  court  replies  to  this  suggestion 
that  the  tax  is  not  imposed  upon  the  property  but  on  the  right  of 
succession,  and  quotes  Plummerv.  Coler,  178  U.S.  115,  20  S.Ct.  829, 
44  L.  Ed.  998,  Wallace  v.  Myers  (C.  C),  38  Fed.  184,  4  L.  R.  A.  171, 
where  state  inheritance  taxes  upon  legacies  of  United  States 
bonds  were  sustained  on  that  principle.  Booth  v.  Commonwealth, 
130Ky.88,  113S.W.61. 

Devise  for  Public  School  not  Exempt. 

The  tax  is  not  levied  upon  the  fund  but  upon  its  trans- 
mission, and  hence  the  argument  that  it  is  against  the  policy 
of  the  law  to  levy  a  tax  upon  a  fund  devised  for  a  public  school  has 
no  bearing  upon  the  case  at  bar,  for  the  reason  that  this  fund  does 
not  become  a  fund  devoted  to  the  maintenance  of  a  school  until 
the  law  relative  to  its  transmission  has  been  complied  with.  The 
tax  must  be  paid  before  the  fund  in  question  can  become  the  prop- 
erty of  the  school  or  be  devoted  to  educational  purposes.  Leavell 
V.  Arnold,  131  Ky.  426,  115  S.  W.  232. 

Legtacy  to  Debtor  of  Testator. 

The  act  of  1906  makes  no  exception  in  favor  of  legatees  who 
may  be  indebted  to  the  estate.  Leavell  v.  Arnold,  131  Ky.  426,  115 
S.  W.  232. 

Particular  Estates  and  Remainders. 

S.  2.  When  any  grant,  gift,  devise,  legacy  or  succession  upon  which  a  tax  is 
imposed  by  section  1  of  this  article  shall  be  an  estate,  income  or  interest  for  a  term 
of  years  or  for  life,  or  determinable  upon  any  future  or  contingent  event,  or  shall 
be  a  remainder,  reversion  of  other  expectancy,  real  or  personal,  the  entire  property 
or  fund  by  which  such  estate,  income  or  interest  is  supported,  or  of  which  it  is  a 
part,  shall  be  appraised  immediately  after  the  death  of  the  decedent,  and  the 
fair  cash  value  thereof,  estimated  at  the  price  it  would  bring  at  a  fair  voluntary 
sale,  determined  in  the  manner  provided  in  section  11  of  this  article  and  the  tax 
prescribed  shall  be  immediately  due  and  payable  to'  the  sheriff  or  collector  of  the 
proper  county,  and,  together  with  the  interest  thereon,  shall  be  and  remain  a  lien 
on  said  property  until  the  same  is  paid:  Provided,  that  the  person  or  persons,  or 
body  politic  or  corporate,  beneficially  interested  in  the  property  chargeable  with 


498  STATUTES  ANNOTATED.  [Ky.  St. 

said  tax,  may  elect  not  to  pay  the  same  until  they  shall  come  into  the  actual 
possession  or  enjoyment  of  such  property,  and  in  that  case  such  person  or  persons 
or  body  politic  or  corporate,  shall  execute  a  bond  to  the  commonwealth  of  Ken- 
tucky, in  a  sum  of  twice  the  amount  of  the  tax  arising  upon  personal  estate,  with 
such  sureties  as  the  county  court  may  approve,  conditioned  for  the  payment  of 
said  tax  and  interest  thereon,  at  such  time  or  period  as  they  or  their  representatives 
may  come  into  the  actual  possession  or  enjoyment  of  such  property,  which  bond 
shall  be  filed  in  the  office  of  the  county  clerk  of  the  proper  county:  Provided, 
further,  that  such  person  shall  make  a  full  and  verified  return  of  such  property 
to  said  court,  and  file  the  same  in  the  office  of  the  county  clerk  within  one  year 
of  the  death  of  the  decedent,  and  within  that  period  enter  into  such  surety  and 
renew  the  same  every  five  years. 

Gifts  to  Executors  or  Trustees  in  Lieu  of  Commissions. 

S.  3.  Whenever  a  decedent  appoints  or  nominates  one  or  more  executors  or 
trustees,  and  makes  a  bequest  or  devise  of  property  to  them  in  lieu  of  commissions 
or  allowances,  which  otherwise  would  be  liable  to  said  tax,  or  appoints  them  his 
residuary  legatees  and  said  bequest,  devises,  or  residuary  legacies  exceed  what 
would  be  a  lawful  compensation  for  their  services,  such  excess  shall  be  liable 
to  said  tax,  and  the  county  court  in  which  the  personal  representatives  of  .the 
decedent  has  qualified  shall  fix  the  compensation. 

When  Tax  Accrues.  —  Interest.  —  Discount. 

S.  4.  All  taxes  imposed  by  this  chapter,  unless  otherwise  herein  provided  for, 
shall  be  due  and  payable  at  the  death  of  the  decedent,  and  if  the  same  are  paid 
within  eighteen  months,  no  interest  shall  be  charged  and  collected  thereon,  but 
if  not  so  paid,  interest  at  the  rate  of  ten  per  centum  per  annum  shall  be  charged 
and  collected  from  the  time  said  tax  accrued:  Provided,  that  if  said  tax  is  paid 
within  nine  months  from  the  accruing  thereof  a  discount  of  five  per  centum  shall 
be  allowed  and  deducted  from  said  tax.  And  in  all  cases  where  the  executors, 
administrators  or  trustees  do  not  pay  such  tax  within  eighteen  months  from  the 
death  of  the  decedent,  they  shall  be  required  to  give  a  bond  in  the  form  and  to 
the  effect  prescribed  in  section  2  of  this  chapter  for  the  payment  of  said  tax,  to- 
gether with  interest. 

The  court  construes  sections  4281  d,  e,  /,  h  to  mean  that  it  was  not 
intended  that  during  the  first  eighteen  months  the  executors  should 
be  harassed  by  suits  to  recover  the  tax  or  subjected  to  heavy  penal- 
ties, but  when  eighteen  months  have  run,  unless  the  payment  is 
further  postponed  by  the  execution  of  the  bond  provided  for  in 
sections  42816  and  4281c^,  or  by  the  conditions  described  in  section 
4281e,  the  tax  must.be  paid  and  a  failure  to  pay  subjects  the  de- 
linquent to  a  suit  by  a  revenue  agent  and  to  the  payment  of  the 
penalties  allowed  these  agents  under  the  general  law.  The  ad- 
ministrator should  have  paid  the  tax  within  thirty  days  after 
distributing  any  part  of  the  estate  subject  to  the  tax,  and  as  he 
failed  to  pay  the  tax  on  that  portion  of  the  estate  distributed  after 


1910,  c.  36.]  KENTUCKY.  499 

more  than  thirty  days,  the  county  attorney  had  the  authority  to 
institute  such  proceedings  as  might  be  necessary  to  compel  its 
payment  although  not  entitled  to  any  penalty.  Commonwealth  v. 
Gaulbert,  134  Ky.  157,  119  S.  W.  779. 

Penalty. 

S.  5.  The  penalty  of  ten  per  centum  per  annum  imposed  by  section  4  hereof, 
for  the  non-payment  of  said  tax,  shall  not  be  charged  in  case  where,  by  reason 
of  claims  made  upon  the  estate,  necessary  litigation,  or  other  unavoidable  cause 
of  delay,  the  estate  of  any  decedent,  or  a  part  thereof,  can  not  be  settled  at  the 
end  of  eighteen  months  from  the  death  of  the  decedent;  and  in  such  case  only 
six  per  centum  per  annum  shall  be  charged  upon  the  said  tax  from  the  expiration 
of  said  eighteen  months  until  the  cause  of  such  delay  is  removed. 

Tax  to  be  Deducted. 

S.  6.  Any  administrator,  executor  or  trustee  having  in  charge  or  trust  any 
legacy  or  property  for  distribution  subject  to  the  said  tax,  shall  deduct  the  tax 
therefrom,  or  if  the  legacy  or  property  be  not  money,  he  shall  collect  the  tax 
thereon  upon  the  fair  cash  value  thereof,  from  the  legatee  or  person  entitled  to 
such  property,  and  he  shall  not  deliver,  or  be  compelled  to  deliver,  any  specific 
legacy  or  property  subject  to  tax  to  any  person  until  he  shall  have  collected  the 
tax  thereon  and  whenever  any  such  legacy  shall  be  charged  upon  or  payable 
out  of  real  estate,  the  executor,  administrator  or  trustee  shall  collect  said  tax  from 
the  distributee  thereof,  and  the  same  shall  remain  a  charge  on  such  real  estate 
until  paid;  if,  however,  such  legacy  be  given  in  money  to  any  person  for  a  limited 
period,  the  executor,  administrator  or  trustee  shall  retain  the  tax  upon  the  whole 
amount;  but  if  it  be  not  in  money,  he  shall  make  application  to  the  county  court 
to  make  an  apportionment  if  the  case  require  it,  of  the  sum  to  be  paid  into  his 
hands  by  such  legatees,  and  for  such  further  orders  relative  thereto  as  the  case 
may  require.     ' 

Lien  on  Proceeds  of  Sale. 

Where  a  sale  of  real  estate  was  made  by  the  probate  court  to 
settle  an  estate  it  was  claimed  that  the  sales  should  not  be  confirmed 
as  the  state  had  a  lien  on  the  real  estate  for  the  inheritance  tax. 
The  court  holds,  however,  that  as  the  proceeds  arising  from  the  sale 
either  are  now  in  court  or  will  be  paid  into  court  and  will  in  any 
event  be  subject  to  the  order  of  the  court,  the  objection  is 
without  merit.  The  lien  of  the  state  is  against  the  property  of  the 
decedent  and  will  first  be  satisfied  out  of'  any  personal  estate  left 
by  him,  and  if  this  sum  is  not  sufficient  then  the  real  estate  may  be 
subjected  to  the  payment  of  this  claim  of  the  state,  and  the  trial 
court  can  make  such  order  with  the  entire  estate  under  its  control 
as  is  necessary  to  satisfy  any  claim  of  the  state  against  the  estate 
for  taxes,  inheritance  or  otherwise.  Mandel  v.  Fidelity  Trust  Co. 
(Ky-  1908),  32  Ky.  L.  Rep.  1104,  107  S.  W.  775. 


500  STATUTES  ANNOTATED.  [Ky.  St. 

Power  of  Sale. 

S.  7.  All  executors,  administrators  and  trustees  shall  have  full  power  to  sell 
so  much  of  the  property  of  the  decedent  as  will  enable  them  to  pay  said  tax,  in 
the  same  manner  as  they  may  be  enabled  by  law  to  do  for  the  payment  of  debts 
of  the  estate,  and  the  amount  of  said  tax  shall  be  paid  as  hereinafter  directed. 

Payment.  —  Receipts. 

S.  8.  Every  sum  of  money  retained  by  an  executor,  administrator  or  trustee  or 
paid  into  his  hands,  for  any  tax  on  property,  shall  be  paid  by  him,  within  thirty 
days  thereafter,  to  the  sheriff  or  collector  of  the  county  in  which  the  said  tax  is 
due  and  payable  and  the  said  sheriff  or  collector  shall  give  and  every  executor, 
administrator  or  trustee  shall  take,  duplicate  receipts  for  such  payment,  one  of 
which  receipts  said  executor,  administrator  or  trustee  shall  immediately  send  to 
the  auditor  of  public  accounts,  whose  duty  it  shall  be  to  charge  the  said  sheriff 
or  collector  so  receiving  the  tax  with  the  amount  thereof,  and  said  auditor  shall 
seal  said  receipt  with  the  seal  of  his  office  and  countersign  the  same,  and  return 
it  to  the  executor,  administrator  or  trustee,  whereupon  it  shall  be  a  proper  voucher 
in  the  settlement  of  his  accounts;  and  an  executor,  administrator  or  trustee 
shall  not  be  entitled  to  credits  in  his  accounts,  nor  be  discharged  from  liability 
for  such  tax,  nor  shall  said  estate  be  distributed  unless  he  shall  produce  a  receipt 
so  sealed  and  countersigned  by  the  auditor,  or  a  copy  thereof,  certified  by  him. 

Refunding  to  Pay  Debts. 

S.  9.  Whenever  any  debts  shall  be  proven  against  the  estate  of  a  decedent  after 
the  payment  of  legacies  or  distribution  of  property,  from  which  the  said  tax 
has^Deen  deducted  or  upon  which  it  has  been  paid,  and  a  refund  is  made  by  the 
legatee,  devisee,  heir  or  next  of  kin,  a  proportion  of  the  tax  so  deducted  or  paid 
shall  be  repaid  to  him  by  the  executor,  administrator  or  trustee,  if  the  said  tax 
has  not  been  paid  to  the  sheriff  or  collector  or  to  the  auditor  or  by  the  auditor  if 
it  has  been  so  paid. 

Payment  on  Transfer. 

S.  10.  Whenever  any  foreign  executor  or  administrator  shall  assign  or  transfer 
any  stocks  or  loans  in  this  state  standing  in  the  name  of  a  decedent,  or  held  in 
trust  for  a  decedent,  which  shall  be  liable  to  the  said  tax,  such  tax  shall  be  paid 
to  the  sheriff  or  collector  of  the  proper  county  on  the  transfer  thereof;  otherwise 
the  corporation  permitting  such  transfer  shall  become  liable  to  pay  such  tax. 
Appraisal. 

S.  11.  When  the  value  of  any  inheritance,  devise,  bequest  or  other  interest 
subject  to  the  payment  of  said  tax  is  uncertain,  the  county  court  in  which  the 
said  tax  settlement  proceedings  are  pending,  on  the  application  of  any  interested 
party,  or  upon  his  own  motion,  shall  appoint  some  competent  person  as  appraiser, 
as  often  as  and  whenever  occasion  may  require,  whose  duty  it  shall  be  forthwith 
to  give  such  notice  by  mail  to  all  persons  known  to  have  or  claim  an  interest  in 
such  property,  and  to  such  persons  as  the  court  may  by  order  direct,  of  the  time 
and  place  at  which  he  will  appraise  such  property,  and  at  such  time  and  place 
to  appraise  the  same  and  make  a  report  thereof,  in  writing,  to  said  court,  together 
with  such  other  facts  in  relation  thereto  as  said  court  may  by  order  require  to  be 


1910,  c.  36.]  KENTUCKY.  501 

filed  with  the  clerk  of  said  court;  and  from  this  report  the  said  court  shall,  by 
order,  forthwith  assess  and  fix  the  fair  cash  value,  as  hereinbefore  provided,  of  all 
inheritances,  devises,  bequests,  or  other  interests  and  the  tax  to  which  the  same 
is  liable,  and  shall  immediately  cause  notice  hereof  to  be  given,  by  mail,  to  all 
parties  known  to  be  interested  therein ;  and  the  value  of  every  future  or  contingent 
or  limited  estate,  income  or  interest  shall,  for  the  purpose  of  this  chapter,  be 
determined  by  the  rule,  method  and  standards  of  mortality  prescribed  by  the  mor- 
tality tables  authorized  by  Kentucky  statutes  for  ascertaining  the  value  of  life 
estates,  annuities  and  remainder  interests  save  that  the  rate  of  interest  to  be  as- 
sessed in  computing  the  present  value  of  all  future  interest  and  contingencies 
shall  be  five  per  centum  per  annum;  and  the  insurance  commissioner  shall,  on 
the  application  of  said  court,  de  ermine  the  value  of  such  future  or  contingent 
or  limited  estate,  income  or  interest,  upon  the  facts  contained  in  such  report, 
and  certify  the  same  to  the  court,  and  his  certificate  shall  be  conclusive  evi- 
dence that  the  method  of  computation  adopted  therein  is  correct.  The  said 
appraiser  shall  be  paid  by  the  personal  representative  of  the  decedent,  out  of 
any  funds  that  may  be  or  may  come  into  his  hands  on  account  of  said  tax,  on 
the  certificate  of  the  court,  at  the  rate  of  three  dollars  per  day  for  every  day 
actually  and  necessarily  employed  in  said  appraisement,  together  with  his 
actual  and  necessary  traveling  expenses. 

This  section  should  be  read  together  with  the  general  law  as  to 
filing  of  an  appraisal  and  the  court  therefore  finds  that  the  appraisal 
required  under  the  inheritance  tax  law  with  the  names  of  the 
distributees  or  devisees  should  be  filed  within  ninety  days  after 
qualification  of  the  executor,  and  if  the  statement  is  not  filed  within 
this  time  the  county  court  may  upon  its  own  motion  or  upon  motion 
of  any  party  interested  in  the  estate  take  such  proceeding  as  may 
be  necessary  to  compel  a  statement  to  be  filed,  and  after  it  has  been 
filed  to  require  if  necessary  that  it  shall  be  made  sufficiently  full 
and  specific  to  furnish  such  information  as  will  enable  the  county 
court  to  ascertain  with  reasonable  certainty  the  character  and 
value  of  the  estate  and  the  beneficiaries  thereof,  and  this  independent 
of  the  power  conferred  on  the  court  by  section  4281^.  Under  this 
section  the  court  may  upon  its  own  motion  or  that  of  any  interested 
party  have  an  appraisement  of  the  estate  made  at  any  time  after 
the  expiration  of  ninety  days  from  the  date  of  the  death  of  the 
testator,  or  even  before  this  time  if  it  should  appear  necessary  to 
secure  the  payment  of  the  tax.  Commonwealth  v.  Gaulbert,  134  Ky. 
157,  119  S.W.  779. 

Misdemeanor  of  Appraiser. 

S.  12.  Any  appraiser  appointed  by  virtue  of  this  chapter  who  shall  take  any 
fee  or  reward  from  any  executor,  administrator,  trustee,  legatee,  next  of  kin  or 
heir  of  decedent,  or  from  any  other  person  liable  to  pay  said  tax,  or  any  portion 


502  STATUTES  ANNOTATED.  [Ky.  St. 

thereof,  shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  thereof  shall  be 
fined  not  less  than  two  hundred  dollars  nor  more  than  five  hundred  dollars,  or 
imprisoned  in  the  county  jail  sixty  days,  or  both  so  fined  and  imprisoned,  and  in 
addition  thereto  the  court  shall  dismiss  him  from  such  service. 

Jurisdiction  of  County  Court. 

S.  13.  The  county  court  in  the  county  in  which  is  situated  the  real  property 
of  a  decedent  who  was  not  a  resident  of  the  state,  or  in  the  county  of  which  the 
decedent  was  a  resident  at  the  time  of  his  death,  shall  have  jurisdiction  to  hear 
and  determine  all  questions  in  relation  to  the  tax  arising  under  the  provisions 
of  this  chapter  and  the  court  first  acquiring  jurisdiction  hereunder  shall  retain 
the  same,  to  the  exclusion  of  every  other. 

Sections  13,  14  and  15  confer  jurisdiction  on  the  county  court  to 
determine  questions  arising  in  relation  to  the  tax,  but  this  jurisdic- 
tion is  not  exclusive  when  the  jurisdiction  of  the  court  of  equity  is 
invoked  to  distribute  an  estate,  and  the  interest  of  each  or  any 
number  of  the  heirs  at  law  is  subject  to  the  inheritance  or  other  tax. 
The  court  at  the  instance  of  the  official  representative  of  the 
commonwealth  charged  with  the  duty  of  collecting  such  tax  may 
require  its  payment  out  of  the  share  or  shares  of  those  chargeable 
with  the  tax  before  distributing  the  estate  or  funds  among  them, 
and  thereby  save  both  the  tax  collector  and  the  heirs  the  trouble 
and  expense  of  a  separate  and  independent  proceeding  in  the  county 
court  to  compel  the  payment  of  the  tax.  The  circuit  court  therefore, 
in  requiring  the  payment  of  the  tax  before  distribution,  did  not 
exceed  its  jurisdiction.  Barret  v.  Commonwealth,  130  Ky.  109,  114 
S.  W.  750. 

Summons. 

S.  14.  If  it  shall  appear  to  the  judge  of  the  county  court  that  any  tax  accruing 
under  the  provisions  of  this  chapter  has  not  been  paid  according  to  law,  the  cleric 
of  said  court  shall  issue  a  summons,  summoning  the  persons  known  to  own  any 
interest  in  or  part  of  the  property  liable  to  the  tax  to  appear  before  the  court 
on  a  day  certain  and  show  cause  why  said  tax  should  not  be  paid.  The  service 
of  said  summons,  and  the  time,  manner  and  proof  thereof,  and  the  hearing  and 
determination  thereon,  and  the  enforcement  of  the  judgment  or  decree,  shall 
conform  to  the  provisions  of  the  Kentucky  statutes  and  the  Civil  Code  of  Practice 
applicable  to  and  pursued  in  the  levy,  ascertainment  and  collection  of  taxes. 

The  jurisdiction  of  the  county  court  is  not  exclusive  but  the  tax 
may  be  collected  on  distribution  in  equity.  Barret  v.  Commonwealth^ 
130  Ky.  109,  114  S.  W.  750. 


1910.  c.  36.]  KENTUCKY.  503 

Proceedings. 

S.  15.  Whenever  the  sheriff  or  collector  of  any  county  shall  have  reason  to 
believe  that  any  tax  is  due  and  unpaid  under  the  provisions  of  this  chapter,  after 
the  failure  or  refusal  of  the  persons  interested  in  the  property  liable  to  said  tax 
to  pay  the  same,  he  shall  notify  the  county  attorney  of  the  proper  county,  in 
writing,  of  such  failure  to  pay  such  tax,  and  the  county  attorney  so  notified,  if 
he  have  probable  cause  to  believe  a  tax  is  due  and  unpaid,  shall  prosecute  the 
proceedings  in  the  county  court,  as  provided  in  section  14  of  this  chapter,  for  the 
enforcement  and  collection  of  such  tax. 

The  jurisdiction  of  the  county  court  is  not  exclusive.  See  ante, 
p.  502. 

The  fact -that  a  revenue  agent  was  joined  with  the  county  attorney 
in  a  proceeding  to  collect  an  inheritance  tax  did  not  render  the 
petition  bad  on  demurrer,  although  a  motion  to  strike  the  name  of 
the  revenue  agent  from  the  petition  would  have  been  proper.  Com- 
monwealth V.  Gaulbert,  134  Ky.  157,  119  S.  W.  779. 

S.  16.  The  county  clerk  of  each  county  shall,  every  six  months,  make  a 
statement,  in  writing,  to  the  sheriff  or  collector  of  the  property  from  which,  or 
the  party  from  whom  he  has  reason  to  believe  a  tax,  under  the  provisions  of  this 
chapter,  is  due  and  unpaid. 

S.  17.  The  county  clerk  of  each  county  shall  keep  a  book  to  be  furnished  by 
the  auditor,  in  which  he  shall  enter  the  values  of  inheritances,  devises,  bequests 
and  other  interests  subject  to  the  payment  of  such  tax,  and  the  tax  assessed 
thereon,  and  the  amounts  of  any  receipts  for  payments  thereon  filed  with  him, 
which  book  shall  be  kept  by  him  as  public  record. 

S.  18.  The  sheriff  or  collector  of  each  county  shall  collect  and  pay  to  the 
aud'tor  all  taxes  that  may  be  due  and  payable  under  this  chapter,  who  shall  give 
him  the  receipt  therefor;  of  which  collections  and  payment  he  shall  make  a  report, 
under  oath,  to  the  auditor  of  public  accounts  at  the  same  time  and  m  the  same 
manner  as  provided  by  law  that  he  shall  report  and  pay  the  state's  revenue, 
stating  for  what  estate  paid,  and  in  such  form  and  containing  such  particulars 
as  the  auditor  may  prescribe;  and  for  all  such  taxes  collected  by  him  and  not  paid 
to  the  auditor  by  the  first  day  of  March  of  each  year  he  shall  pay  interest  at  the 
rate  of  ten  per  centum  per  annum. 

S.  19.  All  acts  and  parts  of  acts  in  conflict  with  this  act  are  hereby  repealed 
except  the  act  of  1904,  approved  March  24,  1904,  which  is  chapter  104  of  session 
acts  1904,  fixing  a  tax  of  fifty  cents  on  each  bafrel  of  blended  or  rectified  whiskey, 
which  act  is  not  hereby  repealed,  but  left  in  force  as  it  now  is.  If  any  section  in 
this  bill  shall  be  held  to  be  unconstitutional,  that  fact  shall  not  affect  any  other 
section  of  the  act,  it  being  the  intention  of  the  general  assembly  in  enacting  this 
bill  to  enact  each  section  separately,  and  if  any  proviso  or  exception  contamed  in 
any  section  of  this  bill  shall  be  declared  unconstitutional,  that  fact  shall  not  affect 
the  remaining  portion  of  said  section;  it  being  the  intention  of  the  legislature  to 
enact  each  section  of  said  bill  and  each  proviso  and  exception  thereto  separately. 


504  STATUTES  ANNOTATED.  [La.  Sf 


LOUISIANA, 


In  General. 

Four  states,  California,  Louisiana,  Iowa  and  Washington,  have 
at  some  time  discriminated  severely  against  non-resident  aliens. 
Such  tax  has  been  repealed  in  California  and  Washington,  the 
attempt  to  revive  it  in  Louisiana  has  been  found  invalid,  and  it 
still  stands  only  in  Iowa. 

Louisiana  was  the  second  state  to  tax  inheritances.  This  was 
in  the  form  of  a  tax  of  10  per  cent  imposed  on  estates  passing  to 
non-resident  aliens,  which  was  enacted  in  1828,  repealed  in  1830 
and  re-enacted  in  1842.  This  remained  in  force  until  1877  when  it 
was  repealed  and  an  attempt  to  revive  it  in  1894  was  declared 
invalid  by  the  court. 

The  constitution  of  1898  authorizes  a  direct  inheritance  tax  and 
provides  that  the  "tax  shall  not  be  enforced  when  the  property 
donated  or  inherited  shall  have  borne  its  just  proportion  of  taxes 
prior  to  the  time  of  such  donation  or  inheritance."  It  is  a  common 
argument  in  defence  of  an  inheritance  tax  that  it  reaches  much 
property  that  has  escaped  taxation  during  the  owner's  lifetime, 
without  considering  that  it  equally  reaches  property  that  has  not 
escaped.  Louisiana  by  exempting  property  that  has  borne  its 
proper  burden  is  the  only  state  in  the  country  that  is  honest  in  this 
respect. 

The  present  law  was  adopted  in  1904  and  modified  in  1906.  The 
exemption  applies  to  the  individual  shares,  not  to  the  estate  as  a 
whole. 

We  are  informed  that  Louisiana  is  taxing  stock  of  a  Louisiana 
corporation  owned  by  a  non-resident.  The  statute  provides  that 
no  bank  having  money  or  securities  shall  turn  them  over,  and  no 
corporation,  the  stock  or  registered  bonds  of  which  are  owned  by 
the  deceased,  shall  deliver  or  transfer  the  same  to  any  heir  until 
the  tax  is  paid.  Louisiana  is  not  included,  however,  in  the  Con- 
necticut list  of  states  that  are  taxing  stock  or  bonds  owned  by 
non-residents.  This  tax  has  been  producing  from  $100,000  to 
$200,000  a  year. 


1828,  c.  95.] 


LOUISIANA. 


505 


List  of  Statutes, 

1828.     Statutes  of  Louisiana,  No.  95,  ss.  1  to  2. 


1830. 

March  15,  s.  1. 

1842. 

c.  154,  p.  434. 

1855. 

c.  315,  p.  398. 

1877. 

c.  47,  p.  60. 

1877. 

'    "     c.  86   (extra  session). 

1877. 

c.  86,  p.  125  (extra  session). 

1888. 

c.  109,  p.  173. 

1894. 

c.  130. 

1904. 

c.  45,  p.  102. 

1906. 

c.  145,  p.  249. 

1906. 

c.  109,  p.  173. 

1856.  Revised  Statutes  of  Louisiana,  p.  220,  s.  113. 

1856. 

p.  9,   s.  13. 

1856. 

p.  541,  s.  7. 

1870. 

p.  715,  ss.  3683  to  36 

1870. 

p.  288,  s.  1470. 

1870. 

p.  648,  s.  3345. 

Revised  Civil  Code  1870,  arts.  1221  to  1223. 

1876.     Revised  Statutes  of  Louisiana,  p.  853  (1876  Voorhies),  s.  3345. 

1898.     Constitution  of  Louisiana,  arts.  235  to  236. 

1904.  Constitution  and  Revised  Laws  of  Louisiana  (Wolff),  Vol.  2,  arts.  235 
to  236,  p.  1974. 

1897.     Revised  Laws  of  Louisiana  (Wolff),  ss.  13,  1113,  1470,  3683. 

1900.  Merrick's  Revised  Civil  Code  of  Louisiana,  Vol.  1,  c.  9,  arts.  1221,  1222 
and  1223. 

I. 

THE  ALIEN  TAX. 
History  of  Alien  Tax. 

La.  St.  1828,  c.  95,  was  repealed  in  1830  and  re-enacted  in  1842. 
La.  St.  1842  was  revised  and  reproduced  by  La.  St.  1855.  In  1870 
the  civil  code  was  revised  and  the  provisions  in  the  act  of  1842 
were  incorporated  therein  as  articles  1221,  1222,  1223.  They  con- 
tinued without  alteration  until  1877  when  these  articles  were 
expressly  repealed  and  so  remained  until  1894  when  the  legislature 
revived  them  and  re-enacted  them  in  terms  and  without  change  in 
phraseology.  The  act  of  1894  was,  however,  subsequently  declared 
invalid,  in  Succession  of  Rixner,  48  La.  Ann.  552,  19  S.  597,  32  L. 
R.  A.  177. 

The  Alien  Tax  Statute  of  1828  and  its  Repeal  in  1830. 

La.  St.   1828,  c.  95.       Approved  March  25,  1828. 

S.  1.  Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  State 
of  Louisiana,  in  General  Assembly  convened,  that  any  person  who  is  not  a  citizen 


506  STATUTES  ANNOTATED.  [La.  St. 

of  the  United  States,  or  is  not  domiciliated  in  any  part  of  the  said  states,  shall  be 
subject  to  pay  to  this  state  ten  per  cent  on  all  sums  which  may  be  due  to  him 
as  an  heir,  legatee  or  donee  by  any  succession  which  may  be  opened  in  this  state: 
And  that,  therefore,  all  administrators  of  the  said  succession  and  their  securities, 
under  whatever  title  they  may  administer  the  same,  shall  be  bound  under  this 
responsibility,  to  retain  in  their  hands  ten  per  cent  on  all  the  sums  which  may 
accrue  to  any  person  of  the  above  description,  as  an  heir,  legatee  or  donee,  in 
the  successions  by  them  administered,  and  to  pay  over  the  same,  to  wit:  to  the 
state  treasurer,  with  respect  to  the  successions  which  may  be  opened  in  the  parish 
of  Orleans  and  to  the  judge  of  the  court  of  probates  of  the  parish  where  the 
succession  may  be  opened,  with  respect  to  the  other  parishes  of  the  state,  and 
when  the  said  legacy,  inheritance  or  donation  shall  be  or  consist  of  specific  prop- 
erty, the  same  shall  be  taken  at  the  appraised  value,  as  made  in  the  inventory 
of  the  succession  from  which  the  same  shall  come. 

[La.  St.  1828,  c.  95,  s.  2,  provides  for  the  payment  of  the  inheritance  tax  by 
the  parish  judges  to  the  state  treasurer.] 

This  statute  is  constitutional  and  if  it  be  in  diminution  of  the 
right  of  aliens  to  transmit  their  property  by  will  or  descent,  that 
right  established  by  law  is  susceptible  of  being  curtailed  by  later 
laws.    Arnaud  v.  Arnaud,  3  La.  336. 

La.  St.  1830,  p.  76,  approved  March  15, 1830,  repeals  the  statute 
of  March  25,  1828,  entitled  An  Act  relative  to  the  revenue  of  the 
state,  etc.,  and  amends  section  2  of  the  statute  of  1828  as  to  the 
duties  of  judges  in  regard  to  the  payment  of  tax. 

The  tax  was  held  properly  charged  upon  the  estate  of  one  who 
died  while  the  act  of  1830  was  in  force.  Whatever  may  be  the 
effect  of  the  repeal  of  a  law  in  criminal  matters  it  leaves  all  civil 
rights  acquired  under  the  law  unaffected.  A  tax  cannot  be 
assimilated  to  a  forfeiture  which  presupposes  an  offence.  Arnatid 
V.  Arnaud,  3  La.  336. 

The  tax  under  the  statute  of  1828  is  due  on  the  estate  of  a  de- 
cedent who  died  before  the  repeal  of  the  tax  in  1830,  as  the  rights 
acquired  by  the  state  to  the  tax  are  not  divested  by  the  repealing 
act.    Quessart  v.  Canonge,  3  La.  560. 

The  Alien  Tax  Statute  of  1842. 

La.  St.  1842,  c.  154,  s.  4,  p.  434.     Approved  March  26,  1842. 

Be  it  further  enacted,  etc.,  that  each  and  every  person,  not  being  domiciliated 
in  this  state,  and  not  being  a  citizen  of  any  state  or  territory  in  the  union,  who 
shall  be  entitled,  whether  as  heir,  legatee  or  donee,  to  the  whole  or  any  part  of 
the  succession  of  a  person  deceased,  whether  such  person  shall  have  died  in  this 
state  or  elsewhere,  shall  pay  a  tax  of  ten  per  cent  on  all  sums,  or  on  the  value  of 
all  property  which  he  may  actually  receive  from  said  succession,  or  so  much 
thereof  as  is  situated  in  this  state,  after  deducting  debts  due  by  said  successions. 
When  the  said  inheritance,  donation  or  legacy  consists  of  specific  property,  and 


1842,  c.  154.]  LOUISIANA.  507 

the  same  has  not  been  sold,  the  appraisement  thereof  in  the  inventory  shall  be 
considered  as  the  value  thereof.  Every  executor,  curator,  tutor  or  administrator 
having  the  charge  or  administration  of  succession  property  belonging,  in  whole 
or  in  part,  to  a  person  residing  out  of  this  state,  and  not  being  a  citizen  of  any  other 
state  or  territory,  shall  be  bound  to  retain  in  his  hands  the  amount  of  the  tax 
imposed  by  this  act,  and  to  pay  over  the  same  to  the  state  treasurer,  if  the  succes- 
sion be  opened  in  the  parish  of  Orleans  or  Jefferson,  or  to  the  sheriff  if  the  succes- 
sion be  opened  in  any  other  parish,  in  default  whereof  every  such  executor,  curator, 
tutor  or  administrator,  and  his  securities,  shall  be  liable  for  the  amount  thereof. 
It  shall  be  the  special  duty  of  the  judges  of  the  courts  of  probate  to  see  that 
the  tax  imposed  by  virtue  of  this  section  be  collected  and  paid  over,  and  each  of 
said  judges  shall  be  bound  to  furnish  to  the  treasurer,  once  a  year,  a  statement  or 
list  of  the  successions  opened  in  his  parish  whereof  persons  who  are  neither  resi- 
dents of  this  state  or  citizens  of  any  other  state  or  territory  in  the  union  are  heirs, 
legatees  or  donees,  in  whole  or  in  part,  and  of  the  amount  accruing  to  such  persons; 
and  any  judge  failing  to  furnish  such  statement  shall  be  subject  to  a  fine  not 
exceeding  five  hundred  dollars  for  each  and  every  such  omission;  and  that  he  be 
responsible  to  the  state  for  the  amount  due;  and  that  the  sheriffs  of  the  different 
parishes  throughout  the  state,  except  those  of  the  parishes  of  Orleans  and  Jefferson, 
shall  pay  over  the  taxes  thus  received  from  successions  in  the  same  manner,  and 
be  subject  to  the  same  penalties  as  in  the  payment  of  other  taxes;  and  that  the 
taxes  thus  received  be  taken  in  view  in  the  execution  of  the  sheriff's  bond. 

Not  Retroactive. 

This  statute  does  not  apply  to  successions  opened  before  its  enact- 
ment. Succession  ofDeyraud,  9  Rob.  (La.)  357,  relying  on  Succession 
of  Oyon,  6  Rob.  (La.)  504.  The  court  remarks  that  the  legis- 
lature might  impose  a  tax  on  all  sums  to  be  paid  over  to  the 
aliens  without  reference  to  the  opening  of  the  succession  from  which 
they  may  be  Entitled  to  receive  such  sums,  but  unless  that  intention 
is  clearly  and  unequivocally  expressed  we  are  bound  to  suppose  that 
according  to  the  ordinary  rules  of  legislation  they  intended  to 
provide  for  the  future  and  not  to  affect  in  any  way  the  rights 
previously  acquired.  Succession  of  Oyon,  6  Rob.  (La.)  504. 
Validity. 

"Now  the  law  in  question  is  nothing  more  than  an  exercise  of  the  power  which 
every  state  and  sovereignty  possesses,  of  regulating  the  manner  and  terms  upon 
which  property  real  or  personal  within  its  dominion  may  be  transmitted  by  last 
will  and  testament,  or  by  inheritance;  and  df  prescribing  who  shall  and  who 
shall  not  be  capable  of  taking  it.  Every  state  or  nation  may  unquestionably 
refuse  to  allow  an  alien  to  take  either  real  or  personal  property,  situated  within 
its  limits,  either  as  heir  or  legatee,  and  may,  if  it  thinks  proper,  direct  that 
property  so  descending  or  bequeathed  shall  belong  to  the  state.  In  many  of  the 
states  of  this  union  at  this  day,  real  property  devised  to  an  alien  is  liable  to  escheat. 
And  if  a  state  may  deny  ihe  privilege  altogether,  it  follows  that,  when  it  grants  it, 
it  may  annex  to  the  grant  any  conditions  which  it  supposes  to  be  required  by  its 


508  STATUTES  ANNOTATED.  [La.  St. 

interests  or  policy.  This  has  been  done  by  Louisiana.  The  right  to  take  is  given 
to  the  alien,  subject  to  a  deduction  of  ten  per  cent  for  the  use  of  the  state. 

"In  some  of  the  states,  laws  have  been  passed  at  different  times,  imposing  a  tax 
similar  to  the  one  now  in  question,  upon  its  own  citizens  as  well  as  foreigners;  and 
the  constitutionality  of  these  laws  has  never  been  questioned.  And  if  a  state  may 
impose  t  upon  its  own  citizens,  it  will  hardly  be  contended  that  aliens  are  entitled 
to  exemption;  and  that  their  property  in  our  own  country  is  not  liable  to  the 
same  burdens  that  may  lawfully  be  imposed  upon  that  of  our  own  citizens. 

"We  can  see  no  objection  to  such  a  tax,  whether  imposed  on  citizens  and  aliens 
alike,  or  upon  the  latter  exclusively.  It  certainly  has  no  concern  with  commerce, 
or  with  mports  or  exports.  It  has  been  suggested,  indeed  in  the  argument,  that 
as  the  legatee  resided  abroad,  it  would  be  necessary  to  transmit  to  her  the  pro- 
ceeds of  the  portion  of  the  estate  to  which  she  was  entitled,  and  that  the  law  was 
therefore  a  tax  on  exports.  But  if  that  argument  was  sound,  no  property  would 
be  liable  to  be  taxed  in  a  state,  when  the  owner  intended  to  convert  it  into  money 
and  send  it  abroad."    Per  Taney,  C.  J.,  in  Mager  v.  Grima,  8  How.  490. 

The  court  holds  that  the  Louisiana  inheritance  tax  on  non- 
residents and  aliens  is  not  obnoxious  to  the  constitution  of  1845. 
To  be  uniform,  taxation  need  not  be  universal.  Certain  objects 
may  be  made  its  subject  and  others  may  be  exempted  from  its 
operation,  certain  occupations  may  be  taxed  and  others  not;  so 
some  occupations  may  be  taxed  for  a  greater  amount  and  others 
for  a  less,  but  as  between  the  subjects  of  taxation  in  the  same  class, 
there  must  be  an  equality.  The  object  subjected  to  taxation  in 
the  present  case  is  a  succession  within  the  state  falling  to  alien  heirs 
who  are  non-residents.  By  the  terms  of  the  act,  the  tax  is  equal  and 
uniform,  the  rate  of  the  tax  and  the  description  of  property  subject 
to  it  being  the  same  throughout  the  state.  State  v.  Poydras,  9  La. 
Ann.  165,  167. 

The  Louisiana  inheritance  law  on  non-residents  has  been  upheld 
since  1845  in  the  following  cases:  State  v.  Martin,  2  La.  Ann.  667; 
Succession  of  George,  4  La.  Ann.  223 ;  Succession  of  Pehan,  5  La. 
Ann.  304. 

To  whom  Applicable. 

It  was  contended  that  the  act  of  1842  must  be  construed  according 
to  its  own  terms,  and  that  the  discrepancy  between  its  language 
excepting  those  whp  are  not  citizens  of  any  state  in  the  union  and 
the  La.  St.  1850  which  excepts  only  those  who  are  not  citizens 
of  any  other  state  or  territory  means  that  heirs  who  are  citizens  of 
the  United  States  and  heirs  who  are  domiciled  in  Louisiana  are 
exempt  from  taxes.  The  court,  however,  by  reference  to  the  French 
version  of  the  statute  and  the  original  exemplification  finds  that 
the  word  "other"  has  been  inadvertently  omitted  in  the  English 


1842,  c.  154.]  LOUISIANA.  509 

text  and  from  this  view  of  the  statute  the  court  concludes  that  the 
tax  attaches  not  only  to  property  falling  to  alien  heirs  who  are 
non-residents  but  also  to  property  falling  to  citizens  of  Louisiana 
residing  abroad.  The  only  exceptions  to  non-resident  heirs  are 
citizens  of  any  other  state  or  territory  of  the  United  States  than 
the  state  of  Louisiana.  This  exemption  was  probably  intended  to 
satisfy  the  second  section  of  the  fourth  article  of  the  constitution 
of  the  United  States.  The  object  of  the  law  was  not  only  to  increase 
the  revenues  of  the  state  but  to  discourage  absenteeism.  State  v. 
Poydras,  9  La.  Ann.  165. 

Effect  of  Federal  Treaties. 

This  act  was  abrogated  by  a  treaty  between  the  United  States 
and  France  dated  February  23,  1853,  as  to  French  citizens  taking 
under  successions  in  Louisiana.  Succession  ofDufour,  10  La.  Ann.  391. 

The  treaty  of  1853  between  England  and  France  stipulated  that 
it  should  remain  in  force  for  the  space  of  ten  years  from  the  day  of 
the  exchange  of  the  ratifications.  The  court  holds  that  therefore 
it  did  not  go  into  effect  until  the  ratifications  were  exchanged, 
which  occurred  August  11,  1853,  and  therefore  the  succession  of  a 
testator  who  died  July  22,  1853,  was  not  affected  by  it.  Succession 
of  Schaffer,  13  La.  Ann.  113. 

The  validity  of  an  inheritance  tax  levied  under  the  laws  of 
Louisiana  upon  the  estate  of  one  who  died  in  1848  is  not  affected 
by  a  treaty  between  the  United  States  and  France  ratified  in  1853, 
providing. that  Frenchmen  shall  in  no  case  be  subject  to  taxes  on 
transfers  or  inheritances  different  from  those  paid  by  the  citizens  of 
the  United  States.  The  court  holds  that  the  tax  vested  in  the  state 
at  the  death  of  testator  and  that  the  property  vested  in  the  peti- 
tioner at  that  time  as  heir,  and  that  therefore  the  treaty  had  no 
effect  upon  it.  Prevost  v.  GreneauXy  19  How.  1,  affirming  Succession 
of  Prevost,  12  La.  Ann.  577. 

Where  the  heirs  of  the  decedent  are  subjects  of  Bavaria  the 
court  holds  that  the  treaty  between  the  United  States  and  Bavaria 
of  1845  (U.  S.  Sts.  at  Large,  Vol.  9,  p.  26),  prevents  the  subjects  of 
Bavaria  from  being  liable  to  an  inheritance  tax.  Succession  of 
Crusius,  19  La.  Ann.  369. 

The  court  follows  the  Dufour  case,  10  La. Ann.  391,  and  Succession 
of  Prevost,  12  La.  Ann.  577,  and  holds  that  the  French  treaty  of 
1853  prevents  the  imposition  of  the  Louisiana  alien  tax.  State  v. 
Circe,  Man.  Unreported  Cases  (La.)  412. 


510  STATUTES  ANNOTATED.  [La.  St. 

A  treaty  between  the  Unif^d  States  and  the  King  of  Wurtemberg, 
dated  April  10,  1844,  provided  that  citizens  of  each  country  should 
have  a  right  to  take  as  heirs,  paying  such  duties  only  as  the  inhabi- 
tants of  the  country  where  the  property  lies.  The  court  holds  that 
the  Louisiana  statute  does  not  make  any  discrimination  between 
citizens  of  the  state  and  aliens  in  the  same  circumstances  as  a 
citizen  of  Louisiana  domiciled  abroad  is  subject  to  the  tax.  Further- 
more, the  case  of  a  citizen  or  subject  of  the  respective  countries 
residing  at  home  and  disposing  of  property  there  in  favor  of  a 
citizen  or  subject  of  the  other  was  not  in  contemplation  of  the  treaty. 
So  the  tax  should  be  collected  on  the  estate  of  a  citizen  of  Louisiana 
leaving  property  to  a  citizen  of  Wurtemberg.  Frederickson  v.  State, 
23  How.  (U.  S.)  445. 

The  Statute  of  1850. 

La.  St.  1850,  No.  194,  p.  146,  imposes  the  duty  on  executors  or 
administrators  having  charge  of  succession  property  belonging  in 
whole  or  in  part  to  a  person  residing  out  of  this  state  and  not  being 
a  citizen  of  any  other  state  to  retain  in  his  hands  the  amount  of  the 
tax  imposed  by  law  and  pay  over  the  same  to  the  state  treasurer, 
in  default  whereof  every  such  executor  shall  be  liable  for  the  amount 
of  the  tax. 

The  Statute  of  1855. 

La.  St.  1855,  c.  315,  s.  7,  p.  399.     Approved  March  15,  1855. 

Be  it  further  enacted,  etc.,  that  each  and  every  person  not  being  domiciliated 
in  this  state  and  not  being  a  citizen  of  any  state  or  territory  in  the  union,  who  shall 
be  entitled,  whether  as  heir,  legatee  or  donee,  to  the  whole  or  any  part  of  the  suc- 
cession of  a  person  deceased,  whether  such  person  shall  have  died  in  this  state 
or  elsewhere,  shall  pay  a  tax  of  ten  per  cent  on  all  sums  or  on  the  value  of.  all 
property  which  he  may  have  actually  received  from  said  succession,  or  so  much 
thereof  as  is  situated  in  this  state  after  deducting  all  debts  due  by  said  succession; 
when  the  inheritance,  donation  or  legacy  consists  of  specific  property  and  the 
same  has  not  been  sold,  the  appraisement  thereof  in  the  inventory  shall  be  con- 
sidered as  the  value  thereof.  Every  executor,  curator,  tutor  or  administrator 
having  the  charge  or  administration  of  succession  property  belonging  in  whole 
or  in  part  to  a  person  residing  out  of  this  state,  and  being  a  citizen  of  any  other 
state  or  territory,  shall  be  bound  to  retain  in  his  hands  the  amount  of  the  tax 
imposed,  and  to  pay  over  the  same  to  the  state  treasurer,  or  to  the  officer  appointed 
by  him;  in  default  whereof  every  such  executor,  curator,  tutor  or  administrator, 
and  his  securities  shall  be  liable  for  the  amount  thereof. 

This  tax  is  not  a  debt  of  the  succession,  it  is  simply  a  debt  of  the 
heir  who  happens  to  be  domiciled  in  a  foreign  country,  and  therefore 


1855,  c.  315.]  LOUISIANA.  511 

a  suit  to  recover  this  tax  should  be  brought  directly  against  the 
heirs  who  under  the  statute  owe  it  to  the  state,  and  the  court  does 
not  decide  the  effect  of  the  French  treaty  on  this  statute.  Succession 
of  Pargoud,  13  La.  Ann.  367. 

Repeal  of  the  Alien  Tax  Act. 

La.  St.  1877,  c.  47,  approved  March  10,  1877,  amended  Louisiana 
Revised  Statutes  1870,  section  313,  to  read  as  follows:  — 

"Whenever  any  person,  permanently  residing  without  the  state,  shall  die, 
being  the  owner  of  any  bank  stock,  railroad  stock,  insurance  or  other  stock,  in 
any  bank  or  incorporated  companies  of  this  state,  or  in  any  national  banking 
association,  located  in  this  state,  except  the  property  banks,  no  state  tax  pre- 
scribed in  cases  of  succession  shall  be  applicable  to  such  stock." 

La.  St.  1877,  c.  86  (extra  session),  p.  125,  approved  April  20,  1877, 
repealed  Louisiana  Revised  Civil  Code,  articles  1221,  1222  and  1223, 
and  the  Louisiana  Revised  Statutes  of  1870,  sections  2683,  2684, 
"provided  that  the  repeal  of  said  articles  of  the  civil  code  and 
sections  of  the  Revised  Statutes  shall  not  affect  the  right  of  the 
state  to  collect  said  tax  in  successions  already  opened." 

La.  St.  1888,  c.  109,  p.  173,  approved  July  12, 1888,  amended  La. 
St.  1877,  c.  47,  of  the  regular  session  by  omitting  any  reference  to 
succession  taxes. 

The  Invalid  Alien  Statute  of  1894. 

La.  St.  1894,  c.  130,  approved  July  11,  1894,  amends  and  re-enacts 
Louisiana  Civil  Code,  articles  1221,  1222,  1223,  imposing  a  tax 
on  foreign  heirs,  legatees  and  donees.  The  articles  as  re-enacted 
are  as  follows :  — 

A.  1221.  Each  and  every  person,  not  being  domiciliated  in  this  state,  and  not 
being  a  citizen  of  any  state  or  territory  in  the  union,  who  shall  be  entitled,  whether 
as  heir,  legatee,  or  donee,  to  the  whole  or  any  part  of  the  succession  of  a  person 
deceased,  whether  such  person  shall  have  died  in  this  state,  or  elsewhere,  shall  pay 
a  tax  for  the  benefit  of  the  Charity  Hospital  in  New  Orleans  of  ten  per  cent  on 
all  sums  on  the  value  of  all  property  which  he  may  have  actually  received  from 
said  succession,  or  so  much  thereof  as  is  situated  in  this  state,  after  deducting  all 
debts  due  by  said  succession;  when  the  inheritance,  donation  or  legacy  consists 
of  specific  property  and  the  same  has  not  been  sold,  the  appraisement  thereof 
in  the  inventory  shall  be  considered  the  value  thereof. 

A.  1222.  Every  executor,  curator,  tutor  or  administrator  having  the  charge  or 
administration  of  succession  property  belonging  in  whole  or  in  part  to  a  person 
residing  out  of  the  state,  and  not  being  a  citizen  of  any  other  state  or  territory, 
shall  be  bound  to  retain  in  his  hands  the  amount  of  the  tax  imposed,  and  to  pay 


512  STATUTES  ANNOTATED.  [La.  St. 

over  the  same  to  the  treasurer  of  said  hospital;  in  default  whereof  every  such  exec- 
utor, curator,  tutor  or  administrator  and  his  securities  shall  be  liable  for  the 
amount  thereof. 

A.  1223.  It  shall  be  the  special  duty  of  clerks  of  courts  to  see  that  the  tax  im- 
posed by  the  preceding  section  be  collected  and  paid  over;  and  each  of  such 
clerks  shall  be  bound  to  furnish  the  auditor  and  the  treasurer  of  said  hospital  once 
in  a  year,  a  statement  or  list  of  the  successions  opened  in  his  parish,  whereof 
persons  who  are  neither  residents  of  this  state  nor  citizens  of  any  other  state,  or 
territory  in  the  United  States,  are  heirs,  legatees  or  donees,  in  whole  or  in  part, 
and  of  the  amount  accruing  to  such  persons,  and  any  clerk  failing  to  furnish  such 
statement  or  to  comply  with  the  provisions  of  the  laws  relative  to  vacant  succes- 
sions shall  be  responsible  to  the  state  for  the  amount  due. 

Invalid  as  Revenue  Legislation  Introduced  in  the  Senate. 

The  act  of  1894  was  attacked  as  being  in  conflict  with  article  35 
of  the  constitution  which  requires  that  all  bills  for  raising  a  revenue 
and  appropriating  money  shall  originate  in  the  house  of  representa- 
tives. The  statute  did  originate  in  the  senate  and  it  was  denied  that 
the  act  was  one  raising  revenues  or  appropriating  money.  It 
was  claimed  that  the  statute  is  a  legal  limitation  upon  the  right 
of  inheritance ;  that  it  simply  fixes  as  a  necessary  condition  for  the 
existence  of  a  capacity  to  receive  by  succession  the  payment  of  a 
certain  sum.  The  court  holds  that  the  statute  does  not  make  the 
payhient  of  the  tax  a  condition  precedent  to  a  right  of  inheritance 
but  that  the  law  permits  a  foreigner  to  inherit  and  having  so 
inherited  charges  him  with  the  payment  of  the  tax,  and  that  as 
such  the  legislation  is  revenue  legislation.  The  beneficiary  of  the 
fund  to  be  raised  from  foreign  heirs  and  legatees  is  the  charity 
hospital,  a  public  institution  of  the  state.  The  statute  was  held 
unconstitutional.  Succession  of  Sala  (1898),  50  La.  Ann.  1009, 
24  S.  674.     Succession  of  Givanovich,  50  La.  Ann.  625,  24  S.  679. 

Federal  Treaties. 

Where  the  testator,  a  citizen  of  Italy,  died  in  Louisiana  and  left 
an  heir  in  Italy,  the  court  holds  that  he  was  exempt  from  this  tax 
under  the  treaty  between  the  United  States  and  Italy  of  1871; 
that  the  situation  of  the  litigants  is  identical  with  that  of  the  liti- 
gants in  the  Dufour  case  of  the  earlier  statute,  the  heir  having  in- 
voked the  benefit  "of  the  most  favored  nation"  in  the  Italian 
treaty  with  the  United  States.  Succession  of  Rixner,  48  La.  Ann. 
552,  19  S.  597,  32  L.  R.  A.  177. 

The  court  remarks  that  the  Louisiana  statute  of  1894,  act  No.  130, 
follows  the  language  of  the  repealed  articles  of  the  Revised  Civil 


1894,  c.  130.]  LOUISIANA.  513 

Code  very  closely,  as  said  in  the  Succession  of  Rixner,  48  La.  Ann. 
558,  19  S.  597.  It  must  have  the  same  interpretation  as  was  placed 
on  the  law  in  force  from  1842  to  1877. 

The  treaty  between  France  and  the  United  States  of  August  12, 
1853,  provides  in  article  7:  *'In  all  the  states  of  the  union  whose 
existing  laws  permit  it,  so  long  and  to  the  same  extent  as  the  said 
laws  shall  remain  in  force.  Frenchmen  shall  have  the  right  of  possess- 
ing personal  and  real  property  by  the  same  title  and  in  the  same 
manner  as  the  citizens  of  the  United  States.  They  shall  be  free  to 
dispose  of  it  as  they  please,  either  gratuitously  or  for  value  received, 
by  donation,  testament  or  otherwise,  just  as  those  citizens  them- 
selves; and  in  no  case  shall  they  be  subjected  to  taxes  on  transfer, 
inheritance  or  any  others  different  from  those  paid  by  the  latter  or 
to  taxes  which  shall  not  be  equally  imposed." 

The  charity  hospital  of  the  city  of  New  Orleans  claimed  to  be 
entitled  to  10  per  cent  on  all  sums  and  property  to  which  the  heirs 
and  legatees  not  domiciled  in  the  state  of  Louisiana  would  be  en- 
titled under  the  statute  of  1894,  act  No.  130. 

The  court  denies  this  claim  and  says  that  the  statute  of  1894  left 
the  right  of  Frenchmen  to  inherit  as  absolute  and  untrammeled 
as  it  was  before  the  passage  of  the  statute.  What  the  statute 
attempted  to  do  was  not  to  make  the  right  of  inheritance  contingent 
upon  the  payment  of  the  tax,  but  to  make  the  payment  of  the  tax 
follow  and  result  from  the  vesting  of  the  title  to  the  property. 

The  court,  says  that  the  legislature  may  have  the  right  to  pro- 
hibit Frenchmen  from  possessing  and  owning  personal  and  real 
property  as  may  citizens  of  the  United  States;  but  if  it  has  such 
right  it  has  not  as  yet  exercised  it,  but  has  permitted  them  to  stand 
in  that  respect  on  the  same  plane  as  citizens  of  Louisiana.  Occu- 
pying that  status  the  treaty  provisions  declare  that  in  no  case 
shall  they  be  subjected  to  tax  on  transfer,  inheritance  or  any  other 
condition  from  those  paid  by  the  citizens  of  Louisiana  or  to  tax 
which  shall  not  be  equally  imposed.  Succession  of  Rabasse,  49  La. 
Ann.  1405,  22  So.  767,  772. 

The  treaty  of  1795  between  the  United  States  and  Spain  provides 
that  the  citizens  and  subjects  of  each  party  shall  have  power  to 
dispose  of  their  "personal  goods"  within  the  jurisdiction  of  the 
other,  and  their  representatives  being  subjects  of  the  other  party 
shall  succeed  to  their  said  personal  goods  and  dispose  of  the  same 
at  their  will,  paying  such  dues  only  as  the  inhabitants  of  the  country 
wherein  the  goods  are  shall  be  subject  to  pay  in  like  cases. 


514  STATUTES  ANNOTATED.  [La.  Const. 

The  court  finds  that  the  words  "personal  goods"  include  movable 
property  only  and  not  real  estate  or  immovable  property.  The 
word  "inhabitants"  was  intended  to  have  as  broad  a  signification 
as  would  be  needed  to  insure  to  the  citizens  of  each  country  full 
protection  which  it  was  intended  to  secure.  The  general  assembly 
did  not  have  in  view  the  imposition  of  a  succession  tax  upon  the 
citizens  of  Louisiana  living  away  from  the  state.  The  treaty  would 
have  no  effect  if  the  Louisiana  statute  was  extended  to  Spanish 
heirs  or  legatees  living  in  their  own  country. 

The  act  of  1894  was  not,  however,  aimed  at  any  portion  of  the 
people  of  Louisiana  and  therefore  Spanish  heirs  and  legatees  have 
the  same  rights  that  they  do  to  exemption.  Succession  of  Sala, 
50  La.  Ann.  1009,  24  S.  674. 

11. 

THE  GENERAL  SUCCESSION  TAX. 
Constitutional  Limitations. 
Louisiana  Constitution  1845,  a.  127. 

Taxation  shall  be  equal  and  uniform  throughout  the  state.  After  the  year  1848 
all  property,  on  which  taxes  may  be  levied,  in  this  state,  shall  be  taxed  in  pro- 
portion to  its  value,  to  be  ascertained  as  directed  by  law.  No  one  species  of  prop- 
erty shall  be  taxed  higher  than  another  species  of  property  of  equal  value,  on  which 
taxes  shall  be  levied;  the  legislature  shall  have  the  power  to  levy  an  income  tax, 
and  to  tax  all  persons  pursuing  any  occupation,  trade  or  profession. 

Louisiana  Constitution  1898.     Adopted  May  12,  1898. 

A.  235.  The  legislature  shall  have  power  to  levy,  solely  for  the  support  of 
the  public  schools,  a  tax  upon  all  inheritances,  legacies  and  donations;  provided, 
no  direct  inheritance  or  donation  to  an  ascendant  or  descendant,  below  ten 
thousand  dollars  in  amount  or  value,  shall  be  so  taxed;  provided,  further,  that 
no  such  tax  shall  exceed  three  per  cent  for  direct  inheritances  and  donations 
to  ascendants  or  descendants,  and  ten  per  cent  for  collateral  inheritances,  and 
donations  to  collaterals  or  strangers;  provided,  bequests  to  educational,  religious 
or  charitable  institutions  shall  be  exempt  from  this  tax. 

A.  236.  The  tax  provided  for  in  the  preceding  article  shall  not  be  enforced 
when  the  property  donated  or  inherited  shall  have  borne  its  just  proportion  of 
taxes  prior  to  the  time  .of  such  donation  or  inheritance. 

Not  Applicable  to  Taxes  Levied  before  the  Constitution  went 
into  Effect. 

The  court  holds  that  this  section  and  the  provisions  of  the 
Louisiana  statutes  carrying  these  articles  of  the  constitution  into 


1898,  a.  235.]  LOUISIANA.  515 

effect  do  not  extend  or  reach  back  to  conditions  anterior  to  the 
constitution  itself;  that  where  taxes  due  in  1878  and  1883  on  cer- 
tain lands  had  not  been  paid  the  collector  urged  that  it  made  no 
difference  how  far  back  in  the  past  the  failure  to  pay  taxes  may  have 
occurred  nor  who  the  owners  of  the  lot  may  have  been  at  that  time ; 
but  the  court  holds  that  taxes  due  before  the  passage  of  the  con- 
stitution do  not  affect  the  question  of  inheritance  tax.  Succession 
of  Westfeldt,  122  La.  Ann.  836,  48  S.  281. 

Nature  of  Succession  Tax. 

The  court  follows  the  ruling  in  Succession  of  Sala,  50  La.  Ann. 
1009,  24  S.'  674,  and  holds  that  a  succession  tax  is  a  bill  for  the 
purpose  of  raising  revenue  and  must,  within  the  Louisiana  consti- 
tution, originate  in  the  house  of  representatives.  Succession  of 
Givanovich,  50  La.  Ann.  625,  24  S.  679. 

The  exemption  in  La.  Const.  1898  from  the  operation  of  the 
inheritance  tax,  of  property  which  had  borne  its  just  share  of  tax- 
ation, arose  from  a  misapprehension  of  the  inheritance  tax  which 
is  not  a  tax  proper  but  a  bonus  or  premium  exacted  by  the  sovereign 
on  the  transmission  of  an  estate,  the  amount  being  measured  by 
the  value  of  the  property.  In  its  very  nature  it  is  a  privilege  or 
franchise  tax  and  is  not  affected  by  the  nature  and  character  of  the 
property  transmitted.    Succession  of  Kohn,  115  La.  Ann.  71,  38  S. 


Non-Taxable  Property  not  Exempt. 

As  an  inheritance  tax  is  not  one  on  property  but  upon  its 
transmission  by  will  or  by  descent,  it  does  not  matter  whether 
the  property  of  an  estate  is  taxable  or  not,  or  has  or  has  not  been 
taxed. 

If  the  law-maker  had  intended  to  include  property  exempt  from 
taxation  he  would  have  said  so.  Non-taxable  bonds  cannot  be  said 
to  have  borne  their  just  proportion  of  taxation  as  they  are  exempt 
from  such  a  burden.  The  law-maker  evidently  referred  to  property 
subject  to  assessment  and  taxation  on  which  taxes  had  been  paid 
prior  to  the  time  of  the  devolution  of  the  inheritance.  Exemption 
from  taxation  is  strictly  construed  and  cannot  be  read  into  a  statute 
by  inference  or  implication;  therefore  state  and  municipal  bonds 
exempt  from  taxation  are  subject  to  the  inheritance  tax.  The  court 
relies  on  Plummer  v.  Coler,  178  U.  S.  115,  20  S.  Ct.  829,  44  L.  Ed. 
998.    Succession  of  Kohn,  115  La.  Ann.  71,  38  S.  898. 


516  STATUTES  ANNOTATED.  [La.  St. 

THE  GENERAL  SUCCESSION  STATUTE  OF  1904. 
La.  St.  1904,  c.  45,  p.  102. 

"An  Act  to  carry  into  effect  Articles  235  and  236  of  the  Constitution 
of  1898  relative  to  inheritance  taxes." 

Purpose. 

This  act  was  passed  to  carry  into  effect  articles  235  and  236  of 
the  Louisiana  constitution  of  1898,  relative  to  inheritance  taxes. 
Succession  of  Kohn,  115  La.  Ann.  71,  38  S.  898. 

Title  Sufficient. 

The  court  holds  that  the  title  sufficiently  suggests  the  object 
of  the  act  and  is  therefore  not  void  under  La.  Const.,  article  31. 
Succession  of  Levy,  115  La.  377,  39  S.  37,  affirmed  Cahen  v.  Brewster, 
203  U.  S.  552,  27  S.  Ct.  174,  51  L.  Ed.  310. 

S.  1.  Be  it  enacted  by  the  General  Assembly  of  the  State  of  Louisiana:  That 
there  is  now  and  shall  hereafter  be  levied,  solely  for  the  support  of  the  public 
schools,  a  tax  upon  all  inheritances,  legacies  and  donations,  provided  no  direct 
inheritance,  or  donation,  to  an  ascendant  or  descendant,  below  ten  thousand 
dollars  in  amount  or  value  shall  be  so  taxed;  a  special  inheritance  tax  of  three 
per  cent  on  direct  inheritances  and  donations  to  ascendants  or  descendants  and 
ten  per  cent  for  collateral  inheritances  and  donations  to  collaterals  or  strangers; 
provided  bequests  to  educational,  religious  or  charitable  institutions  shall  be 
exempt  from  this  tax  and  provided  further  that  this  tax  shall  not  be  enforced 
when  the  property  donated  or  inherited  shall  have  borne  its  just  proportion  of 
taxes  prior  to  the  time  of  such  donation  or  inheritance;  this  tax  to  be  collected 
on  all  successions  not  finally  closed  and  administered  upon  and  on  all  successions 
hereafter  opened. 

Retroactive. 

La.  St.  1904  became  operative  in  New  Orleans  July  30,  1904, 
and  the  court  holds  that  it  embraced  all  successions,  those  opened 
and  not  settled  as  well  as  to  be  opened,  and  that  it  is  not  void  as 
retroactive  on  that  ground.  The  court  holds  that  the  power  to 
tax  is  without  limit  in  its  force  and  in  the  extent  of  its  search ;  that 
the  legatees  acquire  no  vested  right  in  the  property  bequeathed 
which  could  enable  them  to  successfully  defend  their  inheritance 
against  the  demand  of  the  state.  It  was  property  within  the  limits 
of  the  state  which  the  state  could  tax  for  the  purposes  mentioned 
until  it  passed  out  of  the  succession  of  the  testator. 

The  court  notes  that  it  does  not  appear  just  to  tax  all  successions 


1904,  c.  45.]  LOUISIANA.  517 

opened  since  the  statute  went  into  effect  and  not  yet  closed  and  not 
tax  those  that  have  been  opened  and  closed  in  that  time.  The  court 
replies  that  it  would  be  utterly  impracticable  to  tax  successions  that 
have  been  closed  for  the  reason  that  there  is  no  succession  remaining. 
The  tax  is  not  a  tax  upon  the  property  itself  but  upon  its  trans- 
mission. It  is  a  tax  upon  the  right  to  dispose  of  property  and  as 
long  as  a  succession,  the  ideal  or  juridical  person,  remains  in 
the  hands  of  the  executors,  the  legislative  power  may  classify 
it  and  subject  it  to  a  tax.  Succession  of  Levy,  115  La.  378,  39 
S.  37,  affirmed  Cahen  v.  Brewster,  203  U.  S.  552,  27  S.  Ct.  174, 
51  L.  Ed.  310. 

The  court  says  that  there  is  nothing  in  the  cases  of  United  States 
v.  Perkins,  163  U.  S.  625,  Magoun  v.  Illinois  Trust  &•  Savings  Bank, 
170  U.  S.  283;  KnowUon  v.  Moore,  178  U.  S.  41,  which  restrains 
the  power  of  the  state  as  to  the  time  of  the  imposition  of  the  tax. 
*Tt  may  select  the  moment  of  death,  or  it  may  exercise  its  power 
during  any  of  the  time  it  holds  the  property  from  the  legatee." 

Where  the  testator  died  in  May,  1904,  before  the  statute  went 
into  effect  the  statute  properly  was  made  to  impose  the  tax  upon 
the  estate. 

La.  St.  1904,  c.  45,  provided  that  the  inheritance  tax  might  be 
collected  "on  all  successions  not  finally  closed  and  administered 
upon."  It  was  argued  that  the  closing  of  the  succession  cannot 
affect  the  question  as  to  when  the  rights  of  the  heirs  vested  and 
cannot  be  the  cause  for  differentiation  among  the  heirs  and  such  a 
classification  is  purely  arbitrary.  Besides,  such  a  classification 
rests  on  the  theory  that  the  tax  is  one  of  property,  when  in  fact  it 
is  one  on  the  right  of  inheritance.  But  the  court  holds  that  the 
property  bequeathed  was  subject  to  the  jurisdiction  of  the  court 
until  it  had  passed  out  of  the  succession  of  the  testator,  and  it  was 
not  improper  classification  to  make  the  tax  depend  upon  a  fact 
without  which  it  would  have  been  invalid.  "In  other  words,  those 
who  are  subject  to  be  taxed  cannot  complain  that  thev  are  denied 
the  equal  protection  of  the  laws  because  those  who  cannot  legally 
be  taxed  are  not  taxed."  Cahen'v.  Brewster,  203  U.  S.  543,  552, 
27  S.  Ct.  174,  51  L.  Ed.  310,  affirming  115  La.  378,  39  S.  37. 

Where  the  testator  died  in  1903  and  his  property  was  in  large  part 
distributed  before  the  passage  of  La.  St.  1904  the  tax  is  not  operative 
as  to  such  property,  as  the  statutes  should  not  be  construed  as 
retroactive  when  impairing  vested  rights.  Succession  of  Stauffer, 
119  La.  Ann.  66,  43  S.  928. 


518  STATUTES  ANNOTATED.  [La.  St. 

Value  Based  on  Share  of  Each  Heir. 

It  was  admitted  that  the  liability  for  tax  is  determined  by  the 
amount  falling  to  each  of  the  heirs  and  not  by  the  aggregate  amount 
falling  to  all  of  them.  Succession  of  Abadie,  118  La.  Ann.  708,  43  S. 
306. 

Usufruct  Not  Taxable. 

Under  Louisiana  statutes  the  surviving  spouse  takes  the  usufruct 
of  a  community  property  under  the  marriage  contract  and  not 
merely  by  inheritance  on  the  death  of  the  decedent,  and  therefore 
the  right  of  usufruct  in  such  case  is  not  subject  to  the  inheritance 
tax  law  of  1904.    Succession  of  Marsal,  118  La.  Ann.  212,  42  S.  778. 

What  Property  Taxable.  —  Debts  Excepted. 

Under  La.  St.  1904  the  legatees  should  pay  the  inheritance  tax 
upon  the  amount  of  all  property,  upon  its  securities,  monies, 
jewelry,  bills,  etc.,  belonging  to  the  successions  as  shown  by  the 
inventory  and  account  except  the  value  of  the  real  estate,  and  the 
amount  of  religious  and  charitable  bequests.  There  should  also  be 
excepted  from  payment  of  the  tax  the  debts  of  the  succession. 
Succession  of  Levy,  115  La.  378,  39  S.  37,  affirmed  Cahen  \.  Brewster, 
203  U.  S.  552,  27  S.  Ct.  174,  51  L.  Ed.  310. 

United  States  bonds  are  not  free  from  tax  as  such.  Succession 
of  Levy,  115  La.  377,  39  S.  37,  affirmed  Cahen  v.  Brewster,  203  U.  S. 
552,  27  S.  Ct.  174,  51  L.  Ed.  310,  following  the  case  of  Plummer  v. 
Coler,  178  U.  S.  115,  20  S.  Ct.  829,  44  L.  Ed.  998. 

**This  Tax  Shall  Not  be  Enforced  When  the  Property  .  .  . 
Shall  Have  Borne  its  Just  Proportion  of  Taxes.'* 

This  just  provision  seems  to  be  contained  in  no  other  inheritance 
tax  in  this  country.  The  court  holds  that  "the  values  which  are 
liable  to  the  inheritance  tax  are  to  be  arrived  at  by  deducting  from 
the  total  value  of  the  estate  the  aggregate  amount  of  the  debts  and 
special  legacy  and  then  subtracting  from  the  remainder  the  value 
of  the  property  shown  to  have  previously  borne  its  just  proportion 
of  tax,  this  second  remainder  to  be  divided  in  parts  representing 
respectively  the  taxable  inheritances"  of  the  descendants.  Succes- 
sion of  Abadie,  118  La.  Ann.  708,  43  S.  306. 

It  was  claimed  that  shares  of  stock  were  exempt  under  this  pro- 
vision where  an  assessment  against  the  corporations  had  been  made 
on  all  of  their  property.  The  court  holds,  however,  that  the  taxation 


1904,  c.  45.]  LOUISIANA.  519 

of  corporate  capital  stock,  franchises  and  property  is  not  a  taxation 
of  the  shares  held  by  individual  stockholders;  and  therefore  these 
taxes  are  not  exempt  from  the  operation  of  the  inheritance  tax  law 
of  1904.    Succession  of  Kohn,  115  La.  Ann.  71,  38  S.  898. 

It  was  argued  that  the  tax  should  not  be  collected  on  bonds  be- 
longing to  the  estate  because  in  1905  the  decedent  sold  certain  real 
estate  on  which  the  taxes  had  been  paid  and  with  the  proceeds  of 
the  sale  during  the  same  year  purchased  bonds  which  she  owned 
at  the  time  of  her  death  in  January,  1906.  It  was  not  contended  that 
any  taxes  have  ever  been  paid  on  these  bonds  but  it  was  argued  that 
as  the  decedent  had  paid  all  taxes  assessed  against  her  real  estate 
and  with  the  p^-oceeds  of  the  sale  purchased  bonds  the  latter  must 
be  construed  in  the  light  of  property  which  has  borne  its  just 
proportion  of  taxes.  The  court  holds  that  there  would  be  weight 
in  this  contention  if  the  constitution  had  exempted  persons  who 
have  paid  all  the  taxes  assessed  against  them,  but  as  the  law  excepts 
property  inherited  it  cannot  construe  the  article  so  as  to  substitute 
persons  for  property.  The  question  of  the  exemption  of  property 
from  the  tax  can  only  arise  after  the  opening  of  the  succession  by 
the  death  of  the  decedent,  and  the  right  ol  the  heirs  and  of  the  fisc 
must  be  determined  by  the  state  of  facts  then  existing.  That  other 
property  formerly  owned  by  the  decedent  may  have  borne  its  just 
proportion  of  taxes  is  a  matter  entirely  foreign  to  the  inquiry.  Suc- 
cession of  Pritchard,  118  La.  Ann.  883,  43  S.  537. 

The  contract  of  an  insurance  agent  with  his  company  provided 
that  in  case  of  his  death  his  representative  should  be  entitled  to 
certain  commissions  on  renewals.  It  was  claimed  under  La.  St. 
1906,  c.  109,  p.  173,  providing  that  the  tax  shall  not  be  imposed 
on  the  property  inherited  until  it  shall  have  borne  its  just  proportion 
of  taxes  prior  to  the  time  of  such  inheritance,  that  as  the  premiums 
had  been  taxed  therefore  the  inheritance  tax  should  not  be  laid. 
The  court  holds,  however,  that  the  premiums  .do  not  form  the  sub- 
ject-matter of  the  inheritance,  but  are  due  to  and  are  paid  to  and 
belong  to  the  company,  and  the  heirs  inherit  simply  an  incorporeal 
right,  whose  only  relation  to  the  premiums  is  that  its  amount  is 
determined  by  a  computation  based  on  their  net  amount,  and  the 
contract  does  not  invest  the  heirs  ,withi the  ownership  of  the  premi- 
ums or  any  part  thereof,  but  only  with  the  right  to  require  of  the 
insurance  company  payment  of  an  amount  of  money  measured  by 
the  net  amount  of  the  premiums,  and  the  right  thus  inherited  has 
never  been  assessed  ^and  has  never  borne  taxes.  Succession  of  Fell, 
119  La.  Ann.  1037,  44  S.  879. 


520  STATUTES  ANNOTATED.  [La.  St. 

La.  St.  1904,  c.  45,  p.  102,  s.  2,  requires  the  judge  to  get  proof 
of  the  exemption  from  the  tax  before  granting  a  discharge  to  the 
executor  or  other  officer  in  charge  of  the  succession. 

La.  St.  1904,  c.  45,  ss.  3,  4  and  5,  cover  the  collection  and  payment 
of  the  tax  and  the  disposition  of  the  funds. 

Fees  for  Collection. 

Section  4  provides  that  it  shall  be  the  duty  of  the  district  attorney 
to  take  proceedings  to  enforce  the  act,  and  this  section  is  held  a 
complete  bar  to  the  claim  of  the  tax  collector  for  an  attorney's  fee 
of  ten  per  cent  for  the  services  of  the  attorney  by  whom  he  is 
represented  in  the  suit.  Succession  of  Levy,  115  La.  378,  39  S.  37, 
affirmed  Cahen  v. Brewster,  203  U.  S.  552,  27  S.  Ct.  174,  51  L.  Ed.  310. 

La.  St.  1904,  c.  45,  p.  102,  does  not  provide  for  the  payment  of 
interest  or  penalties  in  enforcement  of  the  inheritance  tax.  It  is 
a  charge  on  all  the  property  in  the  hands  of  the  administrator  or 
executor  and  is  secured  by  his  official  bond.  The  administrator  or 
executor  cannot  be  discharged  nor  the  heirs  be  put  in  possession 
until  this  tax  is  paid  to  the  tax  collector.  No  duty  as  to  the  collec- 
tion of  such  tax  is  imposed  on  that  official  beyond  receiving  it  from 
the  succession  representative.  Section  4  of  the  statute  provides 
tha^t  it  shall  be  the  duty  of  the  district  attorney  to  take  proceedings 
to  enforce  the  act.  The  act  contemplates  that  the  district  attorney 
should  do  this  work  without  other  emolument  than  his  official 
salary.  The  provisions  of  the  act  exclude  the  idea  of  attorney's  fees 
as  a  penalty,  and  substitute  the  district  attorney  for  the  official 
attorney  of  the  tax  collector,  who,  as  in  words  already  stated,  has 
no  duty  to  perform  except  to  receive  the  tax.  Therefore  the  attorney 
for  the  tax  collector  is  not  entitled  to  10  per  cent  of  the  tax  as  a  fee. 
Succession  of  Kohn,  115  La.  Ann.  71,  38  S.  898. 

La.  St.  1906,  c.  145,  p.  249,  approved  July  10,  1906,  was  a  special 
appropriation  for  compensation  to  an  individual  for  his  services 
in  the  collection  of  inheritance  taxes. 

The  Present  Act  a  Substitute  and  Not  a  Repeal  of   the 
Statute  of  1904. 

This  act  does  notrefer  to  the  St.  1904  and  contains  no  repealing 
clause,  but  it  purports  to  cover  the  whole  subject  legislated  upon 
and  may  therefore  be  regarded  as  a  substitute  for  the  act  of  1904. 
Succession  of  Frigalo,  123  La.  Ann.  71,  48  S.  652.  It  contains  no 
repealing  clause  and  there  is  no  repugnancy  between  its  provisions 
and  those  of  the  act  of  1904  except  as  to  the  rate  of  the  inheritance 


1906,  c.  109.]  LOUISIANA.  521 

tax  which  was  reduced  from  3  to  2  per  cent  on  direct  inheritances 
and  from  10  to  5  per  cent  on  all  other  inheritances.  The  act  of  1906 
was  not  intended  to  repeal  the  act  of  1904  as  to  successions  already 
closed  or  in  which  final  accounts  had  not  been  rendered.  There  is 
nothing  in  the  act  of  1906  which  tends  to  the  conclusion  that  the 
law-maker  intended  to  remit  inheritance  taxes  due  the  state  on 
successions  closed  or  on  which  final  accounts  had  not  been  rendered. 
Such  a  construction  would  operate  in  unjust  discrimination  against 
heirs  and  legatees  who  had  paid  their  taxes  under  the  act  of  1904 
and  would  furnish  good  grounds  for  the  restitution  of  all  the  taxes 
collected  under  the  provisions  of  that  statute.  Where  a  succession 
was  closed  'in  February,  1906,  and  a  sum  of  money  deposited  to 
cover  the  inheritance  tax  the  fact  that  the  tax  was  not  paid  at  that 
time  does  not  change  the  law  which  is  applicable  to  the  succession. 
The  tax  was  due  in  February,  1906,  and  it  should  have  been  paid 
before  the  heirs  were  put  in  possession.  The  state  acquired  a  vested 
right  in  the  fund  to  the  extent  of  the  tax  due  and  the  deposit  operated 
as  a  payment  of  the  lawful  claims  of  the  state  and  therefore  the 
succession  is  bound  to  pay  under  the  La.  St.  1904  and  not  under 
La.  St.  1906.  The  court  relies  on  Arnaud  v.  Arnaud,  3  La.  336; 
Succession  of  Pritchard,  118  La.  Ann.  883,  43  S.  537. 

THE  PRESENT  ACT. 

La.  St.  1906,  c.  109.     Approved  July  7,  1906. 

An  Act  to  carry  into  effect  articles  235  and  246  of  the  consti- 
tution, and  to  levy  taxes  solely  for  the  support  of  the  public  schools  on  all 
inheritances,  legacies  and  other  donations  mortis  causa,  to  provide  exemptions 
therefrom,  to  prescribe  the  manner  of  collecting  the  same,  to  fix  the  fees  of 
attorneys  and  commissions  of  tax  collectors,  and  to  repeal  all  conflicting  laws. 

Transfers  Taxable.  —  Rate. 

S.  1.  Be  it  enacted  by  the  General  Assembly  of  the  State  of  Louisiana,  That 
there  is  now  and  shall  hereafter  be  levied,  solely  for  the  support  of  the  public 
schools,  on  all  inheritances,  legacies  and  other  donations  mortis  causa  to  or  in 
favor  of  the  direct  descendants  or  ascendants  of  the  decedent,  a  tax  of  two  per 
centum,  and  on  all  such  inheritances  or  dispositions  to  or  in  favor  of  the  collateral 
relatives  of  the  deceased  or  strangers,  a  tax  of  five  per  centum  on  the  amount  or 
the  actual  cash  value  thereof  at  the  time  of  the  death  of  the  decedent. 

Debts  Deducted. 

The  inheritance  tax  is  not  levied  on  propisrty  left  by  the  decedent 
but  on  the  Value  actually  received  by  the  heir  or  legatee  and  there- 
fore under  the  La.  St.  1906,  c.  109,  where  the  deceased  bequeathed 


522  STATUTES  ANNOTATED.  [La.  St. 

to  her  husband  all  her  property,  which  consisted  entirely  of  her 
share  of  the  community  property,  that  the  debts  of  the  succession 
should  be  deducted  in  fixing  the  amount  of  the  tax  on  inheritances. 
Succession  of  May,  120  La.  692,  45  S.  551. 

Adopted  Children. 

The  act  of  1906  laid  taxes  on  four  classes  of  persons,  ascendants, 
descendants,  collaterals  and  strangers.  Adopted  children  are  not 
related  by  blood,  so  that  they  are  neither  ascendants  nor  collaterals; 
on  the  other  hand,  as  they  are  legal  heirs  of  the  estate  they  are  not 
strangers.  It  follows,  therefore,  that  they  must  be  persons  who  by 
law  are  given  the  status  of  descendants  if  subject  to  tax  at  all. 
Succession  ofFrigalo,  123  La.  Ann.  71,  48  S.  652. 

Uncertain  Contract  Rights. 

Where  a  tax  was  levied  under  La.  St.  1906,  c.  109,  p.  173,  on  the 
right  under  an  insurance  contract  to  certain  commissions  on  re- 
newal premiums,  the  claim  was  made  that  the  inheritance  tax 
could  not  be  exacted  because  the  value  of  the  inheritance  was  too 
uncertain,  as  the  policies  on  renewal  might  be  suffered  to  lapse  and 
hence  that  the  premiums  might  never  be  collected.  The  court  holds 
that  the  certainty  or  uncertainty  of  policies  being  renewed  is  a 
matter  pertaining  to  the  insurance  business  and  that  the  actuary 
of  the  company  can  no  doubt  make  an  estimate  sufficiently  close 
for  all  practical  purposes  of  the  actual  or  present  value  of  this  claim 
against  the  company.  Succession  of  Fell,  119  La.  Ann.  1037,  44  S. 
879. 

Foreign  Real  Estate. 

The  court  holds  that  this  act  in  both  sections  1  and  2  must  be 
given  the  same  meaning  and  that  that  means  Louisiana  property 
and  therefore  does  not  include  in  its  terms  real  estate  of  the  suc- 
cession in  another  state.  The  inheritance  law  is  unquestionably 
dealing  with  the  Louisiana  succession  law  and  the  word  "inheritance" 
in  the  first  and  second  sections  of  the  act  must  be  held  to  have  the 
same  meaning. and  scope.  The  heirs  and  legatees  do  not  receive  by 
inheritance  under  the  laws  of  Louisiana  real  estate  in  another  state. 
The  legislature  must  be  supposed  to  have  measured  the  burden 
of  the  tax  by  the  extent  of  the  right  and  privilege  which  it  has 
itself  conferred  and  not  upon  that  which  has  been  conferred  by  the 


1906,  c.  109.]  LOUISIANA.  523 

laws  of  another  state.  Succession  of  Westfeldt,  122  La.  Ann.  836, 
48  S.  281. 

See  notes  to  the  act  of  1904,  ante,  p.  518. 

Exemptions. 

S.  2.  Be  it  further  enacted,  etc..  The  said  tax  shall  not  be  imposed  in  the 
following  cases:  — 

(a)  On  any  inheritance,  legacy  or  other  donation  mortis  causa  to  or  in  favor 
of  any  ascendant  or  descendant  of  the  decedent  below  ten  thousand  dollars  in 
amount  or  value. 

(6)  On  any  legacy  or  other  donation  mortis  causa  to  or  in  favor  of  an  educa- 
tional, religious  or  charitable  institution. 

(c)  When  the  property  inherited,  bequeathed  or  donated  shall  have  borne 
its  just  proportion  of  taxes  prior  to  the  time  of  such  donation,  bequest  or  in- 
heritance. 

[See  notes  to  the  act. of  1904,  ante,  p.  518.] 

An  inheritance  to  descendants  of  less  value  than  $10,000 

is  exempt  from  taxation  under  this  statute.  Succession  of  Frigalo, 
123La.  Ann.  71,48  S.  652. 

Sale  does  not  Affect  Exemption. 

Where  payment  of  the  debts  absorbed  the  whole  amount  of  the 
proceeds  of  the  personal  property  and  the  balance  due  had  to  be 
made  from  the  proceeds  of  the  realty  to  satisfy  the  legacies  the 
court  holds  that  there  can  be  no  question.  The  legacy  from  funds 
that  are  not  proceeds  of  property  exempt  owes  a  tax.  But  where 
there  is  an  exemption  the  fact  of  a  sale  or  other  disposition  made 
necessary  to  the  discharge  of  the  legacy  does  not  forfeit  the  exemp- 
tion. The  character  of  the  property  was  fixed  at  the  date  of  the 
death  of  the  testator  and  the  inheritance  tax  is  due  on  a  legacy  not 
paid  from  the  proceeds  of  exempt  property,  but  it  is  not  due  on  a 
legacy  necessarily  paid  from  the  proceeds  of  exempt  property  under 
111.  St.  1906,  c.  109,  p.  173.  Succession  of  Becker,  118  La.  Ann.  1056, 
43  S.  701. 

Property  which  has  borne  its  just  proportion  of  taxes. 

When  a  partnership  has  been  assessed  and  has  paid  the  usual  taxes, 
this  is  sufficient  to  render  the  property  acquired  from  the  partner- 
ship free  from  tax  although  the  partner's  interest  has  not  been 
assessed  and  taxed.  The  court  distinguishes  the  case  of  a  partner 
from  that  of  a  stockholder  in  a  corporation.  Succession  of  Stauffer, 
119La.Ann.  66,43  8.928. 


524  STATUTES  ANNOTATED.  [La.  St. 

Duties  and  Liabilities  of  Beneficiaries. 

S.  3.  Be  it  further  enacted,  etc.,  It  shall  be  unlawful  for  any  heir,  legatee  or 
other  beneficiary  of  a  donation  mortis  causa  to  take  or  be  in  possession  of  any  part 
of  the  things  or  property  composing  the  inheritance,  legacy  or  other  donation 
mortis  causa,  or  to  dispose  of  the  same  or  any  part  thereof,  until  he  shall  have 
obtained  the  authority  of  the  court  to  that  effect,  as  hereafter  provided;  and 
in  case  he  shall  so  take  or  be  in  possession  or  shall  so  dispose  of  such  things  or 
property,  or  any  part  thereof,  he  shall  no  longer  have  the  right  of  renouncing 
such  inheritance  or  donation  mortis  causa,  and  shall  remain  personally  liable  for 
the  tax  thereon;  but  he  may,  without  waiting  for  authority,  do  such  acts  as  may 
seem  necessary  to  preserve  the  property  from  waste,  damage  or  loss. 

Assessment  of  Tax. 

S.  4.  Be  it  further  enacted,  etc..  The  executor  of  the  will  of  a  person  deceased, 
or  the  administrator  of  his  succession,  shall,  after  payment  of  his  debts,  proceed 
against  the  tax  collector  and  all  the  heirs  and  legatees  of  the  deceased  summarily 
by  rule  before  the  court  which  has  jurisdiction  of  the  succession,  to  fix  the  amount 
of  tax  due  by  each  heir  or  legatee,  and  on  trial  thereof  the  court  shall  render  judg- 
ment for  the  same  against  each  heir  or  legatee,  with  interest  and  costs,  as  here- 
inafter provided. 

Power  of  Sale. 

S.  5.  Be  it  further  enacted,  etc..  The  executor  or  administrator  shall  thereupon 
pay  to  the  tax  collector  the  amount  of  tax,  with  interests  and  costs,  so  fixed,  on 
each  inheritance,  legacy  or  donation,  out  of  the  funds  comprised  therein,  if 
sufficient.  Should  there  not  be  sufficient  funds,  the  court  shall,  on  the  application 
of  the  heir  or  legatee,  grant  an  order  for  the  sale  of  the  property  composing  such 
inheritance,  legacy  or  donation,  or  so  much  thereof  as  may  be  necessary,  for  the 
purpose  of  paying  such  judgment.  If  the  same  be  not  paid  by  the  heir  or  legatee, 
or  an  order  of  sale  be  not  granted,  as  above  provided,  within  thirty  days  after  the 
date  of  the  judgment,  the  court  shall,  on  the  application  of  the  executor  or  ad- 
ministrator, grant  an  order  of  sale  for  the  said  purpose,  as  above  provided,  and 
the  executor  or  administrator  shall  pay  the  said  judgment  out  of  the  proceeds  of  the 
sale.  Such  sale  shall  be  made  in  such  manner,  and  on  such  terms  and  condi- 
tions as  the  court  shall  prescribe,  and  the  expense  thereof  shall  be  borne  by 
the  heir  or  legatee. 

Duties  of  Executor. 

S.  6.  Be  it  further  enacted,  etc..  No  executor  or  administrator  shall  deliver 
any  inheritance  or  legacy  until  the  tax  thereon  shall  be  fixed  and  paid,  as  herein 
provided;  otherwise  he,  together  with  his  surety,  shall  be  personally  liable  for 
said  tax,  with  interest  and  cost.  And  no  executor  or  administrator  shall  be 
discharged  until  it  is  shown  that  all  taxes  under  this  act,  due  by  the  heirs  and 
legatees,  have  been  paid,  or  until  it  is  judicially  determined  by  the  process  herein 
provided  that  no  tax  is  due. 

Inventory. 

S.  7.  Be  it  further  enacted,  etc..  In  all  cases  in  which  an  administration  is 
not  ordered  by  the  court,  the  legal  or  instituted  heir,  or  universal  or  residuary 


1906,  c.  109.]  LOUISIANA.  525 

legatee,  shall  within  six  months  after  the  death  of  the  decedent,  or,  should  there 
be  a  will,  within  the  same  time  after  the  discovery  of  the  same,  present  to  the 
court  a  detailed  descriptive  list,  sworn  to  and  subscribed  by  him,  of  all  items 
of  property  contained  in  and  composing  the  estate  of  the  decedent,  and  therein 
shall  state  the  actual  cash  value  of  each  such  item  at  the  time  of  the  death  of 
the  decedent,  and  service  thereof  shall  be  made  on  the  tax  collector  who  shall  have 
the  right  to  traverse  the  same.  Should  the  deceased  have  made  special  or  partic- 
ular legacies  or  donations  mortis  causa,  the  legatee  shall  also  be  served,  and ;  after 
summarily  hearing  the  said  parties  the  court  shall  fix  the  amount  of  tax  due  as 
aforesaid  by  each  such  heir  or  legatee,  and  shall  render  judgment  therefor,  with 
interest  and  cost,  against  each  of  them. 

Payment  of  Tax  on  Special  or  Particular  Gifts. 

S.  8.  Be  it -further  enacted,  etc..  In  the  same  manner  as  provided  in  section  5, 
the  heir  or  universal  or  residuary  legatee  shall  thereupon  pay  or  take  measures 
for  the  payment  of  the  tax  due  on  all  special  or  particular  legacies  or  donations. 

Sale. 

S.  9.  Be  it  further  enacted,  etc.,  The  heir  or  universal  or  residuary  legatee 
may  likewise  obtain  an  order  for  the  sale  of  the  property  of  his  inheritance  or 
legacy,  or  part  thereof,  for  the  purpose  of  paying  the  tax  thereon.  But  if  such 
tax  be  not  paid,  or  such  order  of  sale  be  not  made  within  thirty  days  after  the 
date  of  the  judgment  fixing  the  amount  of  the  tax,  a  similar  order  for  the  same 
purpose  shall  be  granted  on  the  application  of  the  tax  collector,  and  thereunder 
any  property  forming  part  of  the  inheritance  or  legacy  may  be  sold,  and  the 
proceeds  thereof  shall  be  applied  to  the  payment  of  the  tax  with  interest  and 
costs. 

Legacy  Not  to  be  Delivered  till  Tax  Paid. 

S.  10,  Be  it  further  enacted,  etc..  The  heir  or  residuary  or  universal  legatee 
shall  not  deliver  any  legacy  until  the  tax  thereon  shall  have  been  fixed  and  paid; 
otherwise  he  shall  be  personally  liable  for  the  said  tax,  with  interest  and  costs. 

Search  for  WiU. 

S.  11.  Be  it  further  enacted,  etc..  If  during  the  six  months  next  following  the 
death  of  any  person  leaving  property,  movable  or  immovable,  within  this  state, 
an  administration  of  his  succession  be  not  applied  for,  or  his  legal  or  instituted 
heir  or  universal  or  residuary  legatee  do  not  apply  to  the  court  to  be  placed  in 
possession  thereof,  as  herein  provided,  the  court  shall  ex  parte  and  on  the  applica- 
tion of  the  tax  collector  grant  an  order  directing  that  a  search  be  made  for  the 
will  of  the  deceased  by  a  notary  public,  and  in  aid  of  the  same  may  order  that 
all  persons  having  in  their  possession  or  control  any  books,  papers  or  documents 
of  the  deceased,  or  any  bank  box,  safe  deposit  vault  or  other  receptacle  likely  or 
designed  to  contain  the  same,  shall  open  such  receptacle  and  exhibit  the  contents 
thereof,  as  well  as  all  other  books,  papers  and  documents  of  the  deceased,  to  the 
said  notary. 

Probate  of  Will. 

S.  12.  Be  it  further  enacted,  etc..  Should  the  said  notary  find  any  document 
appearing  to  be  the  will  of  the  deceased,  he  shall  take  possession  of  the  same 


526  STATUTES  ANNOTATED.  [La.  St. 

and  produce  it  in  court;  and  on  application  of  the  tax  collector,  or  of  any  party 
in  interest,  the  court  shall  proceed  to  the  probate  thereof,  as  now  provided  by 
law.  If  an  executor  be  therein  appointed,  the  person  named  shall  be  notified, 
and  if  he  do  not  within  ten  days  after  notification  accept  the  appointment,  and  if 
within  the  ten  days  next  following  this  delay  no  person  entitled  to  be  appointed 
dative  testamentary  executor  shall  apply  for  the  appointment,  then  the  public 
administrator  in  the  parish  of  Orleans,  and  in  the  other  parishes  the  tax  collector, 
shall  be  appointed  dative  testamentary  executor  of  the  said  decedent  and  the 
administration  of  his  succession  shall  proceed  as  herein  directed  and  according 
to  existing  law. 

Assessment  of  Tax  where  no  Will  Found. 

S.  13.  Be  it  further  enacted,  etc.,  If  the  notary  can  find  no  will,  he  shall  report 
the  fact  to  the  court;  and  thereupon  the  tax  collector  shall  proceed  against  the 
legal  heir  or  heirs  of  the  deceased  summarily  by  rule  to  fix  the  amount  of  tax  due 
by  him  or  them,  and  each  of  the  heirs  shall  be  ordered,  within  a  delay  to  be  fixed 
by  the  court,  which  may  be  exte  ided  from  time  to  time  in  the  discretion  of  the 
court,  to  make  and  file  a  detailed  descriptive  list,  sworn  to  and  subscribed  by  him, 
of  all  the  items  of  property  contained  in  and  composing  the  estate  of  the  decedent, 
stating  therein  the  actual  cash  value  of  each  such  item  at  the  time  of  the  death 
of  the  decedent,  and  the  tax  collector  shall  have  a  right  to  traverse  the  same. 
On  trial  of  the  rule  the  court  shall  fix  the  amount  of  tax  due  by  each  of  the  heirs, 
and  shall  render  judgment  for  the  same  against  each  of  them,  and  in  such  case, 
as  well  as  in  the  cases  mentioned  in  section  12,  shall  include,  in  the  costs  payable 
by  the  heir  or  legatee,  a  fee  of  not  more  than  ten  per  cent  on  the  amount  of  tax 
due^by  each  heir  or  legatee  in  favor  of  the  attorney  for  the  tax  collector,  in  the 
same  manner  and  under  the  same  conditions  as  provided  in  sections  5  and  9 
of  this  act,  such  heirs  or  legatees  shall  have  the  right  to  procure  the  sale  of  their 
inheritances  or  legacies  for  the  purpose  ot  paying  the  tax  due  thereon,  with  interest, 
costs  and  attorney's  fees;  and  if  payment  thereof  be  not  made  by  the  heir  or 
legatee,  or  if  an  order  of  sale,  as  above  provided,  be  not  granted,  within  thirty 
days  after  the  date  of  the  judgment,  the  tax  collector  shall  be  entitled  to  a  similar 
order,  and  thereunder  any  property  forming  part  of  the  inheritance  or  legacy 
may  be  sold. 

Parties. 

S.  14.  Be  it  further  enacted,  etc..  Should  there  be  more  than  one  legal  or 
instituted  heir  or  universal  or  residuary  legatee  any  one  of  them  may  institute 
the  proceedings  provided  by  this  act,  and  the  others  shall  be  made  parties  thereto, 
and  such  heir  shall  be  entitled  to  recover  out  of  the  mass  of  the  succession  one 
reasonable  attorney's  fee,  besides  his  costs. 

Creditors'  Rights  Preserved. 

S.  15.  Be  it  further  enacted,  etc..  Nothing  contained  in  this  act  shall  affect  the 
rights  of  creditors. of  persons  deceased,  or  the  rights  of  the  creditors  of  the  heirs 
or  legatees  of  such  persons,  as  established  by  the  general  law. 

Restrictions  on  Beneficiaries. 

S.  16.  Be  it  further  enacted,  etc..  Each  inheritance  or  legacy  is  indivisible, 
and  must  be  accepted  or  renounced  for  the  whole;   and  the  heir  or  legatee  shall 


1906,  c.  109.1  LOUISIANA.  527 

not  be  entitled  to  be  placed  in  possession  of  the  same,  and  shall  be  without  right 
or  capacity  to  alienate  any  part  thereof,  until  the  tax  on  the  whole  shall  have  been 
fixed  and  paid,  or  until  it  shall  have  been  judicially  determined,  in  the  manner 
herein  provided,  that  no  part  of  the  same  is  subject  to  the  tax  imposed  by  this 
act. 

Liabilities  on  Transfer. 

S.  17.  Be  it  further  enacted,  etc..  No  bank,  banker,  trust  compan5^  warehouse- 
man, or  other  depositary  and  no  person  or  corporation  or  partnership  having  on 
deposit  or  in  possession  or  control  any  moneys,  credits,  goods  or  other  things  or  in- 
terest rights  of  value  for  a  person  deceased,  or  in  which  he  had  any  interest,  and  no 
corporation  the  stock  or  registered  bonds  of  which  are  owned  by  a  person  deceased 
shall  deliver  or  transfer  such  moneys,  credits,  stock,  bonds  or  other  things  or 
rights  of  value  to  any  heir  or  legatee  of  such  deceased  person,  unless  the  tax  due 
thereon  under  this  act  shall  have  been  paid,  or  unless  it  be  judicially  determined 
in  the  manner  herein  prescribed  that  no  tax  is  due  by  such  heir  or  legatee.  Other- 
wise the  person  or  corporation  so  making  delivery  or  transfer  shall  be  liable  for 
the  said  tax.  But  the  order  of  a  court  of  competent  jurisdiction,  directing  such 
delivery  or  transfer,  shall  be  full  authority  for  the  same. 

Burden  of  Proving  Exemption. 

S.  18.  Be  it  further  enacted,  etc.,  The  burden  of  proving  facts  establishing 
exemption  from  the  tax  imposed  by  this  act  is  upon  the  person  claiming  exemp- 
tion. 

Jurisdiction  of  District  Court. 

S.  19.  Be  it  further  enacted,  etc..  The  district  court  of  the  last  domicile  of 
the  deceased,  and  in  the  parish  of  Orleans  the  civil  district  court,  shall  have 
original  jurisdiction  to  hear  and  determine  all  the  proceedings  provided  by  this 
act.  In  the -case  of  a  non-resident  decedent,  the  district  court,  or  civil  district 
court,  of  any  parish  in  which  he  left  property,  movable  or  immovable,  shall  ex- 
ercise such  jurisdiction,  and  the  court  in  which  such  proceedings  shall  be  first 
begun  shall  have  exclusive  original  jurisdiction  thereof. 

Absentees. 

S.  20.  Be  it  further  enacted,  etc..  Non-residents  and  unknown  heirs  and 
legatees,  and  those  whose  whereabouts  are  unknown,  shall  be  represented  by 
curator  ad  hoc  appointed  by  the  court,  and  all  notices,  citations  and  demands 
prescribed  by  this  act  shall  be  served  on  such  officers.  Though  there  be  in  any 
case  more  than  one  unknown  or  absent  heir  or  legatee,  all  may  be  represented  by 
the  same  curator. 

Officers. 

S.  21.  Be  It  further  enacted,  etc.,  The  tax  collector  spoken  of  and  intended  by 
this  act  is  the  sheriff  and  ex  officio  tax  collector  of  the  parish  in  which  was  the  last 
residence  of  the  decedent,  or  in  which  is  situated  property  of  a  non-resident 
decedent,  and  in  the  Parish  of  Orleans  the  clerk  of  the  civil  district  court.  They 
shall  receive  a  commission  of  two  per  cent  on  their  collections  of  taxes  under  this 
act. 


528  STATUTES  ANNOTATED.  [La.  St. 

Attorneys  to  Collect  Tax. 

S.  22.  Be  it  further  enacted,  etc.,  In  and  for  the  Parish  of  Orleans  the  governor 
shall  appoint,  by  and  with  the  advice  and  consent  of  the  senate,  for  a  term  of 
four  years,  an  attorney  at  law,  whose  duty  it  shall  be  to  a  vise,  assist  and  repre- 
sent the  clerk  of  the  civil  district  court  in  the  enforcement  of  this  act.  For  his 
services,  except  as  provided  in  sections  12  and  13,  he  shall  receive  a  fee  of  four 
per  cent  on  all  taxes  collected  hereunder,  payable  out  of  the  same  before  trans- 
mission to  the  treasury.  In  all  other  parishes  of  the  state  the  said  duties  shall  be 
performed  by  the  attorneys  appointed  under  existing  law  to  assist  the  tax  col- 
lectors in  the  collection  of  delinquent  licenses,  and  the  compensation  of  such 
attorneys  shall  be  as  above  provided. 

[See  notes  to  the  Act  of  1904,  ante,  p.  520.] 

Use  of  Mortality  Tables. 

S.  23.  Be  it  further  enacted,  etc.,  In  fixing  the  value  of  any  legacy  or  donation 
mortis  causa  which  consists  in  whole  or  in  part  of  an  annuity  or  usufruct  or  right 
of  use  or  habitation,  the  court  shall  consider  the  expectancy  of  life  of  the  legatee 
or  donee  according  to  the  table  known  as  the  American  experience  table  of 
mortality,  at  six  per  cent  per  annum  compound  interest. 

Interest. 

S.  24.  Be  it  further  enacted,  etc..  The  taxes  hereby  levied  shall  bear  interest 
at  the  rate  of  two  per  cent  per  month,  beginning  six  months  after  the  death  of 
the  decedent;  saving  to  any  heir,  legatee  or  donee  the  right  to  stop  the  running 
of  interest  against  him  by  paying  the  amount  of  his  tax  with  accrued  interest, 
or  by  tendering  the  same  to  the  tax  collector  in  the  manner  prescribed  by  the 
general  law;  provided,  however,  that  in  cases  in  which  the  settlement  of  the 
succession  is  not  unduly  delayed,  or  in  which  the  right  of  any  party  to  receive 
an  inheritance  or  legacy  is  contested,  and  in  all  cases  in  which  the  failure  to  pay 
tax  on  any  legacy  or  inheritance  within  the  period  aforesaid  is  not  imputable  to 
the  laches  of  the  heir  or  legatee,  the  court  may,  in  its  discretion,  remit  such  in- 
terest. 

Costs.  —  To  what  Estates  the  Act  Applies. 

S.  25.  Be  it  further  enacted,  etc..  The  costs  of  all  proceedings  under  this  act 
shall  be  borne  by  the  mass  of  the  succession;  provided,  that  in  cases  in  which  it 
seems  to  him  equitable  to  do  so  the  judge  shall  have  power  to  apportion  the 
costs  among  the  several  parties,  or  allow  any  party  to  retain  his  costs  out  of  any 
sum  found  to  be  due  by  him  for  tax  hereunder.  Provided,  the  provisions  of  this 
act  shall  affect  all  successions  not  finally  closed,  or  in  which  the  final  account  has 
not  been  filed. 

"All  Successions  not  Finally  Closed." 

Where  the  decedent  died  January  11,  1906,  and  the  succession 
was  closed  by  a. judgment  February  7,  1906,  recognizing  the  heirs 
and  ordering  them  to  be  put  into  possession,  and  as  this  was  done 
before  the  La.  St.  1906  went  into  effect,  this  succession  was  not 
affected  by  that  statute  but  was  governed  by  the  La.  St.  1904. 
Succession  of  Pritchard,  118  La.  Ann.  883,  43  S.  537. 


1906,  c.  109.]  LOUISIANA.  529 

The  testator  died  in  1903  and  his  succession  was  opened  and  a 
large  portion  of  the  property  distributed  prior  to  the  passage  of 
the  statute  of  1904  and  the  succession  was  not  finally  closed  at  the 
date  of  the  passage  of  the  statute  of  1906.  The  court,  relying  upon 
the  case  of  Cahen  Y.Brewster,  203  U.  S.  543,  27  S.  Ct.  174,  51  L.  Ed. 
310,  affirming  Succession  of  Levy,  115  La.  378,  39  S.  37,  holds  that 
it  is  competent  for  the  legislature  to  impose  a  tax  on  inheritances 
which  are  in  gremio  legis  and  which  have  not  as  a  matter  of  fact 
passed  into  the  possession  of  the  heirs  or  donees,  and  therefore  the 
La.  St.  1906  may  properly  apply  to  this  succession.  Succession  of 
Stauffer,  119  La.  Ann.  66,  43  S.  928. 


530  STATUTES  ANNOTATED.  [Me.  Const. 


MAINE. 


In  General. 

Maine  began  to  tax  collateral  inheritances  in  1893  and  direct 
inheritances  under  a  progressive  rate  in  1909.  The  act  of  1911  did  not 
alter  the  rates  but  added  adopting  parents  to  the  most  favored  class. 

Exemptions  apply  to  each  individual  inheritance  and  not  to  the 
estate  as  a  whole.  Probate  courts  have  charge  of  inheritance  tax 
matters.  In  some  of  them  the  tax  is  imposed  on  the  full  amount 
of  the  inheritance ;  thus  an  inheritance  of  $40,000  to  a  child  is  taxed 
$400,  one  per  cent  on  the  whole  $40,000;  but  in  other  probate  courts 
the  tax  is  collected  on  the  excess  over  the  exemption  only,  and  in 
such  courts  the  tax  would  be  only  $300,  one  per  cent  on  the  excess 
over  $10,000.  The  same  uncertainty  prevails  in  the  case  of  large 
inheritances,  as  to  whether  they  are  taxable  at  the  increased  rate 
only,  on  the  excess  over  the  minimum  figure  or  on  the  entire  in- 
heritance.   There  has  been  as  yet  no  authoritative  decision. 

Maine  has  taken  an  advanced  position  in  trying  to  avoid  double 
taxation.  Property  of  a  resident  situated  outside  the  state,  if  taxed 
by  another  state  or  country,  is  taxed  in  Maine  only  for  the  difference 
if  the  Maine  tax  is  the  greater.  Property  of  a  non-resident  within 
the  jurisdiction  of  Maine,  if  subject  to  a  tax  in  his  home  state  or 
country,  pays  to  Maine  only  so  much  as  the  Maine  tax  may  be  in 
excess  of  the  tax  in  the  place  of  residence. 

Maine  is  taxing  stock  of  Maine  corporations  owned  by  non- 
residents, except  such  as  have  less  than  $1,000  in  property  within 
the  state,  but  the  usual  provision  that  the  corporation  itself  shall 
be  responsible  for  the  tax  if  it  transfers  stock  before  the  tax  is  paid 
was  not  inserted  until  1911. 

It  used  to  be  the  general  practice  in  the  probate  courts  to  tax 
Boston  &  Maine  shares  on  their  full  value,  though  the  company 
is  also  incorporated  in  Massachusetts  and  New  Hampshire,  and 
only  a  relatively  small  portion  of  its  line  is  in  Maine,  but  the  act 
of  1911  has  upset  this  practice. 


1875  a.  1-9.]  MAINE.  531 

Constitutional  Limitations. 
Maine  Constitution  1875,  a.  1,  s.  1. 

All  men  are  born  equally  free  and  independent,  and  have  certain  natural, 
inherent  and  inalienable  rights,  among  which  are  those  of  enjoying  and  defending 
life  and  liberty,  acquiring,  possessing  and  protecting  property,  and  of  pursuing 
and  obtaining  safety  and  happiness. 

A.  9,  s.  7. 

While  the  public  expenses  shall  be  assessed  on  polls  and  estates,  a  general 
valuation  shall  be  taken  at  least  once  in  ten  years. 

A.  9,  s.  8. 

All  taxes  upon  real  and  personal  estate,  assessed  by  authority  of  this  state, 
shall  be  apportioned  and  assessed  equally  according  to  the  just  value  thereof. 

List  of  Statutes. 


1893. 

Laws  of  Maine,  c.  146. 

1895. 

' 

"       c.  96. 

1901. 

' 

"      c.  225.  (See  also  c.  1 ,  s.  6,  In  re  Construction  of  Statutes. ) 

1903. 

' 

"      c.  156. 

1905. 

' 

"      c.  124. 

1909. 

' 

"      c.  186. 

1909. 

' 

"      c.  187 

1911. 

U               <( 

"      c.  163. 

1903. 

Revised  Statutes  of  Maine,  c.  8,  ss.  69  to  85. 

1905. 

Re 

port 

of 

Revision  of  the  Public  Laws,  pp.  148,  977. 

History  of  Succession  Taxes. 

"Succession  duties  or  taxes  have  been  in  existence  in  other 
countries  for  centuries,  and  have  been  regarded  with  favor,  as  a 
convenient  and  comparatively  non-burdensome  means  of  revenue. 
They  were  well  known  in  Roman  jurisprudence  (Gibbon's  Rome, 
Vol.  1,  p.  133),  and  were  imposed  upon  all  successions,  except  those 
to  the  nearest  relatives,  and  to  the  poor.  The  practice  has  long  been 
resorted  to  in  European  countries,  and  was  introduced  in  England 
in  the  last  century,  and  was  enlarged  from  time  to  time  till  1853, 
when  it  was  extended  to  all  successions  to  real  property,  chattels 
real,  and  a  vast  variety  of  personal  property  and  rights."  Per 
Strout,  J.,  in  State  v.  Hamlin,  86'  Me.  495,  498,  30  A.  76,  41  Am. 
St.  Rep.  569,25  L.  R.  A.  632. 

Right  of  Descent  is  Merely  Statutory. 

"The  constitution  guarantees  to  the  citizen  the  right  of  acquiring, 
possessing  and  protecting  property.  (Article  1,  section  1,  which 
includes  also  the  right  of  disposal.)     But  the  guaranty  ceases  to 


532  STATUTES  ANNOTATED.  [Me.  St. 

operate  at  the  death  of  the  possessor.  There  is  no  provision  of  our 
constitution,  or  that  of  the  United  States,  which  secures  the  right 
to  any  one  to  control  or  dispose  of  his  property  after  his  death,  nor 
the  right  to  any  one,  whether  kindred  or  not,  to  take  it  by  inheri- 
tance. Descent  is  a  creature  of  statute,  and  not  a  natural  right. 
2  Blackstone's  Com.,  pages  10,  11,  12,  13;  Strode  v.  Com.,  supra. 
At  common  law,  prior  to  the  statute  of  distribution  in  England, 
22  and  23  Car.  11,  descent  of  personal  property  could  hardly  be 
recognized  even  after  the  statute  requiring  administration  to  be 
granted;  the  administrator,  after  the  payment  of  the  debts  and 
funeral  expenses  of  the  deceased,  was  entitled  to  retain  to  himself 
the  residue  of  his  effects,  the  court  holding  that  there  was  no  power 
to  compel  a  distribution.  2  Bl.  Com.  515;  Edwards  v.  Freeman, 
2  P.  Wms.  442."  Per  Strout,  J.,  in  State  v.  Hamlin,  86  Me.  495, 
30  A.  76,  41  Am.  St.  Rep.  569,  25  L.  R.  A.  632. 

THE  ACT  OF  1893. 
Statute  Adopted  from  New  York. 

This  statute  contains  substantially  the  same  provisions  and  nearly 
the  same  exemptions  as  the  N.  Y.  St.  1885,  c.  483.  State  v.  Hamlin, 
86  Me.  495,  30  A.  76,  41  Am.  St.  Rep.  569,  25  L.  R.  A.  632. 

Due  Process  of  Law. 

It  was  claimed  that  the  act  of  1893  was  in  violation  of  the  four- 
teenth amendment  of  the  federal  constitution  which  prohibited 
any  state  from  depriving  any  person  of  property  without  due 
process  of  law,  and  the  court  holds  that  section  12,  providing  for 
appraisal  of  the  estate  upon  application  of  any  person  interested, 
and  section  13,  giving  the  probate  court  power  to  hear  and  determine 
all  questions  in  relation  to  such  tax  that  may  arise  subject  to  appeal 
as  in  other  cases,  fully  secure  the  rights  of  all  parties  interested  and 
satisfy  the  requirement  of  due  process  of  law.  State  v.  Hamlin, 
86  Me.  495,  507,  30  A.  76,  41  Am.  St.  Rep.  569,  25  L.  R.  A.  632. 

Me.  St.  1893,  c.  146.    .  Approved  February  9,  1893. 

S.  1.  All  property  within  the  jurisdiction  of  this  state,  and  any  interest  therein, 
whether  belonging  to  inhabitants  of  this  state  or  not,  and  whether  tangible  or 
intangible,  which  shall  pass  by  will  or  by  the  intestate  laws  of  this  state,  or  by 
deed,  grant,  sale,  or  gift  made  or  intended  to  take  effect  in  possession  or  enjoyment 
after  the  death  of  the  grantor,  to  any  person  in  trust  or  otherwise,  other  than  to 
or  for  the  use  of  the  father,  mother,  husband,  wife,  lineal  descendant,  adopted 


1893,  c.  146.]  MAINE.  533 

child,  the  lineal  descendant  of  any  adopted  child,  the  wife  or  widow  of  a  son,  or 
the  husband  of  the  daughter  of  a  decedent,  shall  be  liable  to  a  tax  of  two  and  a 
half  per  cent  of  its  value,  above  the  sum  of  five  hundred  dollars,  for  the  use  of 
the  state,  and  all  administrators,  executors  and  trustees,  and  any  such  grantee 
under  a  conveyance  made  during  the  grantor's  life  shall  be  liable  for  all  such  taxes, 
with  lawful  interest  as  hereinafter  provided,  until  the  same  shall  have  been  paid 
as  hereinafter  directed. 

Not  a  Property  Tax.  —  Uniformity. 

The  court  holds  that  the  Maine  inheritance  law  of  1893  is  clearly 
an  excise  tax  and  not  a  tax  upon  property  and  is  therefore  not 
obnoxious  to  the  constitutional  provision  above  quoted.  It  is 
uniform  in  its  rates  as  to  the  entire  class  of  collaterals  and  stran- 
gers, which  satisfies  the  constitutional  requirement  of  uniformity. 
State  V.  Hamlin,  86  Me.  495,  502,  30  A.  76,  41  Am.  St.  Rep.  569, 
25  L.  R.  A.  632. 

Classification  by  Relationship  Valid. 

"It  is  necessary  to  make  a  collateral  inheritance  tax  uniform 
as  to  the  entire  class  of  collaterals.  It  must  not  tax  one  and  exempt 
another  in  the  same  class.  But  it  is  not  a  violation  of  this  principle 
to  require  an  excise  from  all  collaterals  and  strangers  and  exempt 
from  the  excise  classes  nearer  in  blood  to  the  deceased.  "The  right 
to  dispose  of  estates  by  will  is  of  very  ancient  origin,  but  is  a  creature 
of  municipal  law,  and  not  a  natural  right.  Redfield  Wills,  c.  1,  s.  1 ; 
Mager  v.  Gr.ima,  8  How.  494.  Before  the  statute  of  wills  in  England, 
32,  34  and  35,  Henry  VIII,  the  right  did  not  extend  to  real  estate, 
and  was  limited  as  to  personal,  if  the  testator  left  a  widow  or 
children.  If  he  had  both,  he  could  dispose  of  but  one-third  of  his 
personal  estate  by  will;  if  but  one,  he  could  dispose  of  one-half. 
This  right  has  since  been  extended  by  statute  to  include  real  estate, 
and  all  personal.  The  restriction  has  never  existed  in  this  country, 
except  as  to  widows,  where  right  to  dower  and  a  share  of  the  personal 
estate  is  secured  by  statute  in  most  of  the  states,  and  in  Louisiana, 
where  the  rules  of  the  civil  law  prevail."  Per  Strout,  J.,  in  State 
V.  Hamlin,  86  Me.  495,  30  A.  76,  41  Am.  St.  Rep.  569,  25  L.  R.  A. 
632. 

Valid  as  Applied  to  Non-Residents. 

Me.  St.  1893  applies  equally  to  citizens  of  Maine  and  other  states 
and  therefore  is  not  in  conflict  with  a  provision  of  the  fourteenth 
amendment  that  "no  state  shall  make  or  enforce  any  law  which 


534  STATUTES  ANNOTATED.  [Me.  St. 

shall  abridge  the  privileges  or  immunities  of  the  citizens  of  the 
United  States."  State  v.  Hamlin,  86  Me.  495,  507,  30  A.  76,  41 
Am.  St.  Rep.  569,  25  L.  R.  A.  632. 

* 'Above  the  Sum  of  Five  Hundred  Dollars." 

The  court  holds  that  this  exemption  of  five  hundred  dollars  is  not 
an  exemption  from  the  corpus  of  the  estate  but  is  a  several  exemp- 
tion of  that  sum  from  each  portion  of  the  estate  passing  by  will  or 
descent.  The  court  relies  on  the  provisions  of  the  second  section 
providing  for  the  deduction  of  five  hundred  dollars  from  taxable 
interests  on  appraisal.  State  v.  Hamlin,  86  Me;  495,  508,  30  A. 
76,  41  Am.  St.  Rep.  569,  25  L.  R.  A.  632. 

Me.  St.  1893,  c.  146,  s.  2,  covers  the  taxation  of  remainders.  Section  3 
provides  that  the  excess  above  reasonable  compensation  bequeathed  to  executors, 
or  trustees,  shall  be  liable  to  tax.  Sections  4  to  16  cover  the  appraisal  of  the 
property  and  the  collection  and  payment  of  the  tax. 

Me.  St.  1893,  c.  146. 

S.  17.  In  the  foregoing  sections  relating  to  collateral  inheritances  the  word 
"person"  shall  be  construed  to  include  bodies  corporate  as  well  as  natural  persons; 
the  word  "property"  shall  be  construed  to  include  both  real  and  personal  estate, 
and  any  form  of  interest  therein  whatsoever,  including  annuities. 

S.  18.  This  act  shall  not  apply  to  any  case  now  pending  in  the  probate  court , 
and  shall  take  effect  when  approved. 

Not  Retrospective. 

The  court  finds  that  this  statute  was  never  intended  to  have 
a  retroactive  effect  and  therefore  that  where  the  testator  died  before 
the  statute  went  into  effect  and  where  his  will  was  filed  and  probated 
after  the  statute  was  passed  no  inheritance  tax  was  due. 

The  court  remarks  that  to  construe  the  statute  as  applying  to 
estates  where  distribution  had  not  been  made  when  the  statute 
was  passed,  although  the  testator  died  before  that  time,  would 
result  in  great  inequality,  as  the  liability  to  taxation  would  in  many 
instances  be  determined  by  the  fact  whether  proceedings  for  the 
settlement  of  the  estate- were  commenced  before  or  after  February  9, 
1893.  It  is  unnecessary  to  impute  to  the  legislature  a  purpose  to 
frame  legislation  which  would  thus  have  the  practical  effect  to  dis- 
turb vested  rights  and  create  a  test  of  liability  thus  depending  upon 
accident  and  chance.  In  re  Collateral  Inheritance  Tax,  88  Me.  587, 
34  A.  530. 


1893,  c.  146.]  MAINE.  535 

The  Amendments  of  1895. 

Me.  St.  1895,  c.  96,  approved  March  14,  1895,  amends  Me.  St. 
1893,  c.  146,  s.  l,byaddingtotheexempted  classes  "any  educational, 
charitable  or  benevolent  institution  in  this  state."  Section  2  makes 
the  foregoing  amendment  to  section  1  applicable  to  all  such  taxes 
unpaid. 

Section  3  made  certain  changes  in  the  tax  on  remainders  to 
conform  with  section  1  as  amended,  and  also  changed  the  times  of 
payment  by  providing  that  the  tax  might  be  paid  within  one  year 
from  the  death  of  said  testator  or  within  such  further  time  as  the 
judge  of  probate  may  allow. 

Section  4  amended  section  4  of  the  statute  of  1893. 

Section  5  amended  section  5  of  the  statute  of  1893;  section  6 
amended  section  12  of  the  statute  of  1893  by  providing  that  the 
property  shall  be  appraised  "after  public  notice  or  personal  notice 
to  the  state  assessors  and  all  persons  interested  in  the  succession  to 
said  property." 

Section  7  repealed  section  14  of  the  statute  of  1893;  section  8 
amended  section  16  of  the  statute  of  1893;  section  9  provides  for 
personal  liability  of  the  executors  for  the  tax. 

Later  Amendments. 

Me.  St.  1901,  c.  225,  approved  March  20,  1901,  amends  Me.  St. 
1895,  c.  96,  by  changing  the  rate  of  tax  from  two  and  one-half  per 
cent  to  four  per  cent. 

Me.  St.  1903,  c.  156,  approved  March  26,  1903,  adds  religious 
institution  to  the  exempt  classes. 

S.  2.  All  such  taxes  heretofore  assessed  or  to  be  assessed  upon  legacies  or 
bequests  to  religious  institutions  are  hereby  abated. 

Me.  St.  1905,  c.  124,  approved  March  21,  1905,  amends  revised 
statutes,  chapter  8,  by  adding  sections  86  and  87.  Section  86 
provides  that  the  register  of  probate  shall  annually  deliver  to 
the  county  attorneys  a  list  of  the  estates  appearing  to  be  liable 
to  the  collateral  inheritance  tax  and  that  the  county  attorney  shall 
investigate  and  may  cite  parties  into  the  probate  court.  Section  87 
gives  the  county  attorney  authority  to  proceed  to  have  an  adminis- 
trator appointed  where  no  application  for  probate  or  administration 
was  made  within  six  months  after  the  death  of  the  decedent. 

Me.  St.  1909,  c.  186,  approved  April  1,  1909,  amends  Revised 
Statutes,  chapter  8,  sections  69  and  70;   and  chapter  187  amends 


536  SLATUTES  ANNOTATED.  [Me.  Rev.  St. 

Revised  Statutes,  chapter  8,  sections  86  and  87,  as  enacted  by  the 
statute  of  1905,  chapter  124.  Chapter  187  also  amends  Revised 
Statutes,  chapter  8,  sections  72,  79,  82,  83,  85.  Sections  88  and  89 
are  further  added  to  the  act. 

Me.  St.  1911,  c.  163,  approved  March  30,  1911,  amends  Revised 
Statutes,  chapter  8,  sections  69,  72  and  88,  and  adds  seven  new 
sections,  and  is  entitled :  — 

An  Act  to  amend  chapter  eight  of  the  Revised  Statutes,  as 
amended  by  chapter  one  hundred  and  eighty-six  of  the  public  laws  of  nine- 
teen hundred  and  nine,  chapter  one  hundred  and  twenty-four  of  the*  public 
laws  of  nineteen  hundred  and  five  and  chapter  one  hundred  and  eighty- 
seven  of  the  public  laws  of  nineteen  hundred  and  nine,  in  relation  to  collec- 
tion of  inheritance  taxes. 

THE  PRESENT  ACT. 

Maine  Revised  Statutes,  c.  8,  s.  69.     [As  amended  by  St.  1911,  c.  163.1 
Taxable  Transfers.  —  Rates.  —  Exemptions. 

All  property  within  the  jurisdiction  of  this  state,  and  any  interest  therein,  whether 
belonging  to  inhabitants  of  this  state  or  not,  and  whether  tangible  or  intangible, 
which  shall  pass  by  will,  by  the  interstate  laws  of  this  state,  by  allowance  of  a 
judge  of  probate  to  a  widow  or  child  by  deed,  grant,  sale  or  gift,  except  in  cases 
of  a  bona  fide  purchase  for  full  consideration  in  money  or  money's  worth,  and  ex- 
cept^as  herein  otherwise  provided  made  or  intended  to  take  effect  in  possession 
or  enjoyment  after  the  death  of  the  grantor,  to  any  person  in  trust  or  otherwise 
except  to  or  for  the  use  of  any  educational,  charitable,  religious  or  benevolent 
institution  in  this  state,  the  property  of  which  is  by  law  exempt  from  taxation, 
shall  be  subject  to  an  inheritance  tax  for  the  use  of  the  state  as  hereinafter  pro- 
vided. Property  which  shall  so  pass  to  or  for  the  use  of  (class  A)  the  husband, 
wife,  lineal  ancestor,  lineal  descendant,  adopted  child,  the  adopted  parent,  the 
wife  or  widow  of  a  son,  or  the  husband  of  a  daughter  of  a  decedent,  shall  be 
subject  to  a  tax  upon  the  value  of  each  bequest,  devise  or  distributive  share,  in 
excess  of  the  exemption  hereinafter  provided,  of  one  per  cent  if  such  value  does 
not  exceed  fifty  thousand  dollars,  one  and  one-half  per  cent  if  such  value  exceeds 
fifty  thousand  dollars  and  does  not  exceed  one  hundred  thousand  dollars,  and 
two  per  cent  if  such  value  exceeds  one  hundred  thousand  dollars;  the  value  ex- 
empt from  taxation  to  or  for  the  use  of  a  husband,  wife,  father,  mother,  child, 
adopted  child,  or  adopted  parent  shall  in  each  case  be  ten  thousand  dollars,  and 
the  value  exempt  from  taxati  )n  to  or  for  the  use  of  any  other  member  of  (class  A) 
shall  in  each  case  be  five  hundred  dollars.  Property  which  shall  so  pass  to  or  for 
the  use.  of  (class  B)  a  brother,  sister,  uncle,  aunt,  nephew,  niece  or  cousin  of 
decedent,  shall  be  subject  to  a  tax  upon  the  value  of  each  bequest,  devise  or 
distributive  share  in  excess  of  five  hundred  dollars,  and  the  tax  of  this  class 
shall  be  four  per  cent  of  its  value  for  the  use  of  the  state  if  such  value  does  not 
exceed  fifty  thousand  dollars,  four  and  one-half  per  cent  if  its  value  exceeds  fifty 
thousand  dollars  and  does  not  exceed  one  hundred  thousand  dollars  and  five 
per  cent  if  its  value  exceeds  one  hundred  thousand  dollars.    Property  which  shall 


c.  8,  ss.  70-72.]  MAINE.  537 

pass  to  or  for  the  use  of  any  others  than  members  of  class  A,  Class  B  and  the 
institutions  excepted  in  the  first  sentence  of  this  section,  shall  be  subject  to  a  tax 
upon  the  value  of  each  bequest,  devise  or  distributive  share  in  excess  of  five 
hundred  dollars,  and  the  tax  of  this  class  shall  be  five  per  cent  of  its  value  for  the 
use  of  the  state  if  such  value  does  not  exceed  fifty  thousand  dollars,  six  per  cent 
if  its  value  exceeds  fifty  thousand  and  does  not  exceed  one  hundred  thousand 
dollars  and  seven  per  cent  if  its  value  exceeds  one  hundred  thousand  dollars. 
Administrators,  executors  and  trustees,  and  any  grantees  under  such  conveyances 
made  during  the  grantor's  life  shall  be  liable  for  such  taxes,  with  interest,  until 
the  same  have  been  paid. 

[See  notes  to  the  Act  of  1893,  ante,  p.  533  et  seq^.\ 

Value  of  Prior  Estate,  how  Determined  and  how  Taxed. 

S.  70.  [As  amended  by  St.  1909,  c.  186,  s.  2.]  Whenever  property  shall  descend 
by  devise,  descent,  bequest  or  grant  to  a  person  for  life  or  for  a  term  of  years 
and  the  remainder  to  another,  except  to  or  for  the  use  of  any  educational,  chari- 
table, religious  or  benevolent  institution  in  this  state,  the  value  of  the  prior  estate 
shall  be  determined  by  the  actuaries'  compound  experience  tables  at  four  per 
cent  compound  interest  and  a  tax  imposed  at  the  rate  prescribed  in  the  preceding 
section  for  the  class  to  which  the  devisee,  legatee  or  grantee  of  such  estate  belongs 
and  a  tax  shall  be  imposed  at  the  same  time  upon  the  remaining  value  of  such 
property  at  the  rate  prescribed  in  said  section  for  the  class  to  which  the  devisee, 
legatee  or  grantee  of  such  remainder  belongs,  subject  to  the  exemptions  provided 
in  the  preceding  section. 

Excess  of  Reasonable  Compensation  to   Executors   for   Services  when 
Residuary  Legatees,  shall  be  Taxed. 

S.  71.  Whenever  a  decedent  appoints  one  or  more  executors  or  trustees,  and 
in  lieu  of  their  allowance  makes  a  bequest  or  devise  of  property  to  them  which 
would  otherwise  be  liable  to  said  tax,  or  appoints  them  his  residuary  legatees,  and 
said  bequests,  devises  or  residuary  legacies  exceed  a  reasonable  compensation  for 
their  services,  such  excess  shall  be  liable  to  such  tax,  and  the  court  of  probate 
having  jurisdiction  of  their  accounts  shall  determine  the  amount  of  such  reasonable 
compensation. 

When  Tax  Payable.  —  Petition  for  Assessment.  —  Lien. 

S.  72.  [As  amended  by  St.  1909,  c.  187,  s.  2;  St.  1911,  c.  163.]  All  taxes 
imposed  by  section  sixty-nine  upon  the  estates  of  deceased  residents  of  this  state 
shall  be  payable  to  the  treasurer  of  state  and  all  taxes  imposed  by  said  section 
sixty-nine  upon  the  estates  of  non-resident  decedents  to  the  attorney  general 
by  the  executors,  administrators  or  trustees  at  the  expiration  of  two  years  after 
the  granting  of  letters  testamentary  or  of  administration;  but  if  legacies  or 
distributive  shares  are  paid  within  two  years,  the  tax  thereon  shall  be  payable 
at  the  same  time;  and  if  the  same  are  not  so  paid,  interest  at  the  rate  of  six  per 
cent  a  year  shall  be  charged  and  collected  from  the  time  the  same  became  payable ; 
but  no  such  tax  upon  estates  of  residents  or  inhabitants  of  this  state  shall  be 
accepted  except  upon  presentation  of  a  certificate  from  a  probate  court  showing 
the  amount  of  such  tax  due.  It  shall  be  the  duty  ot  the  personal  representative 
of  said  deceased  to  petition  the  probate  court  having  jurisdiction  to  assess  such 


538  STATUTES  ANNOTATED.  [Me.  Rev.  St. 

taxes  before  the  payment  of  any  such  legacies  or  distributive  shares,  and  before 
the  expiration  of  two  years  after  the  granting  of  letters  aforesaid.  The  register 
of  probate  shall  send  by  registered  mail  a  copy  of  such  petition  to  the  attorney 
general  at  least  seven  days  before  the  hearing  thereon  unless  the  attorney  general 
in  writing  waives  the  same. 

If  no  such  petition  is  filed  within  the  time  limited,  the  attorney  general  may 
file  a  similar  petition,  of  which,  unless  notice  is  waived,  at  least  fourteen  days' 
notice  shall  be  given  such  personal  representative  or  his  agent.  In  either  case 
the  attorney  general  may  appear  and  be  heard  upon  the  assessment  of  such  tax 
and  an  appeal  may  be  had  from  the  decree  of  the  judge  of  probate  by  either  party. 
Real  estate  of  which  the  decedent  died  seized  or  possessed,  subject  to  taxes  as 
aforesaid  shall  be  charged  with  a  lien  for  all  such  taxes  and  interest,  which  lien 
may  be  discharged  by  the  payment  of  all  taxes  due  and  to  become  due  upon  said 
real  estate  or  separate  parcel  thereof,  or  by  an  order  or  decree  of  the  probate 
court  discharging  said  lien,  said  order  or  decree  to  be  granted  by  the  probate 
court  upon  the  deposit  with  said  court  of  a  sum  of  money  or  a  bond,  sufficient 
to  secure  to  the  state  the  payment  of  any  tax  due  or  to  become  due  on  said  real 
estate.  Orders  or  decrees  discharging  such  lien  may  be  recorded  in  the  registry 
of  deeds  in  the  county  where  said  real  estate  is  located. 

Failure  to  Pay  Tax  Renders  Administrator  Liable.  —  An  Action  of  Debt 
may  be  Maintained  for  Tax. 

S.  73.  After  failure  to  pay  such  tax,  as  provided  in  the  preceding  section,  such 
an  administrator,  executor  or  trustee  is  liable  to  the  state  on  his  administration 
bond  for  such  tax  and  interest,  and  an  action  shall  lie  thereon  without  the  authority 
of  the  judge  of  probate;  or  an  action  of  debt  may  be  maintained  in  the  name  of 
the  state  against  any  such  administrator,  executor  or  trustee,  or  any  such  grantee, 
for  such  tax  and  interest.  But  if  such  administrator,  executor  or  trustee,  after 
being  duly  cited  theretor,  refuses  or  neglects  to  return  his  inventory  or  to  settle 
an  account,  by  reason  whereof  the  judge  of  probate  cannot  determine  the  amount 
of  such  tax,  such  administrator,  executor  or  trustee  shall  be  liable  to  the  state 
on  his  administration  bond  for  all  damages  occasioned  thereby. 

Property  shall  not  be  Delivered  to  Legatee  until  Tax  is  Paid. 

S.  74.  Any  administrator,  executor  or  trustee,  having  in  charge  or  trust  any 
property  subject  to  such  tax,  shall  deduct  the  tax  therefrom,  or  shall  collect  the 
tax  thereon,  and  interest  chargeable  under  section  seventy-two  from  the  legatee 
or  person  entitled  to  said  property,  and  he  shall  not  deliver  any  specific  legacy 
or  property  subject  to  said  tax  to  any  person  until  he  has  collected  the  tax  thereon. 

All  Taxes  Payable  upon  Real  Estate  shall   Remain   a   Charge   thereon 
until  Paid. 

S.  75.  Whenever  any  legacies  subject  to  said  tax  shall  be  charged  upon  or 
payable  out  of  any  real  estate,  the  heir  or  devisee,  before  paying  the  same,  shall 
deduct  said  tax  therefrom  and  pay  it  to  the  executor,  administrator  or  trustee, 
and  the  same  shall  remain  a  charge  upon  said  real  estate  until  it  is  paid;  and 
payment  thereof  shall  be  enforced  by  the  executor,  administrator  or  trustee,  in 
the  same  manner  as  the  payment  of  the  legacy  itself  could  be  enforced. 


c.  8,  ss.  76-81.1  MAINE.  539 

When  Legacy  is  in  Money  for  a  Limited  Period,  Executor  sliall  Retain 
Tax  on  Wliole  Amount,  otlierwise  Judge  of  Probate  siiall  Malce  an 
Apportionment. 

S.  76.  If  any  such  legacy  be  given  in  money  to  any  person  for  a  limited  period 
such  administrator,  executor  or  trustee  shall  retain  the  tax  on  the  whole  amount; 
but  if  it  be  not  in  money,  he  shall  make  an  application  to  the  judge  of  probate 
having  jurisdiction  of  his  accounts  to  make  an  apportionment,  if  the  case  requires 
it,  of  the  sum  to  be  paid  into  his  hands  by  such  legatee  on  account  of  said  tax  and 
for  such  further  order  as  the  case  may  require. 

Sale  of  Real  Estate  to  Pay  Tax. 

S.  77.  All  administrators,  executors  and  trustees  shall  have  power  to  sell  so 
much  of  the  estate  of  the  deceased  as  will  enable  them  to  pay  said  tax  in  the  same 
manner  as  they  may  be  empowered  to  do  for  the  payment  of  his  debts. 

No  Final  Settlement  of  Accounts  shall  be  Allowed  until  all  Taxes 
have  been  Paid. 

S.  78.  No  final  settlement  of  the  account  of  any  executor,  administrator 
or  trustee  shall  be  accepted  or  allowed  by  any  judge  of  probate  unless  it  shall  show, 
on  oath  or  affirmation  of  the  accountant,  and  the  judge  of  said  court  shall  find, 
that  all  taxes,  imposed  by  the  provisions  of  section  sixty-nine,  upon  any  property 
or  interest  therein  belonging  to  the  estate  to  be  settled  by  said  account,  shall  have 
been  paid,  and  the  receipt  of  the  treasurer  of  state  for  such  tax  shall  be  the  proper 
voucher  for  such  payment. 

Inventory  or  Copy  thereof  of  any  Estate  Subject  to  Tax  shall  be  Fur- 
nished Attorney  General. 

S.  79.  [As  amended  by  1909,  c.  187,  s.  3.]  A  copy  of  the  inventory  of  every 
estate,  any  part  of  which  may  be  subject  to  a  tax  under  the  provisions  of  section 
sixty-nine,  or  if  the  same  can  be  conveniently  separated,  then  a  copy  of  such 
part  of  such  inventory  with  the  appraisal  thereof,  shall  be  sent  by  mail  by  the 
register  or  the  judge  of  the  court  of  probate  in  which  such  inventory  is  filed  to 
the  attorney  general  within  ten  days  after  the  same  is  filed.  The  fees  for  such 
copy  shall  be  paid  by  the  executor,  administrator  or  trustee,  and  allowed  in  his 
account. 

Whenever  any  Real  Estate  Passes  to  Another  Person  and  Subject  to  Tax, 
State  Assessors  shall  be  Informed. 

S.  80.  Whenever  any  of  the  real  estate  ot  a  decedent  shall  so  pass  to  another 
person  as  to  become  subject  to  said  tax,  the  executor,  administrator  or  trustee 
of  the  decedent  shall  inform  the  board  of  state  assessors  thereof  within  six  months 
after  he  has  assumed  the  duties  of  his  trust,  or  if  the  fact  is  not  known  to  him 
within  that  time,  then  within  one  month  after  it  does  become  so  known  to  him. 

Whenever  any  Property  shall  be  Refunded  by  Legatee,  Tax  shall  be  Paid 
Back. 

S.  81.  Whenever  for  any  reason  the  devisee,  legatee  or  heir  who  has  paid  anj' 
such  tax  shall  refund  any  portion  of  the  property  on  which  it  was  paid,  or  it  shall 
be  judicially  determined  that  the  whole  or  any  part  of  such  tax  ought  not  to  have 


540  STATUTES  ANNOTATED.  [Me.  Rev.  St. 

been  paid,  said  tax,  or  the  due  proportional  part  of  said  tax,  shall  be  paid  back  to 
him  by  the  executor,  administrator  or  trustee. 

How  Value  of  Property  Shall  be  Fixed.  —  Fees  for  Appraisal,  How  Paid. 

S.  82.  [As  amended  by  1909,  c.  187,  s.  4.]  The  value  of  such  property  as  may 
be  subject  to  said  tax  shall  be  its  actual  market  value  as  found  by  the  judge 
of  probate,  after  public  notice  or  personal  notice  to  the  board  of  state  assessors 
and  all  persons  interested  in  the  succession  to  said  property,  or  the  board  of  state 
assessors  or  any  of  said  persons  interested  may  apply  to  the  judge  of  probate 
having  jurisdiction  of  the  estate  and  on  such  application  the  judge  shall  appoint 
three  disinterested  persons,  who,  being  first  sworn,  shall  view  and  appraise  such 
property  at  its  actual  market  value  for  the  purposes  of  said  tax,  and  shall  make 
return  thereof  to  said  probate  court,  which  return  may  be  accepted  by  said  court 
in  the  same  manner  as  the  original  inventory  of  such  estate  is  accepted,  and  if  so 
accepted  it  shall  be  binding  upon  the  person  by  whom  such  tax  is  to  be  paid,  and 
upon  the  state.  And  the  fees  of  the  appraisers  shall  be  fixed  by  the  judge  of 
probate  and  paid  by  the  executor,  administrator  or  trustee. 

This  section  with  the  following  section,  satisfies  the  provision 
of  the  federal  constitution  as  to  due  process  of  law.  State  v.  Hamlin, 
86  Me.  495,  507,  30  A.  76,  41  Am.  St.  Rep.  569,  25  L.  R.  A.  632. 

Court  of  Probate  shall  have  Jurisdiction  to  Determine    all    Questions 
Relating  to  Tax.  —  Notice  and  Hearing.  —  Appeals. 

S.  83.  [As  amended  by  1909,  c.  187,  s.  5.]  The  court  of  probate,  having  either 
principal  or  ancillary  jurisdiction  of  the  settlement  of  the  estate  of  the  decedent, 
shall  have  jurisdiction  to  hear  and  determine  all  questions  in  relation  to  said  tax 
that  may  arise  affecting  any  devise,  legacy  or  inheritance  under  this  chapter, 
subject  to  appeal  as  in  other  cases,  and  the  attorney  general  shall  represent  the 
interests  of  the  state  in  any  such  proceedings.  The  judge  of  probate,  having 
jurisdiction  as  aforesaid,  shall  fix  the  time  and  place  for  hearing  and  determining 
such  questions  and  shall  give  public  notice  thereof  and  personal  notice  to  the 
executor,  administrator  or  trustee.  Appeals  in  behalf  of  the  estate  shall  be  taken 
in  the  name  of  the  executor,  administrator  or  trustee  and  service  upon  the  attorney 
general  shall  be  sufficient.  When  appeals  are  taken  by  the  state,  service  shall  be 
made  upon  the  executor,  administrator  or  trustee. 

This  and  the  previous  section  together  satisfy  the  provision  of 
the  federal  constitution  as  to  due  process  of  law.  State  v.  Hamlin, 
86  Me.  495,  507,  30  A.  76,  41  Am.  St.  Rep.  569,  25  L.  R.  A.  632. 

Fees  of  Judges  and  Registers  of  Probate. 

S.  84.  The  fees  of  judges  or  registers  of  probate  for  the  duties  required  of 
them  by  the  fifteen  preceding  sections  shall  be,  for  each  order,  appointment, 
decree,  judgment,  or  approval  of  appraisal  or  report  required  hereunder,  fifty 
cents,  and  for  copies  of  records,  the  fees  that  are  now  allowed  by  law  for  the 
same.    And  the  administrators,  executors,  trustees  or  other  persons  paying  said 


c.  8,  ss.  85-86.]  MAINE.  541 

tax  shall  be  entitled  to  deduct  the  amount  of  all  such  fees  paid  to  the  judge  or 
register  of  probate  from  the  amount  of  said  tax  to  be  paid  to  the  treasurer  of  state. 

How  Words  shall  be  Construed. 

S.  85.  [As  amended  by  1909,  c.  187,  s.  6.]  In  the  foregoing  sections  relating 
to  inheritances  the  word  "person"  shall  be  construed  to  include  bodies  corporate 
as  well  as  natural  persons;  the  word  "property"  shall  be  construed  to  include 
both  real  and  personal  estate,  and  any  form  of  interest  therein  whatsoever 
including  annuities. 

[Compare  Revised  Statutes,  c.  1,  s.  6.] 

X.  The  word  "land  or  lands,"  and  the  words  "real  estate,"  include  lands  and 
all  tenements  and  hereditaments  connected  therewith,  and  all  rights  thereto  and 
interest  therein.] 

Registers  of  Probate  shall  Annually  Deliver  to  Attorney  General  List 
of  Estates  Appearing  to  be  Liable  to  Collateral  Inheritance  Tax.  — 
Proceedings  Thereon. 

S.  86.  [As  added  by  1905,  c.  124;  amended  by  1909,  c.  187,  s.  1.]  The  registers 
of  probate  in  the  several  counties  shall  deliver  to  the  attorney  general,  on  or  before 
the  first  day  of  June  in  each  year,  a  list  of  all  estates  in  which  it  appears  from 
the  record  that  some  part  of  said  estate  may  be  liable  to  an  inheritance  tax,  and 
in  which  a  will  has  been  offered  for  probate  or  administration  granted  for  more 
than  one  year  prior  to  the  time  of  filing  such  list,  and  in  which  no  inheritance  tax 
has  been  assessed  or  paid. 

Said  list  shall  contain  the  name  of  the  deceased,  the  date  of  the  administration 
granted,  and  the  name  and  residence  of  the  administrator  or  executor. 

The  attorney  general  shall  promptly  investigate  all  cases  so  reported,  by  noti- 
fying the  executor,  administrator,  trustee,  heir  or  devisee,  and  in  such  other 
manner  as  he  may  determine,  and  if  it  appears  to  him  that  in  any  such  case  an 
inheritance  tax  is  due  the  state  and  has  not  been  paid  to  the  state,  he  shall, 
unless  said  tax  is  paid  to  the  state,  within  thirty  days  after  notice  from  him  to  the 
executor,  administrator,  trustee,  heir  or  devisee  that  the  same  is  due,  cite  the 
executor,  administrator,  trustee,  heir  or  devisee,  whose  duty  it  is  to- pay  said  tax, 
before  the  proper  probate  court  in  such  manner  as  is  provided  for  the  citation  of 
trust  officers  in  probate  proceedings  and  shall  take  all  other  action  necessary  to 
secure  the  payment  of  said  tax. 

In  such  proceedings  the  attorney  general  shall  recover  costs  to  be  fixed  and 
determined  by  the  judge  of  probate  in  his  discretion,  which  costs  may  be  retained 
by  said  attorney  general  for  his  own  use  and  shall  be  additional  to  any  salary 
allowed  to  him  by  law. 

Certain  Actions  in  Behalf  of  the  State  may  be  Brought  in  any  County. 
Revised  Statutes,  c.  83,  s.  15. 

An  action  in  behalf  of  the  state  to  enforce  the  collection  of  state  taxes 
upon  any  corporation,  or  to  recover  of  any  person  or  corporation  moneys  due  the 
stats,  public  funds  or  property  belonging  to  the  state,  or  the  value  thereof,  may 
be  brought  in  any  county;  provided,  that  on  motion  of  the  defendant,  any  justice 
of  the  supreme  judicial  court,  holding  the  term  at  which  such  action  is  returnable, 


542  STATUTES  ANNOTATED.  [Me.  Rev.  St. 

may,  for  sufficient  reasons  shown,  remove  the  same  to  the  docket  of  said  court  in 
any  other  county  for  trial,  and  may  upon  such  removal  award  costs  to  the  de- 
fendant for  one  term,  to  be  paid  by  the  treasurer  of  state  on  presentation  of  the 
certificate  of  the  amount  thereof,  from  the  clerk  of  courts  of  the  county  from 
which  said  action  is  transferred.] 

Proceedings  when  Estate  Liable  to  Pay  Inheritance  Tax  is  not  Before 
Probate   Court   within    Six   Months. 

S.  87.  [As  added  by  1905,  c.  124;  amended  by  1909,  c.  187,  s.  1.]  If,  upon  the 
decease  of  a  person  leaving  an  estate  liable  to  pay  an  inheritance  tax,  a  will  dis- 
posing of  such  estate  is  not  offered  for  probate,  or  an  application  for  administration 
made  within  six  months  after  such  decease,  the  proper  probate  court  upon 
application  by  the  attorney  general,  shall  appoint  an  administrator  for  such  estate, 
and  it  shall  be  the  duty  of  the  attorney  general,  when  such  case  is  brought  to  his 
attention  to  petition  for  administration  on  such  estate  and  the  judge  in  his  dis- 
cretion may  appoint  such  attorney  general  or  other  suitable  person  as  such 
administrator,  and  said  attorney  general  shall  be  entitled  to  costs  as  in  other 
probate  proceedings. 

Penalty  for  Neglect  or  Refusal  to  File  Inventory  of  Estate. 

S.  88.  [As  added  by  1909,  c.  187,  s.  7  and  amended  by  St.  1911,  c.  163.]  If  any 
executor,  administrator  or  trustee  neglects  or  refuses  to  file  an  inventory  of  the 
estate  under  his  charge  within  three  months  from  the  date  of  the  warrant  of 
appraisal,  unless  such  time  be  extended  by  the  judge  of  probate,  he  shall  be  cited 
to  file  such  inventory  by  the  judge  of  probate  and  if  he  neglects  or  refuses  to 
file  such  inventory  within  sixty  days  thereafter  he  shall  be  liable  to  a  penalty 
of  not  more  than  five  hundred  dollars  which  shall  be  recovered  in  an  action  of  debt 
by  the  attorney  general  for  the  use  of  the  state  and  the  register  of  probate  shall 
notify  the  attorney  general  of  the  failure  of  any  executor,  administrator  or  trustee 
to  file  an  inventory  as  above  provided. 

Property  of  a  Deceased  Resident  of  This  State,  Subject  to  Taxation  in 
Another  State,  Not  Liable  to  Taxation  in  This  State.  —  Property 
of  Non-Resident  Decedent. 

S.  89.  [As  added  by  1909,  c.  187,  s.  7.]  Property  belonging  to  a  deceased 
resident  of  this  state  which  shall  be  distributed  by  order  of  the  probate  court 
subsequent  to  the  passage  of  this  act,  and  which  is  not  therein  at  the  time  of  his 
death  shall  not  be  taxable  under  the  provisions  of  this  chapter  if  legally  subject 
in  another  state  or  country  to  a  tax  of  like  character  and  amount  to  that  imposed 
by  section  sixty-nine  and  if  such  tax  be  actually  paid  or  guaranteed  or  secured  in 
accordance  with  the  law  of  such  other  state  or  country;  if  legally  subject  in  another 
state  or  country  to  a  tax  of  like  character,  but  of  less  amount  than  that  imposed 
by  section  sixty-nine  and  such  tax  be  actually  paid,  guaranteed  or  secured  as 
aforesaid,  such  property  shall  be  taxable  under  the  provisions  of  section  sixty-nine 
to  the  extent  of  the  difference  between  the  tax  thus  actually  paid,  guaranteed 
or  secured  and  the  amount  for  which  such  property  would  otherwise  be  liable 
under  this  chapter.  Property  of  non-resident  decedent  which  is  within  the 
jurisdiction  of  the  state  at  the  time  of  his  death,  if  subject  to  a  tax  by  the  law 
of  the  state  or  country  of  his  residence,  of  like  character  with  that  imposed  by 
this  chapter,  shall  be  subject  only  to  such  portion  of  the  tax  imposed  hereunder  as 
may  be  in  excess  of  such  tax  imposed  by  the  laws  of  such  state  or  country. 


c.  8,  ss.  90-93.]  MAINE.  543 

Reports  by  City  and  Town  Clerks. 

S.  90.  [Added  by  the  Statute  of  1911.]  Clerks  of  cities  and  towns  shall  report 
to  the  attorney  general  the  names  of  all  persons  dying  within  their  respective 
municipalities  who  in  the  judgment  of  said  clerks  leave  estates  the  value  whereof 
exceeds  five  hundred  dollars,  together  with  the  names  of  husband,  wife  and 
next  of  kin  so  far  as  known  to  him;  such  report  shall  be  mailed  to  the  attorney 
general  within  ten  days  of  the  time  when  the  certificate  of  death  is  filed  with 
such  clerk,  and  a  fee  of  twenty-five  cents  shall  be  paid  said  clerk  by  the  state  there- 
for. The  attorney  general  shall  prepare  and  furnish  blanks  for  such  returns- 
Corporations  Incorporated  in  Two  or  More  States. 

S.  91.  [Added  by  the  Statute  of  1911.]  When  the  personal  estate  passing 
from  any  person,  not  an  inhabitant  or  resident  of  this  state,  as  provided  in  section 
sixty-nine  of  chapter  eight  of  the  revised  statutes,  shall  consist  in  whole  or  in  part 
of  shares  of  any  railroad,  or  street  railway  company  or  telegraph  or  telephone 
company  incorporated  under  the  laws  of  this  state  and  also  of  some  other  state  or 
country,  so  much  only  of  each  share  as  is  proportional  to  the  part  of  such  com- 
pany's lines  lying  within  this  state  shall  be  considered  as  property  of  such  person 
within  the  jurisdiction  of  this  state  for  the  purposes  of  this  chapter. 

The  courts  of  IVIassacliusetts  and  New  Yorlc  had  already  reached 
this  eminently  just  result  without  statutory  aid.     See  ante,  p.  170. 

Tax  on  Stock,  etc.,  Limited  to  Corporations  Having  $1,000  of  Property  in 
Maine. 

S.  92.  [Added  by  the  Statute  of  1911.]  When  the  personal  estate  passing 
from  any  deceased  person  not  an  inhabitant  or  resident  of  this  state,  as  provided 
in  section  sixty-nine,  shall  consist  of  the  stocks,  bonds  or  other  debt  or  certificate 
of  indebtedness  of  any  corporation  organized  under  the  laws  of  Maine,  no  col- 
lateral inheritance  tax  shall  be  assessed  upon  the  same  unless  said  corporation 
shall  at  the  time  of  such  decease  have  tangible  property  within  the  state  exceeding 
one  thousand  dollars  in  value.  The  attorney  general,  upon  satisfactory  evidence 
and  payment  of  a  fee  of  five  dollars  to  the  use  of  the  state  shall  file  a  certificate 
in  the  office  of  the  secretary  of  state  that  any  such  corporation  has  not  tangible 
property  within  the  state  exceeding  one  thousand  dollars  in  value.  Such  certifi- 
cate may  at  any  time  after  notice  and  upon  satisfactory  evidence,  be  revoked. 
A  copy  of  the  certificate  of  revocation  shall  be  sent  to  the  clerk,  and  to  any  stock 
registrar  or  transfer  agent  whose  name  is  on  file  with  said  secretary.  Until  the 
receipt  of  such  certificate  of  revocation  any  such  stock  registrar  or  transfer  agent 
may  lawfully  transfer  the  stock  of  said  corporation  and  perform  all  other  duties 
incident  to  his  office. 

This  provision  seems  to  be  unique  and  is  evidently  intended  as 
an  inducement  to  non-residents  to  incorporate  in  Maine. 

Fiduciaries  and  Corporations  Liable  for  Tax  on  Transfer  of  Stock  of  Non- 
Residents. 

S.  93.  [Added  by  the  Statute  of  1911.]  Subject  to  the  provisions  of  section 
ninety-two  if  a  foreign  executor,  administrator  or  trustee  assigns  or  transfers 


544  STATUTES  ANNOTATED.  [Me.  Rev.  St. 

any  stock  in  any  national  bank  located  in  this  state  or  in  any  corporation  organ- 
ized under  the  laws  of  this  state,  owned  by  a  deceased  non-resident  at  the  date  of 
his  death  and  liable  to  a  tax  under  the  provisions  of  this  chapter,  the  tax  shall  be 
paid  to  the  attorney  general  at  the  time  of  such  assignment  or  transfer;  and 
if  it  is  not  paid  when  due,  such  executor,  administrator  or  trustee  shall  be  per- 
sonally liable  therefor  until  it  is  paid.  Subject  to  the  provisions  of  section  ninety- 
two  a  bank  located  in  this  state  or  a  corporation  organized  under  the  laws  of  this 
state  which  shall  record  a  transfer  of  any  share  of  its  stock  made  by  a  foreign 
executor,  administrator  or  trustee,  or  issue  a  new  certificate  for  a  share  of  its 
stock  at  the  instance  of  a  foreign  executor,  administrator  or  trustee  before  all 
taxes  imposed  thereon  by  the  provisions  of  this  chapter  have  been  paid,  shall  be 
liable  for  such  tax  in  an  action  of  debt  brought  by  the  attorney  general. 

This  closes  an  obvious  loophole  in  the  Maine  law.  Prior  to  the 
passage  of  this  statute  corporations  might  transfer  stock  without 
liability  although  it  had  been  the  practice  of  large  corporations  to 
require  the  assent  of  the  Maine  tax  officers  before  doing  so. 

S.  94.  [Added  by  the  Statute  of  1911.]  Subject  to  the  provisions  of  section 
ninety-two  no  person  or  corporation  shall  deliver  or  transfer  any  securities  or 
assets  belonging  to  the  estate  of  a  non-resident  decedent  to  anyone  unless  au- 
thority to  receive  the  same  shall  have  been  given  by  a  probate  court  of  this  state, 
and  upon  satisfactory  evidence  that  all  inheritance  taxes  provided  for  by  this 
chapter  have  been  paid,  guaranteed  or  secured  as  hereinbefore  provided.  Any 
person  or  corporation  that  delivers  or  transfers  any  securities  or  assets  in  violation 
of  the  provisions  of  this  section  shall  be  liable  for  such  tax  in  an  action  of  debt 
brought  by  the  attorney  general. 

Proceedings  by  the  Attorney  General. 

S.  95.  [Added  by  the  Statute  of  1911.]  The  attorney  general  shall  promptly 
commence  proceedings  for  the  recovery  of  any  of  said  taxes  within  six  months 
after  the  same  became  payable;  and  shall  commence  the  same  when  the  judge 
of  a  probate  court  certifies  to  him  that  the  final  account  of  an  executor,  adminis- 
trator or  trustee  has  been  filed  in  such  court,  and  that  the  settlement  of  the  estate 
is  delayed  because  of  the  non-payment  of  said  tax.  The  judge  of  the  probate 
court  shall  so  certify  upon  the  application  of  any  heir,  legatee  or  other  person 
interested  therein,  and  may  extend  the  time  of  payment  of  said  tax  whenever 
the  circumstances  of  the  case  require. 

Not  Retroactive. 

S.  96.  [Added  by  the  Statute  of  1911.]  This  act  shall  not  apply  to  estates  of 
persons  deceased  prior  to  the  date  of  taking  effect  of  the  same,  nor  to  property 
passing  by  deed,  grant,  sale  or  gift  made  prior  to  said  date,  but  said  estates 
and  property  shall  remain  subject  to  the  provisions  of  law  in  force  prior  to  the 
taking  effect  of  this  act." 

[See  notes  to  the  Act  of  1893,  ante,  p.  534.] 

Payment  to  State  Treasurer. 

S.  97.  [Added  by  the  Statute  of  1911.]  All  moneys  received  by  the  attorney 
general  as  taxes  collected  under  the  provisions  of  this  chapter  shall  be  by  him 
forthwith  paid  to  the  state  treasurer. 


Md.  St.] 


MARYLAND. 


545 


MARYLAND. 


In  General. 

Maryland  adopted  a  collateral  inheritance  tax  in  1845.  The 
present  tax  is  on  collateral  inheritances  only;  the  rate  is  uniformly 
5  per  cent  with  an  exemption  of  $500,  which  applies  to  the  estate  as 
a  whole,  not  to  individual  shares.  No  tax  is  levied  on  an  inheritance 
to  father,  mother,  husband,  wife,  child  or  lineal  descendant.  The 
commissions  of  executors  are  also  subject  to  tax. 

It  would  seem  that  Maryland  formerly  attempted  to  tax  shares 
of  Maryland  corporations  owned  by  non-residents,  but  they  are 
not  now  considered  taxable.  Securities  of  a  non-resident  deposited 
in  Maryland  for  safekeeping  are  taxable. 

Constitutional  Limitations. 

Maryland  Constitution  1864,  Declaration  of  Rights.  Ratified  October  12 
and  13,  1864. 

A.  15.  That  the  levying  taxes  by  the  poll  is  grievous  and  oppressive,  and  ought 
to  be  prohibited;  that  paupers  ought  not  to  be  assessed  for  the  support  of  the 
government;  but  every  other  person  in  the  state,  or  persons  holding  property 
therein,  ought  to  contribute  his  proportion  of  public  taxes  for  the  support  of  gov- 
ernment, according  to  his  actual  worth  in  real  or  personal  property;  yet  fines, 
duties  or  taxes  may  properly  and  justly  be  imposed  or  laid,  with  a  political  view, 
for  the  good  government  and  benefit  of  the  community. 

[This  provision  is  embodied  in  the  constitution  of  1867.] 

List  of  Statutes. 


1844.     Statutes  of  Maryland 

,  c.  184. 

1844. 

<              u 

c.  237. 

1845-46.      " 

' 

c.  71. 

1845-46.      " 

' 

c.  391. 

1846-47.      " 

' 

c.  344. 

1847-48.      " 

" 

c.  222. 

1847-48.      " 

' 

c.  230. 

1849-50.      " 

♦  c.  447. 

1860.     Maryland 

Code,  Vol. 

1,  a.  81, 

ss.  106  to  114,  124  to  148. 


546  STATUTES  ANNOTATED.  [Md.  St- 

1862.  Statutes  of  Maryland,  c.  18. 

1862.  "         "         "  c.  157. 

1864.  ■   "         "         "  c.  200. 

1864.  "  "         "  c.  372. 

1865.  "         "         "  c.  127. 

1868.  c.  196. 

1874.  "         "         "  c.  483. 

1878.  Revised  Code  of  Maryland,  p.  117,  ss.l04  to  125,  inclusive. 

1880.  "  "       "  "  c.  444. 

1880.  "  "       "  "  c.  455. 

1888.  Public  General  Laws  of  Maryland,  Vol.  2,  a.  81,  ss.  97  to  125. 

1890.  Statutes  of  Maryland,  c.  249. 

1892.     "    "    "     c.  473. 

1892.     "    "    "     c.  564. 

1894.     "    "    "     c.  493. 

1898.  Supplement  to  Public  General  Laws  (1890-1898),  p.  536,  ss.  115  a.,  120 

and  124. 

1904.  Statutes  of  Maryland,  c.  222. 

1904.  Public  General  Laws  of  Maryland,  Vol.  2,  p.  1835. 

1908.  Statutes  of  Maryland,  c.  695. 

History  of  Legislation. 

Collateral  inheritances  were  first  taxed  for  revenue  to  the  state 
by  Md.  St.  1844,  c.  237.   Banks  v.  State,  60  Md.  305. 

The  Maryland  collateral  inheritance  tax  was  passed  in  1844, 
chapter  237,  and  its  constitutionality  was  never  questioned  until 
Tyson  v.  State,  28  Md.  577. 

Tax  on  Commissions  of  Executors. 

Md.  St.  1844,  passed  February  22,  1845,  c.  184,  s.  1,  provides 
that  commissions  to  executors  and  administrators  shall  be  subject 
to  a  tax  of  ten  per  cent.  Sections  2,  3,  4,  5  and  6,  provide  for  the 
assessment  and  collection  of  this  tax. 

Retroactive. 

Where  the  testator  died  March  27, 1845,  the  court  holds  that  the 
commissions  of  the  trustees  were  subject  to  a  tax  of  10  per  cent  in 
favor  of  the  state,  imposed  by  the  act  of  1844,  chapter  184,  which 
went  into  effect  June  2, 1845.    Williams  v.  Mosher,  6  Gill  (Md.)  454. 

Md.  St.  1845,  c.  391,  passed  March  10,  1846,  gives  the  orphans' 
courts  jurisdiction  to  fix  and  determine  the  commission  which 
shall  be  allowed  executors;  and  provides  further  for  inventories 
and  a  determination  of  the  tax  on  commissions  allowed  to  executors 
and  administrators. 


1847  to  1888.]  MARYLAND.  547 

Md.  St.  1847,  c.  230,  passed  March  9,  1848,  provides  that  in 
every  case  the  court  shall  fix  the  amount  of  commission  to  which 
the  executor  is  by  law  entitled  and  shall  impose  a  tax  upon  it 
whether  the  executor  claims  the  commission  or  not. 

Md.  St.  1849,  c.  447,  passed  March  9,  1850,  extends  the  provisions 
of  Md.  St.  1844,  c.  184,  to  cases  where  non-residents  die  owning 
Maryland  stock  or  bonds. 

Md.  Code  1860,  a.  81,  ss.  106  to  114,  codify  existing  statutes. 

Md.  St.  1860,  c.  163,  provides  that  where  the  executor  renounces 
his  commission  he  shall  not  be  taxed  thereon. 

Retroactive. 

Where  this  statute  was  enacted  before  the  passage  of  the  execu- 
tor's account,  the  executor  having  renounced  his  commission  was 
not  liable  to  the  state  tax  of  ten  per  cent  on  such  commissions. 
Owings  V.  State,  22  Md.  116. 

Md.  St.  1861-62,  c.  18,  passed  January  6,  1862,  amends  Md. 
Code,  a,  81,  s.  107,  as  to  the  commissions  of  executors  to  be  fixed 
by  the  orphans*  courts. 

Md.  St.  1864,  c.  372,  passed  March  7,  1864,  amends  Md.  Code, 
a.  81,  s.  106,  providing  that  commissions  allowed  to  executors 
or  administrators  shall  be  subject  to  a  tax  of  five  per  cent;  and 
where  a  legacy  is  left  to  an  executor  by  way  of  compensation  such 
legacy  shall  be  reckoned  in  the  commissions  fixed  by  the  court. 

Md.  St.  1865,  c.  127,  passed  March  24,  1865,  amends  Md.  Code, 
a.  81,  s.  106,  by  increasing  the  tax  on  commissions  to  executors  or 
administrators  to  ten  per  cent. 

Md.  Code  of  1888,  a.  81,  ss.  97  to  99,  continues  the  tax  on  the 
commissions  of  executors. 

Sections  97  to  99  of  article  81  of  the  code  of  1888,  do  not  authorize 
the  orphans'  court  to  allow  commissions  where  the  executor  is 
given  a  legacy  in  lieu  of  commissions  larger  than  the  commissions 
would  amount  to.    Renshaw  v.  Williams,  75  Md.  498. 

There  is  no  tax  on  commissions  of  the  administrator  in  Maryland 
with  respect  to  a  fund  which  had  been  paid  to  the  foreign  executor 
before  the  administrator  was  appointed  in  Maryland,  as  he  was 
not  entitled  to  commissions  thereon.  Citizens'  Nat.  Bank  v.  Sharpy 
53  Md.  521. 

Public  General  Laws  of  Maryland  of  1904,  a.  81,  ss.  112  to  116, 
imposes  a  tax  on  commissions  allowed  to  executors  or  administrators 
of  ten  per  cent. 


548  STATUTES  ANNOTATED.  [Md  St. 

Md.  St.  1904,  c.  222.     Approved  April  1,  1904. 

An  Act  to  repeal  and  re-enact  with  amendments  sections  113,  114,  115  and 
116  of  article  81  of  the  Code  of  Public  General  Laws,  title,  "Revenue  and 
Taxes,"  sub-title,  "Collateral  Inheritance  Tax." 

S.  1.  Be  it  enacted  by  the  General  Assembly  of  Maryland,  That  sections  113, 
114,  115  and  116  of  article  81  of  the  Code  of  Public  General  Laws,  title  "Revenue 
and  Taxes,"  sub-title  "Collateral  Inheritance  Tax,"  be  and  the  same  are  hereby 
repealed  and  re-enacted  so  as  to  read  as  follows:  — 

S.  113.  The  amount  of  said  tax  shall  be  a  lien  on  said  real  estate  for  the 
period  of  four  years  from  the  date  of  the  death  of  the  decedent,  who  shall  have 
died  seized  and  possessed  thereof. 

S.  114.  The  executor  or  administrator  shall  collect  the  same  from  the  parties 
liable  to  pay  said  tax  or  their  legal  representatives  within  thirteen  months  from  the 
date  of  his  administration,  and  pay  the  same  to  the  register  of  wills  of  the  county 
or  city  in  which  administration  is  granted ;  and  if  the  said  parties  shall  neglect  or 
fail  to  pay  the  same  within  that  time,  the  orphans'  court  of  the  said  county 
or  city  shall  order  the  executor  or  administrator  to  sell  for  cash  so  much  of  said 
real  estate  as  may  be  necessary  to  pay  said  tax  and  all  the  expenses  of  said  sale, 
including  the  commissions  of  the  executor  or  administrator  thereon;  and  after  the 
report  of  said  sale,  the  ratification  thereof  and  the  payment  of  the  purchase 
money,  the  executor  or  administrator  may  execute  a  valid  deed  for  the  estate  sold, 
and  not  before;  provided,  however,  that  nothing  in  this  section  contained  shall 
be  construed  to  confer  authority  on  the  orphans'  court  to  order  the  sale  of  any  real 
estate  for  the  satisfaction  of  collateral  inheritance  tax  after  the  expiration  of  four 
years  from  the  date  of  the  death  of  the  decedent,  who  shall  have  died  seized  and 
possessed  of  said  real  estate. 

S.  115.  Whenever  any  estate,  real,  personal  or  mixed,  of  a  decedent  shall  be 
subject  to  the  tax  mentioned  in  the  thirteen  preceding  sections,  and  there  be  a  life 
estate  or  interest  for  a  term  of  years,  or  a  contingent  interest,* given  to  one  party 
and  the  remainder,  or  reversionary  interest  to  another  party,  the  orphans'  court  of 
the  county  or  city  in  which  administration  is  granted  shall  determine  in  its  discre- 
tion and  at  such  time  as  it  shall  think  proper  what  proportion  the  party  entitled  to 
said  life  estate,  or  interest  for  a  term  of  years,  or  contingent  interest,  shall  pay  of 
said  tax,  and  the  judgment  of  said  court  shall  be  final  and  conclusive,  and  the 
party  entitled  to  said  life  estate  or  interest  for  a  term  of  years,  or  other  contingent 
interest,  shall  within  thirty  days  after  the  date  of  such  determination,  pay  to  the 
register  of  wills  his  proportion  of  said  tax;  and  thereafter  the  said  court  shall 
from  time  to  time,  after  the  determination  of  the  preceding  estate  and  as  the 
remainder  of  said  estate  shall  vest  in  the  party  or  parties  entitled  in  remainder  or 
reversion,  determine  in  its  discretion  what  proportion  of  the  residue  of  said  tax 
shall  be  paid  by  the  party  or  parties  in  whom  the  estate  shall  so  vest;  and  the 
judgment  of  the  said  court  shall  be  final  and  each  of  the  parties  successively 
entitled  in  remainder  or  reversion  shall  pay  his  proportion  of  said  tax  to  the 
register  of  wills  within  thirty  days  after  the  date  of  such  determination  as  to  him; 
and  the  proportion  of  the  tax  so  determined  to  be  paid  by  the  party  entitled 
to  the  life  interest  or  estate  shall  be  and  remain  a  lien  upon  such  interest  or  estate 
for  the  period  of  four  years  after  the  date  of  the  death  of  the  decedent,  who  shall 


1904,  c.  222.]  MARYLAND.  549 

have  died  seized  and  possessed  of  the  property;  and  the  proportion  of  the  tax 
so  determined  to  be  paid  by  the  persons  respectively  entitled  to  the  remainder 
or  revisionary  interest,  shall  be  a  lien  on  such  interest  for  the  period  of  four  years 
from  the  date  of  which  such  interest  shall  vest  in  possession. 

S.  116.  If  any  of  the  parties  mentioned  in  the  last  preceding  section  shall  re- 
fuse or  neglect  to  pay  the  several  proportions  so  decreed  by  the  orphans'  court 
within  thirty  days  from  the  time  of  such  decree,  the  court  shall  order  and  direct 
the  executor  or  administrator  to  sell  all  the  right,  title  and  interest  of  such  party 
in  and  to  said  estate  or  property,  or  so  much  thereof  as  the  court  may  deem 
necessary,  to  pay  his  proportion  of  said  tax  and  all  expenses  of  sale;  provided, 
however,  that  nothing  in  this  section  contained  shall  be  construed  to  confer 
authority  on  the  orphans'  court  to  order  the  sale  for  the  satisfaction  of  collateral 
inheritance  tax-of  any  life  interest  after  the  expiration  of  four  years  from  the  date 
of  the  death  of  the  decedent,  who  shall  have  died  seized  and  possessed  of  the 
property,  or  of  any  remainder  or  reversionary  interest  after  the  expiration  of 
four  years  from  the  date  at  which  such  interest  shall  vest  in  possession. 

S.  2.  And  be  it  enacted.  That  this  act  shall  be  retroactive  in  its  operation  and 
shall  take  effect  from  the  date  of  its  passage. 

The  Inheritance  Statutes. 

Md.  St.  1844.    Passed  February  26,  1845,  c.  237. 

S.  1.  Be  it  enacted  by  the  General  Assembly  of  Maryland,  That  from  and 
after  the  first  day  of  June  next,  all  estates,  real,  personal  and  mixed,  money, 
public  and  private  securities  for  money,  of  every  nature  and  kind  whatsoever, 
passing  from  any  person  who  may  die  seized  and  possessed  thereof,  being  in  this 
state,  either  by  will  or  under  the  intestate  laws  of  this  state,  or  any  part  of  such 
estate,  or  estates,  money,  or  securities  as  aforesaid,  or  interest  therein,  transferred 
by  deed,  grant,  bargain,  gift  or  sale,  made  or  intended  to  take  effect  in  possession 
or  enjoyment  after  the  death  of  the  grantor,  bargainor,  devisor  or  donor,  to  any 
person  or  persons,  or  bodies  politic  or  corporate,  in  trust  or  otherwise,  other  than 
to  or  for  the  use  of  the  father,  mother,  wife,  children  and  lineal  descendants, 
born  in  lawful  wedlock,  of  the  grantor,  bargainor,  devisor,  donor  or  intestate 
shall  be  and  they  are  hereby  made  subiect  to  a  tax  or  duty  of  two  and  one-half 
per  centum  on  every  hundred  dollars  of  the  clear  value  of  such  estate  or  estates, 
or  money  or  securities  as  aforesaid,  to  be  paid  to  the  use  of  this  state;  and  all 
executors  and  administrators  and  their  sureties,  shall  only  be  discharged  from 
liability  of  the  amount  of  such  tax,  the  payment  of  which  they  may  be  charged 
with,  by  paying  the  same  over  for  the  use  of  this  state,  as  hereinafter  directed; 
provided,  that  no  estate  which  may  be  valued  at  a  less  sum  than,  five  hundred 
dollars,  shall  be  subject  to  the  duty  or  tax  aforesaid. 

Constitutionality. 

This  statute  is  not  repugnant  to  the  fifteenth  article  of  the 
declaration  of  rights  of  the  constitution  of  1864.  The  court  finds 
that  this  article  did  not  engraft  upon  fundamental  law  any  new 


550  STATUTES  ANNOTATED.  [Md.  St. 

principle  of.  taxation,  but  that  this  same  provision  is  to  be  found 
in  every  constitution  adopted  in  Maryland  from  1776  down. 
While  this  article  provided  for  a  uniform  mode  of  taxation  on 
property  it  was  not  the  purpose  of  the  friends  of  the  constitution 
to  prohibit  any  other  species  of  taxation  but  to  leave  the  legislature 
power  to  impose  such  other  taxes  as  the  necessities  of  the  govern- 
ment might  require.  The  fact  that  the  collateral  inheritance  tax 
was  understood  to  be  legal  under  the  constitution  by  the  convention 
which  framed  it  is  significant.    Tyson  v.  State,  28  Md.  577. 

Manumission  of  Slave.  —  Taxable. 

The  manumission  or  bequest  of  freedom  to  a  slave  by  last  will 
and  testament  confers  on  such  slave  the  identical  rights  which 
would  pass  if  the  testator  had  bequeathed  the  same  slave  to  another 
person,  and  therefore  the  bequest  of  freedom  is  a  legacy  on  which 
the  executor  is  liable  to  pay  a  tax  on  the  appraised  value  of  the 
slave.    State  v.  Dorsey,  6  Gill  (Md.)  388. 

The  court  on  the  petition  of  a  manumitted  slave  affirms  the  case 
of  State  V.  Dorsey,  6  Gill  (Md.)  388,  to  the  effect  that  a  manumission 
of  a  slave  is  a  legacy  and  as  such  subject  to  the  inheritance  tax. 
The  court  bases  its  decision  on  the  theory  that  a  large  part  of  the 
personal  property  in  the  state  consists  of  slaves,  which  should  pay 
their  share  of  the  taxes.    Spencer  v.  Negro  Dennis,  8  Gill  (Md.)  314. 

St.  1844,  c.  237,  s.  2,  covers  the  collection  of  the  tax.  Section  3 
provides  that  all  money  collected  by  the  register  shall  be  paid  to 
the  state  treasurer.  Section  4  provides  that  the  levy  courts  shall 
take  an  account  of  all  real  estate  subject  to  the  inheritance  tax. 
Section  5  provides  that  the  tax  shall  be  a  lien  on  real  estate.  Sec- 
tion 6  provides  for  an  oath  by  the  administrators  to  comply  with 
the  statute. 

Md.  St.  1845,  c.  71,  s.  3,  passed  January  31,  1846,  requires  the 
register  of  wills  to  pay  over  to  the  state  treasury  all  money  received 
by  him  under  the  Md.  St.  1844,  chaps.  184,  187,  237,  every  six 
months. 

Md.  St.  1845,  c.  202,  s.  1,  passed  March  2,  1846,  imposes  the 
duty  on  the  executors  to  pay  the  tax  imposed  by  Md.  St.  1844,  c. 
237.  Section  2  provides  that  where  real  estate  is  liable  for  the  tax 
the  orphans'  court  shall  issue  a  notice  to  the  parties  entitled. 
Section  3  covers  penalties  for  neglect  to  pay.  Section  4  provides  for 
a  lien.  Section  5  covers  the  duty  of  the  registers  to  account  for 
moneys  collected. 


j^^mh. 


1846  to  1874.]  MARYLAND.  551 

Md.  St.  1846,  c.  344,  passed  March  10,  1847,  provides  that  the 
orphans'  court  shall  determine  the  apportionment  of  tax  where 
there  is  a  particular  estate  and  a  remainder.  It  further  provides 
that  the  tax  shall  be  a  lien,  and  that  the  executor  shall  take  oath  to 
comply  with  the  law. 

Md.  St.  1847,  c.  22,  passed  March  8,  1848,  provides  particularly 
for  the  collection  of  the  tax  imposed  by  Md.  St.  1844,  c.  237,  and 
covers  the  matter  of  inventories  and  appraisals  and  procedure  for 
collection  of  the  tax. 

Md.  Code  1860,  a.  81,  ss.  124  to  148,  codifies  the  existing  law. 

Md.  Code  1860,  a.  81,  s.  137. 

Whenever  a'ny  estate,  real,  personal  or  mixed,  of  a  decedent  shall  be  subject 
to  the  tax  mentioned  in  the  preceding  section,  and  there  be  only  a  life  estate,  or 
an  interest  for  a  term  of  years,  or  a  contingent  interest  given  to  one  party,  and 
the  remainder  or  reversionary  interest  to  another,  the  orphans*  court  of  the 
county  or  city  in  which  administration  is  granted,  shall  determine  in  its  dis- 
cretion, and  at  such  time  as  it  shall  think  proper,  what  proportion  each  party 
who  may  be  thus  interested  in  said  estate  or  property  shall  pay  of  said  tax;  and 
the  judgment  of  the  said  court  shall  be  final  and  conclusive;  and  every  such  party 
shall  pay  to  the  register  of  wills  his  proportion  of  said  tax  within  thirty  days  after 
the  date  of  such  determination;  and  any  party  entitled  in  remainder  or  reversion, 
shall  be  required  to  pay  his  proportion  within  the  same  time  as  if  his  interest  had 
vested  in  possession. 

Jurisdiction  of  Court. 

Under  Md.  St.  1844,  and  s.  137,  a.  81  of  the  Cede,  the  orphans* 
court  should  properly  determine  what  proportion  each  party  who 
may  be  interested  in  an  estate  shall  pay  of  the  tax  by  it  imposed. 
Tyson  v.  State,  28  Md.  577. 

Md.  St.  1862,  c.  157,  passed  March  3,  1862,  provides  that  the 
clerks  and  registers  of  wills  shall  pay  inheritance  taxes  to  the  state 
treasurer,  deducting  for  themselves  a  commission  of  five  per  cent. 

Md.  St.  1864,  c.  200,  passed  March  7,  1864,  amends  Md.  Code, 
1860,  a.  81,  ss.  124  and  125,  by  reducing  the  tax  to  one  and  one-half 
per  cent. 

Md.  St.  1868,  c.  196,  approved  March  28, 1868,  amends  Md.  Code, 
a.  81,ss.  146  and  147. 

Md.  St.  1874,  c.  483,  approved  April  11,  1874,  repeals  Md.  Code, 
a.  81,  and  re-enacts  the  same  with  amendments.  Section  113, 
imposes  a  collateral  inheritance  tax  of  two  and  one-half  per 
cent  on  every  hundred  dollars  of  the  clear  value  of  all  estates, 
provided  that  no  estate  which  is  valued  at  less  than  five  hundred 
dollars  shall  be  subject  to  tax.  Cited  in  Montague  v.  State,  54 
Md.  481. 


552  STATUTES  ANNOTATED.  iMd.  Code- 

Md.  Code  1878,  a.  11,  s.  117. 

Whenever  any  estate,  real,  personal,  or  mixed,  of  a  decedent  shall  be  subject 
to  the  tax  mentioned  in  the  preceding  section,  and  there  be  only  a  life  estate,  or 
an  interest  for  a  term  of  years,  or  a  contingent  interest  given  to  one  party,  and 
the  remainder  or  reversionary  interest  to  another,  the  orphans'  court  of  the  county 
or  city  in  which  administration  is  granted  shall  determine,  in  its  discretion,  and 
at  such  time  as  it  shall  think  proper,  what  proportion  each  party  who  may  be 
thus  interested  in  said  estate  or  property  shall  pay  of  said  tax;  and  the  judgment 
of  the  said  court  shall  be  final  and  conclusive;  and  every  such  party  shall  pay 
to  the  register  of  wills  his  proportion  of  said  tax  within  thirty  days  after  the  date 
of  such  determination,  and  any  party  entitled  in  remainder  or  reversion  shall  be 
required  to  pay  his  proportion  within  the  same  time  as  if  his  interest  had  vested 
in  possession. 

Md.  St.  1880,  c.  44,  approved  April  14,  1880,  amends  Md.  St. 
1874,  c.  483,  s.  113,  by  adding  surviving  husbands  to  the  exempt 
class. 

Release  by  Statute  Retroactive. 

The  act  of  1880,  c.  444,  declared  that  the  collateral  inheritance 
tax  shall  not  be  imposed  where  property  may  pass  from  a  deceased 
wife  to  her  surviving  husband;  and  that  in  all  cases  where  such  a 
tax  has  been  "heretofore  claimed  of  but  not  actually  paid  by  the 
husband"  of  any  decedent  such  claim  shall  be  released  or  abandoned. 
The  court  says  this  is  not  exactly  an  exemption,  but  a  release,  and 
so  does  not  fall  within  the  rule  that  exemptions  are  to  be  strictly 
construed.  The  law  is  valid  and  the  statute  applied  to  a  case  which 
was  pending  on  appeal  when  the  law  was  passed.  Montague  v.  State, 
54  Md.  481. 

Validity  of  Release  by  Statute. 

This  statute  was  not  void  on  the  ground  that  it  was  a  release 
of  taxes  and  that  under  Md.  Const,  a.  3,  s.  33,  it  did  not  appear 
upon  the  face  of  the  act  that  the  release  had  been  recommended 
by  the  governor  or  officers  of  the  treasury  department  and  that  the 
act  did  not  provide  that  such  recommendation  shall  be  obtained 
before  the  release  shall  take  effect.  The  court  replies  to  this  claim 
that  the  constitution  provides  that  the  general  assembly  shall  not 
pass  any  local  or  special  laws  of  that  character,  that  the  release 
of  debts  or  obligations  to  the  state  is  a  public  general  law  not  for- 
bidden by  the  constitution.    Montague  v.  State,  54  Md.  481. 

Md.  St.  1880,  c.  455,  approved  April  14,  1880,  provides  that  when 
there  is  a  particular  estate  and  estates  in  remainder  the  tax  shall 
be  paid  only  as  the  remainder  shall  vest  in  the  parties  entitled. 


1888,  a.  81.]  MARYLAND.  553 

Md.  Code  1888,  a.  81,  ss.  102  to  125,  codifies  existing  law. 

S.  102.  All  estates,  real,  personal  and  mixed,  money,  public  and  private 
securities  for  money  of  every  kind  passing  from  any  person  who  may  die  seized 
and  possessed  thereof,  being  in  this  state,  or  any  part  of  such  estate  or  estates, 
money  or  securities,  or  interest  therein,  transferred  by  deed,  will,  grant,  bargain, 
gift  or  sale,  made  or  intended  to  take  effect  in  possession  after  the  death  of  the 
grantor,  bargainor,  devisor  or  donor,  to  any  person  or  persons,  bodies  politic  or 
corporate,  in  trust  or  otherwise,  other  than  to  or  for  the  use  of  the  father,  mother, 
husband,  wife,  children  and  lineal  descendants  of  the  grantor,  bargainor,  testator, 
donor  or  intestate,  shall  be  subject  to  a  tax  of  two  and  a  half  per  centum  on  every 
hundred  dollars  of  the  clear  value  of  such  estates,  money  or  securities;  and  all 
executors  and  administrators  shall  only  be  discharged  from  liability  for  the  amount 
of  such  tax,  the  payment  of  which  they  may  be  charged  with,  by  paying  the  same 
for  the  use  of  this  state,  as  hereinafter  directed;  provided,  that  no  estate  which 
may  be  valued  at  a  less  sum  than  five  hundred  dollars,  shall  be  subject  to  the  tax 
imposed  by  this  section. 

The  words  **being  within  this  state"  in  Md.  Code  1888,  a.  81, 
s.  102,  refer  to  the  situation  of  the  estate,  not  to  the  mere  accidental 
residence  of  the  owner,  as  in  Pennsylvania  the  words  in  a  similar 
statute,  "being  within  this  commonwealth,"  had  reference  to  the 
property  and  not  to  the  person  of  the  resident.  Commonwealth 
V.  Smith,  5  Pa.  St.  142;  /?i  re  Short,  16  Pa.  St.  63. 

These  words  include  the  property  of  non-residents  actually 
situated  in  Maryland  at  the  date  of  death.  So  where  a  resident 
of  California  died  shortly  after  the  death  of  his  brother  who  resided 
in  Maryland  and  the  estate  of  the  Californian  is  entitled  to  certain 
securities  and  other  property  from  the  estate  of  the  resident  of 
Maryland,  this  property,  so  far  as  it  went  to  collaterals,  was 
subject  to  tax.  State  v.  Dalrymple,  70  Md.  294,  301,  17  A.  82, 
3  L.  R.  A.  372. 

Property  of  Non-Residents.  —  Beneficiaries. 

The  court  holds  that  personal  property  of  a  non-resident  actually 
situated  in  Maryland  at  the  date  of  the  death  of  the  decedent  is 
subject  to  a  Maryland  inheritance  tax  so  far  as  the  personal  property 
goes  to  relations  who  are  liable  for  the  tax  under  the  Maryland 
statute.  The  court  in  this  case  did  not  need  to  consider  and  did  not 
consider  the  question  of  the  division  of  the  property  as  to  whether 
the;  particular  property  in  Maryland  actually  went  to  a  collateral 
or  to  a  direct  descendant,  as  in  this  case  the  will  gave  the  whole 
of  the  personal  property  to  a  collateral,  so  that  the  property  in 
question  was  clearly  subject  to  the  tax.  State  v.  Dalrymple,  70  Md. 
294,  17  A.  82,  3  L.  R.  A.  372. 


554  STATUTES  ANNOTATED.  [Md.  St. 

Power  of  Legislature. 

The  state  in  allowing  property  actually  located  here  or  personal 
property  situated  elsewhere  but  owned  by  a  resident  to  be  disposed 
of  by  will,  and  in  designating  who  shall  take  such  property  where 
there  is  no  will,  may  prescribe  such  conditions  as  the  legislature 
may  deem  expedient.  State  v.  Dalrymple,  70  Md.  294,  17  A.  82, 
3  L.  R.  A.  372. 

Md.  St.  1890,  c.  249,  exempts  from  the  inheritance  tax  a  certain 
legacy  to  a  home  for  aged  women  which  the  testator  intended  to 
endow  for  its  permanent  support  and  maintenance,  but  which 
sudden  death  prevented  him  from  doing,  so  that  the  home  was  left 
destitute. 

Md.  St.  1892,  c.  473,  approved  April  7,  1892,  amends  Md.  Code, 
a.  81,  s.  120,  as  to  a  summons  to  persons  interested  in  an  inheritance 
tax. 

Md.  St.  1892,  c.  493,  approved  April  6,  1894,  provides  for  taxation 
of  an  interest  less  than  an  absolute  interest. 

Md.  St.  1892,  c.  564,  approved  April  7,  1892,  amends  Md.  Code, 
a.  81,  s.  124,  as  to  the  commissions  of  clerks  and  registers  of  wills. 

Md.  St.  1908,  c.  695.     Approved  April  8,  1908. 

An  Act  to  repeal  and  re-enact  with  amendments  sections  117  and  140 
of  article  81  of  the  Code  of  Public  General  Laws  of  Maryland,  title  "Revenue 
and  Taxes,"  sub-title,  "Collateral  Inheritance  Tax." 

THE  PRESENT  ACT. 

Public  General  Laws  of  Maryland  (1904),  a.  81,  s.  117.     [As  amended  by 

Md.  St.  1908,  c.  695.] 
Transfers  Taxable. 

S.  117.  All  estates,  real,  personal  and  mixed,  money,  public  and  private  securities 
for  money  of  every  kind  passing  from  any  person  who  may  die  seized  and  possessed 
thereof,  being  in  this  state,  or  any  part  of  such  estate  or  estates,  money  or  securi- 
ties, or  interest  therein,  transferred  by  deed,  will,  grant,  bargain,  gift  or  sale,  made 
or  intended  to  take  effect  in  possession  after  the  death  of  the  grantor,  bargainor, 
devisor  or  donor,  to  any  person  or  persons,  bodies  politic  or  corporate,  in  trust 
or  otherwise,  other  than  to  or  for  the  use  of  the  father,  mother,  husband,  wife, 
children  and  lineal  descendants  of  the  grantor,  bargainor  or  testator,  donor  or 
intestate,  shall  be  subject  to  a  tax  of  five  per  centum  in  every  hundred  dollars  of 
the  clear  value  of  such  estates,  money  or  securities;  and  all  executors  and  adminisT 
trators  shall  only  be  discharged  from  liability  for  the  amount  of  such  tax,  the 
payment  of  which  they  be  charged  with,  by  paying  the  same  for  the  use  of  this 
state,  as  hereinafter  directed;  provided,  that  no  estate  which  may  be  valued  at 
a  less  sum  than  five  hundred  dollars  shall  be  subject  to  the  tax  imposed  by  this 
section. 


1904,  a.  81.]  •  MARYLAND.  555 

As  to  the  constitutionality  of  the  statute  see  notes  to  the  Act  of 
1844,  ante,  p.  546. 

As  to  a  tax  on  the  manumission  of  a  slave  see  notes  to  the  Act 
of  1844,  ante,  p.  550. 

Situs  of  Debt. 

No  collateral  inheritance  tax  is  payable  in  Maryland  on  the  fund 
paid  by  a  debtor  in  Maryland  to  his  creditor's  executor  where  the 
testator  was  domiciled  in  another  state,  the  executor  was  appointed 
in  that  other  state  and  payment  was  made  before  any  administration 
had  been  granted  in  Maryland.  Citizens'  Bank  v.  Sharp  (1879), 
53Md.  521.' 

"Clear  Value''  on  Death. 

Where  a  Maryland  testator  died  leaving  his  property  in  trust 
for  the  life  tenant  and  on  her  death  to  be  disposed  of  as  she  might 
by  will  direct,  and  the  life  tenant  did  leave  property  by  will,  the 
inheritance  tax  on  her  death  should  be  reckoned  on  the  value  of  the 
property  at  that  time,  although  it  had  doubled  in  value  while  in 
the  hands  of  the  trustees.  The  court  holds  that  Md.  Code,  a.  81, 
s.  117,  provides  that  the  tax  is  imposed  upon  the  clear  value  of  all 
estates  at  the  time  of  transfer  or  receipt  by  the  collateral  bene- 
ficiary.   Fisher  v.  State,  106  Md.  104,  66  A.  661. 

Absence  of  Provisions  for  Ascertainment  and  Recovery  of 
Tax  is  not  Fatal. 

The  court  holds  that  the  manifest  intention  of  the  legislature  was 
to  tax  the  transmission  of  all  property  to  collaterals  situated  in  the 
state  as  provided  by  the  statute  and  that  the  fact  that  the  statute 
does  not  contain  special  provision  for  the  ascertainment  and  collec- 
tion of  the  tax  cannot  defeat  the  state's  right  to  a  recovery.  Fisher 
V.  State,  106  Md.  104,  66  A.  661. 

"Being  in  This  State." 

See  notes  to  the  Code  of  1888,  ante,  p.  553. 

Powers. 

Where  property  is  given  by  deed  in  trust  providing  that  the 
cestui,  being  the  life  tenant,  shall  have  the  right  to  dispose  of  the 
fund  by  will,  the  transfer  by  will  of  the  life  tenant  is  not  liable  to 
the  collateral  inheritance  tax  under  the  provisions  of  Md.  Code, 


666  STATUTES  ANNOTATED.  [Md.  St. 

a.  81,  s.  117,  et  seq.  The  court  holds  that  the  description  in  the 
Code  does  not  include  the  property  involved  under  the  deed  of 
trust.    Gallard  v.  Winans,  111  Md.  434,  472,  74  A.  626. 

Laid  on  Trustee  and  not  Cestui. 

The  collateral  inheritance  tax  is  properly  laid  upon  the  trustee 
holding  the  property  rather  than  upon  the  cestui.  Tyson  v.  State, 
28  Md.  577. 

Deduction  of  Tax. 

S.  118.  Every  executor  or  administrator,  to  whom  administration  may  be 
granted,  before  he  pays  any  legacy,  or  distributes  the  shares  of  any  estate  liable 
to  the  tax  imposed  by  the  preceding  section,  shall  pay  to  the  register  of  wills  of 
the  proper  county  or  city,  two  and  a  half  per  centum  of  every  hundred  dollars 
he  may  hold  for  distribution  among  the  distributees  or  legatees,  and  at  that  rate 
for  any  less  sum,  for  the  use  of  the  state;  this  section  shall  not  be  construed  so 
as  to  release  any  tax  already  fixed  on  any  collateral  inheritance,  distributive  share 
or  legacy. 

Action  Against  Legatee. 

If  an  administrator  or  executor  actually  pays  over  money  of  his 
decedent  to  a  collateral  distributee  or  legatee  without  retaining 
therefrom  a  tax  it  becomes  to  the  extent  of  the  tax  money  had  and 
received  by  him  for  the  use  of  the  state,  and  an  action  may  be 
maintained  against  such  distributee  or  legatee  therefor.  Montague 
V.  State  (1879),  54  Md.  481,  487. 

Tax  on  Appraised  Value.  —  Power  of  Sale. 

S.  119.  When  any  species  of  property  other  than  money  or  real  estate  shall 
be  subject  to  said  tax,  the  tax  shall  be  paid  on  the  appraised  value  thereof  as  filed 
in  the  office  of  the  register  of  wills  of  the  proper  county  or  city ;  and  every  executor 
shall  have  power,  under  the  order  of  the  orphans'  court,  to  sell,  if  necessary, 
so  much  of  said  property  as  will  enable  him  to  pay  said  tax. 

When  Tax  Payable. 

S.  120.  Every  executor  or  administrator  shall,  within  thirteen  months  from 
the  date  of  his  administration,  pay  said  tax  on  distributive  shares  and  legacies 
in  his  hands,  and  on  failure  to  do  so  he  shall  forfeit  his  commissions. 

Appraisers  of  Real  Estate. 

S.  121.  In  all  cases  where  real  estate  of  any  kind  is  subject  to  the  said  tax, 
the  orphans'  court  of  the  county  in  which  administration  is  granted  shall  appoint 
the  same  persons  who  may  have  been  appointed  to  value  the  personal  estate  to 
appraise  and  value  all  the  real  estate  of  the  deceased  within  the  state. 


1904,  a.  81.]  MARYLAND.  557 

Warrant  and  Oath  of  Appraisers. 

S.  122.  The  form  of  the  warrant  to  such  appraisers  shall  be  the  same  as  to 
appraisers  of  personal  property,  except  that  the  words  "real  estate"  shall  be  in- 
serted therein  instead  of  the  words  "goods,  chattels  and  personal  estate,"  and  the 
words  "price  of  property"  instead  of  the  word  "article,"  and  the  appraisers  shall 
take  the  oath  prescribed  for  appraisers  of  personal  estate,  except  that  the  words 
"real  estate"  shall  be  substituted  for  the  words  "goods,  chattels  and  personal 
estate,"  and  their  duties  and  proceedings  shall,  in  every  respect,  be  the  same  as 
those  of  the  appraisers  of  personal  estate. 

Appraisers  in  Different  Counties. 

S.  123.  If  the  estate  or  property  lies  in  more  than  one  county,  and  it  is  not 
convenient  for, the  appraisers  to  visit  the  other  county,  the  court  may  appoint 
two  appraisers  in  said  county. 

Inventory  of  Real  Estate. 

S.  124.  The  inventory  of  the  real  estate  shall  be  entirely  separate  and  distinct 
from  that  of  the  personal  estate. 

Vacancy  among  Appraisers. 

S.  125.  On  the  death  or  refusal  of  any  appraiser  to  act,  the  court  may  appoint 
another  in  his  place. 

Proceedings  on  Inventory. 

S.  126.  The  appraisers  shall  return  the  inventory,  when  completed,  to  the 
executor  or  administrator,  whose  duty  it  shall  be  to  return  the  same  to  the  office 
of  the  register  of  wills,  to  which  the  inventory  of  the  personal  estate  is  returnable, 
and  within  the  same  time  and  under  like  penalty,  and  shall  make  oath  that  said 
inventory  or  inventories  is  or  are  a  true  and  perfect  inventory  or  inventories  of 
all  the  real  estate  of  the  deceased,  within  this  state,  that  has  come  to  his  knowledge 
and  that,  should  he  thereafter  discover  any  other  real  estate  belonging  to  the  de- 
ceased, in  this  state,  he  will  return  an  additional  inventory  thereof. 

Appraisement  to  be  Deemed  True  Value. 

S.  127.  The  appraisement  thus  made  shall  be  deemed  and  taken  to  be  the  true 
value  of  the  said  real  estate  upon  which  the  said  tax  shall  be  paid. 

Lien. 

S.  128.  The  amount  of  said  tax  shall  be  a  lien  on  said  real  estate  for  the  period 
of  four  years  from  the  date  of  the  death  of  the  decedent,  who  shall  have  died 
seized  and  possessed  thereof. 

Payment.  —  Sale  of  Real  Estate. 

S.  129.  The  executor  or  administrator  shall  collect  the  same  from  the  parties 
liable  to  pay  said  tax  or  their  legal  representatives  within  thirteen  months  from 
the  date  of  his  administration,  and  pay  the  same  to  the  register  of  wills  of  the 
county  or  city  in  which  administration  is  granted;  and  if  the  said  parties  shall 
neglect  or  fail  to  pay  the  same  within  that  time,  the  orphans'  court  of  the  said 


558  STATUTES  ANNOTATED.  [Md.  St. 

county  or  city  shall  order  the  executor  or  administrator  to  cell  for  cash  so  much  of 
said  real  estate  as  may  be  necessary  to  pay  said  tax  and  all  the  expenses  of  said 
sale,  including  the  commissions  of  the  executor  or  administrator  thereon;  and 
after  the  report  of  said  sale,  the  ratification  thereof  and  the  payment  of  the  pur- 
chase money,  the  executor  or  administrator  may  execute  a  valid  deed  for  the 
estate  sold,  and  not  before;  provided,  however,  that  nothing  in  this  section 
contained  shall  be  construed  to  confer  authority  on  the  orphans'  court  to  order  the 
sale  of  any  real  estate  for  the  satisfaction  of  collateral  inheritance  tax  after  the 
expiration  of  four  years  from  the  date  of  the  death  of  the  decedent,  who  shall  have 
died  seized  and  possessed  of  said  real  estate. 

Particular  Estates  and  Remainders. 

S.  130.  Whenever  any  estate,  real,  personal  or  mixed,  of  a  decedent  shall  be 
subject  to  the  tax  mentioned  in  the  thirteen  preceding  sections,  and  there  be  a 
life  estate  or  interest  for  a  term  of  years,  or  a  contingent  interest,  given  to  one 
party  and  the  remainder  or  reversionary  interest,  to  another  party,  the  orphans' 
court  of  the  county  or  city  in  which  administration  is  granted  shall  determine 
in  its  discretion  and  at  such  time  as  it  shall  think  proper  what  proportion  the  party 
entitled  to  said  life  estate,  or  interest  for  a  term  of  years,  or  contingent  interest, 
shall  pay  of  said  tax,  and  the  judgment  of  said  court  shall  be  final  and  conclusive, 
and  the  party  entitled  to  said  life  estate  or  interest  for  a  term  of  years,  or  other 
contingent  interest,  shall  within  thirty  days  after  the  date  of  such  determination 
pay  to  the  register  of  wills  his  proportion  of  said  tax;  and  tnereafter  the  said 
court  shall  from  time  to  time  after  the  determination  of  the  preceding  estate  and 
as  the  remainder  of  said  estate  shall  vest  in  the  party  or  parties  entitled  in  re- 
mainder or  reversion  determine  in  its  discretion  what  proportion  of  the  residue 
of  said  tax  shall  be  paid  by  the  party  or  parties  in  whom  the  estate  shall  so  vest; 
and  the  judgment  of  the  said  court  shall  be  final  and  each  of  the  parties  succes- 
sively entitled  in  remainder  or  reversion  shall  pay  his  proportion  of  said  tax  to 
the  register  of  wills  within  thirty  days  after  the  date  of  such  determination  as  to 
him ;  and  the  proportion  of  the  tax  so  determined  to  be  paid  by  the  party  entitled 
to  the  life  interest  or  estate  shall  be  and  remain  a  lien  upon  such  interest  or  estate 
for  the  period  of  four  years  after  the  date  of  the  death  of  the  decedent,  who  shall 
have  died  seized  and  possessed  of  the  property;  and  the  proportion  of  the  tax  so 
determined  to  be  paid  by  the  persons  respectively  entitled  to  the  remainder, 
or  reversionary  interest,  shall  be  a  lien  on  such  interest  for  the  period  of  four  years 
from  the  date  of  which  such  interest  shall  vest  in  possession. 

S.  131.  Whenever  an  interest  in  any  estate,  real,  personal  or  mixed,  less  than 
an  absolute  interest,  shall  be  devised  or  bequeathed  to  or  for  the  use  and  benefit 
of  any  person  or  object  not  exempted  from  the  tax  under  section  117,  then  only 
such  interest  so  devised  or  bequeathed  shall  be  liable  for  said  tax;  and  it  shall  be 
the  duty  of  the  orphans'  court  of  the  county  or  city  in  which  administration  is 
granted,  or  any  other  court  assuming  jurisdiction  over  such  administration,  to 
determine  as  soon  after  administration  is  granted  as  possible,  on  application  of 
such  person  or  object,  the  value  of  such  interest  liable  for  said  tax,  by  deducting 
from  the  whole  value  of  the  estate  so  much  thereof  as  shall  be  the  value  of  the 
interest  therein,  of  any  person  who  under  said  section  117,  is  exempt  from  said 
tax,  and  the  residue  thereof  shall  be  the  value  of  said  interest  upon  which  said 
tax  is  payable;  and  said  tax  so  ascertained  shall  be  paid  by  such  person  or  object 


1904,  a.  81.]  MARYLAND.  559 

within  ninety  days  from  such  ascertainment,  with  interest  thereon  at  six  per 
cent  per  annum,  after  the  expiration  of  twelve  (12)  months  from  the  date  of  the 
death  of  the  decedent,  under  whose  will  or  by  whose  intestacy  said  interest  is 
acquired,  if  said  tax  has  not  sooner  been  paid,  or  within  ninety  days  from  the 
time  that  it  shall  be  ascertained  that  such  person  or  object  shall  be  entitled  to  any 
such  interest  in  any  estate;  but  such  tax  shall  bear  interest  at  the  rate  of  six 
per  cent  per  annum  from  the  expiration  of  twelve  (12)  months  from  said  death; 
but  if  such  person  or  object  shall  fail  to  pay  said  tax,  as  above  provided,  then  such 
person  or  object  shall  at  the  time  when  he,  she  or  it  comes  into  possession  of  such 
estate,  pay  a  tax  as  provided  for  in  said  section  117,  on  the  whole  value  thereof 

S.  132.  If  any  of  the  parties  mentioned  in  sections  129  and  130  shall  refuse 
or  neglect  to  pay  the  several  proportions  so  decreed  by  the  orphans'  court  within 
thirty  days  from  the  time  of  such  decree,  the  court  shall  order  and  direct  the  execu- 
tor or  administrator  to  sell  all  the  right,  title  and  interest  of  such  party  in  and  to 
said  estate  or  property,  or  so  much  thereof  as  the  court  may  deem  necessary,  to 
pay  his  proportion  of  said  tax  and  all  expenses  of  sale;  provided,  however,  that 
nothing  in  this  section  contained  shall  be  construed  to  confer  authority  on  the 
orphans'  court  to  order  the  sale  for  the  satisfaction  of  collateral  inheritance  tax 
of  any  life  interest  after  the  expiration  of  four  years  from  the  date  of  the  death  of 
the  decedent,  who  shall  have  died  seized  and  possessed  of  the  property,  or  of  any 
remainder  or  reversionary  interest  after  the  expiration  of  four  years  from  thedate 
at  which  such  interest  shall  vest  in  possession.  Sections  128,  129,  130  and  132 
shall  take  effect  from  April  1,  1904,  and  be  retroactive. 

Bonds  of  Executors,  etc.,  Liable  for  Tax. 

S.  133.  The  bond  of  an  executor  or  administrator  shall  be  liable  for  all  money 
he  may  receive  under  this  article  for  taxes,  or  for  the  proceeds  of  the  sales  of  real 
estate  received  by  him  thereunder. 

Revocation  -of  Administration  on  Failure  to  Pay  Tax. 

S.  134.  If  any  executor  or  administrator  shall  fail  to  perform  any  of  the  duties 
imposed  upon  him  by  this  article,  the  orphans'  court  of  the  county  in  which 
the  administration  was  granted  may  revoke  his  administration,  and  his  bond 
shall  be  liable,  and  the  same  proceedings  shall  be  had  against  him  as  if  his  ad- 
ministration had  been  revoked  for  any  other  cause. 

Administrator  de  bonis. 

S.  135.  The  powers  and  duties  of  an  administrator  de  bonis  non,  or  with  the  will 
annexed,  shall  be  the  same  under  this  article  as  those  of  an  executor  or  adminis- 
trator, and  he  shall  be  subject  to  the  same  liabilities. 

Summons.  —  Proceedings. 

S.  136.  In  all  cases  where  any  estate  real,  personal  or  mixed,  shall  be  subject 
to  the  collateral  inheritance  tax  imposed  by  this  article  and  no  administration 
is  taken  out  on  the  estate  of  the  person  who  died  seized  and  possessed  thereof, 
within  ninety  days  after  the  death  of  said  person  the  orphans'  court  of  the  county 
in  which  such  administration  should  be  granted  shall  issue  a  summons  for  the 
parties  entitled  to  administration  to  show  cause  wherefore  they  do  not  administer; 
provided,  however,  that  when  any  real  estate  shall  be  subject  to  said  tax  and  no 


560  STATUTES  ANNOTATED.  [Md.  St. 

administration  has  been  taken  on  the  estate  of  the  person  who  died  seized  thereof, 
the  orphans'  court  of  the  county  where  said  real  estate  shall  be  situate  may, 
on  the  application  of  any  one  interested  in  said  real  estate,  appoi.it  appraisers 
to  value  the  same  as  provided  by  the  preceding  sections  of  this  article,  and  the 
amount  of  said  tax  may  be  paid  to  the  register  of  wills  of  the  county  where  the 
said  application  shall  be  made. 

Where  Parties  Entitled  do  Not  Administer. 

S.  137.  If  the  parties  entitled  by  law  to  administration  do  not  administer 
within  a  reasonable  time  to  be  fixed  by  the  said  court,  or  if  they  be  incapable,  or 
being  incapable  if  they  decline  or  refuse  to  appear  on  proper  summons  or  notice, 
administration  shall  be  granted  to  such  person  as  the  court  may  deem  proper 

Information  as  to  Real  Estate. 

S.  138.  In  all  cases  where  application  is  made  to  the  orphans'  court  or  register 
of  wills  of  any  county  or  the  city  of  Baltimore  for  letters  testamentary  or  of 
administration,  the  said  court  or  register  shall  inquire  of  the  person  making 
application  whether  he  knows  or  believes  that  there  is  any  real  estate  of  the 
decedent  liable  to  the  collateral  inheritance  tax,  and  the  answer  of  such  applicant 
shall  be  given  on  oath  if  the  court  or  register  requires  it. 

Duplicate  Receipts. 

S.  139.  The  register  of  wills  shall  give  to  the  person  paying  the  collateral 
inheritance  tax  imposed  by  this  article  duplicate  receipts  for  said  tax,  one  of 
which  shall  be  forwarded  by  said  person  to  the  treasurer  to  be  by  him  preserved, 
and  copies  thereof  shall  be  evidence  in  suit  upon  the  bond  of  said  register. 

Accounting  and  Fees  of  Clerks  and  Registers. 

S.  140.  [As  amended  by  St.  1908,  c.  695.]  It  shall  be  the  duty  of  the  several 
clerks  and  the  several  registers  of  wills  in  this  state  to  account  with  and  pay  to  the 
treasurer  on  the  first  Monday  of  March,  June,  September  and  December  in  each 
and  every  year  all  sums  of  money  received  by  them  respectively,  for  which  the 
clerks  shall  be  allowed  a  commission  of  two  and  one-half  per  centum,  and  the 
register  of  wills  shall  be  allowed  a  commission  of  twelve  and  one-half  per  centum 
upon  the  amount  of  said  collateral  inheritance  tax,  and  the  said  clerks  shall  be 
allowed  a  commission  of  five  per  centum,  and  the  register  of  wills  shall  be  allowed 
a  commission  of  twenty-five  per  cent  upon  the  amount  received  of  the  tax  on 
official  commissions  and  executors'  commissions  respectively,  so  paid  over. 

Compensation  of  Register. 

The  register  of  wills  in  Maryland  is  not  entitled  to  retain  as  extra 
compensation  the  five  per  cent  commission  allowed  by  law  on  the 
amount  of  taxes  on  collateral  inheritances  received  by  him,  but  by 
the  Const.  1851  he  is  required  to  account  for  it  as  part  of  the  income 
or  receipts  of  the  office.   Banks  v.  State  (1883),  60  Md.  305. 


1904,  a.  81.]  MARYLAND.  561 

Proceedings  for  Recovery. 

S.  141,  If  any  of  the  said  clerks  or  registers  shall  fail  to  account  and  pay  over 
as  required  in  the  preceding  section,  the  comptroller  shall,  in  thirty  days  there- 
after, give  notice  thereof  to  the  state's  attorney  for  the  county  or  city  whose 
duty  it  shall  be  to  put  the  bond  of  such  clerk  or  register  in  suit  for  the  use  of  the 
state,  in  which  suit  a  recovery  shall  be  had  for  the  amount  appearing  to  be  due, 
with  interest  at  the  rate  of  ten  per  cent  per  annum,  from  the  date  or  dates  when 
the  same  was  payable  as  aforesaid,  which  recovery  shall  be  evidence  of  misbehavior 
and  upon  conviction  thereof  the  said  clerk  or  register  shall  be  removed  from  office, 
which  shall  thereupon  be  filled  as  prescribed  by  the  constitution;  and  such  failure 
on  the  part  of  any  clerk  or  register  shall  amount  to  a  forfeiture  of  the  commission 
to  which  he  would  otherwise  be  entitled. 


662  STATUTES  ANNOTATED.  [Mass.  Const. 


MASSACHUSETTS. 


In  General. 

Massachusetts  first  adopted  a  collateral  inheritance  tax  in  1891, 
and  a  direct  inheritance  tax  in  1907,  which  applies  to  estates  of 
persons  who  have  died  since  September  1,  1907. 

Exemptions  apply  to  each  individual  inheritance  and  not  to  the 
estate  as  a  whole.  In  the  case  of  a  non-resident,  the  inheritance 
is  taxable  if  the  entire  amount  of  the  share  passing  is  greater 
than  the  amount  exempted,  though  the  portion  of  the  share  in 
Massachusetts  is  less  than  the  exempted  amount;  but  in  such 
case  the  tax  is  levied  only  on  the  portion  of  the  inheritance  subject 
to  Massachusetts  jurisdiction.  For  example,  a  non-resident  leaves 
a  child  $100,000,  of  which  $5,000  is  stock  in  a  Massachusetts 
corporation.     Massachusetts  taxes  this  $50,  one  per  cent  on  $5,000. 

It  should  be  noted  that  the  tax,  where  levied,  is  on  the  full  amount 
without  deducting  the  exemption.  Thus  a  bequest  of  $10,000  by  a 
resident  to  a  child  would  be  taxed  nothing,  a  bequest  of  $20,000 
would  be  taxed  $200,  one  per  cent  on  the  full  $20,000.  But  the  tax 
must  not  reduce  the  inheritance  below  the  exempted  figure,  so  an 
inheritance  of  $10,001  would  pay  only  $1. 

Shares  in  voluntary  associations,  like  Massachusetts  Gas  and 
Massachusetts  Electric,  and  also  shares  in  local  real  estate  trusts, 
have  been  regarded  by  the  tax  commissioner  as  standing  on  the 
same  footing  as  Massachusetts  corporations,  and  have  been  taxed 
whether  owned  by  a  resident  or  non-resident.  The  right  to  collect 
such  a  tax  on  real  estate  trust  shares  is  being  contested  in  a  case 
now  pending  in  the  supreme  court. 

A  corporation  that  transfers  stock,  and  a  person  or  corporation 
that  delivers  over  securities  of  a  non-resident  estate  before  the  tax 
is  paid,  are  made  liable  for  the  tax. 

It  is  the  practice  of  the  tax  commissioner's  office  to  require  an 
inventory  of  the  entire  estate  of  a  non-resident,  as  the  commissioner 
deems  it  necessary  for  a  proper  computation  of  the  tax. 

Massachusetts  is  one  of  the  very  few  states  that  have  made  any 
attempt  to  avoid  double  taxation. 

If  personal  property  of  a  deceased  resident,  which  is  outside  the 
state,  has  been  taxed  in  other  states  —  and  this  includes  stock  in 


1780,  pt.  2.]  MASSACHUSETTS.  563 

foreign  corporations,  whether  the  certificate  is  actually  kept  in 
Massachusetts  or  not  —  Massachusetts  will  not  tax  it,  unless  the 
outside  tax  is  less  than  the  Massachusetts  tax,  and  then  Massachu- 
setts collects  only  the  difference.  This  exemption  has  been  ex- 
tended in  1911  to  shares  owned  by  a  resident,  in  a  company 
incorporated  in  Massachusetts  and  other  states. 

The  result  is  that  at  present,  so  far  as  the  inheritance  tax  is 
concerned,  for  a  Massachusetts  investor,  stocks  in  Massachusetts 
corporations  are  most  desirable,  stocks  in  corporations  of  states 
whose  taxes  are  no  heavier  than  Massachusetts  are  a  second  choice, 
while  stocks  in  corporations  of  states  whose  taxes  are  heavier  than 
Massachusetts  are  less  desirable. 

The  attempt  to  avoid  double  taxation  in  the  case  of  non-residents 
has  as  yet  been  of  little  practical  value.  There  is  a  reciprocal  clause 
in  favor  of  non-residents  owning  stocks  in  Massachusetts  corpora- 
tions which  provides  that  such  stock  shall  not  be  taxed  (except  for 
the  difference  if  Massachusetts  rates  are  higher)  if  owned  by  a 
resident  of  a  state  which  extends  similar  courtesies  to  residents  of 
Massachusetts.  There  are  only  six  other  states  to  which  by  any 
possibility  this  could  apply.  It  has  been  ruled  that  residents  of 
Maine  are  entitled  to  the  exemption;  the  same  ruling  is  likely  to 
be  made  when  occasion  arises  as  to  Vermont,  Kansas  and 
New  York.  The  attorney  general  has  ruled  that  the  retaliative 
provision  in  the  Connecticut  law  does  not  satisfy  the  reciprocal 
requirements,  and  it  is  probable  that  the  same  ruling  would  be 
made  as  to  West  Virginia. 

Constitutional  Limitations. 

Massachusetts  Constitution  1780,  pt.  2,  c.  1,  s.  1,  a.  4. 

And  further,  full  power  and  authority  are  hereby  given  and  granted  to  the 
said  general  court,  from  time  to  time,  ...  to  impose  and  levy  proportional  and 
reasonable  assessments,  rates,  and  taxes,  upon  all  the  inhabitants  of,  and  persons 
resident,  and  estates  lying,  within  the  said  commonwealth;  and  also  to  impose 
and  levy  reasonable  duties  and  excises  upon  any  produce,  goods,  wares,  mer- 
chandise and  commodities,  whatsoever, 'brought  into,  produced,  manufactured 
or  being  within  the  same. 

•  The  privilege  of  transmitting  or  receiving  by  will  or  descent 
property  on  the  death  of  the  owner  is  a  '^commodity"  within  the 
meaning  of  this  word  in  the  Massachusetts  constitution  and  an 
excise  may  be  laid  upon  it.  Minot  v.  Winthrop,  162  Mass.  113, 
122,  38  N.  E.  512,  26  L.  R.  A.  259  (Lathrop,  J.,  dissenting). 


564 


STATUTES  ANNOTATED. 


[Mass.  St. 


Right  of  Succession  Cannot  be  Abolished. 

"The  descent  or  devolution  of  property  on  the  death  of  the  owner 
in  England  and  in  this  country  has  always  been  regulated  by  law. 

''The  legislature  cannot  so  far  restrict  the  right  to  transmit 
property  by  will  or  by  descent  as  to  amount  to  an  appropriation  of 
property  generally,  ...  it  cannot  impose  a  tax  which  shall  be 
equivalent,  or  almost  equivalent,  to  the  value  of  the  property  and 
cannot  so  limit  the  persons  who  can  take  as  heirs,  devisees,  dis- 
tributees or  legatees  that  the  great  mass  of  all  the  property  of  the 
inhabitants  must  become  vested  in  the  commonwealth  by  escheat. 
The  state  can  take  property  by  taxation  only  for  the  public  service, 
and  we  assume  that  its  right  to  take  property,  if  any  exists,  by  regu- 
lating the  distribution  of  it  on  the  death  of  the  owner,  is  limited  in 
the  same  manner,  and  that  this  right  must  be  exercised  in  a  reason- 
able way."-  Per  Field,  C.  J.,in  Minot  v.  Winthrop,  162  Mass.  113, 
117,  38  N.  E.  512,  26  L.  R.  A.  113. 

It  should  be  noted  that  this  language  is  contrary  to  the  great 
weight  of  authority  in  this  country.  See  ante,  p.  24.  A  note  in 
8  Harvard  Law  Review,  p.  226,  criticizes  adversely  the  attitude 
of  the  court.  The  editor  suggests  that  this  statement  is  a  dictum 
and  that  the  only  necessary  incident  of  private  property  is  that 
there  be  a  succession  of  some  kind  on  the  death  of  the  owner.  Who 
shall  succeed  is  quite  a  different  question  which  has  been  answered 
differently  at  different  times  and  places. 

List  of  Statutes. 

1836-1853.  Supplement  to  Revised  Statutes,  c.  355. 

1841.  ' "        c.  123. 

1843.  "  "         "  "        c.  11. 

1868.  Statutes  of  Massachusetts,  c.  132. 

1882-1887.  Public  Statutes  of  Massachusetts,  c.  24,  s.  18. 

1889-1895.  Supplement  to  Public  Statutes,  pp.  512  to  516,  642,  1386,  1430. 

1891.  Statutes  of  Massachusetts,  c.  425. 

1892.  "    "      "      c.  379. 

1893.  "  "  "  c.  432. 
1895.         "    "      "     c.  307. 

1895.  "    "      "     c.  430. 

1896.  "    " .     "     c.  108. 

1900.  u      ■  u  u  ^   371^ 

1901.  "    "      "     c.  277. 

1901.  "  "  "  c.  297. 

1902.  "  "  "  c.  473. 

1903.  "  "  "  c.  248. 
1903.  "  "  "  c.  251. 
1903.  "  "  "  c.  276. 


1841,  c. 

123.] 

MASSACHUSETTS. 

1904. 

Statutes  of  Massachusetts,  c.  421. 

1905. 

a             li 

c.  367. 

1905. 

a             « 

c.  470. 

1906. 

'•             " 

c.  436. 

1907. 

(<              i< 

c.  452. 

1907. 

((              11 

c.  563. 

1908. 

a             n 

p.  840. 

1908. 

a              a 

c.  268. 

1908. 

"             " 

c.  624. 

1909. 

u             a 

c.  266. 

1909. 

a             (( 

c.  268. 

1909. 

"             " 

c.  490.  pt.  4. 

1909. 

" 

c.  527. 

1910. 

«t            " 

c.  440. 

1910. 

a 

c.  481. 

1911. 

((             <( 

c.  191. 

1911. 

(<               u 

c.  359. 

1911. 

((              (( 

c.  502. 

1911. 

.       "              " 

c.  551. 

1902. 

Revised  Laws, 

c.  15. 

1902. 

"           " 

c.  6,  p.  70,  ss.  4  to  5. 

1906. 

Supplement  to  the  Revised  Laws,  c.  15,  p.  94 

565 


History. 

Neither  in  England  or  the  province  of  Massachusetts  had  there 
been  a  tax  on  legacies  and  inheritances  when  the  Massachusetts 
constitution  was  adopted  in  1780.  Minot  v.  Winthrop,  162  Mass. 
113,  116,  38  N.  E.  512,  26  L.  R.  A.  259. 

Early  Probate  Fees. 

Mass.  St.  1841,  c.  123,  approved  March  18,  1841,  imposed  a 
tax  of  one-quarter  of  one  per  cent  on  all  personal  property  of 
any  deceased  person  distributable  among  his  heirs  and  legatees  after 
the  payment  of  his  debts  and  expenses  of  administering  the  estate, 
including  the  proceeds  of  real  estate  sold  to  pay  legacies,  with  an 
exemption  of  five  hundred  ($500)  dollars. 

Mass.  St.  1841,  c.  123,  was  repealed  by  Mass.  St.  1843,  c.  11, 
saving  liabilities  already  incurred  under  the  Mass.  St.  1841. 

Mass.  St.  1836-53,  Supplement  to  Revised  Statutes,  c.  355. 

An  Act  to  exempt  the  personal  property  of  widows  and  unmar- 
ried FEMALES  FROM  TAXATION,  IN  CERTAIN  CASES. 
No  tax  shall  hereafter  be  assessed  upon  the  personal  property  of  any  widow  or 
unmarried  female,  or  female  minor  whose  father  is  deceased,  which  was  not 
received  by  gift,  legacy,  devise  or  inheritance;  provided  that  the  whole  estate, 
real  or  personal,  of  such  persons  (person),  whose  personal  property  is  so  exempted 
from  taxation,  does  not  exceed  in  value  the  sum  of  five  hundred  dollars,  exclusive 
of  property  exempted  from  taxation  by  existing  laws  of  this  state.  (May  21, 1853.) 


566  STATUTES  ANNOTATED.  [Mass.  St. 

THE  COLLATERAL  INHERITANCE  TAX  OF  1891. 
Validity. 

The  act  of  1891  is  constitutional.  Crocker  v.  Shaw,  V74l  Mass.  266; 
Minot  V.  Winthrop,  162  Mass.  113,  115,  38  N.  E.  512,  26  L*  R. 
A.  259. 

Nature  of  Tax. 

The  collateral  inheritance  tax  of  1891  is  properly  construed  as  an 
excise,  and  is  not  meant  to  be  a  substitute  for  the  annual  tax  on 
estates  or  an  additional  tax  of  that  nature.  Minot  v.  Winthrop, 
162  Mass.  113,  122,  38  N.  E.  512,  26  L.  R.  A.  259. 

It  is  not  a  property  tax,  but  strictly  an  excise  or  franchise  tax, 
although  the  amount  of  it  may  be  made  dependent  to  a  greater  or 
less  extent  upon  the  value  of  property.  Kingsbury  v.  Chapin,  196 
Mass.  533,  537,  82  N.  E.  700. 

Whether  an  inheritance  tax  is  a  tax  on  the  right  of  testators 
to  dispose  of  their  property  or  on  the  right  of  beneficiaries  to  receive 
it  will  depend  to  some  extent  upon  the  provisions  of  the  particular 
statute.    Minot  v.  Winthrop,  162  Mass.  113,  38  N.  E.  512 

The  Massachusetts  inheritance  tax  is  not  upon  the  property 
itself,  although  its  value  is  made  the  basis  of  taxation,  but  on  the 
right  of  transmission.  State  Street  Trust  Co.  v.  Stevens,  209  Mass.  373, 
95  N.  E.  851,  44  Bank,  and  Tr.  149 

Mass.  St.  1891,  c.  425.    Approved  June  11,  1891. 
Transfers  Taxable.  —  Rates. 

S.  1.  All  property  within  the  jurisdiction  of  the  commonwealth,  and  any 
interest  therein,  whether  belonging  to  inhabitants  of  the  commonwealth  or  not, 
and  whether  tangible  or  intangible,  which  shall  pass  by  will  or  by  the  laws  of  the 
commonwealth  regulating  intestate  succession,  or  by  deed,  grant,  sale  or  gift, 
made  or  intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of 
the  grantor,  to  any  person  in  trust  or  otherwise,  other  than  to  or  for  the  use  of  the 
father,  mother,  husband,  wife,  lineal  descendant,  brother,  sister,  adopted  child, 
the  lineal  descendant  of  any  adopted  child,  the  wife  or  widow  of  a  son,  or  the 
husband  of  a  daughter  fo  a  decedent,  or  to  or  for  charitable,  educational  or  re- 
ligious societies  or  institutions,  the  property  of  which  is  exempt  by  law  from 
taxation,  shall  be  subject  to  a  tax  of  five  per  centum  of  its  value,  for  the  use  of  the 
commonwealth;  and  all  administrators,  executors  and  trustees,  and  any  such 
grantee,  under  a  conveyance  made  during  the  grantor's  life,  shall  be  liable  for  all 
such  taxes,  with  lawful  interest  as  hereinafter  provided,  until  the  same  have 
been  paid  as  hereinafter  directed;  provided,  however,  that  no  estate  shall  be 
subject  to  the  provisions  of  this  act  unless  the  value  of  the  same,  after  the  payment 
of  all  debts,  shall  exceed  the  sum  of  ten  thousand  dollars. 


1891,  c.  425.]  MASSACHUSETTS.  567 

**A11  Property/' 

A  legacy  tax  paid  to  the  United  States  is  to  be  deducted  before 
paying  the  state  succession  tax,  under  Mass.  St.  1891,  c.  425, 
although  that  act  contains  no  express  exception.  The  court  pro- 
ceeds on  the  theory  that  the  words  of  the  act  most  naturally  signify 
the  property  which  the  legatee  actually  would  get  were  it  not  for 
the  state  tax  imposed  and  that  as  a  matter  of  justice  he  should  not 
be  taxed  for  more.     Hooper  v.  Shaw,  176  Mass.  190,  57  N.  E.  361. 

Annuity  of  Fluctuating  Value. 

Where  a  testator  directed  his  executors  and  trustees  to  pay  over 
to  his  sister  such  sums  as  with  the  income  of  her  own  property 
should  give  her  a  net  annual  income  of  $10,000  the  court  ruled  that 
she  was  to  be  taxed  on  an  annuity  to  the  amount  of  the  difference 
between  $10,000  and  her  net  annual  income  at  the  death  of  the 
testator.  The  objection  was  made  that  the  sum  bequeathed  was 
neither  an  annuity  nor  a  life  estate,  as  it  was  of  an  uncertain  amount 
and  liable  to  fluctuate  from  year  to  year.  The  court  takes  the 
position  that  it  did  not  appear  how  great  the  fluctuations  might 
be  and  it  might  be  treated  as  an  annuity  of  $10,000  a  year  subject 
to  reduction  so  that  the  value  of  the  interest  might  be  treated  as  an 
annuity  of  $10,000  a  year.  Howe  v.  Howe,  179  Mass.  546,  554, 
61  N.  E.  225,  55  L.  R.  A.  626. 

Marshaling .  Assets. 

The  court  holds  that  the  executors  cannot  use  stock  in  Massa- 
chusetts corporations  for  the  payment  of  debts  and  legacies  to  the 
exemption  of  the  property  in  New  Hampshire  and  so  relieve  it 
from  liability  to  a  tax  imposed  by  Massachusetts  law. 

The  court  holds  that  the  rights  of  all  parties,  including  the  rights 
of  the  commonwealth  to  its  tax,  vest  at  the  death  of  the  testator. 
The  executors  "cannot  by  independent  action  in  attempting 
to  marshal  assets  according  to  their  personal  wishes,  enlarge  or 

diminish  the  rights  of  legatees  or  of  the  Commonwealth 

The  debts,  the  legacies  in  Massachusetts  exempt  from  taxation  and 
the  expenses  of  administration  are  chargeable  upon  the  general 
assets,  as  well  those  in  New  Hampshire  as  those  in  Massachusetts, 
and  only  a  proportional  part  of  the  property  in  Massachusetts 
should  be  used  in  paying  them.  The  balance  is  subject  to  the 
payment  of  a  tax  under  the  statute."  Per  Knowlton,  C.  J.,  in 
Kingsbury  v.  Chapin,  196  Mass.  533,  82  N.  E.  700. 


568  STATUTES  ANNOTATED.  [Mass.  St. 

The  tax  commissioner  regards  this  case  as  requiring  him  to 
apportion  among  all  the  beneficiaries,  including  the  pecuniary 
legatees  but  excepting  specific  legatees,  the  tax  on  each  separate 
item  of  personal  property  in  the  estate.  The  same  rule  probably 
applies  to  real  estate  though  distributed  to  beneficiaries  specifically. 

•'Within  the  Jurisdiction." 

Real  estate  outside  the  state  is  not  taxable.  1  Op.  Att.  Gen.  75. 
For  the  purposes  of  the  inheritance  tax  the  legislature  regards 
personal  property  as  having  a  situs  at  the  domicile  of  the  owner 
although  this  may  lead  to  double  taxation.  Frothingham  v.  Shaw, 
175  Mass.  59,  61,  55  N.  E.  623,  78  Am.  St.  Rep.  475. 

The  fact  that  certificates  of  stock  in  Massachusetts  corporations 
owned  by  a  non-resident  were  actually  outside  the  state  at  the  time 
of  the  death  of  the  testatrix  is  immaterial.  Greves  v.  Shawy  173 
Mass.  205,  208,  53  N.  E.  372. 

There  can  be  no  doubt  that  stock  in  corporations  organized  under 
the  laws  of  Massachusetts  and  of  national  banking  corporations 
located  in  Massachusetts,  is  property  within  the  jurisdiction  of 
the  state  within  the  meaning  of  the  act  of  1891. 

>So  stock  in  a  Massachusetts  corporation  owned  by  a  non-resident 
is  subject  to  tax  although  the  executor  transferred  it  under  the 
authority  of  his  appointment  in  New  York  before  he  was  appointed 
in  Massachusetts.  It  was  claimed  that  under  these  circumstances 
the  property  should  be  treated  as  if  it  had  never  been  within  the 
jurisdiction  of  Massachusetts  and  be  free  from  taxation  inasmuch  as 
it  did  not  come  into  the  hands  of  the  local  administrator  or  executor. 
The  court,  however,  concludes  that  the  provisions  of  the  statute 
are  absolute  and  the  statute  assumes  that  the  property  will  be 
administered  by  an  executor  or  administrator  appointed  in  Massa- 
chusetts. It  could  not  be  supposed  that  the  question  whether  the  tax 
should  be  levied  or  not  should  depend  on  the  ability  or  inability 
of  the  foreign  executor  to  obtain  possession  of  it  without  a  suit. 

Persons  claiming  a  succession  to  property  in  Massachusetts 
under  non-resident  owners  must  hold  their  right  subject  to  the  prior 
right  of  the  commonwealth  to  have  the  property  administered  here 
in  order  that  taxes  may  be  paid  upon  the  succession.  Greves  v.  Shaw, 
173  Mass.  205, 210,  53  N.  E.  372. 

The  legal  right  of  the  legislature  to  tax  the  succession  to  "property 
of  a  non-resident  owner  rests  upon  the  fact  that  the  property  is 


1891,  c.  425.]  MASSACHUSETTS.  569 

within  the  State  and  subject  to  its  jurisdiction.  This  power  is  as 
large  in  reference  to  the  property  of  a  non-resident  decedent  as  in 
reference  to  that  of  the  inhabitants  of  the  commonwealth.  It  covers 
the  property  within  the  jurisdiction.  A  ground  for  its  exercise 
is  that  the  property  has  the  protection  of  our  laws  and  that  our 
laws  are  invoked  for  the  administration  of  it  when  a  change  of 
ownership  is  to  be  effected."  Per  Knowlton,  J.,  in  Callahan  v. 
Woodhridge,  171  Mass.  595,  597,  51  N.  E.  176. 

Callahan  v.  Woodbridge,  171  Mass.  595,  51  N.  E.  176,  does  not 
stand  for  the  principle  that  the  succession  to  the  personal 
property  in  Massachusetts  took  place  by  virtue  of  the  law  of  Massa- 
achusetts  although  the  testator  was  domiciled  in  New  York. 
That  case  and  Greves  v.  Shaw,  53  N.  E.  372,  173  Mass.  205,  and 
Moody  v.  Shaw,  173  Mass.  375,  53  N.  E.  891,  rest  on  the  right  of 
a  State  to  impose  a  tax  or  duty  in  respect  to  the  passing  on  the 
death  of  a  non-resident  of  personal  property  belonging  to  him 
and  situated  within  its  jurisdiction.  Frothingham  v.  Shaw,  175 
Mass.  59,  55  N.  E.  623,  78  Am.  St.  Rep.  475. 

Non-Taxable  Property  Not  Exempt. 

"It  is  very  plainly  shown  in  Plummer  v.  Coler,  178  U.  S.  115, 
20  Sup.  Co.  829,  that  property  which  is  not  taxable  as  such  may 
constitutionally  be  considered  under  the  statute  in  fixing  the 
amount  of  an  excise  tax."  Per  Knowlton,  C.  J.,  in  Kingsbury 
V.  Chapin,  196  Mass.  533,  537,  82  N.  E.  700. 

Situs  of  Stocks  and  Bonds. 

Stocks  and  bonds  of  foreign  corporations  are  properly  taxed  in 
Massachusetts  when  the  testator  lived  there  although  they  were 
and  for  many  years  had  been  in  the  hands  of  his  agents  in  New  York. 
Frothingham  v.  Shaw,  175  Mass.  59,  55  N.  E.  623,  78  Am.  St. 
Rep.  475. 

Situs  of  Mortgage  Interests. 

A  mortgage  debt  for  the  purpose  of  taxation  may  be  regarded 
as  having  a  situs  in  the  domicile  of  the  mortgagee.  Frothingham  v. 
Shaw,  175  Mass.  59,  61,  78  Am.  St.  Rep.  475. 

The  court  does  not  decide  whether  a  note  and  mortgage  kept 
in  Massachusetts  signed  by  a  non-resident  covering  land  outside 
the  state  is  taxable  in  Massachusetts  as  part  of  the  assets  of  the 
estate  of  a  non-resident.  Callahan  v.  Woodbridge,  171  Mass.  595, 
599,  51  N.  E.  176. 


570  STATUTES  ANNOTATED.  [Mass.  St- 

Callahan  v.  Woodhridge,  171  Mass.  595,  51  N.  E.  176,  is  dis- 
tinguished, as  there  the  testator's  domicile  was  in  New  York  and 
it  does  not  appear  that  the  note  and  mortgage  were  in  Massachu- 
setts. Frothingham  v.  Shaw,  175  Mass.  59,  61,  55  N.  E.  623,  78 
Am.  St.  Rep.  475. 

The  testator  died  domiciled  in  New  Hampshire,  holding  there  a 
certain  note  secured  by  conveyance  on  the  deposit  book  in  The 
Cambridge  Real  Estate  Associates,  which  was  a  voluntary  associa- 
tion for  investment  in  real  estate;  but  the  title  to  which  remained 
in  trustees.  The  court  holds  that  the  testator  held  an  equitable 
interest  in  this  real  estate  and  that  therefore,  this  note  is  subject 
to  the  succession  tax.  Kinney  v.  Stevens,  207  Mass.  368,  371, 
93  N.  E.  586. 

The  testator  was  a  resident  of  New  Hampshire  and  the  court 
holds  that  certain  promissory  notes  belonging  to  him,  secured  by 
mortgage  on  real  estate  in  Massachusetts,  are  subject  to  tax  in 
Massachusetts.  The  court  notes  that  in  Massachusetts  the  mort- 
gagee takes  not  merely  a  lien  upon  the  land,  but  he  holds  the  legal 
title  subject  to  the  right  of  redemption  and  that  the  interest  of  the 
mortgagee  is  subject  to  taxation  under  the  Massachusetts  statute; 
that  while  for  general  purposes  the  interest  of  the  mortgagee  is 
treated  as  personal  property  it  has  a  local  situs  and  carries  with  it 
ownership  of  the  land  until  it  is  redeemed  by  the  payment  of  the 
debt.  The  court  holds,  therefore,  that  these  notes  and  mortgages  are 
property  within  the  jurisdiction  of  Massachusetts  within  the  mean- 
ing of  the  Massachusetts  statute  of  1909,  c.  527,  s.  1,  although  they 
were  held  by  the  testator  at  his  domicile  in  New  Hampshire  at  the 
time  of  his  death.    Kinney  v.  Stevens,  207  Mass.  368,  93  N.  E.  586. 

Corporations  Incorporated  in  Two  States. 

A  railroad  company  with  a  Massachusetts  charter  formed  by 
the  consolidation  of  Massachusetts  and  New  York  corporations, 
and  owning  tracks  in  both  states,  is  a  Massachusetts  corporation 
so  far  as  the  act  of  1891  is  concerned,  and  stock  in  the  company 
owned  by  a  non-resident  decedent  is  assessable  under  that  statute. 
Moody  V.  Shaw,  173  Mass.  375,  377,  53  N.  E.  89. 

The  court  holds  that  its  value  for  the  purpose  of  taxation  was 
intended  to  be  limited  by  the  value  of  the  franchise  and  property 
which  it  specially  represents  within  the  state  of  Massachusetts; 
and  the  stock  in  each  state  represents  only  the  property  within  that 
state.     Kingsbury  v.  Chapin,  196  Mass.  533,  82  N.  E.  700. 

[This  same  result  is  now  reached  by  St.  1909,  c.  490,  pt.  4,  s.  2.] 


1891,  c.  425.]  MASSACHUSETTS.  571 

**And  Any  Interest  Therein." 

A  fund  was  given  in  trust  to  pay  the  income  to  H.  till  he  reached 
forty-five  and  then  to  pay  the  principal  to  him  unless  he  died  before 
that  time,  when  the  principal  was  to  go  to  such  heirs  of  his  body  as 
should  be  living  when  he  would  have  reached  the  age  of  forty-five. 
The  court  ruled  that  under  the  act  of  1891,  any  interest  to  which  H. 
will  become  entitled  if  he  dies  before  reaching  that  age,  or  any 
interest  of  his  heirs,  is  subject  to  the  tax  to  be  paid  by  the  executor 
and  that  the  determination  of  the  value  of  such  future  interest  be 
postponed  until  the  happening  of  that  future  event.  Howe  v.  Howe, 
179  Mass.  546,  550,  61  N.  E.  225,  55  L.  R.  A.  626. 

"Whether  Belonging  to  Inhabitants  of  the  Commonwealth 
or  Not/' 
Double  taxation,  both  in  the  state  where  personal  property 
is  situated  and  in  the  state  of  its  owner's  domicile,  is  apparently 
approved  in  Frothingham  v.  Shaw,  175  Mass.  59,  61,  55  N.  E.  623, 
78  Am.  St.  Rep.  475. 

"Tangible." 

Real  estate,  cash  on  hand  and  railroad  and  government  bonds 
belonging  to  a  non-resident  but  within  the  state  of  Massachusetts 
are  all  taxable  in  Massachusetts  as  "tangible  property."  Callahan 
V.  Woodbridge,  171  Mass.  595,  598,  51  N.  E.  176. 

**Which  shall  Pass." 

The  statute  applies  only  to  cases  where  the  death  occurs  after  the 
statute  was  passed.    1  Op.  Att.  Gen.  2 

Law  Applicable  to  Exercise  of  Power  of  Appointment  by  Will. 

A.,  by  trust  deed  executed  prior  to  the  passage  of  the  act  of  1891, 
placed  property  in  trust  for  herself  for  life  and  on  her  death  subject 
to  appointment  under  her  will.  She  died  in  1895  leaving  a  will,  and 
the  court  holds  that  interests  under  her  will  are  taxable. 

The  court  holds  that  the  property  passed  by  a  deed  intended  to 
take  effect  in  possession  or  enjoyment  after  the  death  of  the  grantor. 
It  makes  no  difference  that  the  donor  of  the  power  and  the  person 
executing  it  are  one  and  the  same. 

The  fact  that  the  deed  is  dated  before  the  passage  of  the  act  of 
1891  is  immaterial.  It  is  the  vesting  of  the  property  in  possession 
and  enjoyment  on  the  death  of  the  life  tenant  and  after  the  statute 


572  STATUTES  ANNOTATED.  [Mass.  St. 

took  effect  that  renders  it  liable  to  the  tax,  although  there  is  no 
such  express  provision  in  the  statute  making  it  applicable  whether 
the  transfer  was  made  before  or  after  the  passage  of  the  act  as  in 
In  re  Green,  153  N.  Y.  223 ;  In  re  Seaman,  147  N.  Y.  69,  77 ;  Crocker 
V.  Shaw,  174  Mass.  266,  54  N.  E.  549. 

Where  a  will  creates  a  power  to  appoint  by  will,  the  original 
testator  is  the  decedent  whose  estate  is  subject  to  tax  under  the 
act  of  1891.  Although  the  tax  is  a  duty  on  the  privilege  of  trans- 
mitting property  by  will,  still  the  statute  does  not  provide  that  all 
property  transmitted  by  will  shall  be  taxed,  but  only  the  property 
which  passes  by  will  intended  to  take  effect  on  death.  Emmons 
V.  Shaw,  171  Mass.  410,  413,  50  N.  E.  1033. 

Income  received  after  the  testator's  death  is  not  covered  by 
the  statute.     Hooper  v.  Bradford,  178  Mass.  95,  59  N.  E.  678. 

"By  Will  or  by  the  Laws  of  the  Commonwealth." 

This  language  applies  to  foreign  wills  and  to  property  of  a  foreign 
owner  dying  intestate.  Callahan  v.  Woodbridge,  171  Mass.  595,  597, 
51  N.  E.  176. 

**By  Deed." 

In  1893  the  decedent  deposited  certain  sums  of  money  with  a 
trust  company  under  a  trust  agreement  that  the  income  was  to  be 
paid  to  a  certain  third  party  and  at  the  expiration  of  five  years  from 
the  date  of  the  agreement  the  decedent  might  withdraw  the  whole 
trust  fund  by  giving  the  company  written  notice  of  an  intention 
so  to  do  six  months  before  that  time ;  and  the  company  could  pay 
off  the  trust  fund  if  it  chose  by  giving  him  a  like  notice  of  its  in- 
tention. If  no  notice  were  given  by  either  party  the  trust  fund  was 
to  remain  during  another  term  of  five  years  and  the  right  of  with- 
drawing or  paying  off  the  principal  sum  might  be  exercised  at 
intervals  of  five  years  from  the  date  of  the  agreement.  In  case 
of  the  death  of  the  decedent  before  the  termination  of  the  trust  the 
trust  fund  was  to  be  payable  to  a  certain  third  party. 

The  decedent  died  before  the  trust  fund  was  terminated  and 
the  court  holds  that  a  tax  is  due  on  the  transfer  to  the  third  party. 
The  court  holds  that  this  gift  was  intended  to  take  effect  in  posses- 
sion or  enjoyment  after  the  death  of  the  grantor,  as  the  beneficiary 
could  have  no  possession  or  enjoyment  of  the  principal  until  after 
his  death;  and  the  fact  that  she  had  possession  and  enjoyment 
of  the  income  in  his  lifetime  makes  no  difference.  The  income  and 
principal  stood  each  by  itself  and  were  as  independent  of  each  other 


1891,  c.  425.]  MASSACHUSETTS.  573 

as  if  the  income  had  been  given  to  a  third  person.  The  property 
is  subject  to  a  tax  to  be  assessed  as  of  a  time  thirty  days  after  the 
expiration  of  the  five  years  referred  to  in  the  agreement  and  interest 
is  to  be  paid  upon  the  tax  from  that  time.  New  England  Trust  Co. 
V.  Abbott,  205  Mass.  279,  91  N.  E.  379. 

"Other  Than  To  or  For  the  Use  of  the  Father,  etc." 

The  fact  that  an  inheritance  tax  is  imposed  on  collaterals  only 
does  not  make  it  unreasonable  on  the  ground  that  it  is  not  imposed 
on  all  heirs  or  beneficiaries.  Minot  v.  Winthrop,  162  Mass.  113,  123, 
26  L.  R.  A.  259. 

Where  the  will  leaves  property  to  one  for  life  and  makes  no 
disposition  of  the  remainder,  and  one  of  the  heirs  is  a  brother  of 
the  testator  and  another  is  a  nephew,  the  interest  of  the  brother  is 
not  taxable  and  that  of  the  nephew  is  taxable.  Dow  v.  Abbott, 
197  Mass.  283,  288,  84  N.  E.  96. 

"Charitable,  Educational,  or  Religious." 

A  free  public  library  may  fairly  be  called  an  "educational  or 
charitable  institution"  and  takes  exempt  from  the  inheritance  tax. 
Essex  V.  Brooks,  164  Mass.  79,  83,  41  N.  E.  119. 

"Institutions"  very  likely  need  not  be  incorporated.  The 
court  holds  that  a  gift  to  a  trust  company  in  trust  for  "needy  aged 
men  and  women"  is  not  exempt,  as  such  a  trust  cannot  by  the 
broadest  latitude  be  called  an  "institution."  Very  likely  the 
"institution"'  need  not  be  incorporated,  but  it  is  contemplated 
as  an  owner  of  property,  not  as  property.  Hooper  v.  Shaw,  176 
Mass.  190,  57  N.  E.  361. 

"The  Property  of  Which  is  Exempt  by  Law  from  Taxation." 

It  appeared  that  under  the  Massachusetts  statutes  there  was 
no  general  exemption  from  taxation  of  property  given  charitable, 
educational  or  religious  societies,  but  certain  property  of  religious 
associations,  houses  of  worship  and  pews  and  furniture  are  exempt 
from  taxation.  Under  them  the  personal  and  real  property  of  a 
religious  society  is  taxable  even  although  the  income  is  used  to 
support  religious  worship. 

The  commonwealth  contended  that  the  exemption  clause  in  the 
inheritance  tax  statute  should  be  construed  to  provide  that  property 
passing  to  charitable,  educational  or  religious  societies  is  to  be 
exempt  to  the  extent  to  which  the  property  of  such  societies  or 
institutions  is  exempt  by  general  laws. 


574  STATUTES  ANNOTATED.  [Mass.  St. 

But  the  court  finds  that  the  test  should  depend  upon  the  question 
whether  the  institution  is  one  whose  property  is  generally  exempt 
from  taxation.  In  the  case  at  bar  the  property  was  bequeathed  for 
a  parsonage  and  parsonages  are  not  exempt  from  taxation.  But  the 
court  holds  that  this  is  an  accident,  that  houses  of  religious  worship 
are  the  principal  property  held  by  religious  societies  and  that 
therefore  a  devise  to  a  religious  society  is  a  devise  to  a  society 
whose  property  is  generally  exempt  from  taxation  and  is  not 
subject  to  an  inheritance  tax.  First  Universalisi  Society  v.  Bradford, 
185  Mass.  310,  70  N.  E.  204. 

The  exemption  extends  only  to  institutions  whose  property  is 
exempted  by  Massachusetts  law  and  not  by  the  law  of  another  state. 
1  Op.  Att.  Gen.  75. 

Confined  to  Domestic  Corporations. 

This  exemption  is  confined  to  societies  the  property  of  which 
is  exempt  by  the  laws  of  Massachusetts,  and  does  not  include  a 
New  York  corporation.  Minot  v.  Winthrop,  162  Mass.  113,  126, 
26  L.  R.  A.  259. 

A  corporation  formed  for  the  purpose  of  administering  a  deed 
of^trust  for  charitable  purposes  is  exempt  as  a  charitable  institution 
although  the  corporation  might  expend  the  money  in  charitable 
purposes  in  another  state.  Batch  v.  Shaw,  174  Mass.  144,  54  N. 
E*.  490. 

A  bequest  to  Bowdoin  College,  a  Maine  institution,  is  not  exempt 
from  the  inheritance  tax  although  Bowdoin  College  was  a  corporation 
created  by  Massachusetts  by  the  statute  of  1794  before  Maine  was 
separated  from  Massachusetts.  The  court  holds  that  nevertheless 
after  the  separation  it  ceased  to  be  an  institution  incorporated 
within  the  state  of  Massachusetts  within  the  meaning  of  the  Massa- 
chusetts statute,  and  therefore  it  is  subject  to  tax.  The  court 
follows  Rice  v.  Bradford,  180  Mass.  540,  63  N.  E.  7;  Batt  v. 
Stevens,  209  Mass.  319   (June  20,  1911),  95  N.  E.  784. 

"And  all  Administrators  .  .  .  shall  be  Liable  for  all  Such 
Taxes  .  .  .  until  .  .  .  Paid.'' 

This  provision  plainly  imports  that  nothing  except  payment  shall 
operate  as  a  discharge  or  bar  the  collection  of  the  tax.  Howe  v. 
Howe,  179  Mass.  546,  549,  55  L.  R.  A.  626.  See  further,  notes  to 
section  18,  post,  582. 


1891,  c.  425]  MASSACHUSETTS.  575 

**Unless  the  Value  .  .  .  shall  Exceed  the  Sum  of  Ten  Thou- 
sand Dollars." 

The  court  discusses  the  history  of  exemptions  in  the  Massachu- 
setts act  ini  Davis  v.  Stevens,  208  Mass.  343,  94  N.  E.  556. 
Where  the  estate  exceeds  ten  thousand  dollars  exclusive  of  debts 
it  is  taxable  although  after  the  payment  of  the  probable  expenses 
of  administration  the  estate  will  probably  be  less  than  ten  thou- 
sand dollars.  This  is  so  although  for  the  purpose  of  determining 
on  what  amount  the  tax  is  to  be  computed  expenses  of  adminis- 
tration must  be  deducted.  Callahan  v.  Woodbridge,  171  Mass. 
595,  599,  51  N.  E.  176. 

The  exemption  is  reckoned  only  on  the  Massachusetts  property 
of  a  non-resident.  Attorney  General  v.  Barney,  211  Mass.  134,  97 
N.  E.  750. 

An  exemption  of  all  estates  of  a  value  not  exceeding  ten  thousand 
dollars  is  not  unreasonable.  It  was  objected  that  the  excise,  if 
upon  the  privilege  of  taking  property  by  will  or  descent,  should  be 
the  same  whenever  the  privilege  enjoyed  is  the  same  in  kind  and 
extent,  whatever  might  be  the  value  of  the  estate,  and  that  the  ex- 
emptions should  relate  to  the  value  of  the  property  received  and 
not  to  the  value  of  the  estate.  But  the  court  remarks  that  the 
privilege  taxed  can  be  regarded  either  as  the  privilege  of  the  owner 
of  property  to  transmit  it  on  his  death,  or  as  the  privilege  of  these 
persons  to  receive  the  property.  The  tax  too  has  some  of  the 
characteristics  of  a  duty  on  the  administration  of  the  estates  of 
deceased  persons.  The  cost  of  administering  small  estates  is 
proportionately  greater  than  that  of  administering  large  ones. 
Minot  V.  Winthrop,  162  Mass.  113, 124, 38  N.  E.  512, 26  L.  R.  A.  259. 

Particular  Estates  and  Remainders. 

S.  2.  When  any  person  bequeaths  or  devises  any  property  to  or  for  the  use  of 
father,  mother,  husband,  wife,  lineal  descendant,  brother,  sister,  an  adopted 
child,  the  lineal  descendant  of  any  adopted  child,  the  wife  or  widow  of  a  son,  or 
the  husband  of  a  daughter,  during  life  or  for  a  term  of  years,  and  the  remainder 
to  a  collateral  heir  or  to  a  stranger  to  the  blood,  the  value  of  the  prior  estate  shall, 
within  three  months  after  the  date  of  giving  bond  by  the  executor,  administrator 
or  trustee,  be  appraised  in  the  manner  hereinafter  provided,  and  deducted  from 
the  appraised  value  of  such  property,  and  the  remainder  shall  be  subject  to  a  tax 
of  five  per  centum  of  its  value. 

This  section  was  referred  to  as  looking  to  a  scheme  of  valuation 
as  of  a  date  earlier  than  the  distribution  in  Hooper  v.  Bradford,  178 
Mass.  95,  97,  59  N.  E.  678. 


576  STATUTES  ANNOTATED.  [Mass.  St. 

Gifts  to  Executors  or  Trustees  in  Lieu  of  Commissions. 

Section  3  provides  for  the  taxation  of  property  in  excess  of  reason- 
able compensations  bequeathed  to  executors  or  trustees  in  lieu  of 
their  allowance. 

When   Tax   Accrues.  —  Interest.  —  Lien.  —  To   Whom   Tax 
Payable. 

S.  4.  All  taxes  imposed  by  this  act  shall  be  payable  to  the  treasurer  of  the 
commonwealth  by  the  executors,  administrators  or  trustees,  at  the  expiration 
of  two  years  from  the  date  of  their  giving  bond;  provided,  that  whenever  legacies 
or  distributive  shares  are  paid  within  the  two  years,  the  taxes  thereon  shall  be 
payable  at  the  time  the  same  are  paid.  In  cases,  however,  where  the  probate 
court  has  ordered  the  executor  or  administrator  to  retain  funds  to  satisfy  a  claim 
of  a  creditor,  whose  right  of  action  for  which  does  not  accrue  within  the  two  years, 
the  payment  of  the  tax  may  be  suspended  by  an  order  of  the  court  to  await  the 
disposition  of  such  claim.  If  the  taxes  are  not  paid  when  due,  interest  at  the  rate 
of  six  per  centum  per  annum  shall  be  charged  and  collected  from  the  time  the 
same  became  due;  and  the  taxes  and  interest  that  may  accrue  on  the  same  shall 
be  and  remain  a  lien  on  the  property  subject  to  the  taxes  till  the  same  are  paid 
to  the  commonwealth.  An  executor,  administrator  or  trustee  may,  if  he  prefers, 
pay  the  tax  to  the  treasurer  of  the  county  in  which  the  probate  court  having 
jurisdiction  of  the  estate  is  located,  and  the  several  county  treasurers  shall  account 
with  the  treasurer  of  the  commonwealth. 

This  section  was  referred  to  mGreves  v.  Shaw,  173  Mass.  205,  209, 
53  N.  E.  372.  It  does  not  bar  suit  for  recovery  after  the  two  years. 
Howev.  Howe,  179  Mass.  546,  548,  61  N.  E.  225,  55  L.  R.  A.  626. 

The  state  treasurer  has  no  discretion  as  to  the  time  for  payment 
of  inheritance  taxes.  1  Op.  Att.  Gen.  268.  It  is  not  the  duty  of 
the  state  treasurer  to  determine  when  a  tax  should  be  paid.  1  Op. 
Att.  Gen.  76. 

Tax  on  Annuity. 

The  statute  contemplates  that  the  tax  shall  be  paid  out  of  an 
annuity  as  soon  as  the  annuity  becomes  payable,  and  at  the  time 
when  payments  on  account  of  the  annuity  are  made,  and  is  a 
method  which  the  legislature  could  adopt  although  the  tax  exhausts 
the  whole  of  the  first  payment  or  payments.  Minot  v.  Winthropj  162 
Mass.  113,  126,  38.  N-.  E.  512,  26  L.  R.  A.  259. 

Interest. 

Where  the  Massachusetts  statute  provides  that  the  tax  shall  be 
payable  at  the  expiration  of  two  years  after  the  date  of  giving  bond 
with  interest  from  that  date,  interest  should  be  computed  according 


1891,  c.  425.]  MASSACHUSETTS.  577 

to  that  rule,  although  a  part  of  the  estate  was  given  in  remainder 
or  the  dispositions  of  the  will  were  modified  by  an  agreement  that 
was  entered  into.  The  whole  estate  was  liable  to  the  tax  and  there 
was  nothing  to  effect  the  time  when  it  was  payable.  Bradford  v. 
Storey,  189  Mass.  104,  75  N.  E.  256. 

Remainder. 

Where  a  testator  gives  property  to  one  for  life  and  leaves  the 
remainder  undistributed,  and  one  of  the  heirs  is  a  nephew,  his  tax 
is  not  payable  until  he  comes  into  actual  possession  of  the  estate. 
It  is  to  be  assessed  on  its  then  value  except  that  at  his  option  it  may 
be  paid  any  time  after  deducting  the  value  of  the  life  estate,  and  is 
to  be  paid  by  him.  Unless  the  nephew  has  given,  the  bond  under 
Mass.  St.  1903,  c.  276,  for  the  payment  of  the  tax  on  the  personal 
property  within  one  year  from  the  death  of  the  testatrix,  then  the 
tax  is  due  and  payable.  It  must  be  paid  by  the  administrator  upon 
the  value  at  the  time  of  the  death  of  the  testatrix  of  the  interest 
coming  to  the  nephew. 

The  value  of  the  life  interest  is  to  be  deducted  in  order  to  ascertain 
the  value  of  the  interest  of  the  nephew.  Dow  v.  Abbott,  197  Mass. 
283,  288,  84  N.  E.  96. 

Deducted  from  Principal. 

This  section  contemplates  that  the  tax  shall  be  deducted  from 
the  principal  sum  and  paid  over  to  the  treasurer.  Where  ten  thou- 
sand dollars  is  given  in  trust  for  a  life  tenant,  who  is  exempt  from 
taxation,  and  the  tax  diminishes  the  principal  below  ten  thousand 
dollars  and  reduces  the  income  proportionately,  there  is  no  warrant 
for  taking  any  part  of  the  principal  of  the  trust  fund  or  of  the  estate 
generally  to  make  up  the  loss  of  the  life  tenant.  Minot  v.  Winfhrop, 
162  Mass.  113,  125,  38  N.  E.  512,  26  L.  R.  A.  259. 

Tax  Deducted  by  Executor,  etc. 

S.  5.  Any  administrator,  executor,  or  trustee  having  in  charge  or  trust  any 
property  subject  to  said  tax,  shall  deduct  the  tax  therefrom,  or  shall  collect  the 
tax  thereon  from  the  legatee  or  person  entitled  to  said  property,  and  he  shall  not 
deliver  any  specific  legacy  or  property  subject  to  said  tax  to  any  person  until  he 
has  collected  the  tax  thereon. 

This  section  was  referred  to  inGreves  v.  Shaiv,  173  Mass.  205,  207, 
53  N.  E.  372,  and  in  Howe  v.  Howe,  179  Mass.  546,  548,  61  N.  E. 
225,  55  L.  R.  A.  626. 


678  STATUTES  ANNOTATED.  [Mass.  St. 

This  section  makes  it  the  duty  of  the  administrator,  executor  or 
trustee  to  collect  the  tax  before  delivering  articles  of  personal 
property  specifically  bequeathed  to  the  legatee.    1  Op.  Att.  Gen.  30. 

Deduction  of  Tax  from  Legacies  Charged  on  Real  Estate. 

S.  6.  Whenever  any  legacies  subject  to  said  tax  are  charged  upon  or  payable 
out  of  any  real  estate,  the  heir  or  devisee,  before  paying  the  same,  shall  deduct 
said  tax  therefrom  and  pay  it  to  the  executor,  administrator  or  trustee,  and  the 
same  shall  remain  a  charge  upon  said  real  estate  until  it  is  paid;  and  payment 
thereof  shall  be  enforced  by  the  executor,  administrator  or  trustee,  in  the  same 
manner  as  the  payment  of  the  legacy  itself  could  be  enforced. 

This  section  was  referred  to  in  Howe  v.  Howe,  179  Mass.  546,  548, 
61  N.  E.  225,  55  L.  R.  A.  626. 

Tax    Deducted  or  Apportioned  in  Certain  Cases. 

Section  7  provides  that  if  a  legacy  is  given  in  money  for  a  limited 
period,  the  executor  or  trustee  shall  retain  the  tax  on  the  whole 
amount,  and  if  it  is  not  in  money  the  tax  may  be  apportioned. 

Sale  of  Real  Estate. 

Section  8  provides  for  the  sale  of  real  estate  for  the  payment  of 
the  tax. 

Inventory. 

S.  9.  An  inventory  of  every  estate,  any  part  of  which  may  be  subject  to  a  tax 
under  the  provisions  of  this  act,  shall  be  filed  by  the  executor,  administrator  or 
trustee,  within  three  months  from  his  appointment  and  qualification.  In  case 
such  executor,  administrator  or  trustee  neglects  or  refuses  to  file  such  inventory 
as  above  required,  he  shall  be  liable  to  a  penalty  of  not  more  than  one  thousand 
dollars,  and  the  treasurer  of  the  commonwealth  shall  commence  in  his  own  name 
appropriate  proceeding  against  such  executor,  administrator  or  trustee  for  the 
recovery  of  such  penalty. 

This  section  was  referred  to  in  Hooper  v.  Bradford,  178  Mass.  95, 
97,  59  N.  E.  678. 

The  state  treasurer  has  no  authority  to  waive  the  filing  of  the 
inventory.  1  Op.  Att.  Gen.  52.  An  inventory  of  the  whole  estate 
■  should  be  filed  and  not  merely  of  such  portion  as  is  subject  to  the 
tax.     1  Op.  Att.  Gen.  40. 

The  state  treasurer  may  rely  on  the  provisions  of  sections  9,  10 
and  11  for  information  concerning  estates  liable  to  tax  and  need 
not  institute  independent  inquiry  as  to  the  existence  of  such  estates. 
1  Op.  Att.  Gen.  30. 


1891,  c.  425]  MASSACHUSETTS.  579 

Inventory  Filed  with  State  Treasurer. 

S.  10.  A  copy  of  the  inventory  of  every  estate,  any  part  of  which  may  be 
subject  to  a  tax  under  the  provisions  of  this  act,  or  if  the  same  can  be  conveniently 
separated,  then  a  copy  of  the  inventory  of  such  part  of  such  estate,  with  the 
appraisal  thereof,  shall  be  sent  by  mail,  by  the  register  of  the  probate  court  in 
which  such  inventory  is  filed,  to  the  treasurer  of  the  commonwealth  within 
thirty  days  after  the  same  is  filed.  The  fees  for  such  copy  shall  be  paid  by  the 
treasurer  of  the  Commonwealth. 

This  section  was  referred  to  as  contemplating  a  tax  on  the  ap- 
praised value.     Hooper  v.  Bradford,  178  Mass.  95,  97;  59  N.  E.  678. 

State  Treasurer  to  be  Notified  of  Transfer  of  Real  Estate. 

Section  11  provides  that  the  executor  or  trustee  is  to  notify  the 
state  treasurer  of  the  passing  of  any  real  estate  subject  to  the  tax. 

Refund. 

S.  12.  Whenever,  for  any  reason,  the  devisee,  legatee  or  heir,  who  has  paid 
any  such  tax,  afterwards  refunds  any  portion  of  the  property  on  which  it  was  paid, 
or  it  is  judicially  determined  that  the  whole  or  any  part  of  such  tax  ought  not  to 
have  been  paid,  said  tax,  or  the  due  proportional  part  of  said  tax,  shall  be  paid  back 
by  him  to  the  executor,  administrator  or  trustee. 

This  section  was  referred  to  in  Callahan  v.  Woodbridge,  171  Mass. 
595,  598,  51  N.  E.  176. 

Appraisal. 

S.  13.  The  valufe  of  such  property  as  may  be  subject  to  said  tax  shall  be  its 
actual  value  as  found  by  the  probate  court,  but  the  treasurer  of  the  common- 
wealth, or  any  person  interested  in  the  succession  to  said  property,  may  apply 
to  the  probate  court  having  jurisdiction  of  the  estate,  and  on  such  application 
said  court  shall  appoint  three  disinterested  persons  who,  being  first  sworn,  shall 
appraise  such  property  at  its  actual  market  value,  for  the  purposes  of  said  tax, 
and  shall  make  return  thereof  to  said  court,  which  return  may  be  accepted  by 
said  court;  and  if  so  accepted  it  shall  be  binding  upon  the  person  by  whom  the 
tax  is  to  be  paid,  and  upon  the  commonwealth.  And  the  fees  of  the  appraiser 
shall  be  fixed  by  the  judge  of  probate,  and  paid  by  the  treasurer  of  the  common- 
wealth. In  case  of  an  annuity  or  life  estate  the  value  thereof  shall  be  determined 
by  the  so  called  actuaries'  combined  experience  tables  and  four  percent  compound 
interest. 

This  section  was  referred  to  in  Hooper  w. Bradford,  178  Mass.  95, 
97,  59  N.  E.  678. 

Where  the  statute  makes  no  specific  provision  for  a  case  exactly 
like  the  one  in  question  the  values  can  be  ascertained  according  to 


580  STATUTES  ANNOTATED.  [Mass.  St. 

the  method  pointed  out  for  similar  cases.    Dow  v.  Abbott,  197  Mass. 
283,  288,  84  N.  E.  96. 

At  Death  of  Testator. 

The  valuation  under  this  section  is  to  be  as  of  the  date  of  the 
death  of  the  testator  as  the  act  implies  the  value  when  the  property 
passes  even  in  case  o  a  future  estate.  Howe  v.  Howe,  179  Mass. 
546,  551,  61  N.  E.  225,  55  L.  R.  A.  626. 

Life  Estate. 

Where  the  will  leaves  real  and  personal  property  for  life  to  one 
who  is  not  related  to  the  testator  and  makes  no  disposition  of  the 
remainder,  the  life  interest  under  the  Massachusetts  collateral 
inheritance  statute  is  to  be  assessed  on  its  value  at  the  death  of 
the  testatrix,  and  its  amount  ascertained,  and  the  tax  to  be  paid 
by  the  administrator,  who  has  a  right  to  collect  from  the  life  tenant 
so  much  as  is  due  on  the  life  interest.  Dow  v.  Abbott,  197  Mass.  283, 
84  N.  E.  96. 

Remainder.  —  Interest  under  Power. 

The  value  of  a  remainder  interest  is  reckoned  by  deducting  the 
value  of  a  life  estate  reckoned  according  to  the  annuity  tables  as 
of  the  death  of  the  testator,  and  not  by  reckoning  it  according  to 
the  time  the  life  tenant  actually  lived,  while  the  interest  of  an  ap- 
pointee under  a  life  tenant  is  ascertained  by  deducting  the  value 
of  the  life  interest  reckoned  according  to  the  annuity  tables  as  of  the 
death  of  the  testator.  Howe  v.  Howe,  179  Mass.  546,  551,  61  N.  E. 
225,  55  L.  R.  A.  626. 

Equity  of  Redemption. 

Where  the  testator  died  domiciled  in  New  Jersey  owning  real 
estate  subject  to  mortgage  in  Massachusetts,  the  court  holds  that 
the  inheritance  tax  is  to  be  computed  only  upon  the  value  of  the 
equity  of  redemption  above  the  amount  of  the  mortgage 

It  was  contended  by  the  state  treasurer  that  the  doctrine  of 
equitable  conversion  and  exoneration  should  be  applied  to  relieve 
the  land  from  the  encumbrance  of  the  mortgage.  But  the  court 
holds  that  the  answer  to  this  contention  is  that  the  rights  and  obli- 
gations of  all  parties  are  to  be  determined  as  of  the  time  of  the 
death  of  the  decedent.  And  that,  furthermore,  the  law  of  equitable 
conversion  ought  not  to  be  invoked  merely  to  subject  property  to 


1891,  c.  425.]  MASSACHUSETTS.  581 

taxation,  especially  when  the  question  is  one  of  jurisdiction  between 
different  states.  The  court  follows  In  re  Skinner,  106  N.  Y.  App. 
Div.  217;  In  re  Sutton,  3  N.  Y.  App.  Div.  208;  McCurdy  v. 
McCurdy,  197  Mass.  248,  83  N.  E.  881. 

Jurisdiction  of  Probate  Court. 

S.  14.  The  probate  court  having  jurisdiction  of  the  settlement  of  the  estate 
of  the  decedent,  shall  have  jurisdiction  to  hear  and  determine  all  questions  in 
relation  to  said  tax  that  may  arise  affecting  any  devise,  legacy  or  inheritance 
under  this  act,  subject  to  appeal  as  in  other  cases,  and  the  treasurer  of  the  com- 
monwealth shall  represent  the  interests  of  the  commonwealth  in  any  such  pro- 
ceedings. 

This  section  was  referred  to  in  Callahan  v.  Woodbridge,  171  Mass. 
595,  596,  51  N.  E.  176,  and  in  Greves  v.  Shaw,  173  Mass.  205,  209, 
53  N.  E.  372. 

The  probate  court  has  jurisdiction  over  a  petition  praying  the 
court  to  determine  whether  such  a  tax  is  payable  and  to  fix  its 
amount.   Bradford  v.  Storey,  189  Mass.  104,  75  N.  E.  256. 

This  section  does  not  give  the  probate  court  exclusive  jurisdiction 
but  the  legatee  may  sue  the  executor  at  law  to  recover  his  legacy. 
Essex  V.  Brooks,  164  Mass.  79,  41  N.  E.  119.  In  this  case  the 
executor  had  the  state  treasurer  summoned  in  as  a  party  to  settle 
the  inheritance  tax,  and  the  treasurer  withdrew  his  objection  to 
being  brought  in. 

The  state  treasurer  has  no  power  to  determine  nor  duty  to  advise 
in  advance  as  to  whether  any  legacy  is  taxable,  or  any  other  such 
questions  which  are  within  the  jurisdiction  of  the  probate  courts. 
1  Op.  Att.  Gen.  85. 

The  question  as  to  the  liability  to  pay  a  tax  is  a  question  affecting 
devise,  legacy  or  inheritance  under  the  act,  for  if  the  tax  is  paid 
the  devise,  legacy  or  inheritance  will  be  diminished  by  the  payment 
and  therefore  under  this  section  the  probate  court  has  jurisdiction 
of  the  question  whether  the  executor  of  a  foreign  will  approved  in 
Massachusetts  is  liable  to  a  tax  there.  Callahan  v.  Woodhridge, 
171  Mass.  595,  51  N.  E.  176. 

State  Treasurer  to  Administer  Estates  in  Certain  Cases. 

Section  15  empowers  the  state  treasurer  to  take  out  administration 
where  application  is  not  made  within  four  months  from  the  death 
of  the  decedent. 


582  STATUTES  ANNOTATED.  [Mass.  St. 

Accounts  Must  Show  Payment. 

Section  16  provides  that  probate  accounts  cannot  be  settled  unless 
the  account  shows  and  the  court  finds  that  the  inheritance  taxes 
have  been  paid. 

Section  16  was  referred  to  in  Howe  v.  Howe,  179  Mass.  546, 
549,  55  L.  R.  A. 


Definitions. 

S.  17.  In  the  foregoing  sections  the  word  "person"  shall  include  the  plural 
as  well  as  the  singular  and  artificial  as  well  as  natural  persons;  the  word  "prop- 
erty" shall  include  both  real  and  personal  estate,  and  any  forms  of  interest  therein 
whatsoever,  including  annuities. 

Suits  for  Collection  of  Tax.  —  When  to  be  Brought. 

S.  18.  The  treasurer  of  the  commonwealth  shall,  within  six  months  after  the 
same  shall  be  due  and  payable,  bring  suit  in  his  own  name  for  the  recovery  of  all 
taxes  remaining  unpaid,  and  shall  also  bring  such  suit  when  the  judge  of  a  probate 
court  shall  certify  to  him  that  a  final  account  of  any  executor,  administrator  or 
trustee  has  been  filed  in  said  court,  and  that  the  final  settlement  of  such  estate 
is  delayed  by  reason  of  the  non-payment  of  such  tax,  and  such  certificate  shall 
issue  upon  the  application  of  any  heir,  legatee  or  any  person  in  interest;  pro- 
vided, however,  that  the  probate  court  may  extend  the  time  when  any  tax  shall 
be  due  and  payable  whenever  the  circumstances  of  the  case  may  require. 

Limitations. 

This  section  does  not  operate  to  set  a  limit  of  two  years  and  six 
months  on  the  right  of  recovery,  but  the  provision  as  to  action  is 
directory  merely.  Howe  v.  Howe,  179  Mass.  546,  61  N.  E.  225, 
55  L.  R.  A.  626. 

The  Massachusetts  Revised  Laws,  c.  202,  s.  2,  provide  for  six 
years'  limitation  on  actions  of  contract  founded  upon  contracts 
or  liabilities  expressed  or  implied.  The  court  holds  that  a  petition 
under  the  inheritance  statute  for  the  fixing  of  the  inheritance  tax 
is  not  included  in  this  limitation,  although  the  limitation  applies 
expressly  to  "actions  brought  by  the  commonwealth  or  for  its 
benefit."  The  court  holds  that  a  tax  is  not  a  debt  in  the  ordinary 
sense  of  the  word  and  is  not  founded  upon  a  contract  expressed  or 
implied,  and  the  collector  cannot  maintain  an  action  to  recover  it 
except  as  authorized  -by  statute. 

The  word  ''liability"  is,  it  is  true,  of  large  significance,  but  as 
used  in  the  general  and  special  statutes  of  limitations  refers  plainly 
to  liabilities  of  a  contractual  nature  and  not  to  proceedings  to 
collect  the  inheritance  tax.  Bradford  v.  Storey,  189  Mass.  104,  75 
N.  E.  256. 


1891,  c.  425.1  MASSACHUSETTS.  583 

Power. 

This  statute  contained  no  provision  relating  to  interests  that 
vest  after  the  death  of  the  testator  and  the  question  arose  as  to 
the  tax  on  an  estate  arising  by  appointment  after  the  death  of  the 
life  tenant.  The  court  holds  that  although  it  was  not  ascertained 
till  after  the  time  appointed  for  payment  whether  the  interest 
under  the  appointment  was  exempt  or  not,  the  tax  might  be  col- 
lected when  the  appointment  had  been  made,  as  under  the  provi- 
sions of  this  section  the  court  may  extend  the  time  when  any  tax 
may  be  due  whenever  the  circumstances  may  require.  Howe  v. 
Howe,  179  Mass.  546,  551,  61  N.  E.  225,  55  L.  R.  A.  626. 

AMENDMENTS  TO  THE  ACT  OF  1891. 

Mass.  St.  1892,  c.  379,  amends  Mass.  St.  1891,  c.  425,  s.  12,  by 
correcting  a  verbal  error  in  the  original  act. 

Mass.  St.  1893,  c.  432,  approved  June  9,  1893,  provides  for 
extra  clerical  assistance  in  the  assessment  and  collection  of  taxes. 

Mass.  St.  1895,  c.  307,  provides  an  exemption  on  all  bequests 
unless  the  value  of  such  bequest  exceeds  $500,  and  exempts  also 
bequests  to  towns  for  any  public  purpose. 

This  statute  is  not  retrospective.  1  Op.  Att.  Gen.  288.  It  is  only 
prospective  in  its  operation  and  does  not  apply  to  legacies  to  which 
the  parties  became  entitled  before  it  took  effect.  Howe  v.  Howe, 
179  Mass.  546,  552,  61  N.  E.  225,  55  L.  R.  A.  626. 

Mass.  St.  1895,  c.  430,  approved  May  29,  1895,  strikes  out  the 
provision  from  section  4  of  the  statute  of  1891  that  the  taxes  might 
be  paid  to  the  county  treasurers.  It  also  amends  Mass.  St.  1891,  c. 
425,  s.  9,  by  making  it  optional  instead  of  obligatory  on  the  state 
treasurer  to  commence  proceedings  against  the  executor  for  the 
recovery  of  the  penalty,  and  by  making  it  obligatory  on  the  registers 
of  probate  to  notify  the  state  treasurer  within  thirty  days  for  any 
neglect  or  refusal  to  file  an  inventory. 

Mass.  St.  1896,  c.  108,  extends  the  exemption  of  five  hundred 
dollars  on  bequests  to  include  also  "distributive  shares." 

Mass.  St.  1900,  c.  371,  s.  1,  provides  that  the  tax  on  national 
bank  or  state  corporation  stock  or  obligations  shall  be  paid  on 
assignment  or  transfer,  and  if  not,  the  exequtor,  administrator  or 
trustee  shall  be  personally  liable  until  paid.  And  any  bank  or 
corporation  accepting  such  transfer  and  issuing  new  stock  shall  be 
liable  for  the  tax. 


584  STATUTES  ANNOTATED.  [Mass.  St. 

Section  2  forbids  a  safe  deposit  company,  bank  or  other  insti- 
tution, person  or  persons  holding  securities  or  assets  belonging  to 
the  estate  of  a  deceased  non-resident  to  transfer  the  same  to  a 
foreign  executor,  administrator  or  legal  representative  of  such 
decedent  until  he  has  been  licensed  to  receive  the  same,  and  until 
notice  has  been  served  on  the  treasurer  of  the  intended  transfer. 

Section  3  provides  that  the  treasurer  and  receiver  general  shall 
be  made  a  party  to  all  petitions  by  foreign  executors,  administrators 
or  trustees  brought  under  Public  Statutes,  c.  142,  s.  3,  for  sale  of 
personal  estate  and  shall  be  entitled  to  fourteen  days'  notice. 

Mass.  St.  1901,  c.  277,  amends  Mass.  St.  1891,  c.  425,  s.  5, 
by  adding  to  the  section  authority  to  administrators  or  ex- 
ecutors to  collect  taxes  on  real  estate  from  the  heirs  or  devisees 
entitled. 

Mass.  St.  1901,  c.  297,  struck  out  the  exemption  of  estates  which 
did  not  exceed  the  sum  of  ten  thousand  ($10,000)  dollars  in  value. 


Tax  on  Remainders. 

Mass.  St.  1902,  c.  473,  s.  1.  In  all  cases  where  there  has  been  or  shall  be  a 
devise,  descent  or  bequest  to  collateral  relatives  or  strangers  to  the  blood,  liable 
to  collateral  inheritance  tax,  to  take  effect  in  possession  or  come  into  actual  en- 
joyment after  the  expiration  of  one  or  more  life  estates  or  a  term  of  years,  the 
tax  on  such  property  shall  not  be  payable  nor  interest  begin  to  run  thereon  until 
the  person  or  persons  entitled  thereto  shall  come  into  actual  possession  of  such 
property,  and  the  tax  thereon  shall  be  assessed  upon  the  value  of  the  property  at 
the  time  when  the  right  of  possession  accrues  to  the  person  entitled  thereto  as 
aforesaid,  and  such  person  or  persons  shall  pay  the  tax  upon  coming  into  posses- 
sion of  such  property.  The  executor  or  administrator  of  the  decedent's  estate 
may  settle  his  account  in  the  probate  court  without  being  liable  for  said  tax: 
provided,  that  such  person  or  persons  may  pay  the  tax  at  any  time  prior  to  their 
coming  into  possession,  and  in  such  cases  the  tax  shall  be  assessed  on  the  value 
of  the  estate  at  the  time  of  the  payment  of  the  tax,  after  deducting  the  value  of 
the  life  estate  or  estates  for  years;  and  provided,  further,  that  the  tax  on  real 
estate  shall  remain  a  lien  on  the  real  estate  on  which  the  same  is  chargeable  until 
it  is  paid. 

Mass.  St.  1902,  c.  473,  postponed  the  operation  of  an  inheritance 
tax  on  remainders  until  the  remainders  fell  in.  And  the  act  applied 
to  "all  cases  where  there  has  been  or  shall  be  a  devise."  The  court 
holds  that  this  is  plainly  retrospective  in  operation  and  applies 
to  estates  of  decedents  who  died  before  the  passage  of  the  statute 
where  the  tax  has  not  been  paid.  Stevens  w. Bradford,  185  Mass.  439, 
70  N.  E.  425. 


1902-1904.]  MASSACHUSETTS.  585 

The  statute  of  1902,  chapter  473,  is  applicable  to  estates  of 
resident  decedents  in  cases  where  the  intervening  life  estate  is 
taxable.  2  Op.  Att.  Gen.  373.  This  statute  does  not  apply  to  the 
estates  of  non-resident  decedents.    2  Op.  Att.  Gen.  373. 

Lien  on  Real  Estate. 

Mass.  St.  1903,  c.  248,  amends  Revised  Laws,  c.  15,  s.  17,  by 
giving  the  probate  court  jurisdiction  to  discharge  the  lien  created 
by  the  act  on  real  estate  and  make  proper  order  to  secure  the  pay- 
ment of  the  tax  to  the  commonwealth. 

Compounding  Tax. 

Mass.  St.  1903,  c.  251,  authorizes  the  treasurer  to  effect  such 
settlement  as  he  deems  for  the  best  interest  of  the  state  of  interests 
dependent  upon  the  happening  of  a  contingency  or  upon  the  exer- 
cise of  a  discretion. 

Tax  on  Remainders. 

Mass.  St.  1903,  c.  276,  amended  Mass.  St.  1902,  c.  473,  by  re- 
quiring one  entitled  in  remainder  to  give  bond  within  one  year  from 
the  death  of  the  decedent  for  the  payment  of  the  tax  on  coming  into 
possession ;  and  on  failure  to  give  bond  the  tax  was  made  payable  as 
in  other  cases. 

Where  a  remainder  is  not  disposed  of  by  will  and  vests  as  intestate 
estate  in  a  brother  of  the  testatrix  it  is  free  from  tax,  while  the 
remainder  which  vested  in  a  nephew  is  subject  to  tax  payable  when 
the  nephew  comes  into  actual  possession  of  the  estate.  It  is  assessed 
upon  its  then  value  except  that  at  his  option  it  may  be  paid  at  any 
time  after  deducting  the  value  of  the  life  estate,  and  is  to  be  paid 
by  him.  If  the  nephew  gives  a  bond  under  the  statute  of  1903, 
chapter  276,  the  provisions  of  the  statute  are  clear  as  to  the  tax 
upon  the  personal  property.  If  he  has  not  given  the  bond  required 
by  the  statute  then  the  tax  as  to  the  personal  estate  is  due  and 
payable  as  set  forth  in  Revised  Laws,  c.  15,  s.  4.  The  value  of  the 
life  interest  is  to  be  deducted  in  order  to  ascertain  the  value  of  the 
interest  of  the  remainderman.  Dow  v.  Abbott,  197  Mass.  283,  288, 
84  N.  E.  96. 

Compounding  Tax. 

Mass.  St.  1904,  c.  421,  provides  that  the  state  treasurer  may 
effect  a  settlement  of  the  tax  in  any  case  where  there  is  a  particular 
estate  to  open  with  power  of  appointment  by  deed  or  will. 


586  STATUTES  ANNOTATED.  [Mass.  St. 

Fees  of  Appraisers. 

Mass.  St.  1905,  c.  367,  approved  May  4,  1905,  amends  Revised 
Laws,  c.  15,  s.  16,  by  providing  that  one-half  of  the  fees  of  appraisers 
appointed  on  the  application  of  any  party  interested  by  the  probate 
court  shall  be  paid  by  the  treasurer  and  one-half  by  the  other  party 
or  parties  to  the  proceeding.  * 

See  notes  to  Dow  v.  Abbott,  ante,  p.  579, 197  Mass.  283,  84  N.  E.  96. 

Exemptions. 

Mass.  St.  1905,  c.  470,  amends  the  exemption  to  charitable, 
educational  or  religious  societies  by  providing  that  all  gifts  "for  the 
use  of"  said  societies  are  exempt  from  taxation. 

Mass.  St.  1906,  c.  436,  approved  May  31,  1906.  This  statute 
provides  in  section  1  that  exemptions  for  charitable  purposes  shall 
extend  to  the  trustee  or  trustees  for  public  charitable  purposes 
within  the  commonwealth. 

S.  2.  The  provisions  of  this  act  shall  apply  to  all  cases  in  which  such  tax 
remains  unpaid  at  the  date  of  the  passage  thereof. 

The  court  holds  that  a  legacy  to  trustees  for  the  purpose  of 
establishing  a  certain  Latin  school  in  a  foreign  country  is  not 
exempt  from  taxation  under  the  statute  of  1906,  chapter  436.  The 
fact  that  the  will  authorized  the  trustees  to  form  a  corporation 
to  administer  the  fund  and  that  the  trustees  did  form  a  Massa- 
chusetts corporation  does  not  alter  the  case,  as  the  fund  vested 
in  the  trustees  on  the  death  of  the  testator,  and  there  was  no  re- 
quirement that  a  corporation  should  be  formed.  The  gift  took 
effect  absolutely  in  the  trustees  on  the  death  of  the  testator. 

The  court  distinguishes  the  case  oiBalch  v.  Shaw,  174  Mass.  144, 
54  N.  E.  490,  where  there  was  no  gift  to  anyone  until  the  corpora- 
tion was  formed.     Pierce  v.  Stevens,  205  Mass.  219,  91  N.  E.  319. 

Direction  in  Will  to  Pay  Tax  from  Residue. 

Mass.  St.  1907,  c.  452,  s.  1,  provides  that  when  a  tax  by  the 
terms  of  the  will  is  payable  from  the  residue  of  the  estate  or  from 
any  source  other  than  the  legacy  or  devise  itself,  the  tax  shall  be 
calculated  and  paid  upon  the  appraised  value  of  the  property  be- 
queathed or  devised,  without  increase  or  addition  of  any  kind  on 
account  of  the  direction  that  the  tax  shall  be  payable  from  the 
residue  or  otherwise. 

This  statute  provided  that  the  act  should  apply  to  all  cases  in 
which  the  tax  remains  unpaid  at  the  date  of  the  passage  thereof. 


1909,  c.  527.]  MASSACHUSETTS.  587 

The  Direct  Inheritance  Tax  and  Amendments. 

Mass.  St.  1907,  c.  563,  in  effect  September  1,  1907,  is  the  first 
direct  inheritance  tax  in  Massachusetts  and  was  substantially  the 
same  as  the  present  act,  printed  in  full,  infra. 

Mass.  St.  1908,  c.  268,  approved  May  25,  1908,  authorizes  the 
tax  commissioner  to  excuse  the  register  from  filing  inventories 
where  no  part  of  the  estate  appears  to  be  subject  to  tax. 

Mass.  St.  1908,  c.  624,  approved  June  12,  1908,  authorizes  the 
treasurer  to  abate  inheritance  taxes  except  those  imposed  under 
the  statute  of  1907,  chapter  563,  at  any  time  after  the  expiration 
of  six  years  from  the  date  when  such  taxes  become  payable. 

Mass.  St.  1*908,  p.  840,  is  a  special  exemption  granted  to  certain 
individuals  in  a  certain  estate. 

Mass.  St.  1909,  c.  266,  authorizes  the  state  treasurer  to  bring 
actions  of  contract  for  the  taxes.    See  post,  p.  600. 

Mass.  St.  1909,  c.  268  added  to  class  A  subject  to  the  lower  rate 
of  taxation,  the  adoptive  parent  or  the  lineal  ancestor  of  an  adoptive 
parent. 

Mass.  St.  1909,  c.  490,  pt.  4,  was  approved  June  12,  1909,  and 
went  into  effect  July  12,  1909.  (C/.  R.  L.,  c.  8,  s.  1.)  St.  1909, 
c.  527,  was  approved  and  went  into  effect  June  19,  1909. 

Mass.  St.  1910,  c.  440,  approved  April  25,  1910,  authorizes  the 
probate  court  to  determine  the  taxes  on  real  estate. 

Mass.  St.  1910,  c.  481,  approved  May  4,  1910,  amends  St.  1909, 
c.  490,  pt.  4,  s.  23,  as  to  the  allowance  of  final  accounts  only  on 
payment  of  the  tax.    See  post,  p.  597. 

Mass.  St.  1911,  c.  191,  approved  March  25,  1911,  applies  to 
probate  accounts.     See  post,  p.  601. 

Mass.  St.  1911,  c.  359,  approved  April  29,  1911,  restricts  access 
to  papers  placed  on  file.    See  post,  p.  601. 

Mass.  St.  1911,  c.  502,  approved  May  27,  1911,  amends  Mass. 
St.  1909,  c.  490,  pt.  4,  s.  3.    See  post,  p.  590. 

Mass.  St.  1911,  c.  551,  approved  June  16,  1911,  amends  St.  1909, 
c.  490,  pt.  4,  s.  22.     ' 

THE  PRESENT  ACT. 

Transfers  Taxable.  —  Rates.  —  Exemptions.     (St.  1909,  c.  527.) 

S.  1.  All  property  within  the  jurisdiction  of  the  commonwealth,  corporeal  or 
incorporeal,  and  any  interest  therein,  wheth  r  belonging  to  inhabitants  of  the 
commonwealth  or  not,  which  shall  pass  by  will,  or  by  the  laws  regulating  in- 
testate succession,  or  by  eed,  grant,  or  gift,  except  in  cases  of  a  bona  fide  purchase 
for  full  consideration  in  money  or  money's  worth,  made  or  intended  to  take  effect 


588  STATUTES  ANNOTATED.  [Mass.  St. 

in  possession  or  enjoyment  after  the  death  of  the  grantor,  to  any  person,  abso- 
lutely or  in  trust,  except  to  or  for  the  use  of  charitable,  educational  or  religious 
societies  or  institutions,  the  property  of  which  is  by  the  laws  of  this  common- 
wealth exempt  from  taxation,  or  for  or  upon  trust  for  any  charitable  purposes,  to 
be  carried  out  within  this  commonwealth,  or  to  or  for  the  use  of  a  city  or  town 
within  this  commonwealth  for  public  purposes,  or  to  or  for  the  use  of  (class  A) 
the  husband,  wife,  lineal  ancestor,  lineal  descendant,  adopted  child,  the  lineal  de- 
scendant of  any  adopted  child,  the  adoptive  parent  or  lineal  ancestor  of  an  adop- 
tive parent,  the  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter,  of  a  decedent, 
or  to  or  for  the  use  of  (class  B)  the  brother,  sister,  nephew  or  niece  of  a  decedent, 
shall  be  subject  to  a  tax  of  five  per  cent  of  its  value  for  the  use  of  the  common- 
wealth; and  such  property  which  shall  so  pass  to  or  for  the  use  of  a  member  of 
class  A  shall  be  subject  to  a  tax  of  one  per  cent  of  its  value  for  the  use  of  the 
commonwealth  if  such  value  does  not  exceed  fifty  thousand  dollars,  to  a  tax  of 
one  and  one-half  per  cent  if  its  value  exceeds  fifty  thousand  and  does  not  exceed 
one  hundred  thousand  dollars,  and  to  a  tax  of  two  per  cent  if  its  value  exceeds  one 
hundred  thousand  dollars;  and  such  property  which  shall  so  pass  to  or  for  the 
use  of  a  member  of  class  B  shall  be  subject  to  a  tax  of  three  per  cent  of  its  value  for 
the  use  of  the  commonwealth  if  such  value  does  not  exceed  twenty-five  thousand 
dollars,  to  a  tax  of  four  per  cent  if  its  value  exceeds  twenty-five  thousand  and  does 
not  exceed  one  hundred  thousand  dollars,  and  to  a  tax  of  five  per  cent  if  its  value 
exceeds  one  hundred  thousand  dollars;  and  administrators,  executors  and 
trustees,  and  any  grantees  under  such  conveyance  made  during  the  grantor's 
life,  shall  be  liable  for  such  taxes,  with  interest,  until  the  same  have  been  paid; 
but  no  bequest,  devise  or  distributive  share  of  an  estate  which  shall  so  pass  to 
or-for  the  use  of  a  husband,  wife,  father,  mother,  child,  adopted  child,  adoptive 
father  or  adoptive  mother  of  the  deceased,  unless  its  value  exceeds  ten  thousand 
dollars,  and  no  other  bequest,  devise  or  distributive  share  of  an  estate  unless  its 
value  exceeds  one  thousand  dollars,  shall  be  subject  to  the  provisions  of  this  act; 
but  no  tax  shall  be  exacted  upon  property  so  passing  which  shall  reduce  its  value 
below  the  amount  of  the  above  exemptions. 

[See  notes  to  the  Act  of  1891,  ante.  As  to  valuation  of  remainder  see  notes 
to  Dow  v.  Abbott,  ante,  p.  585.] 

The  Mass.  St.  1909,  c.  527,  s.  1,  is  merely  a  declaratory  act. 
"The  curious  part  of  St.  1909,  c.  527,  which  we  now  hold  to  be  a 
declaratory  act,  is  that  although  it  is  an  act  subsequent  to  the 
codifying  act  (St.  1909,  c.  490),  it  amends  not  the  codifying  act 
but  one  of  the  earlier  acts  re-enacted  in  the  codifying  act.  The 
explanation  is  that  the  latter  act  went  into  effect  on  its  passage, 
June  19,  1909,  w^hile  the  codifying  act  (which  was  passed  on  June 
12)  did  not.  [Cf.  R.  L.,  c.  8,  s.  1.]  The  matter  is  further  ex- 
pressly dealt  with  in  St.  1909,  c.  490,  pt.  4,  s.  27."  Per  Loring, 
J.,  in  Davis  v.  Stevens,  208  Mass.  343,  94  N.  E.  556. 

**Within  the  Jurisdiction/' 

The  court  notes  the  contention  of  the  state  treasurer  that  because 
debts  owned  by  a  non-resident  against  a  resident  of  Massachusetts 


1909,  c.  527.]  MASSACHUSETTS.  589 

can  only  be  enforced  by  the  aid  of  Massachusetts'  courts  it  ought 
to  hold  they  are  property  within  the  jurisdiction  of  the  state ;  but  the 
court  does  not  decide  this  contention.  Kinney  v.  Stevens,  207  Mass. 
368,  93  N.  E.  586. 

The  words  "which  shall  pass  by  will"  in  the  Mass.  St.  1909, 
c.  490,  pt.  4,  s.  1,  described  only  property  which  passed  by  the 
terms  of  the  will  as  written  and  not  as  changed  by  any  agreement 
for  compromise  made  within  or  without  the  statute.  Any  other 
interpretation  would  make  the  amount  to  be  assessed  hinge  on  the 
manner  in  which  the  agreement  was  to  be  carried  out.  The  court 
comes  to  this  conclusion  after  examining  the  history  of  the  Massa- 
chusetts statute  allowing  the  parties  with  the  approval  of  the  court 
to  alter  by  compromise  the  terms  of  a  will.  Baxter  v.  Stevens, 
209  Mass.  459,  95  N.  E.  854. 

**For  Full  Consideration  in  Money  or  Money's  Worth." 

Under  the  Mass.  St.  1909,  c.  490,  pt.  4,  s.  1  (repeated  in  1909, 
c.  527,  s.  1),  a  transfer  for  a  consideration  is  not  exempt  from  tax 
unless  "the  consideration,  whatever  form  it  may  assume,  is  not 
only  valuable,  but  full,  by  covering  the  value  in  money,  or  the 
equivalent  in  money  of  the  property  transferred.  ...  If  services 
rendered,  or  to  be  rendered,  constitute  the  consideration  .  .  .  their 
value  may  be  inquired  into  and  ascertained,  and  where  in  "money's 
worth"  they  equal  or  exceed  the  fair  value  of  the  property  at  the 
death  of  the  transferror  no  tax  can  be  imposed.  If  they  fall  below 
such  value,  there  is  no  provision  for  a  reduction,  leaving  the  excess 
only  to  be  taxed  as  a  gratuity."  Per  Braley,  J.,  in  State  Street  Trust 
Co.  V.  Stevens.     95  N.  E.  851  (June  22,  1911.) 

The  testator  made  an  agreement  to  leave  property  by  will  in 
consideration  of  care  and  support  to  be  given  him  for  the  rest  of 
his  life  and  he  made  a  will  carrying  out  the  agreement.  The  court 
finds  that  this  is  not  a  *' bona  fide  purchase  for  full  consideration  for 
money  or  money's  worth  made  ...  to  take  effect  .  .  .  after  the 
death  of  the  grantor."  The  court  finds  that  the  devisee  took  no 
title  in  her  lifetime,  but  that  the  words  quoted  applied  only  to  a 
deed,  not  to  a  will.  As  the  will  was  made  and  allowed  the  devisee 
is  bound  by  an  effective  performance  of  the  agreement  and  must 
take  compensation  under  the  will,  and  as  an  incident  of  the  transfer 
of  the  estate  to  her  she  must  suffer  the  assessment  of  the  tax.  The 
court  suggests  that  for  actual  disbursements  incurred  in  the  service 


590  STATUTES  ANNOTATED.  [Mass.  St. 

the  devisee  may  well  be  a  creditor  of  the  estate.     In  re  Perry. 
(Middlesex  County  Probate  Court,  July,  1911,  unreported.) 

Religious  Societies. 

It  has  been  decided  at  nisi  prius  and  affirmed  in  the  supreme 
court  that  the  Young  Men's  Christian  Association  is  a  religious 
corporation.    Little  v.  Newburyport,  210  Mass.  414,  96  N.  E.  1032. 

"To  or  For  the  Use  of  a  City  or  Town." 

The  testator  made  a  bequest  to  a  town  in  New  Hampshire  of  the 
residue  of  her  property  as  a  perpetual  fund  in  trust,  the  income 
to  be  expended  in  aid  of  the  worthy  poor  of  American  parentage, 
residents  of  the  town.  The  testator  died  November  23,  1908,  and 
the  court  holds  that  the  Mass.  St.  1909,  c.  527,  s.  1,  providing  that 
the  exemption  of  gifts  to  charitable  purposes  shall  be  an  exemption 
of  gifts  to  "charities  to  be  carried  out  within  this  commonwealth"; 
and  that  the  exemption  of  bequests  to  a  "state  or  town  for  public 
purposes"  shall  be  an  exemption  to  "a  city  or  town  within  this 
commonwealth  for  public  purposes"  is  merely  declaratory  of  pre- 
vious statutes.  The  court  notes  that  the  charitable  exemption  has 
always  been  confined  in  Massachusetts  to  towns  of  Massachusetts 
ahd  finds  in  the  history  of  the  statutes  which  it  discusses  no  rea- 
son to  think  that  this  policy  had  ever  been  altered.  Davis  v. 
Stevens,  208  Mass.  343,  94  N.  E.  556. 

Corporations  Incorporated  in  Two  States. 

St.  1909,  c.  490,  pt.  4. 

S.  2,  When  the  personal  estate  so  passing  from  any  person  not  an  inhabitant 
of  this  commonwealth  shall  consist  in  whole  or  in  part  of  shares  in  any  railroad 
or  street  railway  company  or  telegraph  or  telephone  company  incorporated  under 
the  laws  of  this  commonwealth  and  also  of  some  other  state  or  country,  so  much 
only  of  each  share  as  is  proportional  to  the  part  of  such  company's  line  lying  within 
this  commonwealth  shall  be  considered  as  property  of  such  person  within  the  juris- 
diction of  the  commonwealth  for  the  purposes  of  this  part. 

[See  notes  to  the  Act  of  1891,  ante,  p.  570.] 

Mass.  St.  1911,  c.  502,  s,  1,  approved  May  27,  1911,  amends 
St.  1909,  c.  490,  pt.  4,  s.  3,  to  read  as  follows:  — 

Stock  in  Companies  in  Two  or  More  States. 

Property  of  a  resident  of  the  commonwealth  which  is  not  therein  at  the 
time  of  his  death,  including  so  much  of  each  share  of  stock  in  any  railroad  or  street 
railway  company  or  telegraph  or  telephone  company  incorporated  under  the 
laws  of  this  commonwealth  and  also  under  the  laws  of  some  other  state  or  country 
as  is  proportional  to  the  part  of  such  company's  line  lying  without  the  common- 


1909,  c.  527.]  MASSACHUSETTS.  591 

wealth,  shall  not  be  taxable  under  the  provisions  of  this  part  if  legally  subject 
in  another  state  or  country  to  a  tax  of  like  character  and  amount  to  that  hereby 
imposed,  and  if  such  tax  be  actually  paid  or  guaranteed  or  secured  in  accordance 
with  law  in  such  other  state  or  country;  if  legally  subject  in  another  state  or 
country  to  a  tax  of  like  character  but  of  less  amount  than  that  hereby  imposed 
and  such  tax  be  actually  paid  or  guaranteed  or  secured  as  aforesaid,  such  property 
shall  be  taxable  under  this  part  to  the  extent  of  the  difference  between  the  tax 
thus  actually  paid,  guaranteed  or  secured  and  the  amount  for  which  such  property 
would  otherwise  be  liable  hereunder.  Property  of  a  non-resident  decedent  which 
is  within  the  jurisdiction  of  the  commonwealth  at  the  time  of  his  death,  if  subject 
to  a  tax  of  like  character  with  that  imposed  by  this  part  by  the  law  of  the  state 
or  country  of  his  residence,  shall  be  subject  only  to  such  portion  of  the  tax  hereby 
imposed  as  may  be  in  excess  of  such  tax  imposed  by  the  laws  of  such  state  or 
country:  provided,  that  a  like  exemption  is  made  by  the  laws  of  such  other  state 
or  country  in  favor  of  estates  of  citizens  of  this  commonwealth,  but  no  such  ex- 
emption shall  be  allowed  until  such  tax  provided  for  by  the  law  of  such  other 
state  or  country  shall  be  actually  paid,  guaranteed  or  secured  in  accordance  with 
law. 

S.  2.  The  provisions  of  this  act  shall  apply  to  all  cases  in  which  the  tax  re- 
mains unpaid  at  the  date  of  the  passage  hereof. 

S.  3.     This  act  shall  take  effect  upon  its  passage. 

[See  notes  to  the  Act  of  1891,  ante,  p.  568  et  seq.  As  to  the  effect  of  this 
provision  see  general  notes,  ante,  p.  563.] 

Tlie  following  states  have  reciprocal  provisions  for  inheritance 
taxes  paid  in  another  state:  W.  Va.  St.  1904,  c.  6,  s.  6;  ]VIass.  St. 
1907,  c.  563,  s.  3;  Vt.  St.  1904,  no.  30,  s.  3.  Connecticut  tried  a 
reciprocal  provision  (statute  of  1903,  chapter  63)  but  has  now- 
adopted  a  retaliatory  arrangement  (statute  of  1907,  chapter  179). 
When  Payable.  —  Interest.  —  Lien.     (St.  1909,  c.  527,  s.  2.) 

Except  as  hereinafter  provided,  taxes  imposed  by  the  provisions  of  this 
act  shall  be  payable  to  the  treasurer  and  receiver  general  by  the  executors,  ad- 
ministrators or  trustees  at  the  expiration  of  two  years  after  the  date  of  their  giving 
bond.  If  the  probate  court,  acting  under  the  provisions  of  section  thirteen  of 
chapter  one  hundred  and  forty-one  of  the  Revised  Laws,  has  ordered  the  executor 
or  administrator  to  retain  funds  to  satisfy  a  claim  of  a  creditor,  the  payment  of  the 
tax  may  be  suspended  by  the  court  to  await  the  disposition  of  such  claim.  In 
all  cases  where  there  shall  be  a  grant,  devise,  descent  or  bequest  to  take  effect 
in  possession  or  come  into  actual  enjoyment  after  the  expiration  of  one  or  more 
life  estates  or  a  term  of  years,  the  taxes  thereon  shall  be  payable  by  the  executors, 
administrators  or  trustees  in  office  when  such  right  of  possession  accrues,  or,  if 
there  is  no  such  executor,  administrator  or  trustee,  by  the  person  or  persons  so 
entitled  thereto,  at  the  expiration  of  one  year  after  the  date  when  the  right  of 
possession  accrues  to  the  person  or  persons  so  entitled.  If  the  taxes  are  not  paid 
when  due,  interest  shall  be  charged  and  collected  from  the  time  the  same  became 
payable.  Property  of  which  a  decedent  dies  seized  or  possessed,  subject  to  taxes 
as  aforesaid,  in  whatever  form  of  investment  it  may  happen  to  be,  and  all  prop- 
erty acquired  in  substitution  therefor,  shall  be  charged  with  a  lien  for  all  taxes  and 


692  STATUTES  ANNOTATED.  [Mass.  St. 

interest  thereon  which  are  or  may  become  due  on  such  property;  but  said  lien 
shall  not  affect  any  personal  property  after  the  same  has  been  sold  or  disposed 
of  for  value  by  the  executors,  administrators  or  trustees.  The  lien  charged  by 
this  act  upon  any  real  estate  or  separate  parcel  thereof  may  be  discharged  by 
the  payment  of  all  taxes  due  and  to  become  due  upon  said  real  estate  or  separate 
parcel,  or  by  an  order  or  decree  of  the  probate  court  discharging  said  lien  and 
securing  the  payment  to  the  commonwealth  of  the  tax  due  or  to  become  due  by 
bond  or  deposit  as  hereinafter  provided,  or  by  transferring  such  lien  to  other 
real  estate  owned  by  the  owner  or  owners  of  said  real  estate  or  separate  parcel 
thereof. 

[Applicable  to  all  cases  where  tax  unpaid,  see  St.  1909,  c.  527,  s.  10,  post, 
p.  600.     See  notes  to  the  Act  of  1891,  ante,  p.  576.] 

The  effect  of  this  section  is  that  there  is  no  inducement  to  pay  the  tax  within 
the  two-year  period.  The  tax  commissioner's  office  declines  to  give  any  credit 
for  prompt  payment  within  that  time  even  under  the  section  authorizing  the 
compromise  of  claims. 

Deposit  in  Lien  of  Tax.     (St.  1909,  c.  490,  pt.  4.) 

S.  5.  In  every  case  where  there  shall  be  a  bequest  or  grant  of  personal  estate 
made  or  intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of  the 
grantor,  to  take  effect  in  possession  or  come  into  actual  enjoyment  after  the  ex- 
piration of  one  or  more  life  estates  or  a  term  of  years,  whether  conditioned  upon 
the  happening  of  a  contingency  or  dependent  upon  the  exercise  of  a  discretion, 
or  subject  to  a  power  of  appointment  or  otherwise,  the  executor  or  administrator 
or  grantee  may  deposit  with  the  treasurer  and  receiver  general  a  sum  of  money 
sufficient  in  the  opinion  of  the  tax  commissioner  to  pay  all  taxes  which  may  be- 
come due  upon  such  bequest  or  grant,  and  the  person  or  persons  having  the  right 
to  the  use  or  income  of  such  personal  estate  shall  be  entitled  to  receive  from  the 
commonwealth  interest  at  the  rate  of  two  and  one-half  per  cent  per  annum  upon 
sach  deposit,  and  when  said  tax  shall  become  due  the  treasurer  and  receiver 
general  shall  repay  to  the  persons  entitled  thereto  the  difference  between  the 
tax  certified  and  the  amount  deposited;  or  any  executor,  administrator,  trustee  or 
grantee,  or  any  person  interested  in  such  bequest  or  grant  may  give  bond  to  a 
judge  of  the  probate  Court  having  jurisdiction  of  the  estate  of  the  decedent,  in 
such  amount  and  with  such  sureties  as  said  court  may  approve,  with  the  condition 
that  the  obligor  shall  notify  the  tax  commissioner  when  said  tax  becomes  due  and 
shall  then  pay  the  same  to  the  treasurer  and  receiver  general. 

Method  of  Valuation.     (St.  1909,  c.  527,  s.  3.) 

Except  as  hereinafter  provided,  said  tax  shall  be  assessed  upon  the  ac- 
tual value  of  the  property  at  the  time  of  the  death  of  the  decedent.  In  every 
case  where  there  shall  be  a  devise,  descent,  bequest  or  grant  to  take  effect  in 
possession  or  enjoyment  after  the  expiration  of  one  or  more  life  estates  or  a  term 
of  years,  the  tax  shall  be  assessed  on  the  actual  value  of  the  property  or  the 
interest  of  the  beneficiary  therein  at  the  time  when  he  becomes  entitled  to  the 
same  in  possession  or  enjoyment.  The  value  of  an  annuity  or  a  life  interest  in 
any  such  property,  or  any  interest  therein  less  than  an  absolute  interest,  shall 
be  determined  by  the  American  experience  tables  at  four  per  cent  compound 
interest. 

[See  notes  to  the  Act  of  1891,  ante,  p.  579.] 


1909,  c.  627.]  MASSACHUSETTS.  593 

Tax  on  Future  Interests.     (St.  1909,  c.  527,  s.  4.) 

Any  person  or  persons  entitled  to  a  future  interest  or  to  future  interests 
in  any  property  may  |)ay  the  tax  on  aoeount  of  the  same  at  any  time  before  such 

tax  would  lie  (I  111-  ill  .u  i  .m  .  I.m.r  w  il  li  (lie  |)H'\  iMtuis  lici  I'iiil  xh  m  r  i<>ii(  .1  i  iuhI,  and 
in  sn«-h  c.i  m:-  (  he  l.i  \  •.li.ill  I  m-  .1  •.•,(■■-..  1  up.  m  |  lie  ,1.  (  ii.il  x.iliie  ol  1  hr  iiUcn-st  at  the 
time  ol  liic  iM\  nuiu  ol  (lie  (.i\,  .iii.l  ;,ih  h  \,iliir  •.li.ill  Le  deternuned  by  the  tax 
eoiniiii-.M.Mici  .!^;  licuiu.itiri-  ]  )i  >  i\  k  Ic.  1 .  Ill  cxciN  t.isc  ill  whieli  it  is  impossible 
to  roiiipiilt'  llu-  pu'-riil  N.iiiicol  .iii\  iiilcn'.l  (he  (,i\  ruminissioiU'i  111. i\.  willi 
the  .ippiox  .il  oi  I  lie  .11  Idi  luv  ^r  111  1.1 1,  illi.  I  mu  li  m(  I  KiiiiiK  ol  |  lie  l.i\  .i:,  ju-  :.li.ill 
deem  («>  In-  l.u  (lie  \h-A  lulcicsls  of  I  he  »  i  )iiiuh  uiw  c.ildi,  .1  iid  p.i\  iiuiil  ol  I  lir  ..lun 
tjo  .u;ifed   upon  .nIliII   Iu-  .1   lull  s.il  isl.ul  1.  .11  ol   mu  li   l.i\. 

lApplicil.lo  (o.dl  (.IMS  wli.-.r  l,,x  in.p.nd.  :.rr  M.  1009,  C.  617,  8.  10.  ScC  llOtCS 
to  tlie  Act  of  ISiH,  unit',  p.  J.SO.J 

Property  Requeathed   to  an  Executor,  etc.,  in  Lieu  of  Compensation. 

(St.  1909.  e.  -lOO.  pi.   l.) 

S.  S.  11. 1  I,  .i.iioi  ii\(  ,  luiiiK  .11  hs  or  devises  to  his  e.xecutora  or  trustees  any 
propii(>  oiluiwi.c  li.iMf  to  ...lid  (.i\.  in  lieu  of  their  compensation,  the  value 
thereof  in  excess  of  k  ,1  .oii.d>l.  roiupriisation,  as  determined  by  the  probate 
court  upon  the  applic.K  loii  of  any  iiitcit  •led  party  or  of  the  tax  commissioner, 
shall  iu'\i  1  llu  1.  .-.  I.c  Mil.|ic-t  to  the  pro\  i  1011  ,  ol  this  part. 

ICxecutor,  etc.,  Holding  Property  Subject  to  Tax  sliall  Deduct  the  Tax 
or  Collect  it  from  tlie  Lcftateo,  etc.     (Si.  1<)()9,  * .  190.  pt.  4.) 
S.  9.     An  executor,  adniiiiisii.Koi- or  1 1 II  .Iff  lioMm;'  piopnix   Mihject  to  snld 

tax  shall  dl'duet  tlu>  I.l\  llicicliom  or  collr,  l  il  hom  llu-  Ir-.iPc  oi  pci'.oii  .nlillfd 
to  said  p|-op(-i(\  ;  .iiid  lie  sli.ill  iiol  dilixrr  piopiil\  or  .i  .spcritic  Ici'.k  \  ^.lll)n•^•t 
to  ^.iid  (.i\  iiiilil  lu-  1 1. 1 :.  roiicvl  cd  (lie  l.i\  liuu-oii.  An  cxrciilor  or  .idiumisl  i  ,i(  or 
shall  coll,-,  I  l.ixts  dm-  upon  l.iiid  wLuli  is  mi1>m>I  Io  |.i\  iiiidcr  (lu-  jMoxisioiis 
hereof  liom  llu-  luip.  or  d<\  i:..-,:.  .Mlill.d  ih.  u  lo,  .ind  lu-  iii.iN-  In-  ,i  ii  ( lion.-.-,l  tO 
sell  said  1.1  lid.  .u.  oidiiij;  to  the  piovibiun^  uf  t.ccliuii  twclw-,  if  {\wy  icfiiso  or 
nei'lct  I   Io  p.i\   :..iid  i.i\. 

If  a  Legacy  is  Payable  out  of  Real  Estate  the  Devisee  shall  Pay  the  Tax 
to  the  Executor,  etc.  (St.  1909,  c.  490,  pt.  4.) 
S.  10.  If  a  legacy  subject  to  said  tax  is  charged  upon  or  payable  out  of  real 
estate,  the  heir  or  devisee,  before  paying  it,  shall  deduct  said  tax  therefrom  and 
pay  it  to  the  executor,  administrator  or  trustee,  and  the  tax  shall  remain  a  lien 
upon  said  real  estate  until  it  is  paid.  Payment  thereof  may  be  enforced  by  the 
executor,  administrator  or  trustee  in  the  same  manner  as  the  payment  of  the 
legacy  itself  could  be  enforced. 

No  Tax  Chargeable  Upon  Money  Applied  in  Payment  of  Succession  Tax 
in  Certain  Cases.  (St.  1909,  c.  400,  pt.  4.) 
S.  11.  When  provision  is  made  by  any  will  or  other  instrument  for  payment 
of  the  legacy  or  s  ccession  tax  upon  any  gift  thereby  made  out  of  any  property 
other  than  that  so  given,  no  tax  shall  be  chargeable  upon  any  money  to  be  applied 
ill  payment  of  such  tax. 


594  STATUTES  ANNOTATED.  [Mass.  St. 

Probate  Court  May  Authorize  Sale  of  Real  Estate  in  Certain  Cases. 

(St.  1909,  c.  490,  pt.  4.) 
S.  12.     The    probate    court    may    authorize    executors,    administrators    and 
trustees  to  sell  the  real  estate  of  a  decedent  for  the  payment  of  said  tax  in  the  same 
manner  as  it  may  authorize  them  to  sell  real  estate  for  the  payment  of  debts. 

Inventory.     (St.  1909,  c.  527,  s.  5.) 

A  full  and  complete  inventory  and  appraisa  mder  oath  of  every  estate  shall 
be  filed  in  the  probate  court  or  with  the  tax  commissioner  by  the  executor,  ad- 
ministrator or  trustee  within  three  months  ^fter  his  appointment,  and  such 
inventory  shall  contain  a  complete  list  of  all  the  assets  within  the  knowledge 
of  the  said  executor,  administrator  or  trustee.  If  he  neglects  or  refuses  to  file 
such  an  inventory  and  appraisal  he  shall  be  liable  to  a  penalty  of  not  more  than 
one  thousand  dollars,  which  shall  be  recovered  by  the  tax  commissioner  for 
the  use  of  the  commonwealth,  and  the  register  of  probate  shall  notify  the 
tax  commissioner  within  thirty  days  after  the  expiration  of  said  three 
months  of  the  failure  of  any  executor,  administrator  or  trustee  to  file  an  inven- 
tory and  appraisal  in  his  ofifice. 

[To  what  cases  applicable,  see  St.  1909,  c.  527,  s.  11.  See  notes  to  the  Act 
of  1891,  s.  9,  ante,  p.  578.] 

Register  to  Furnish  Inventory,  etc.,  to  Tax  Commissioner.  (St.  1909, 
c.  527,  s.  6.) 

Within  thirty  days  after  the  filing  of  the  inventory  and  appraisal  provided 
for, in  the  preceding  section,  the  register  of  probate  shall  send  by  mail  to  the  tax 
commissioner  a  copy  thereof.  The  register  shall  also,  within  the  same  period, 
send  by  mail  to  the  tax  commissioner  a  copy  of  the  will  of  the  decedent,  if  such 
has  been  allowed  by  the  probate  court.  The  register  shall  also  furnish  such  copies 
of  papers  in  his  office  as  the  tax  commissioner  shall  require,  and  shall  furnish 
information  as  to  the  records  and  files  in  his  office  in  such  form  as  the  tax  com- 
missioner may  require.  A  refusal  or  neglect  by  the  register  so  to  send  a  copy  of 
such  inventory  and  appraisal,  or  to  furnish  such  copies  or  information  shall  be  a 
breach  of  his  official  bond;  but  the  tax  commissioner  may  excuse  the  register 
from  filing  inventories  or  copies  of  inventories  and  of  wills  of  estates  no  part  of 
which,  in  his  judgment,  appears  to  be  subject  to  a  tax  under  the  provisions  of  this 
chapter. 

[See  notes  to  the  Act  of  1891,  s.  10,  ante,  p.  579.] 

In  Cases  of  Assignment  or  Transfer  of  Stock  the  Tax  shall  be  Paid  to 
the  Treasurer  and  Receiver  General,  etc.  (St.  1909,  c.  490,  pt.  4.) 
S.  15.  If  a  foreign  executor,  administrator  or  trustee  assigns  or  transfers  any 
stock  in  any  national  bank  located  in  this  commonwealth  or  in  any  corporation 
organized  under  the  laWs  of  this  commonwealth,  owned  by  a  deceased  non-resident 
at  the  date  of  his  death  and  liable  to  a  tax  under  the  provisions  of  this  part,  the 
tax  shall  be  paid  to  the  treasurer  and  receiver  general  at  the  time  of  such  assign- 
ment or  transfer;  and  if  it  is  not  paid  when  due,  such  executor,  administrator 
or  trustee  shall  be  personally  liable  therefor  until  it  is  paid.  A  bank  located  in 
this  commonwealth  or  a  corporation  organized  under  the  laws  of  this  common- 
wealth which  shall  record  a  transfer  of  any  share  of  its  stock  made  by  a  forcing 


1909,  c.  490.]  MASSACHUSETTS.  595 

executor,  administrator  or  trustee,  or  issue  a  new  certificate  for  a  share  of  its  stock 
at  the  instance  of  a  foreign  executor,  administrator  or  trustee,  before  all  taxes 
imposed  thereon  by  the  provisions  of  this  party  have  been  paid,  shall  be 
liable  for  such  tax  in  an  action  of  contaact  brought  by  the  treasurer  and  receiver 
general. 

License  for  Transfer  of  Property  of  Non-Resident.  (St.  1909,  c.  527,  s.  7.) 
Securities  or  assets  belonging  to  the  estate  of  a  deceased  non-resident  shall  not 
be  delivered  or  transferred  to  a  foreign  executor,  administrator  or  legal  repre- 
sentative of  such  decedent,  unless  such  executor,  administrator  or  legal  representa- 
tive has  been  licensed  to  receive  the  said  securities  or  assets  under  the  provisions 
of  section  three  of  chapter  one  hundred  and  forty-eight  of  the  Revised  Laws. 
License  to  receive,  sell,  transfer  or  convey  securities  or  assets  under  the  provisions 
of  section  three  of  said  chapter  one  hundred  and  forty-eight  of  the  Revised  Laws 
shall  not  be  granted  unless  it  appears  to  the  judge  of  the  probate  court  that  all 
taxes  imposed  by  the  provisions  of  this  act  have  been  paid  or  secured  according 
to  law.'  Any  person  or  corporation  that  delivers  or  transfers  any  securities  or 
assets  belonging  to  the  estate  of  a  non-resident  decedent  before  all  taxes  imposed 
thereon  by  the  provisions  of  this  act  have  been  paid  or  secured  according  to  law, 
shall  be  liable  for  such  tax  in  an  action  of  contract  brought  by  the  treasurer  and 
receiver  general.^  The  notice  required  by  section  three  of  said  chapter  one  hundred 
and  forty-eight  to  be  given  to  the  treasurer  and  receiver  general  shall  be  given  to 
the  tax  commissioner  in  regard  to  all  property  subject  to  the  provisions  of  this 
act,  instead  of  being  given  to  the  treasurer  and  receiver  general. 

The  Tax  Commissioner  to  be  a  Party  to  Petitions  by  Foreign  Executors, 
etc.     (St.  1909,  c.  490,  pt.  4.) 

S.  17.  The  tax  commissioner  shall  be  made  a  party  to  all  petitions  by  foreign 
executors,  administrators  or  trustees  brought  under  the  provisions  of  section  three 
of  chapter  one  hundred  and  forty-eight  of  the  Revised  Laws,  and  no  decree 
shall  be  made  upon  any  such  petition  unless  it  appears  that  notice  of  such  petition 
has  been  served  on  the  tax  commissioner  fourteen  days  at  least  before  the  return 
of  such  petition. 

[See  notes  to  the  act  of  1891,  s.  14,  ante,  p.  581.] 

Refund.     (St.  1909,  c.  490,  pt.  4.) 

S.  18.  If  a  person  who  has  paid  such  tax  afterward  refunds  a  portion  of  the 
property  on  which  it  was  paid,  or  if  it  is  judicially  determined  that  the  whole  or 
any  part  of  such  tax  ought  not  to  have  been  paid,  such  tax,  or  the  due  proportion 
thereof,  shall  be  repaid  to  him  by  the  executor,  administrator  or  trustee. 

[See  notes  to  the  Act  of  1891,  s.  12,  ante,  p.  579.] 

Value  of  Property  Liable  to  Tax  to  be  Determined  by  the  Tax  Commis- 
sioner, etc.  (St.  1909,  c.  490,  pt.  4.) 
S.  19.  The  value  of  the  property  upon  which  the  tax  is  computed  shall  be 
determined  by  the  tax  commissioner  and  notified  by  him  to  the  person  or  persons 
by  whom  the  tax  is  payable,  and  such  determination  shall  be  final  unless  the  value 
so  determined  shall  be  reduced  by  proceedings  as  herein  provided.    At  any  time 


596  STATUTES  ANNOTATED.  [Mass.  St. 

within  three  months  after  such  determination  the  probate  court  shall,  upon  the 
application  of  any  party  interested  in  the  succession,  or  of  the  executor,  adminis- 
trator or  trustee,  appoint  one  disinterested  appraiser  or  three  disinterested 
appraisers,  who,  first  being  sworn,  shall  appraise  such  property  at  its  actual  market 
value,  as  of  the  day  of  the  death  of  the  decedent  and  shall  make  return  thereof 
to  said  court.  Such  return,  when  accepted  by  said  court,  shall  be  final:  provided, 
that  any  party  aggrieved  by  such  appraisal  shall  have  an  appeal  upon  matters 
of  law.  One-half  of  the  fees  of  said  appraisers,  as  determined  by  the  judge  of 
said  court,  shall  be  paid  by  the  treasurer  and  receiver  general,  and  one-half  of 
said  fees  shall  be  paid  by  the  other  party  or  parties  to  said  proceeding. 
[See  notes  to  the  Act  of  1891,  s.  13,  ante,  p.  579.] 

Tax  Commissioner  shall  Certify  Amount  of  Tax  Due  to  the  Treasurer 
and  Receiver  General,  etc.     (St.  1909,  c.  490,  pt.  4.) 

S.  20.  The  tax  commissioner  shall  determine  the  amount  of  tax  due  and 
payable  upon  any  estate  or  upon  any  part  thereof,  and  shall  certify  the  amount 
so  due  and  payable  to  the  treasurer  and  receiver  general  and  to  the  person  or 
persons  by  whom  the  tax  is  payable;  but  in  the  determination  of  the  amount  of 
any  tax  said  tax.  commissioner  shall  not  be  required  to  consider  any  payments  on 
account  of  debts  or  expenses  of  administration  which  have  not  been  allowed  by 
the  probate  court  having  jurisdiction  of  said  estate.  Payment  of  the  amount 
so  certified  shall  be  a  discharge  of  the  tax.  An  executor,  administrator,  trustee 
or  grantee  who  is  aggrieved  by  any  determination  of  the  tax  commissioner  may, 
within  one  year  after  the  payment  of  any  tax  to  the  treasurer  and  receiver  general, 
apply  by  a  petition  in  equity  to  the  probate  court  having  jurisdiction  of  the  estate 
of  the  decedent  for  the  abatement  of  said  tax  or  any  part  thereof,  and  if  the  court 
adjudges  that  said  taxor  any  part  thereof  was  wrongly  exacted  it  shall  order  an 
abatement  of  such  portion  of  said  tax  as  was  assessed  without  authority  of  law. 
Upon  a  final  decision  ordering  an  abatement  of  any  portion  •  of  said  tax,  the 
treasurer  and  receiver  general  shall  pay  the  amount  adjudged  to  have  been  illegally 
exacted,  with  interest,  without  any  further  act  or  resolve  making  appropriation 
therefor. 

[See  notes  to  the  Act  of  1891,  ante,  p.  579.] 

The  Probate  Court  to  Hear  and  Determine  all  Questions,  etc.  (St.  1909 
c.  490,  pt.  4.) 

S.  21.  The  probate  court  having  jurisdiction  of  the  settlement  of  the  estate 
of  the  decedent  shall,  subject  to  appeal  as  in  other  cases,  hear  and  determine 
all  questions  relative  to  said  tax,  and  the  treasurer  and  receiver  general  shall 
represent  the  commonwealth  in  any  such  proceedings.  If  the  court  shall  fine 
that  any  tax  remains  due,  it  shall  order  the  executor,  administrator  or  trusted 
to  pay  the  same,  with  interest  and  costs;  and  execution  shall  be  awarded  against 
the  goods  and  estate  of  the  deceased  in  the  hands  of  the  executor,  administrator 
or  trustee,  or,  if  it  appears  ,that  there  are  no  such  goods  or  estate  in  his  hands, 
against  the  goods  and  estate  of  the  executor,  administrator  or  trustee,  as  if  for 
his  own  debt;  but  the  administrators,  executors,  trustees  and  grantees  herein- 
before mentioned  shall  be  personally  liable  only  for  such  taxes  as  shall  be  payable 
while  they  continue  in  the'  said  offices  or  have  title  as  such  grantees  respectively^ 

[See  notes  to  the  Act  of  1891,  s.  14,  ante,  p.  581.] 


1909,  c.  490.1  MASSACHUSETTS.  597 

If  a  Will  is  Not  Oflfered  for  Probate  within  Four  Months  the  Probate 
Court  to  Appoint  an  Administrator,  etc.  (St.  1909,  c.  490,  pt.  4.) 
S.  22.  If,  upon  the  decease  of  a  person  leaving  an  estate  liable  to  a  tax  under 
the  provisions  of  this  part,  a  will  disposing  of  such  estate  is  not  offered  for  probate, 
or  an  application  for  administration  made  within  four  months  after  such  decease, 
the  probate  court,  upon  application  by  the  tax  commissioner,  shall  appoint  an 
administrator.     (As  amended  by  St.  1911,  c.  551.) 

No  Final  Account  Allowed  Till  Taxes  Paid.  (St.  1910,  c.  481,  s.  1,  amend- 
ing St.  1909,  c.  490,  pt.  4.  s.  23.) 

The  final  or  other  account  heretofore  or  hereafter  filed  of  an  executor,  adminis- 
trator or  trustee  heretofore  or  hereafter  appointed,  may  be  allowed  by  the  probate 
court,  if  such  account  shows,  and  the  judge  of  said  court  finds,  that  all  taxes 
imposed  by  the  provisions  of  part  four  of  chapter  four  hundred  and  ninety  of  the 
acts  of  the  year  nineteen  hundred  and  nine,  and  of  acts  in  amendment  thereof  or 
in  addition  thereto,  upon  any  property  or  interest  therein  belonging  to  the  estate 
to  be  settled  by  said  account  and  already  payable  have  been  paid,  and  that  such 
property,  or  interest  therein,  has  been  transferred  to  a  trustee  appointed  by  a 
probate  court  of  this  commonwealth  who  has  given  bond,  with  sufficient  sureties, 
in  such  a  sum  as  to  insure  the  payment  of  all  taxes  which  may  become  due  on 
said  estate,  unless  such  trustee  is  exempted  from  giving  sureties  by  the  probate 
court  appointing  him. 

[See  notes  to  the  Act  of  1891,  s.  16,  ante,  p.  582.] 

Proceedings  for  Recovery.    (St.  1909,  c.  490,  pt.  4.) 

S.  24.  The  treasurer  and  receiver  general  shall  commence  proceedings  for 
the  recovery  of  any  of  said  taxes  within  six  months  after  the  same  become  payable, 
and  also  whenever  the  judge  of  a  probate  court  certifies  to  him  that  the  final 
account  of  an  executor,  administrator  or  trustee  has  been  filed  in  such  court, 
and  that  the  settlement  of  the  estate  is  delayed  because  of  the  non-payment  of 
said  tax.  The  probate  court  shall  so  certify  upon  the  application  of  any  heir; 
legatee  or  other  person  interested  therein,  and  may  extend  the  time  of  payment 
of  said  tax  whenever  the  circumstances  of  the  case  require. 


Decree  of  Distribution  no  Defence  to  Action. 

The  intestate  died  in  1892  and  the  defendant  was  appointed 
administrator  in  that  year  and  her  final  account  was  allowed  in 
March,  1895.  It  was  admitted  that  an  inheritance  tax  should  have 
been  paid  on  the  estate  and  never  was  paid ;  but  the  administrator 
claims  that  she  is  protected  froni  liability  by  the  decrees  of  dis- 
tribution of  the  probate  court  under  which  she  acted. 

The  court  assumes  that  the  decrees  were  properly  entered  and 
that  the  probate,  court  had  jurisdiction  and  that  the  administrator 
acted  in  good  faith,  but  the  court  holds  that  the  probate  decrees 
are  no  protection  to  the  administrator,  relying  on  Attorney  General 


598  STATUTES  ANNOTATED.  [Mass.  St. 

V.    Stone,    209    Mass.    186,    95    N.    E.   395;   Attorney  General  v. 
Rafferty,  209  Mass.  321,  95  N.  E.  747. 

Not  to  Apply  in  Certain  Cases.    (St.  1909,  c.  490,  pt.  4.) 

S.  25.  This  part  shall  not  apply  to  estates  of  persons  deceased  prior  to  the 
date  when  chapter  five  hundred  and  sixty-three  of  the  acts  of  the  year  nineteen 
hundred  and  seven  took  effect,  nor  to  property  passing  by  deed,  grant,  sale  or 
gift  made  prior  to  said  date;  but  said  estates  and  property  shall  remain  subject  to 
the  provisions  of  law  in  force  prior  to  the  passage  of  said  chapter. 

How  Construed.     (St.  1909,  c.  490,  pt.  4.) 

S.  26.  The  provisions  of  this  act,  so  far  as  they  are  the  same  as  those  of 
existing  statutes,  shall  be  construed  as  continuations  thereof,  and  not  as  new 
enactments,  and  a  reference  in  a  statute  which  has  not  been  repealed  to  provisions 
of  law  which  have  been  revised  and  re-enacted  herein  shall  be  construed  as  apply- 
ing to  such  provisions  as  so  incorporated  in  this  act;  they  shall  not  affect  any  act 
done,  liability  incurred,  or  any  right  accrued  and  established,  or  any  suit  or 
prosecution,  civil  or  criminal,  pending  or  to  be  instituted,  to  enforce  any  right 
or  penalty  or  punish  any  offence  under  the  authority  of  existing  laws,  but  the 
proceedings  in  such  cases  shall  conform  to  the  provisions  of  this  act. 

Not  Affecting* Other  Legislation  of  1909.    (St.  1909,  c.  490,  pt.  4.) 

S.  27.     Nothing  in  this  act  contained  shall  be  construed  as  repealing  or  in 

any  way  affecting  any  other  legislation  passed  in  the  year  nineteen  hundred  and 

nine. 

[Approved  June  12,  1909.     In  effect  July  12,  1909,  under  the  terms  of  R.  L., 

c.  8,  s.  1.] 

Powers.     (St.  1909,  c.  527.) 

S.  8.  Whenever  any  person  shall  exercise  a  power  of  appointment  derived 
from  any  disposition  of  property  made  prior  to  September  first,  nineteen  hundred 
and  seven,  such  appointment  when  made  shall  be  deemed  to  be  a  disposition 
of  property  by  the  person  exercising  such  power,  taxable  under  the  provisions  of 
chapter  five  hundred  and  sixty-three  of  the  acts  of  the  year  nineteen  hundred  and 
seven,  and  of  all  acts  in  amendment  thereof  and  in  addition  thereto,  in  the  same 
manner  as  though  the  property  to  which  such  appointment  relates  belonged 
absolutely  to  the  donee  of  such  power,  and  had  been  bequeathed  or  devised  by 
the  donee  by  will ;  and  whenever  any  person  possessing  such  a  power  of  appoint- 
ment so  derived  shall  omit  or  fail  to  exercise  the  same  within  the  time  provided 
therefor,  in  whole  or  in  part,  a  disposition  of  property  taxable  under  the  pro- 
visions of  chapter  five  hundred  and  sixty-three  of  the  acts  of  the  year  nineteen 
hundred  and  seven  and  all  acts  in  amendment  thereof  and  in  addition  thereto 
shall  be  deemed  to  take  place  to  the  extent  of  such  omission  or  failure  in  the 
same  manner  as  though  the  persons  or  corporations  thereby  becoming  entitled 
to  the  possession  or  enjoyment  of  the  property  to  which  such  power  related  had 
succeeded  thereto  by  a  will  of  the  donee  of  the  power  failing  to  exercise  such  pov  er, 
taking  effect  at  the  time  of  such  omission  or  failure.  The  provisions  of  chapter 
fifteen  of  the  Revised  Laws,  chapter  four  hundred  and  seventy-three  of  the  acts 
of  the  year  nineteen  hundred  and  two,  chapters  two  hundred  and  forty-eight, 


1909,  c.  527.]  MASSACHUSETTS.  599 

two  hundred  and  fifty-one  and  two  hundred  and  seventy-six  of  the  acts  of  the 
year  nineteen  hundred  and  three,  chapter  four  hundred  and  twenty-one  of  the 
acts  of  the  year  nineteen  hundred  and  four,  chapters  three  hundred  and  sixty-seven 
and  four  hundred  and  seventy  of  the  acts  of  the  year  nineteen  hundred  and  five  and 
chapter  four  hundred  and  thirty-six  of  the  acts  of  the  year  nineteen  hundred 
and  six  are  hereby  repealed  in  so  far  as  they  apply  to  the  taxation  of  property 
passing  through  or  by  reason  of  powers  of  appointment  created  in  dispositions  of 
property  made  subsequent  to  June  eleventh,  eighteen  hundred  and  ninety-one, 
and  prior  to  September  first,  nineteen  hundred  and  seven,  which  have  not  been 
fully  exercised  prior  to  the  passage  of  this  act  or  the  taxes  thereon  settled  under  the 
provisions  of  chapter  four  hundred  and  twenty-one  of  the  acts  of  the  year  nine- 
teen hundred  and  four.  The  provisions  of  section  twenty-five  of  chapter  five 
hundred  and  sixty-three  of  the  acts  of  the  year  nineteen  hundred  and  seven 
are  hereby  repealed  in  so  far  as  the  same  are  inconsistent  with  the  provisions 
of  this  act. 

[See  notes  to  the  Act  of  1891,  ante,  p.  571.] 

Tlie  IVlass.  St.  1909,  c.  527,  s.  8,  is  different  from  tlie  former 
statutes  in  tliat  it  provides  that  the  taxation  of  property  subject 
to  a  power  of  appointment  shall  be  in  the  same  manner  as  though 
the  property  belonged  absolutely  to  the  donee  of  the  power 
and  had  been  bequeathed  or  devised  by  the  donee  by  will. 
In  this  respect  the  provision  is  different  from  the  construction 
that  is  given  to  the  previous  statute  in  Emmons  v.  Shaw,  171 
Mass.  410,  50  N.  E.  1033;  Minot  v.  Stevens,  207  Mass.  588,  38 
N.  E.  512. 

The  donor  by  marriage  settlement  executed  in  1844  conveyed 
property  to  trustees  to  pay  the  income  to  a  certain  person  for  life, 
and  on  her  death  to  convey  it  as  she  might  by  will  appoint  and  in 
default  of  appointment  to  her  heirs  at  law.  The  life  tenant  died 
August  17,  1909,  without  exercising  the  power  and  the  court  holds 
that  a  succession  tax  is  due  under  the  statute  of  1909,  chapter  527, 
section  8. 

The  court  remarks  that  it  is  held  without  dissent  that  the  legis- 
lature has  power  to  lay  a  tax  on  the  exercise  of  the  power  of  appoint- 
ment although  the  power  was  created  before  the  passage  of  the 
statute. 

The  court  goes  further  and  says  that  property  held  subject  to 
a  power  may  be  said  by  the  legislature  to  be  not  vested  in  anybody 
and  that  when  it  vests  in  possession  through  a  proper  disposition 
of  it  which  is  dependent  upon  the  will  and  conduct  of  the  donee 
a  succession  tax  shall  be  imposed,  whether  the  succession  is  de- 
termined by  action  or  refraining  from  action  on  the  part  of  the 
donee.     Minot  v.  Stevens,  207  Mass.  588,  38  N.  E.  512. 


eOO  STATUTES  ANNOTATED.  [Mass.  St. 

Highest  Rate  to  Apply  Where  Information  is  Not  Furnished.  (St.  1909, 
c.  527.) 
S.  9.  Whenever  an  executor,  administrator,  trustee  or  any  person  who  is 
liable  to  taxation  under  the  provisions  of  chapter  five  hundred  and  sixty-three 
of  the  acts  of  the  year  nineteen  hundred  and  seven  and  all  acts  in  amendment 
thereof  and  in  addition  thereto,  refuses  or  neglects  to  furnish  the  tax  commissioner 
with  any  information  which  in  the  opinion  of  the  tax  commissioner  is  necessary 
to  the  proper  computation  of  the  taxes  payable  by  such  executor,  administrator, 
trustee  or  person,  after  having  been  requested  so  to  do,  the  tax  commissioner  shall 
certify  such  taxes  at  the  highest  rate  at  which  they  could  in  any  event  be  computed. 

Sections  2  and  4  to  Apply  Where  Tax  is  Unpaid.    (St.  1909,  c.  527.) 

S.  10.  The  provisions  of  sections  two  and  four  of  this  act  shall  apply  to  all 
cases  in  which  the  tax  remains  unpaid  at  the  date  of  the  passage  hereof. 

Section  5  Not  to  Apply  to  Executors,  etc.,  Appointed  Prior  to  Passage. 

(St.  1909,  c.  527.) 
S.  11.     The  provisions  of  section  five  of  this  act  shall  not  apply  to  executors, 
administrators  or  trustees  appointed  prior  to  the  passage  hereof,  but  such  execu- 
tors, administrators  or  trustees  shall  remain  subject  to  the  provisions  of  said 
section  thirteen  prior  to  its  amendment. 

Actions  to  Recover.     (St.  1909,  c.  266.) 

S.  1.  Taxes  imposed  by  chapter  four  hundred  and  twenty-five  of  the  acts 
of  ^he  year  eighteen  hundred  and  ninety-one,  and  the  acts  in  amendment  thereof 
and  in  addition  thereto,  and  by  chapter  fifteen  of  the  Revised  Laws,  and  the  acts 
in  amendment  thereof  and  in  addition  thereto,  and  by  chapter  five  hundred  and 
sixty-three  of  the  acts  of  the  year  nineteen  hundred  and  seven,  and  the  acts  in 
amendment  thereof  and  in  addition  thereto,  may  be  recovered  by  the  treasurer 
and  receiver  general  in  an  action  of  contract  brought  in  the  name  of  the  common- 
wealth, or  by  an  information  in  equity  brought  in  the  supreme  judicial  court 
by  the  attorney  general  at  the  relation  of  the  treasurer  and  receiver  general.  In 
a  proceeding  under  this  act  for  the  collection  of  taxes  imposed  by  chapter  four 
hundred  and  twenty-five  of  the  acts  of  the  year  eighteen  hundred  and  ninety-one, 
and  the  acts  in  amendment  thereof  and  in  addition  thereto,  or  by  chapter  fifteen 
of  the  Revised  Laws,  and  the  acts  in  amendment  thereof  and  in  addition  thereto, 
a  final  decree  of  the  probate  court  in  a  proceeding  to  which  the  treasurer  and  re- 
ceiver general  was  a  party,  fixing  the  amount  of  the  tax,  shall  be  conclusive  as 
to  such  amount;  but  if  there  has  been  no  such  determination  the  amount  may 
be  determined  in  proceedings  under  this  act.  In  a  proceeding  under  this  act  for 
the  collection  of  taxes  imposed  by  chapter  five  hundred  and  sixty-three  of  the 
acts  of  the  year  nineteen  hundred  and  seven,  and  the  acts  in  amendment  thereof 
and  in  addition  thereto,  the  determination  by  the  tax  commissioner  in  accordance 
with  the  provisions  of  section  twenty  of  said  chapter,  of  the  amount  of  the  tax 
shall  be  final  as  to  such  amount:  provided,  however,  that  an  executor,  adminis^-ra- 
tor,  trustee  or  grantee  may  show,  in  any  proceeding  brought  against  him  under 
this  act,  any  facts  which  would  entitle  him  to  an  abatement  under  the  provisions 
of  section  twenty  of  said  chapter,  and  a  judgment  or  decree  shall  be  entered  for 
the  amount  of  the  tax  so  determined  less  the  amount  proved  to  have  been  assessed 


1911,  c.  359.]  MASSACHUSETTS.  601 

without  authority  of  law,  together  with  interest  and  costs.  If  upon  an  information 
brought  under  this  act  the  court  shall  find  that  any  tax  remains  due,  it  shall 
order  the  executor,  administrator,  trustee  or  grantee  to  pay  the  same,  with  in- 
terest and  costs,  and  execution  may  be  awarded  therefor.  Execution  awarded 
upon  judgments  and  decrees  for  taxes  imposed  by  chapter  five  hundred  and 
sixty-three  of  the  acts  of  the  year  nineteen  hundred  and  seven,  and  the  acts  in 
amendment  thereof  and  in  addition  thereto,  shall  be  awarded  in  accordance  with 
the  provisions  of  section  twenty-one  of  said  chapter. 
[See  notes  to  section  24,  ante  p.  597.] 

Penalties  and  Forfeitures,  etc. 

S.  2.  Penalties  and  forfeitures  incurred  by  persons  under  the  provisions  of 
chapter  five  hundred  and  sixty-three  of  the  acts  of  the  year  nineteen  hundred  and 
seven,  and  the  acts  in  amendment  thereof  and  in  addition  thereto,  may  be  re- 
covered by  the  treasurer  and  receiver  general  in  an  action  of  contract  brought  in 
the  name  of  the  commonwealth,  or  by  the  information  in  equity  brought  in  the 
supreme  judicial  court  by  the  attorney  general  at  the  relation  of  the  treasurer 
and  receiver  general. 

S.  3.     This  act  shall  take  effect  upon  its  passage.     [Approved  April  8,  1909.] 

Assessment  of  Tax  on  Real  Estate. 

IVIass.  St.  1910,  c.  440,  approved  April  25,  1910,  authorizes  the 
probate  court  to  determine  the  amount  of  taxes  imposed  on  real 
estate;  that  after  such  determination  the  state  treasurer  may 
collect  the  taxes  and  interest  by  a  sale. 

Final  Account  of  Fiduciary.     (Mass.  St.  1911,  c.  191.) 

S.  1.  In  all  cases  in  which  a  tax  is  due  under  the  provisions  of  chapter  four 
hundred  and  ninety,  part  IV,  of  the  acts  of  the  year  nineteen  hundred  and  nine, 
and  the  amount  thereof  cannot  be  ascertained,  the  final  account  of  the  executor, 
administrator  or  trustee  liable  therefor  may  be  allowed  if  it  appears  that  all 
taxes  imposed  by  the  provisions  of  said  chapter  upon  any  property  or  interest 
therein  belonging  to  the  estate  to  be  settled  by  said  account  and  already  payable, 
the  amount  of  which  can  be  ascertained,  have  been  paid,  and  that  such  property 
or  interest  therein,  has  been  transferred  to  a  trustee  appointed  by  a  probate 
court  of  this  commonwealth  who  has  given  bond,  with  sufficient  sureties,  in  such 
a  sum  as  to  insure  the  payment  of  all  taxes  which  are  or  may  become  due  on 
said  estate,  unless  such  trustee  is  exempted  from  giving  sureties  by  the  probate 
court  appointing  him;  and  such  trustee  shall  be  liable  for  such  taxes  and  the 
interest  thereon  in  the  same  manner  and  to  the  same  amount  as  if  he  had  been 
the  executor,  administrator  or  trustee  originally  liable  therefor,  and  the  property 
received  by  him  shall  be  subject  to  a  Hen  for  said  taxes  and  interest  until  the 
same  are  paid. 

S.  2.     This  act  shall  take  effect  upon  its  passage.     [Approved  March  25,  1911.] 

Access  Restricted  to  Papers  Filed.     (Mass.  St.  1911,  c.  359.) 

S.  1.  Papers,  copies  of  papers,  affidavits,  statements,  letters  and  other  in- 
formation and  evidence  filed  with  the  tax  commissioner  in  connection  with  the 


602  STATUTES  ANNOTATED.  [Mass.  St. 

assessment  of  taxes  upon  legacies  and  successions,  except  inventories  filed  with 
the  tax  commissioner  under  the  provisions  of  section  thirteen  of  part  four  of  chapter 
four  hundred  and  ninety  of  the  acts  of  the  year  nineteen  hundred  and  nine, 
as  amended  by  section  five  of  chapter  five  hundred  and  twenty-seven  of  the  acts 
of  the  year  nineteen  hundred  and  nine,  shall  be  open  only  to  the  inspection  of 
persons  charged  or  likely  to  become  charged  with  the  payment  of  taxes  in  the  case 
in  which  such  paper,  copy,  affidavit,  statement,  letter  or  other  information  or 
evidence  is  filed,  or  their  representatives,  and  to  the  tax  commissioner,  his  deputy 
assistants  and  clerks  and  such  other  officers  of  the  commonwealth  and  other 
persons  as  may,  in  the  performance  of  their  duties,  have  occasion  to  inspect  the 
same  for  the  purpose  of  assessing  or  collecting  taxes. 

S.  2.  Nothing  in  this  act  shall  be  construed  as  limiting  the  duties  imposed 
upon  the  supervisors  of  assessors  by  section  six  of  part  three  of  chapter  four 
hundred  and  ninety  of  the  acts  of  the  year  nineteen  hundred  and  nine,  or  as 
prohibiting  the  use  of  such  papers,  copies,  affidavits,  statements,  letters  and  other 
information  and  evidence  in  legal  proceedings  involving  the  assessment,  collection 
or  abatement  of  taxes. 

S.  3.     This  act  shall  take  effect  upon  its  passage.    [Approved  April  29,  1911.] 

Practice.  —  Forms. 

The  tax  commissioner  requires  the  following  data  and  gives  the 
following  information :  — 

AFFIDAVIT  OF  EXECUTOR  OF  NON-RESIDENT. 

(2)*  That  the  total  amount  of  property,  real  and  personal,  wherever 
situated,  of  which  said  decedent  died  seized  or  possessed,  at  its  actual  value 
on  the  date  of  h      death  was 


REAL  ESTATE, 
PERSONAL  ESTATE, 


an  itemized  statement  of  which  is  hereto  annexed,  made  a  part  hereof,  and 
marked  "Schedule  A": 

(3)  *  That  the  total  amount  of  property,  real  and  personal,  within  the  jurisdiction 
of  Massachusetts,  owned  by  said  decedent  at  its  actual  value  on  the  date  of  h 
death  was 

REAL   ESTATE,  $ 

PERSONAL   ESTATE,      $ 


an  itemized  statement  of  which  is  hereto  annexed,  made  a  part  hereof,  and  marked 
"Schedule  B": 

(4)   That  at  the  time  of  h      death  the  said  decedent  had  no  safe  deposit  box, 

individually  or  jointly,  no  bonds,  public  or  private,  no  money,  no  real  estate  nor 

mortgages  on  property  within  the  state  of  Massachusetts;    no  interest  in   any 

*  In  valuing  mortgaged  real  estate  in  this  item,  the  value  of  the  equity  alone  is  to  be  given. 


Forms.]  MASSACHUSETTS.  603 

business  or  co-partnership  carried  on  therein;  no  shares  of  stock  in  National  Banks 
situated  therein  nor  in  corporations  organized  and  existing  under  the  laws  of 
Massachusetts;  no  interest  in  the  estate  of  a  deceased  resident  of  Massachusetts; 
no  claims  against  nor  debts  due  from  residents  of  Massachusetts;  no  deposits 
in  banks,  trust  companies  nor  savings  institutions  in  Massachusetts,  in  h  own 
name,  jointly  or  in  trust;  no  jewelry,  horses,  carriages  or  furniture  within  said 
state;  and  was  seized  or  possessed  of  or  entitled  to  no  other  property  of  any  kind 
whatsoever  in  the  said  state  except  as  set  forth  in  said  Schedule  B. 
(5)  That  prior  to  h  death  the  said  decedent  made  no  transfer  of  property  within 
the  jurisdiction  of  Massachusetts  by  deed,  grant  or  gift  (except  bona  fide  sales  for 
full  consideration  in  money  or  money's  worth),  made  or  intended  to  take  effect 
in  possession  or  enjoyment  after  death;  and  the  said  decedent  had  no  power  of 
appointment  over  property  within  the  jurisdiction  of  Massachusetts  except  as 
below  stated:     ' 


(6)  a.  That  the  amount  of  debts  incurred  by  the  decedent  and  due  Massachusetts 
creditors  at  the  time  of  h  death  (not  including  debts  secured  by  mortgage  on 
real  estate)  was  $ 

h.  That  the  amount  of  debts  incurred  by  the  de- 
cedent and  payable  at  the  time  of  h  death  other 
than  above  (not  including  debts  secured  by  mortgage 
of  real  estate)  was  $ 

c.  That  the  expenses  of  administration  in  Massa- 
chusetts are  $ 

d.  That  all  other  expenses  of  administration  and 

funeral  charges  are  $ 

That  hereto  annexed,  marked  "Schedule  C"  and 

made  a  part  hereof  is  an  itemized  statement  of  the        

above  debts  and  expenses. 

Total,  $ 

(7)  That  the  amount  of  succession  tax  paid,  guaranteed  or  secured  by  law  in 
the  state  of  the  domicile  of  the  decedent  on  the  personal  estate  within  the  juris- 
diction of  Massachusetts  is  as  follows:*  — 


PROPERTY 


VALUE 


RATE  OF  TAX 


AMOUNT  OF 


*(No  statement  as  to  succession  tax  paid,  guaranteed  or  secured  in  the  state  of  the  domicile  of 
the  decedent  need  be  made  unless  such  state  by  law  exempts  from  the  application  of  its  succes- 
sion tax  laws,  property  within  its  jurisdiction  belonging  to  Massachusetts  decedents. 


604  STATUTES  ANNOTATED.  [Mass.  St. 

(8)  That  annexed  hereto,  marked  "Schedule  D,"  and  made  a  part  hereof,  is  a 
true  copy  of  the  last  will  and  testament  of  the  decedent,  as  allowed  by  the  court 
of  domicile. 

(9)  That  all  the  persons  who  are  mentioned  in  the  will  of  the  decedent  or  who  take 
any  share  of  the  property  with  the  amounts  of  their  respective  shares  and  their 
relationships  to  the  decedent ;  also  the  dates  of  birth  of  life  tenants  and  remainder- 
men, are  as  follows:  — 

SCHEDULE  "B." 

Assets  Within  the  Jurisdiction  of  Massachusetts. 

Note:  —  The  following  kinds  of  property  are  within  the  scope  of  the  legacy 
and  succession  tax  law:  — 

1.  Money,  bonds,  stock  in  trade,  furniture  and  all  kinds  of  tangible  property 
which  were  physically  presenc  in  Massachusetts  at  the  date  of  death  of  the  de- 
cedent. 

2.  Real  estate  and  mortgages  on  real  estate  situated  in  Massachusetts. 

3.  Shares  in  corporations  incorporated  under  the  laws  of  Massachusetts, 
including  railroad  companies  incorporated  under  the  laws  of  Massachusetts  and 
one  or  more  other  states. 

4.  Interests  in  co-partnerships  doing  business  in  Massachusetts  or  owning 
stock  in  trade,  fixtures  or  book  accounts  with  residents  of  Massachusetts. 

5.  Choses  in  action  against  residents  of  Massachusetts. 

6.  Deposits  in  Savings  Banks,  National  Banks,  Trust  Companies,  etc.,  doing 
business  in  Massachusetts. 

7.  Shares  of  National  Banks  located  in  Massachusetts. 


RESIDENT   DECEDENT. 

AFFIDAVIT  OF  DEBTS,  EXPENSES,  ETC. 

Estate  of 

Late  of 

INSTRUCTIONS. 

In  General:  No  debt  or  expense  of  any  kind  should  be  included  in  this  affidavit 
unless  the  same  is  a  proper  charge  against  PRINCIPAL  of  the  estate.  Fees 
based  on  income  are  not  allowable. 

Mortgiage  Notes  secured  by  real  estate  of  the  decedent  should  not  be  included 
as  debts  —  the  equity  only  of  such  real  estate  having  been  valued  for  taxation. 

Local  Taxes  and  assessments  should  not  be  included  as  debts  unless  the  same 
were  assessed  as  of  May  first  (or  April  first,  if  on  or  after  April  first,  1910)  prior 
to  the  death  of  the  decedent.  When  taxes  or  water  rates  are  included  give  the 
year  for  which  they  were  assessed. 


Forms.]  MASSACHUSETTS.  605 

Foreign  Legacy  Taxes  should  not  be  included  as  debts  as  the  same  are  de- 
ducted in  another  manner.  The  original  documents  showing  the  details  of  the 
assessment  of  the  foreign  tax,  together  with  the  receipt  for  its  payment,  should 
be  enclosed  for  the  inspection  of  the  tax  commissioner.  These  papers  will  be  re- 
turned after  examination. 

INFORMATION  GIVEN  ON  VALUATION. 

The  Valuation  herewith  enclosed,  after  deductions  for  debts,  funeral  expenses 
and  expenses  of  administration,  constitutes  the  basis  upon  which  the  inheritance 
tax,  if  any,  will  be  computed. 

This  Valuation  Becomes  Final  unless  an  appeal  is  taken  within  three  months 
from  the  date  thereof. 

The  Inheritance  Tax  Becomes  Due  at  the  expiration  of  two  years  from 
the  date  of  giving  bond. 

The  Tax  Upon  Future  Interests  (remainders  after  life  estates  or  terms  of 
years)  becomes  due  at  the  expiration  of  one  year  from  the  date  the  gift  vests  in 
possession  or  enjoyment.  The  tax  may  be  paid  upon  the  present  worth  of  future 
interests  at  any  time  upon  request  by  the  persons  entitled.  A  form  for  such  request 
will  be  furnished. 

If  Certification  for  Immediate  Payment  is  Desired  the  tax  commissioner 
should  be  furnished  with  a  waiver  of  appeal  from  the  enclosed  valuation,  and  an 
affidavit  of  the  debts,  expenses,  etc.,  on  the  enclosed  form.  In  any  event  this 
affidavit  should  be  furnished  at  least  two  weeks  before  the  tax  becomes  due  to 
allow  for  computation. 

If  Succession  Taxes  Have  Been  Paid  in  Other  States  on  any  of  the  prop- 
erty of  the  decedent,  the  original  receipts  and  other  papers  showing  the  details 
of  the  assessment  of  such  tax  should  be  forwarded  to  this  department  for  ex- 
amination.    The  same  will  be  returned  after  inspection. 


606  STATUTES  ANNOTATED.  [Mich.  St. 

MICHIGAN. 


In  General. 

Michigan's  first  inheritance  tax  law,  enacted  in  1893,  was  held 
unconstitutional.  The  present  statute  dates  from  1899,  with  impor- 
tant amendments  in  1903,  1907  and  1909.  An  interesting  feature 
is  that  in  the  case  of  direct  inheritances  personal  property  only  is 
taxed.  The  exemptions  apply  to  individual  shares,  not  to  the  estate 
as  a  whole. 

The  Michigan  statute  seems  to  contain  no  penalty  or  lien  and 
so  it  would  seem  not  to  be  collectible  against  the  estates  of  non- 
resident stockholders  in  Michigan  corporations.  For  example, 
Calumet  &  Hecla  and  Osceola  mining  stock  can  be  transferred 
without  reference  to  the  state  authorities. 

However,  Michigan  attempts  to  tax  stock  of  a  Michigan  corpora- 
tion owned  by  a  non-resident  wherever  held.  It  taxes  registered 
bonds  of  a  Michigan  corporation  as  well.  A  person  or  corporation 
that  transfers  or  delivers  securities  or  assets  of  a  non-resident  before 
the  tax  is  paid  is  responsible  for  the  tax. 

Michigan  taxes  stock  or  bonds  of  a  foreign  corporation  owned 
by  a  non-resident  if  the  certificates  are  kept  in  Michigan.  It  is 
the  practice  to  require  an  inventory  of  the  entire  estate  before  per- 
mission is  given  to  transfer  securities  of  a  Michigan  corporation. 


List  of  Statutes. 

1893. 

Statutes  of  Michigan,  c.  205,  p.  344. 

1899. 

c.  188,  p.  284,  ss.  1  to  21 

1903. 

No.  195,  p.  277,  s.  1. 

1907. 

c.  155,  p.  199. 

1907. 

c.  328,  p.  475. 

1909. 

c.    44,  p.  70. 

1909. 
1911. 

c.  298,  p.  700. 
c.    73,  p.  105. 

Constitutional  Limitations. 
Michigan  Constitution  1850,  a.  14. 

S.  1.  All  specific  state  taxes,  except  those  received  from  the  mining  companies 
of  the  upper  peninsula,  shall  be  applied  in  paying  the  interest  upon  the  primary 
school,  university  and  other  educational  funds,  and  the  interest  and  principal 
of  the  state  debt,  in  the  order  herein  recited,  until  the  extinguishment  of  the 
state  debt,  other  than  the  amounts  due  to  educational  funds,  when  such  specific 


1893,  c.  205.1  MICHIGAN.  607 

taxes  shall  be  added  to,  and  constitute  a  part  of  the  primary  school  interest  fund. 
The  legislature  shall  provide  for  an  annual  tax,  sufficient  with  other  resources, 
to  pay  the  estimated  expenses  of  the  state  government,  the  interest  of  the  state 
debt,  and  such  deficiency  as  may  occur  in  the  resources. 

S.  11.  The  legislature  shall  provide  an  uniform  rule  of  taxation  except  on 
property  paying  specific  taxes,  and  taxes  shall  be  levied  on  such  property  as  shall 
be  prescribed  by  law. 

S.  14.  Every  law  which  imposes,  continues  or  revives  a  tax  shall  distinctly 
state  the  tax,  and  the  object  to  which  it  is  to  be  applied;  and  it  shall  not  be 
sufficient  to  refer  to  any  other  law  to  fix  such  tax  or  object. 

S.  11  (as  amended  in  1900).  The  legislature  shall  provide  a  uniform  rule  of 
taxation,  except  on  property  paying  specific  taxes,  and  taxes  shall  be  levied  on 
such  property  as  shall  be  prescribed  by  law:  Provided,  that  the  legislature  shall 
provide  an  uniform  rule  of  taxation  for  such  property  as  shall  be  assessed  by  a 
state  board  of  assessors,  and  the  rate  of  taxation  on  such  property  shall  be  the 
rate  which  the  state  board  of  assessors  shall  ascertain  and  determine  is  the 
average  rate  levied  upon  other  property  upon  which  ad  valorem  taxes  are  assessed 
for  state,  county,  township,  school  and  municipal  purposes. 

How  to  Test  the  Validity  of  the  Statute. 

In  Chamhe  v.  Durfee,  100  Mich.  112,  58  N.  W.  661,  and  in  Union 
Trust  Co.  V.  Durfee,  125  Mich.  487,  84  N.  W.  1101,  7  Detroit  Leg.  N. 
597,  the  question  of  the  constitutionaHty  of  the  statute  was  raised 
by  a  writ  of  prohibition  brought  against  the  probate  court  to  enjoin 
that  court  from  collecting  the  tax. 

THE  UNCONSTITUTIONAL  STATUTE  OF  1893. 

Mich.  St.  1893,  c.  205.     Approved  June  1,  1893. 

S.  1.  The  people  of  the  state  of  Michigan  enact,  That  after  the  passage  of 
this  act  a  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  property, 
real  or  personal,  of  the  value  of  five  hundred  dollars  or  over,  or  of  any  interest 
therein  or  income  therefrom,  in  trust  or  otherwise,  to  persons  or  corporations,  on 
real  or  personal  property,  in  the  following  cases:  — 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  from 
any  person  dying  seized  or  possessed  of  the  property  while  a  resident  of  this  state. 

2.  When  the  transfer  is  by  will  or  intestate  law,  of  property  within  the  state, 
and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

3.  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  non-resident, 
when  such  non-resident's  property  is  within  this  state,  by  deed,  grant,  bargain, 
sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  donor, 
or  intended  to  take  effect,  in  possession  or  enjoyment  at  or  after  such  death. 
Such  tax  shall  also  be  imposed  when  any  such  person  or  corporation  becomes 
beneficially  entitled,  in  possession  or  expectancy,  to  any  property  or  the  income 
thereof  by  any  such  transfer,  whether  made  before  or  after  the  passage  of  this  act. 
Such  tax  shall  be  at  the  rate  of  five  per  cent  upon  the  clear  market  value  of  such 
property,  except  as  otherwise  prescribed  in  the  next  section. 

Ss.  2  to  20  cover  the  assessment,  collection  and  payment  of  the  tax. 
S.  21  defines  the  words  "estate"  and  "property"  and  "transfer." 


608  STATUTES  ANNOTATED.  [Mich.  St. 

This  statute  is  unconstitutional  in  that  it  provides  that  the  pro- 
ceeds of  the  tax  shall  be  paid  into  the  state  treasury  for  the  use  of 
the  state  and  shall  be  applicable  to  the  expenses  of  the  state  govern- 
ment, and  to  such  other  purposes  as  the  legislature  shall  by  law 
direct.  Mich.  Const,  a.  14,  s.  14,  provides  that  every  tax  law  shall 
distinctly  state  the  tax  and  the  object  to  which  it  is  to  be  applied. 
Mich.  Const,  a.  14,  s.  1,  provides  that  all  specific  state  taxes 
except  mining  taxes  shall  be  applied  in  paying  the  interest 
upon  educational  debts  and  the  principal  and  interest  of  the 
state  debt. 

The  court  holds  that  the  collateral  inheritance  tax,  if  it  is  a  specific 
tax,  is  unconstitutional  as  in  violation  of  this  provision  of  the 
constitution.  If  the  inheritance  tax  is  a  tax  upon  property  it  was 
conceded  that  it  violated  the  provisions  of  the  Michigan  consti- 
tution requiring  uniformity.  The  court  further  finds  that  the 
whole  act  must  be  held  unconstitutional,  as  the  money  to  be  raised 
under  it  cannot  be  applied  as  the  act  provides,  and  it  is  fair  to 
assume  that  the  statute  would  not  have  met  the  approval  of  the 
legislature  had  the  moneys  arising  from  it  been  appropriated  as 
provided  by  the  constitution.  Chambe  v.  Durfee,  100  Mich.  112, 
58  N.  W.  661. 


THE  PARTIALLY  VALID  STATUTE  OF  1899. 

Mich.  St.  1899,  c.  188.    Approved  May  2,  1899. 

An  Act  to  provide  for  the  taxation  of  inheritances,  transfers  of  prop- 
erty by  will,  transfer  of  property  by  the  intestate  laws  of  this  state,  or  transfers 
of  property  by  deed,  grant,  barga  n,  sale  or  gift,  made  in  contemplation  of  the 
death  of  the  grantor,  vendor  or  donor,  or  intended  to  take  effect  in  possession 
or  enjoyment  at  or  after  such  death. 

Title. 

This  title  is  sufficient  within  Mich.  Const,  a.  14,  s.  14,  as  the  tax 
is  clearly  defined  and  no  other  law  is  referred  to  either  to  fix  the  tax 
or  its  object.  It  is  imposed  upon  everybody  who  is  not  exempt. 
So  the  reference  in  section  11  to  mortality  tables  to  ascertain  the 
value  of  future  interests  does  not  change  the  rule  of  taxation  or 
modify  it,  but  only  prescribes  a  rule  of  estimating  the  values  and 
is  valid  within  the  constitution.  Union  Trust  Co.  v.  Durfee,  125 
Mich.  487,  84  N.  W.  1101,  7  Detroit  Leg.  N.  597. 


1899,  c.  188.]  MICHIGAN.  609 

Transfers  Taxable.  —  Rate. 

S.  1.  That  af  er  the  passage  of  this  act  a  tax  shall  be  and  is  hereby  imposed 
upon  the  transfer  of  any  property,  real  or  personal,  of  the  value  of  five  hundred 
dollars  or  over,  or  of  any  interest  therein  or  income  therefrom,  in  trust  or  other- 
wise, to  persons  or  corporations  not  exempt  by  law  from  taxation  on  real  or 
personal  property,  in  the  following  cases:  — 

First,  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  from 
any  person  dying  seized  or  possessed  of  the  property  while  a  resident  of  this  state. 

Second,  When  the  transfer  is  by  will  or  intestate  law  of  property  within  the 
state,  and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

Third,  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  non-resident, 
when  such  non-resident's  property  is  within  this  state  by  deed,  grant,  bargain, 
sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  donor 
or  intended  to  t&ke  effect,  in  possession  or  enjoyment  at  or  after  such  death. 
Such  tax  shall  also  be  imposed  when  any  such  person  or  corporation  becomes 
beneficially  entitled  in  possession  or  expectancy  to  any  property  or  the  income 
thereof  by  any  such  transfer,  whether  made  before  or  after  the  passage  of  this 
act.  Such  tax  shall  be  at  the  rate  of  five  per  cent  upon  the  clear  market  value  of 
such  property,  except  as  otherwise  prescribed  in  the  next  section. 

[See  further,  notes  to  section  21,  post,  p.  613.] 

Based  on  the  Early  New  York  Statute. — Construction. 

This  statute  is  nearly  identical  with  the  New  York  statute  prior 
to  the  amendments  made  in  1892  and  was  incorporated  from  the 
state  of  New  York  together  with  the  construction  which  had  been 
given  to  the  New  York  statute  by  the  courts  of  New  York.  Stell- 
wagen  v.  Durfee,  130  IVIich.  166,  89  N.  W.  728,  8  Detroit  Leg.  N. 
1204;  Miller  v.  McLaughlin,  141  IMich.  425,  104  N.  W.  777,  12 
Detroit  Leg.'N..501 ;  In  re  Stanton,  142  IMich.  491,  105  N.  W.  1122, 
12  Detroit  Leg.  N.  829. 

Constitutionality. 

This  statute  is  valid  as  it  is  not  a  tax  on  property  but  is  a  specific 
tax  on  a  privilege,  and  it  is  not  void  on  the  ground  that  the  amount 
of  the  tax  is  based  on  the  value  of  the  property  which  is  the  subject 
of  the  privilege. 

The  act  is  not  void  on  the  ground  that  it  does  not  provide  for  a 
personal  notice  and  opportunity  to  resist  this  assessment  and  that 
it  therefore  takes  private  property  without  due  process  of  law. 
This  loses  sight  of  the  fact  that  it  is  not  taking  the  property  of  the 
legatee,  but  is  imposing  a  condition  upon  the  acquisition  of  property. 

This  act  was  attacked  on  the  ground  of  non-uniformity  on 
account  of  its  progressive  rate  and  the  court  thinks  there  is  much 
force  in  the  point,  but  upholds  the  validity  of  the  tax,  following 


610  STATUTES  ANNOTATED.  [Mich.  St. 

Magoun  v.  Savings  Bank,  170  U.  S.  301,  18  Sup.  Ct.  601;  Union 
Trust  Co.  V.  Durfee,  125  Mich.  487,  84  N.  W.  1101,  7  Detroit  Leg. 
N.  597. 

Not  Retroactive.  —  Remainder  Interests. 

Where  the  testator  died  in  1865,  devising  his  estate  to  Hfe  tenants 
and  on  the  death  of  the  life  tenants  to  their  children,  a  transfer  on 
the  death  of  a  life  tenant  after  the  passage  of  the  act  of  1899  is 
not  subject  to  the  inheritance  tax.  The  court  cites  and  follows 
New  York  cases  construing  the  New  York  inheritance  law,  as 
follows:  In  re  Seaman,  147  N.  Y.  69;  Matter  of  Pell,  171  N.  Y.  48, 
57  L.  R.  A.  540,  89  Am.  St.  Rep.  791;  Miller  v.  McLaughlin,  141 
Mich.  425,  104  N.  W.  777,  12  Detroit  Leg.  N.  501. 

Double  Taxation  Upheld. 

Personal  property  of  a  non-resident  decedent  may  be  taxed  in 
Michigan  where  it  is  actually  situated  within  the  state  of  Michigan 
at  the  death  of  the  testator  although  the  same  property  has  already 
paid  an  inheritance  tax  under  the  law  of  New  York,  on  the  theory 
that  the  situs  of  the  personal  estate  is  the  domicile  of  the  testator. 
In  re  Stanton,  142  Mich.  491,  105  N.  W.  1122,  12  Detroit  Leg.  N. 
829. 

Stock  Actually  Within  the  State. 

Where  a  non-resident  owned  stock  in  an  Illinois  corporation 
whose  business  ofhce  and  all  of  whose  property  was  situated  in  the 
state  of  Illinois  the  stock  is  not  taxable  under  the  Michigan  statute 
although  the  stock  appeared  to  be  actually  within  the  state  at  the 
time  of  the  death  of  the  testator.  In  re  Stanton,  142  Mich.  491, 
105  N.  W.  1122,  12  Detroit  Leg.  N.  829. 

Land  Contracts  of  Non-Resident. 

Where  the  testator  was  domiciled  and  resided  in  New  York  at 
her  death  and  owned  certain  land  in  Michigan  and  had  made  a 
contract  to  sell  this  land,  but  the  title  remained  in  the  testator 
at  her  death,  these  land  contracts  were  taxable  to  the  estate  of 
the  decedent  as  personal  property  under  this  statute.  In  re  Stanton, 
142  Mich.  491,  105  N.  W.  1122,  12  Detroit  Leg.  N.  829. 

In  re  Stanton,  142  Mich.  491,  was  cited  as  holding  that  an 
inheritance  tax  may  be  levied  in  this  state  upon  notes  and  mortgages 
and  contracts  relating  to  land  in  this  state  owned  by  a  resident  of 


1899,  c.  188.]  -  MICHIGAN.  611 

another  state,  but  which  notes  and  mortgages  have  always  been 
kept  in  Michigan  for  the  purpose  of  collection  and  reinvestment 
though  they  might  have  been  temporarily  taken  to  New  York. 
This  seems  to  be  predicated  upon  the  theory  that  the  state 
where  such  property  has  situs  may  control  the  right  of  succession 
and  practically  does  so,  so  that  the  transfer  depends  upon  its  laws. 
In  re  Merriam,  147  Mich.  630,  9  L.  R.  A.  (N.  S.)  1104,  111  N.  W. 
196, 14  Detroit  Leg.  N.  6,  118  Am.  St.  Rep.  561. 

Non-Resident's  Mortgage  on  Michigan  Land. 

Where  a  resident  of  New  Jersey  died  possessed  of  a  promissory 
note  secured  by  a  mortgage  upon  real  estate  in  Michigan  and  both 
note  and  mortgage  were  in  the  possession  of  the  testator  in  New 
Jersey  up  to  the  time  of  his  death,  the  debt  is  subject  to  the  succes- 
sion tax,  as  there  was  a  credit  secured  by  the  mortgage  on  lands  in 
Michigan  and  the  evidence  of  indebtedness  had  a  situs  in  Michigan. 

The  court  distinguishes  the  case  from  the  Matter  of  Bronson^ 
150  N.  Y.  1,  which  held  that  bonds  and  certificates  of  stock  in  a 
New  York  corporation  owned  by  and  in  possession  of  a  non-resi- 
dent, at  his  domicile  out  of  the  state,  at  the  time  of  his  death,  were 
not  subject  to  taxation,  as  in  the  case  at  bar.  There  was  a  credit 
secured  by  a  mortgage  on  the  lands  in  Michigan  and  the  evidence 
of  indebtedness,  namely  the  mortgage  on  Michigan  land,  had  a 
situs  in  Michigan.  In  re  Merriam,  147  Mich.  630,  9  L.  R.  A.  (N. 
S.)  1104,  111  N.  W.  196,  14  Detroit  Leg.  N.  6,  118  Am.  St.  Rep. 
561.  The  court  refuses  to  follow  Matter  of  Preston,  75  N.  Y. 
App.  Div.  250. 

Exceptions  and  Limitations. 

S.  2.  When  the  property  or  any  beneficial  interest  therein  passes  by  any  such 
transfer  to  or  for  the  use  of  any  father,  mother,  husband,  wife,  child,  brother, 
sister,  wife  or  widow  of  a  son  or  the  husband  of  a  daughter,  or  to  or  for  the  use 
of  any  child  or  children  adopted  as  such  in  conformity  with  the  laws  of  this  state, 
of  the  decedent,  grantor,  donor  or  vendor,  or  to  any  person  to  whom  any  such 
decedent,  grantor,  donor  or  vendor  for  not  less  than  ten  years  prior  to  such  trans- 
fer stood  in  the  mutually  acknowledged  relation  of  a  parent,  or  to  or  for  the  use 
of  any  lineal  descendant  of  such  decedent,  grantor,  donor  or  vendor  born  in 
lawful  wedlock,  such  transfer  of  property- shall  not  be  taxable  under  this  act, 
unless  it  is  personal  property  of  the  value  of  five  thousand  dollars  or  more,  in 
which  case  it  shall  be  taxable  under  this  act  at  the  rate  of  one  per  centum  upon 
the  clear  market  value  of  all  such  property  in  excess  of  five  thousand    dollars. 

The  exceptions  of  section  2  of  the  act  applyed  to  each  individual 
share  and  not  to  the  entire  estate,  following  the  construction  placed 


612  STATUTES  ANNOTATED.  [Mich.  St. 

Upon  the  New  York  statute  in  In  re  Gager,  111  N.  Y.  343.    StelU 
wagen  v.  Durfee,  130  Mich.  166,  89  N.  W.  728, 8  Detroit  Leg.  N.  1204. 

Exemptions  Valid. 

The  exemptions  provided  do  not  render  the  statute  void,  as 
there  is  as  much  authority  to  make  exemptions  from  this  tax  as 
from  any  other.  Union  Trust  Co.  v.  DurfeCj  125  Mich.  487,  84 
N.  W.  1101,  7  Detroit  Leg.  N.  597. 

There  is  no  difference  in  principle  between  an  exemption  given 
to  direct  inheritances  and  a  progressive  tax.  The  same  inequaUty 
exists  in  the  one  case  as  in  the  other;  and  if  there  is  unjust  discrim- 
ination in  the  one  case  there  is  also  in  the  other.  The  difference  is 
one  of  degree  and  not  of  principle.  In  re  Fox,  154  Mich.  5,  11, 
117  N.  W.  558. 

Ss.  3  to  19  cover  the  assessment,  collection  and  payment  of  the  tax. 

Provisions  for  Collection  Sufficient. 

The  fact  that  there  is  no  established  practice  of  the  probate  court 
in  like  cases  made  and  provided  for  the  service  of  citations  out  of 
that  court  if  it  is  a  fact,  does  not  make  the  law  unconstitutional.  If 
the  executor  does  not  perform  his  -duties  the  method  usual  in  such 
cases  should  doubtless  prove  efficacious.  The  practice  prescribed 
by  statute  to  enforce  collection  seems  clear  enough.  Union  Trust 
Co.  V.  Durfee,  125  Mich.  487,  84  N.  W.  1101,  7  Detroit  Leg.  N.  597. 

Duties  of  Probate  Judge. 

This  statute  does  not  impose  duties  not  judicial  upon  the  judge 
of  probate.  The  duties  imposed  are  necessarily  incident  to  the 
settlement  of  estates  and  may  be  properly  performed  by  the  judge 
of  probate.  Union  Trust  Co.  v.  Durfee,  125  Mich.  487,  84  N.  W. 
1101,  7  Detroit  Leg.  N.  597,  quoting  State  v.  Gloucester  Circuit 
Judge,  50  N.  J.  L.  585,  611,  15  A.  272,  1  L.  R.  A.  86. 

Application  of  Proceeds  Void. 

S.  20.  All  taxes  levied  and  collected  under  this  act  shall  be  paid  into  the  state 
treasury,  and  be  applied  in  paying  the  interest  upon  the  primary  school,  univer- 
sity and  other  educational  funds,  and  the  interest  and  principal  of  the  state  debt 
in  the  order  herein  recited,  until  the  extinguishment  of  the  state  debt,  other  than 
the  amounts  due  to  educational  funds,  when  such  taxes  shall  be  added  to  and 
constitute  a  part  of  the  primary  school  interest  fund,  in  pursuance  of  and  in  com- 
pliance with  section  one  of  article  fourteen  of  the  constitution  of  this  state. 


1899,  c.  188.]  MICHIGAN.  613 

Mich.  St.  1899,  c.  188,  is  unconstitutional  only  in  so  far  as  it 
provides  that  the  money  raised  shall  be  applied  to  the  payment  of 
fees,  expenses  and  cost  of  possible  litigation. 

Mich.  Const.,  a.  14,  s.  1,  provides  that  all  specific  state  taxes 
shall  be  applied  in  paying  interest  upon  the  school  fund,  etc.,  and 
therefore  the  provision  in  the  statute  as  to  the  application  of  the 
proceeds  is  void.  But  the  court  holds  that  the  remainder  of  the 
act  is  not  so  dependent  upon  it  as  to  require  holding  the  entire 
act  void.  Union  Trust  Co.  v.  Durfee,  125  Mich.  487,  84  N.  W.  1101, 
7  Detroit  Leg.  N.  597. 

Definitions.  , 

S.  21.  The  words  "estate"  and  "property"  as  used  in  this  act  shall  be  taken 
to  mean  the  property  or  interest  therein  of  the  testator,  intestate,  grantor, 
bargainor  or  vendor,  passing  or  transferred  to  those  not  herein  specifically  ex- 
empted from  the  provisions  of  this  act,  and  not  as  the  property  or  interest  therein 
passing  or  transferred  to  individual  legatees,  devisees,  heirs,  next  of  kin,  grantees, 
donees,  or  vendees  and  shall  include  all  property  or  interest  therein  whether 
situated  within  or  without  this  state,  over  which  this  state  has  any  jurisdiction 
for  the  purposes  of  taxation.  The  word  "transfer"  as  used  in  this  act  shall  be 
taken  to  include  the  passing  of  property  or  any  interest  therein  in  possession  or 
enjoyment,  present  or  future  by  inheritance,  descent,  devise,  bequest,  grant, 
deed,  bargain,  sale  or  gift,  in  the  manner  herein  prescribed.  The  words  "county 
treasurer"  and  "prosecuting  attorney"  as  used  in  this  act  shall  be  taken  to  mean 
treasurer  or  prosecuting  attorney  of  the  county  having  jurisdiction  as  provided 
in  section  ten  of  this  act. 

[See  further,  notes  to  section  1,  ante,  p,  609.] 

Not  Confined  to  Property  which  the  State  has  Selected  for 
Taxation. 

The  legislature  intended  the  tax  to  be  measured  by  the  property 
which  it  is  within  the  power  of  the  state  to  tax  and  not  by  property 
which  state  policy  had  selected  for  the  purposes  of  general  taxation. 
This  intention  has  been  found  in  the  New  York  act  of  which  the 
Michigan  statute  is  a  copy.  Matter  of  Whiting,  150  N.  Y.  27,  44  N. 
E.  715;  In  re  Stanton,  142  Mich.  491,  105  N.  W.  1122,  12  Detroit 
Leg.  N.  829. 

There  are  three  reasons  for  holding  that  the  legislature  intended 
the  tax  to  be  measured  by  property  which  it  is  within  the  power  of 
the  state  to  tax,  and  not  by  property  which  state  policy  has  selected 
for  purposes  of  general  taxation.  One  reason  is  that  the  statute  is 
adopted,  together  with  a  judicial  interpretation  of  the  language 
above  quoted,  from  the  state  of  New  York.  Stellwagen  v.  Wayne 
Probate  Judge,  130  Mich.  168.    And,  as  interpreted  by  the  courts 


614  STATUTES  ANNOTATED.  [Mich.  St. 

of  New  York,  the  design  of  the  legislature  to  tax  the  transfer  of 
everything  which  it  has  the  power  to  tax  is  found  in  the  act.  Matter 
of  Whiting,  150  N.  Y.  27,  34  L.  R.  A.  232,  55  Am.  St.  Rep.  640; 
Matter  of  Houdayer,  150  N.  Y.  37,  34  L.  R.  A.  235;  Matter  of 
Sherman,  153  N.  Y.  1 ;  Matter  of  Hellman,  174  N.  Y.  254.  See 
also  Blackstone  v.  Miller,  188  U.  S.  189;  Plummer  v.  Coler,  178 
U.  S.  115.  The  second  reason  is  that  a  policy  of  general  taxation, 
which  recognizes,  to  some  extent  at  least,  the  rule  of  universal 
succession  and  the  theory  of  taxation  of  personal  property  generally, 
at  the  domicile  of  the  owner,  is  not  logically  controlling  of  the  inter- 
pretation of  a  statute  imposing  a  tax  upon  a  right  of  succession  or 
upon  a  transfer  of  property  which  can  only  be  tangible  and  en- 
forceable —  be  made  effective  —  in  the  jurisdiction,  and  by  virtue 
of  the  laws  and  institutions  of  the  situs  of  the  property.  A  third 
reason  is  that,  as  a  tax  upon  succession  or  transfer,  uniformity  of 
operation  and  an  equal  measure  of  the  tax  to  the  property  of 
residents  and  non-residents  can  be,  with  no  other  construction, 
secured.  There  is  property  situated  within  the  state,  belonging 
to  non-residents,  which  the  state  does  not  tax,  generally  {Village 
of  Howell  V.  Gordon,  127  Mich.  517  ;Baars  v.  City  of  Grand  Rapids, 
129Mich.  572),  though  it  might  tax  it  {Catlin  v.  Hull,  21  Vt.  152; 
New  Orleans  v.  Stempel,  175  U.  S.  309).  Property  of  the  same 
class  owned  by  residents  is  taxed,  generally.  Per  Ostrander,  J.,  in 
/wrgStanton,  142Mich.  491, 105  N.  W.  1122,  12  Detroit  Leg.  N.  829. 

Tax  is  on  the  Entire  Estate  of  the  Decedent. 

This  section  places  the  tax  on  each  transfer  and  merges  all  the 
taxes  into  one  upon  the  entire  property.  The  court  follows  the 
construction  of  this  section  given  in  the  case  In  re  Hoffman,  143 
N.  Y.  327,  38  N.  E.  311,  where  it  was  held  that  the  section  was 
enacted  for  the  express  purpose  of  making  plain  the  intention  that 
the  exemptions  should  be  taken  from  the  estate  of  the  decedent  as  a 
whole  and  not  from  each  interest  transferred.  As  so  construed 
the  section  is  constitutional.  Stellwagen  v.  Durfee,  130  Mich.  166, 
173,  89  N.  W.  728,  8  Detroit  Leg.  N.  1204. 

Mich.  St.  1899^  c.  188,  consists  of  twenty-one  sections.  The 
first  twenty  sections  are  carefully  drawn,  and  leave  but  one  con- 
clusion possible,  viz. :  that  each  transfer  stands  by  itself,  that  the 
tax  is  imposed  upon  each  transfer,  and  that  no  tax  is  imposed  upon 
property.  It  recognizes  the  personal  and  individual  right  of  each 
devisee,  heir,  grantee  or  donee  to  receive  and  enjoy  the  property 


1903,  c.  195.]  MICHIGAN.  615 

transferred  to  him  upon  the  payment  of  the  tax  imposed  upon  his  ■ 
right  to  receive  it.  Each  devise,  gift,  conveyance,  or  right  of 
inheritance  is  complete  in  itself,  without  any  regard  to  the  others. 
Each  transferee  is  entitled  to  receive  his  property  upon  payment  of 
the  tax,  or  upon  giving  bond  as  provided  in  section  7.  Section  3 
gives  a  lien  only  upon  the  property  of  each  transferee.  This  is 
conceded.  But  the  sole  claim  is  that  under  section  21,  —  the  last 
section  of  the  act,  — entitled  ''Definitions,"  a  definition  has  been 
given  to  the  words  "estate"  and  "property,"  which  completely 
nullifies  the  language  of  the  other  sections  of  the  act,  overrules 
legal  and  popular  definitions,  and  imposes  the  tax  upon  the  entire 
estate  of  every  decedent,  grantor,  donor  or  vendor  of  property. 
The  section  attempts  to  declare  that  the  words  "transfer  to  or  for 
the  use  of  any  father,  mother,  husband,  wife,  child,  brother,  sister," 
etc.,  used  in  section  2,  cover  all  transfers,  and  impose  a  tax  upon 
the  entire  estate,  and  that  any  transferee  desiring  to  receive  his 
own  must  pay  the  tax  upon  all  if  the  others  do  not  pay.  Per  Grant, 
J.,  dissenting,  in  Stellwagen  v.  Durfee,  130  Mich.  166,  89  N.  W.  728, 
8  Detroit  Leg.  N.  1204. 

THE  VALID  STATUTE  OF  1903. 

Mich.  St.   1903,  c.   195.    Approved  June  9,  1903.     (Amends  ss.  1-19  and  21 
of  the  Statute  of  1899,  No.  188). 

Transfers  Taxable.  —  Rates. 

S.  1.  That  after  the  passage  of  this  act  a  tax  shall  be  and  is  hereby  imposed 
upon  the  transfer  of  any  property,  real  or  personal,  of  the  value  of  one  hundred 
dollars  or  over,  or  of  any  interest  therein  or  income  therefrom,  in  trust  or  other- 
wise, to  persons  or  corporations  not  exempt  by  law  from  taxation  on  real  or 
personal  property,  in  the  following  cases:  — 

First,  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  from 
any  person  dying  seized  or  possessed  of  the  property  while  a  resident  of  this 
state; 

Second,  When  the  transfer  is  by  will  or  intestate  law  of  property  within  the 
state,  and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death; 

Third,  When  the  trnsfer  is  of  property  made  by  a  resident  or  by  non-resident, 
when  such  non-resident's  property  is  within  this  state,  by  deed,  grant,  bargain, 
sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  donor 
or  intended  to  take  effect,  in  possession  or  enjoyment  at  or  after  such  death. 
Such  tax  shall  also  be  imposed  when  any  such  person  or  corporation  becomes 
beneficially  entitled  in  possession  or  expectancy  to  any  property  or  the  income 
thereof  by  any  such  transfer,  whether  made  before  or  after  the  passage  of  this 
act.  Such  tax  shall  be  at  the  rate  of  five  per  cent  upon  the  clear  market  value  of 
such  property,  except  as  otherwise  prescribed  in  the  next  section. 


616  STATUTES  ANNOTATED.  [Mich.  St. 

Constitutionality. 

Because  of  the  peculiar  provisions  of  their  respective  constitutions 
the  courts  of  Minnesota,  New  Hampshire,  Ohio  and  Wisconsin  are 
not  in  entire  harmony  in  their  decisions  with  other  courts.  As  was 
stated  by  the  supreme  court  of  Minnesota  in  Drew  v.  Tiffty  79  Minn. 
187,  47  L.  R.  A.  525,  Minnesota  is  the  only  state  whose  constitu- 
tion in  express  terms  limits  the  power  of  the  legislature  in  the 
laying  of  an  inheritance  tax.  In  re  Fox,  154  Mich.  5,  117  N.  W.  558, 
15  Detroit  Leg.  N.  674.     (C/.  however,  Alabama.) 

The  courts  agree  that  the  constitutional  rule  of  equality  and 
uniformity  is  complied  with  if  all  the  members  of  the  same  class 
are  treated  alike.  The  differences  among  courts  arise  only  in  the 
application  of  that  rule.  Adopted  per  Sessions,  J.,  in  7w  re  Fox, 
154  Mich.  3,  13,  117  N.  W.  558.  The  following  cases  are  cited  to 
show  that  an  unequal  graduated  rate  is  unconstitutional:  Black 
V.  State,  113  Wis.  205;  State  v.  Ferris,  53  Ohio  St.  314;  Drew 
v.  Tifft,  79  Minn.  187;  State  w.  Bazille,  87  Minn.  503.  In  the 
recent  case,  State  v.  Bazille,  97  Minn.  11,  the  court  has  explained 
and  somewhat  modified  its  former  holdings.  The  same  may  be 
said  of  the  Wisconsin  and  Ohio  courts  in  their  recent  utterances. 
See  Nunnemacher  v.  State,  129  Wis.  190;  State  v.  Guilbert,  70 
Ohio  St.  229;  In  re  Fox,  154  Mich.  5,  12. 

No  Deduction  for  Mortgage  Indebtedness. 

The  court  on  rehearing  overrules  its  opinion  given  in  154  Mich. 
5,  on  the  question  whether  in  the  determination  of  an  inheritance  tax 
a  debt  of  the  deceased  secured  by  real  estate  mortgage  should  be 
deducted  from  a  personal  estate  in  determining  the  amount  upon 
which  the  tax  is  to  be  paid.  The  court  is  convinced  that  in  reaching 
the  conclusion  in  the  former  case  that  no  deductions  should  be 
made  on  account  of  such  mortgage  indebtedness,  it  failed  to  give 
sufficient  force  to  the  distinction  which  exists  between  New  York 
and  Michigan  as  to  the  law  for  the  distribution  of  estates.  It  finds 
that  it  is  the  law  in  Michigan  that  the  net  personal  estate  for  dis- 
tribution consists  of  the  personal  property  after  the  payment  of 
debts  and  expenses,  including  the  debts  secured  by  mortgage  on 
real  estate,  while  by  the  New  York  statute  the  heir  or  devisee  taking 
real  estate  is  bound  to  satisfy  and  discharge  any  mortgage  upon 
it  out  of  his  own  property.  In  re  Fox,  159  Mich.  420,  124  N.  W. 
60,  16  Detroit  Leg.  N.  943.  McAlvay,  J.,  dissenting.  See  In  re  Fox, 
154  Mich.  5,  117  N.  W.  558,  15  Detroit  Leg.  N.  674. 


1903,  c.  195.]  MICHIGAN.  617 

Exemptions. 

S.  2.  When  the  property  or  any  beneficial  interest  therein  passes  by  any  such 
transfer  to  or  for  the  use  of  one  or  more  of  the  following  named  persons:  Father, 
mother,  husband,  wife,  child,  brother,  sister,  wife  or  widow  of  a  son,  or  the  husband 
of  a  daughter,  or  to  or  for  the  use  of  any  child  or  children  adopted  as  such  in 
conformity  with  the  laws  of  this  state  of  the  decedent,  grantor,  donor  or  vendor, 
or  to  or  for  the  use  of  any  persons  to  whom  any  such  decedent,  grantor,  donor 
or  vendor,  for  not  less  than  ten  years  prior  to  such  transfer  stood  in  the  mutually 
acknowledged  relation  of  a  parent,  or  to  or  for  the  use  of  any  lineal  descendant 
of  such  decedent,  grantor,  donor  or  vendor,  such  transfer  of  property  shall  not  be 
taxable  under  this  act,  unless  it  is  personal  property  of  the  clear  market  value  of 
two  thousand  dollars  or  over,  in  which  case  the  entire  transfer  shall  be  taxed  under 
this  act  at  the  rate  of  one  per  cent  upon  the  clear  market  value  thereof.  The 
exemptions  of  sections  one  and  two  of  this  act  shall  apply  and  be  granted  to  each 
beneficiary's  interest  therein,  and  not  to  the  entire  estate  of  a  decedent. 

The  exemption  where  the  value  of  the  property  transferred  is 
less  than  two  thousand  dollars  and  taxing  the  entire  transfer  where 
its  value  is  two  thousand  dollars  or  more  is  constitutional.  In  re 
Fox,  154  Mich.  5,  117  N.  W.  558. 

Lien.  —  Payment.  —  Receipts. 

S.  3.  Every  such  tax  shall  be  and  remain  a  lien  upon  the  property  transferred 
until  paid,  and  the  person  to  whom  the  property  is  so  transferred  and  the  ad- 
ministrator, executor,  and  trustee  of  every  estate  so  transferred,  shall  be  personally 
liable  for  such  tax  until  its  payment;  except  that  the  executor  or  administrator 
shall  not  be  personally  liable  for  the  tax  upon  a  reversion  or  remainder  consisting 
of  real  estate  where  the  election  provided  for  in  section  seven  is  made,  and  where 
in  pursuance  of  the  order  of  the  probate  court  the  estate  had  been  distributed 
by  the  executor  or  administrator  prior  to  June  first,  nineteen  hundred  and  one, 
and  the  tax  had  not  been  fixed  by  the  court.  The  tax  shall  be  paid  to  the  treasurer 
of  the  county  in  which  the  probate  court  has  jurisdiction  as  herein  provided, 
and  said  treasurer  shall  make  out,  upon  forms  prescribed  by  the  auditor  general, 
receipts  in  duplicate,  and  immediately  send  the  same  to  the  auditor  general,  and 
accompany  them  with  the  amount  received  in  funds  by  law  receivable  at  the  state 
treasury.  It  shall  then  be  the  duty  of  the  auditor  general  to  charge  the  treasurer 
so  receiving  the  tax  with  the  amount  thereof  and  credit  him  with  payment  of 
same  to  state  treasurer,  and  in  case  the  determination  of  said  tax  and  said  receipt 
are  believed  to  be  in  accordance  with  law,  seal  said  receipts  with  the  seal  of 
his  office  and  countersign  the  same  and  return  one  of  them  to  the  county  treasurer 
who  shall  file  and  preserve  it  in  his  office,  and  immediately  send  the  other  of  such 
receiptstothejudgeof  probate  who  shall,  file  and  preserve  it  in  his  office,  where- 
upon it  shall  be  a  voucher  in  settlement  of  the  accounts  of  the  executor,  adminis- 
trator or  trustee  of  the  estate  upon  which  the  tax  is  paid.  At  the  same  time 
the  auditor  general  shall  send  to  the  county  treasurer,  state  treasurer's  receipt 
countersigned  as  required  by  law,  showing  payment  of  tax.  The  sealing  and 
countersigning  of  said  receipts  shall  not  prejudice  the  right  of  the  state  to  a 
review  of  the  determination  fixing  the  tax.    The  receipts  issued  under  this  section 


618  STATUTES  ANNOTATED.  [Mich.  St. 

shall  show  whether  the  amount  paid  is  a  payment  of  the  tax  upon  any  beneficial 
interest  or  upon  the  entire  transfer.  But  no  executor,  administrator  or  trustee 
of  an  estate,  in  settlement  of  which  a  tax  is  due  under  the  provisions  of  this  act, 
shall  be  discharged  and  the  estate  or  trust  closed  by  a  decree  of  the  court,  unless 
there  shall  be  produced  a  receipt  signed  by  the  county  treasurer  and  sealed 
and  countersigned  by  the  auditor  general,  or  a  copy  thereof,  certified  by  the 
county  treasurer,  or  unless  payment  of  the  tax  has  been  deferred  as  prescribed 
by  section  seven  of  this  act.  When  any  such  tax  shall  be  paid  to  the  county 
treasurer,  he  shall,  in  addition  to  the  duplicate  receipts  required  to  be  issued  upon 
the  form  prescribed  by  the  auditor  general,  give  the  executor,  administrator, 
rustee  or  other  person  paying  the  tax,  a  simple  receipt  for  the  amount  received. 
All  taxes  imposed  by  this  act  shall  accrue  and  be  due  and  payable  at  the  time 
of  transfer,  which  is  the  date  of  death:  Provided,  however,  that  taxes  upon  the 
transfer  of  any  estate,  property  or  interest  therein  limited,  conditioned,  dependent 
or  determinable  upon  the  happening  of  any  contingency  or  future  event,  by 
reason  of  which  the  clear  market  value  thereof  can  not  be  ascertained  at  the  time 
of  the  transfer  as  herein  provided,  shall  accrue  and  become  due  and  payable  when 
the  persons  or  corporations  beneficially  entitled  thereto  shall  come  into  actual 
possession  or  enjoyment  thereof. 

Sections  3  and  5,  providing  that  it  is  the  duty  of  the  executor 
to  collect  the  inheritance  tax  and  that  he  shall  not  deliver  any 
property  subject  to  tax  to  any  person  until  the  tax  assessed  has 
been  paid  to  him  or  to  the  county  treasurer,  do  not  prevent  the 
institution  of  an  action  in  ejectment  by  the  devisees.  No  delivery 
of  possession  of  real  estate  to  the  devisees  was  necessary.  Under 
the  will  they  took  title  subject  to  the  right  of  the  executor  to  take 
possession  for  the  purposes  of  administration.  The  rights  of  the 
state  are  of  no  concern  to  the  descendants.  Weller  v.  Wheelock, 
155  Mich.  698,  118  N.  W.  609. 

Non-Resident's  Interests  in  Michigan  Land. 

The  testator  died  in  New  York,  of  which  state  he  was  a  resident, 
and  administration  of  the  estate  was  granted  in  New  York  and 
ancillary  proceedings  were  had  in  Michigan.  The  Michigan 
authorities  attempted  to  hold  for  an  inheritance  tax  mortgages, 
notes  and  land  contracts.  All  the  devisees,  legatees  and  the  heirs 
at  law  resided  in  New  York.  At  the  time  of  the  death  of  the  testator 
all  the  mortgages,  notes,  land  contracts  and  papers  representing 
property  in  the  state  of  Michigan  were  in  the  actual  possession  of 
the  testator  at  his  residence  in  New  York  and  were  habitually  kept 
by  him  at  his  residence  in  New  York.  The  mortgages  were  recorded 
in  Michigan.  The  court  holds  that  this  property  is  subject  to  a 
tax  in  Michigan  in  In  re  Rogers,  149,  Mich.  305,  112  N.  W.  931 
11  L.  R.  A.  (N.  S.)  1134,  119  Am.  St.  Rep.  677,  14  Detroit  Leg. 


1903,  c.  195.]  MICHIGAN.  619 

N.  444,  following  In  re  Stanton,  142  Mich.  491,  105  N.  W.  1122; 
In  re  Merriam,  147  Mich.  630,  9  L.  R.  A.  (N.  S.)  1104  n.,  118 
Am.  St.  Rep.  561;  Blackstonev.  Miller,  188  U.  S.  189,  23  Sup.  Ct. 
277.  The  court  remarks  that  the  case  of  Gilbert  v.  Oliver,  129 
Iowa  568,  4  L.  R.  A.  (N.  S.)  953,  is  not  in  harmony  with  In  re 
Stanton,  142  Mich.  491,  105  N.  W.  1122. 

The  court  remarks  that  the  mortgagee  could  not  preserve  his 
lien  without  complying  with  the  registry  law  of  Michigan ;  that  the 
debts  secured  cannot  be  collected  without  the  aid  of  the  laws  of 
Michigan;  that  the  estate  of  the  testator  cannot  be  properly 
administered  or  closed  without  ancillary  letters  of  administration 
obtained  under  the  laws  of  Michigan;  and  therefore  it  is  subject 
to  an  inheritance  tax  in  Michigan. 

It  was  claimed  that  the  situs  of  personal  property  was  the 
domicile  of  the  owner  —  mortgages,  notes  and  land  contracts  and 
papers  representing  property  in  Michigan.  ^'Several  authorities  are 
cited  in  support  of  this  claim,  and  it  is  insisted  the  case  is  controlled 
by  the  Iowa  case  of  Gilbertson  v.  Oliver,  129  Iowa  568,  4  L.  R.  A. 
(N.  S.)  953.  In  that  case  the  justice  writing  the  opinion  said: 
'The  controversy  presents  for  determination  but  one  legal  question, 
namely:  Was  the  property  of  the  deceased  within  the  jurisdiction 
of  this  state  at  the  time  of  her  death?  There  is  a  conflict  in  the 
adjudicated  cases  as  to  whether  such  evidences  of  indebtedness  are 
taxable  at  the  domicile  of  the  owner,  or  whether  the  actual  situs  of 
such  property,  and  not  the  domicile  of  the  owner,  determines 
the  liability  to  taxation.'  The  great  weight  of  authority,  however, 
supports  the  holding  of  our  own  cases  that  this  species  of  personal 
property,  which  is  in  a  sense  intangible  and  incorporeal,  is  taxable 
at  the  domicile  of  the  owner,  and  not  elsewhere,  unless  the  owner 
has  himself  given  it  a  different  situs."  Per  Moore,  J.,  in  In  re  Rogers, 
149  Mich.  305,  112  N.  W.  931,  11  L.  R.  A.  (N.  S.)  1134,  14  Detroit 
Leg.  N.  444,  119  Am.  St.  Rep.  677. 

The  court  cites,  however,  In  re  Stanton's  Estate,  142  Mich.  491, 
Q,nd Blackstonev.  Miller,  188  U.  S.  189,  23  Sup.  Ct.  277. 

[See  notes  to  the  Act  of  1899,  ante,  pp.  610,  611.  Section  4  is  printed  as 
amended  on  p.  623.] 

Power  of  Sale.  —  Deduction. 

S.  5.  Every  executor,  administrator,  trustee  or  other  person  shall  have  full 
power  to  sell  or  mortgage  so  much  of  the  property  of  the  decedent  as  will  enable 
him  to  pay  such  tax  in  the  same  manner  as  he  might  be  entitled  by  law  to  do  for 
the  payment  of  the  debts  of  a  decedent  or  ward;  except  that  in  cases  where  the 
transfer  is  to  two  or  more  persons  in  common,  and  one  or  more  of  them  shall 


620  STATUTES  ANNOTATED.  [Mich.  St. 

have  paid  his  proportion  of  such  tax,  such  executor,  administrator,  trustee  or 
other  person  shall  sell  or  mortgage  only  the  interest  of  such  of  the  persons  to  whom 
the  property  was  transferred  as  have  not  paid  the  tax,  to  pay  the  tax  due  upon 
such  share  or  shares.  Any  such  administrator,  executor,  trustee  or  other  person 
having  in  charge  or  in  trust  any  legacy  or  property  for  distribution  subject  to 
such  tax,  shall  deduct  the' tax  therefrom;  and  within  thirty  days  thereafter  shall 
pay  over  the  same  to  the  county  treasurer  as  herein  provided.  If  such  legacy  or 
property  be  not  in  money,  he  shall  collect  the  tax  thereon  as  determined  by  the 
judge  of  probate  from  the  person  entitled  thereto,  unless  such  tax  has  been  paid 
to  the  county  treasurer.  He  shall  not  deliver  or  be  compelled  to  deliver  any 
specific  legacy  or  property  subject  to  tax  under  this  act  to  any  person  until  the 
tax  assessed  thereon  has  been  paid  to  him  or  to  the  county  treasurer.  If  any  such 
legacy  shall  be  charged  upon  or  payable  out  of  real  property  and  is  taxable  under 
this  act,  the  devisee  charged  with  the  payment  of  such  legacy  shall  deduct  such 
tax  therefrom  and  pay  it  to  the  county  treasurer  or  the  administrator,  executor 
or  trustee.  And  the  payment  thereof  shall  be  enforced  by  the  executor,  adminis- 
trator or  trustee,  in  the  same  manner  as  payment  of  the  legacy  might  be  enforced 
or  by  the  attorney  general  or  prosecuting  attorney  by  the  appropriate  legal  pro- 
ceeding. '  If  such  legacy  shall  be  given  in  money  to  any  such  person  for  a  limited 
period,  the  administrator,  executor,  trustee  or  other  person  shall  retain  the  tax 
upon  the  whole  amount,  but  if  not  in  money,  he  shall  make  such  application  to 
the  court  having  jurisdiction  of  an  accounting  by  him,  to  make  an  apportionment, 
if  the  case  require  it,  of  the  sum  to  be  paid  by  such  legatee  and  for  such  further 
order  relative  thereto  as  the  case  may  require. 
[See  note  under  section  3,  supra^  p.  618.] 

Personal  Property  of  Non-Residents. 

Mich.  St.  1903,  c.  195,  amending  section  21  of  the  Mich.  St.  1899, 
c.  188,  by  eliminating  from  section  21  the  words  "over  which  this 
state  has  any  jurisdiction  for  the  purposes  of  taxation"  has  no  effect 
to  narrow  the  provisions  of  the  statute  as  to  the  taxation  of  the 
personal  property  of  non-residents.  The  court  for  that  reason 
follows  In  re  Merriam,  147  Mich.  630,  111  N.  W.  196,  9  L.  R.  A. 
(N.  S.)  1104,  14  Detroit  Leg.  N.  6,  decided  under  the  earlier  act, 
as  to  the  interests  of  non-residents  in  Michigan  real  estate.  In  re 
Rogers,  149  Mich.  305,  112  N.  W.  931,  11  L.  R.  A.  (N.  S.)  1134, 
14  Detroit  Leg.  N.  444,  119  Am.  St.  Rep.  677. 

REGENT  AMENDMENTS. 

Mich.  St.  1907,  No.  155,  approved  June  17,  1907,  amends  Mich. 
St.  1899,  c.  188,  ss.  3,  4,  11  and  19. 

Mich.  St.  1907,  c.  328,  approved  June  28,  1907,  amends  Mich. 
St.  1899,  c.  188,  s.  21,  as  to  the  definition  of  property  to  read  as 
in  the  present  act,  printed  post,  p.  621. 

Mich.  St.  1909,  c.  44,  approved  April  21,  1909,  amends  Mich.  St. 
1899,  c.  188,  s.  19. 


1899,  c.  188.]  MICHIGAN.  621 

Mich.  St.  1911,  c.  73,  approved  April  13,  1911,  amends  Mich.  St. 
1899,  c.  188,  s.  18,  making  elaborate  provisions  as  to  the  collec- 
tion of  the  tax  on  property  in  the  state  belonging  to  a  non-resident. 

Mich.  St.  1909,  c.  298.     Approved  June  2,  1909. 

An  Act  in  relation  to  the  collection  of  inheritance  taxes  in 
certain  cases. 
S.  1.  No  heir,  legatee,  beneficiary,  trustee,  executor,  administrator  or  surety 
shall  be  held  liable  for  any  inheritance  tax  upon  the  transfer  of  property  in  any 
estate  in  which  the  property  has  been  distributed  by  order  of  the  court  prior  to 
January  first,  nineteen  hundred  five;  nor  where  the  executor  or  administrator 
or  trustee  has  been  discharged  by  order  of  the  court  prior  to  January  first,  nine- 
teen hundred  five;  nor  where  the  estate  has  been  closed  prior  to  January  first, 
nineteen  hundred  five.  All  inheritance  taxes  which  may  have  been  assessed 
in  any  such  estate  as  comes  within  the  provisions  of  this  act  shall  not  be  subject 
to  enforcement,  and  all  inheritance  tax  liens  upon  such  property  are  hereby 
released. 

THE  PRESENT  ACT. 

Mich.  St.   1899,  c.  188,  as  amended. 

An  Act  to  provide  for  the  taxation  of  inheritances,  transfers  of 
property  by  will,  transfers  of  property  by  the  intestate  laws  of  this  state,  or 
transfers  of  property  by  deed,  grant,  bargain,  sale  or  gift,  made  in  contem- 
plation of  the  death  of  the  grantor,  vendor  or  donor,  or  intended  to  take 
effect  in  position  or  enjoyment  at  or  after  such  death. 

Taxable  Transfers. 

S.  1.  (As  amended  by  St.  1903,  c.  195.)  That  after  the  passage  of  this 
act  a  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  property, 
real  or  personal,  of  the  value  of  one  hundred  dollars  or  over,  or  of  any  interest 
therein  or  income  therefrom,  in  trust  or  otherwise,  to  persons  or  corporations  not 
exempt  by  law  from  taxation  on  real  or  personal  property,  in  the  following 
cases : — 

First,  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  from 
any  person  dying  seized  or  possessed  of  the  property  while  a  resident  of  this 
state ; 

Second,  When  the  transfer  is  by  will  or  intestate  law  of  property  within  the 
state,  and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

Third,  When  the  transfer  is  of  property  made  by  a  resident  or  by  non-resident; 
when  such  non-resident's  property  is  within  this  state,  by  deed,  grant,  bargain, 
sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  donor 
or  intended  to  take  effect,  in  possession  or  enjoyment  at  or  after  such  death. 
Such  tax  shall  also  be  imposed  when  any  such  person  or  corporation  becomes 
beneficially  entitled  in  possession  or  expectancy  to  any  property  or  the  income 
thereof  by  any  such  transfer,  whether  made  before  oi;  after  the  passage  of  this  act. 
Such  tax  shall  be  at  the  rate  of  five  per  cent  upon  the  clear  market  value  of  such 
property,  except  as  otherwise  prescribed  in  the  next  section. 

[See  notes  to  the  Act  of  1899  and  1903,  ante,  pp.  609,  616.] 


622  STATUTES  ANNOTATED.  [Mich.  St. 

Exemptions. 

S.  2.  (As  amended  by  St.  1903,  c.  195.)  When  the  property  or  any  bene- 
ficial interest  therein  passes  by  any  such  transfer  to  or  for  the  use  of  one  or 
more  of  the  following  named  persons:  Father,  mother,  husband,  wife,  child, 
brother,  sister,  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter,  or  to  or 
for  the  use  of  any  child  or  children  adopted  as  such  in  conformity  with 
the  laws  of  this  state  of  the  decedent,  grantor,  donor  or  vendor,  or  to  or 
for  the  use  of  any  persons  to  whom  any  such  decedent,  grantor,  donor 
or  vendor,  for  not  less  than  ten  years  prior  to  such  transfer  stood  in  the 
mutually  acknowledged  relation  of  a  parent,  or  to  or  for  the  use  of  any  lineal 
descendant  of  such  decedent,  grantor,  donor  or  vendor,  such  transfer  of  property 
shall  not  be  taxable  under  this  act,  unless  it  is  personal  property  of  the  clear  market 
value  of  two  thousand  dollars  or  over,  in  which  case  the  entire  transfer  shall  be 
taxed  under  this  act  at  the  rate  of  one  per  cent  upon  the  clear  market  value  thereof. 
The  exemptions  of  sections  one  and  two  of  this  act  shall  apply  and  be  granted 
to  each  beneficiary's  interest  therein,  and  not  to  the  entire  estate  of  a  decedent. 

[See  notes  to  the  Act  of  1899  and  1903,  ante,  pp.  611,  617.] 

Lien.  —  Liabilities.  —  Payment.  —  When  Tax  Accrues. 

S.  3.  (As  amended  by  St.  1907,  c.  155.)  Every  such  tax  and  the  interest 
thereon  herein  provided  for  shall  be  and  remain  a  lien  upon  the  property 
transferred  until  paid  and  the  person  to  whom  the  property  is  so  trans- 
ferred and  the  administrator,  executor,  and  trustee  of  every  estate  so  trans- 
ferred, shall  be  personally  liable  for  such  tax  until  its  payment;  except  that 
the  executor  or  administrator  shall  not  be  personally  liable  for  the  tax  upon 
a  reversion  or  remainder  consisting  of  real  estate  where  the  election  provided 
for  in  section  seven  is  made.  [Three  lines  in  1903  omitted  here.]  The  tax 
shall  be  paid  to  the  treasurer  of  the  county  in  which  the  probate  court 
has  jurisdiction  as  herein  provided,  and  said  treasurer  shall  make  out,  upon 
forms  prescribed  by  the  auditor  general,  receipts  in  duplicate,  and  immediately 
send  the  same  to  the  auditor  general,  and  accompany  them  with  the  amount 
received  in  funds  by  law  receivable  at  the  state  treasury.  It  shall  then 
be  the  duty  of  the  auditor  general  to  charge  the  treasurer  so  receiving  the 
tax  with  the  amount  thereof  and  credit  him  with  the  payment  of  same  to 
state  treasurer,  and  in  case  the  determination  of  said  tax  and  said  receipt  are 
believed  to  be  in  accordance  with  law,  seal  said  receipts  with  the  seal  of  his  office 
and  countersign  the  same  and  return  one  of  them  to  the  county  treasurer  who  shall 
file  and  preserve  it  in  his  office  and  immediately  send  the  other  of  such  receipts 
to  the  judge  of  probate  who  shall  file  and  preserve  it  in  his  office,  whereupon  it 
shall  be  a  voucher  in  settlement  of  the  accounts  of  the  executor,  administrator, 
or  trustee  of  the  estate  upon  which  the  tax  is  paid.  At  the  same  time  the  auditor 
general  shall  send  to  the  county  treasurer  the  state  treasurer's  receipt,  counter- 
signed as  required  by  law,  showing  payment  of  tax.  The  sealing  and  countersign- 
ing of  said,  receipts  shall  not  prejudice  the  right  of  the  state  to  a  review  of  the 
determination  fixing  the  tax.  The  receipts  issued  under  this  section  shall  show 
whether  the  amount  paid  is  a  payment  of  the  tax  upon  any  beneficial  interest 
or  upon  the  entire  transfer.  But  no  executor,  administrator  or  trustee  of  an 
estate,  in  settlement  of  which  a  tax  is  due  under  the  provisions  of  this  act,  shall 
be  discharged  and  the  estate  or  trust  closed  by  a  decree  of  the  court,  unless  there 
shall  be  produced  a  receipt  signed  by  the  county  treasurer  and  sealed  and  counter- 


1899,  c.  188.]  MICHIGAN.  623 

signed  by  the  auditor  general,  or  a  copy  thereof,  certified  by  the  county  treasurer, 
or  unless  payment  of  the  tax  has  been  deferred  as  prescribed  by  section  seven  of 
this  act.  When  any  such  tax  shall  be  paid  to  the  county  treasurer,  he  shall,  in 
addition  to  the  duplicate  receipts  required  to  be  issued  upon  the  form  prescribed 
by  the  auditor  general,  give  the  executor,  administrator,  trustee,  or  other  person 
paying  the  tax,  a  simple  receipt  for  the  amount  received.  All  taxes  imposed  by 
this  act  shall  accrue  and  be  due  and  payable  at  the  time  of  transfer,  which  is 
the  date  of  death:  Provided,  however,  that  taxes  upon  the  transfer  of  any  estate, 
property  or  interest  therein  limited,  conditioned,  dependent  or  determinable 
upon  the  happening  of  any  contingency  or  future  event,  by  reason  of  which  the 
clear  market  value  thereof  cannot  be  ascertained  at  the  time  of  the  transfer  as 
herein  provided,  shall  accrue  and  become  due  and  payable  when  the  persons 
or  corporations  beneficially  entitled  thereto  shall  come  into  actual  possession 
or  enjoyment  thereof. 

[See  notes  to  the  Act  of  1903,  ante,  p.  618.) 

Discount.  —  Interest. 

S.  4.  (As  amended  by  St.  1907,  c.  155.)  If  in  any  case,  whether  such  trans- 
fer shall  take  effect  prior  or  subsequent  to  the  taking  effect  of  this  act, 
such  a  tax  is  paid  within  twelve  months  from  the  accruing  thereof,  a  dis- 
count of  five  per  centum  shall  be  allowed  and  deducted  therefrom.  If  such 
tax  is  not  paid  within  eighteen  months  from  the  accruing  thereof  interest 
shall  be  charged  and  collected  thereon  at  the  rate  of  eight  per  cent  per  annum 
from  the  time  the  tax  accrued,  unless  by  reason  of  claims  made  upon  the 
estate,  necessary  litigation  or  other  unavoidable  cause  of  delay,  such  tax  can- 
not be  determined  and  paid  as  herein  provided,  in  which  case  interest  at  the 
rate  of  six  per  cent  per  annum  shall  be  charged  upon  such  tax  from  and  after  the 
expiration  of  said  eighteen  months  until  the  tax  is  determined,  or  could  be  de- 
termined and  after  the  determination,  or  after  the  time  it  could  be  determined, 
interest  at  eight  per  cent  per  annum  shall  be  charged  until  the  date  of  the  pay- 
ment thereof.  In  all  cases  where  payment  is  deferred  as  provided  in  section 
sever  of  this  act,  interest  shall  be  charged  at  the  rate  of  five  per  centum  per 
annum  from  the  accrual  of  the  tax  until  the  date  of  the  payment  thereof. 

Power  of  Sale.  —  Tax  Deducted  from  Legacy. 

S.  5.  (As  amended  by  St.  1903,  c.  195.)  Every  executor,  administrator 
trustee  or  other  person  shall  have  full  power  to  sell  or  mortgage  so  much 
of  the  property  of  the  decedent  as  will  enable  him  to  pay  such  tax  in  the 
same  manner  as  he  might  be  entitled  by  law  to  do  for  the  payment  of  the 
debts  of  a  decedent  or  ward;  except  that  in  cases  where  the  transfer  is  to 
two  or  more  persons  in  common,  and  one  or  more  of  them  shall  have  paid 
his  proportion  of  such  tax,  such  executor,  administrator,  trustee  or  other  per- 
son shall  sell  or  mortgage  only  the  interest  of  such  of  the  persons  to  whom 
the  property  was  transferred  as  have  not  paid  the  tax,  to  pay  the  tax  due 
upon  such  share  or  shares.  Any  such  administrator,  executor,  trustee  or  other 
person  having  in  charge  or  in  trust  any  legacy  or  property  for  distribution  sub- 
ject to  such  tax,  shall  deduct  the  tax  therefrom ;  and  within  thirty  days  there- 
after shall  pay  over  the  same  to  the  county  treasurer  as  herein  provided.  If 
such  legacy  or  property  be  not  in  money,  he  shall  collect  the  tax  thereon  as  de- 


624  STATUTES  ANNOTATED.  [Mich.  St 

termined  by  the  judge  of  probate  from  the  person  entitled  thereto,  unless  such  tax 
has  been  paid  to  the  county  treasurer.  He  shall  nor  deliver  or  be  compelled  to 
deliver  any  specific  legacy  or  property  subject  to  tax  under  this  act  to  any  person, 
until  the  tax  assessed  thereon  has  been  paid  to  him  or  to  the  county  treasurer, 
If  any  such  legacy  shall  be  charged  upon  or  payable  out  of  real  property  and  is 
taxable  under  this  act,  the  devisee  charged  with  the  payment  of  such  legacy  shall 
deduct  such  tax  therefrom  and  pay  it  to  the  county  treasurer  or  the  administrator, 
executor  or  trustee.  And  the  payment  thereof  shall  be  enforced  by  the  executor, 
administrator  or  trustee,  in  the  same  manner  as  payment  of  the  legacy  might  be 
enforced,  or  by  the  attorney  general  or  prosecuting  attorney  by  the  appropriate 
legal  proceeding.  If  such  legacy  shall  be  given  in  money  to  any  such  person  for 
a  limited  period,  the  administrator,  executor,  trustee  or  other  person  shall  retain 
the  tax  upon  the  whole  amount,  but  if  not  in  money,  he  shall  make  such  application 
to  the  court  having  jurisdiction  of  an  accounting  by  him,  to  make  an  apportion- 
ment, if  the  case  require  it,  of  the  sum  to  be  paid  by  such  legatee  and  for  such 
further  order  relative  thereto  as  the  case  may  require. 
[See  notes  to  the  Act  of  1903,  ante,  p.  618.] 

Refund. 

S.  6.  (As  amended  by  St.  1903,  c.  195.)  If  any  debt  shall  be  allowed  against 
the  estate  of  a  decedent  after  the  payment  of  any  legacy  or  distributive  share 
thereof,  from  which  any  such  tax  has  been  deducted  or  upon  which  it  has 
been  paid  by  the  person  entitled  to  such  legacy  or  distributive  share,  and  such 
person  is  required  to  refund  the  amount  of  such  debts  or  any  part  thereof, 
an  equitable  proportion  of  the  tax  shall,  upon  the  order  of  the  court,  be  paid  to 
him  by  the  executor,  administrator,  trustee  or  other  person,  if  the  tax  has 
not  been  paid  to  the  county  treasurer.  When  any  amount  of  said  tax  shall 
have  been  paid  erroneously  into  the  county  treasury  by  reason  of  the  allowance 
of  debts  or  otherwise,  it  shall  be  lawful  for  the  auditor  general,  upon  satis- 
factory proof  by  the  order  or  certificate  of  the  proper  court  of  the  allowance 
of  such  debts  or  of  the  reversal,  correction  or  alteration,  in  accordance  with 
law,  of  the  order  fixing  such  tax,  to  draw  his  warrant  upon  the  state  treasury 
for  such  erroneous  payment,  to  be  refunded  to  the  executor,  administrator,  trustee, 
person  or  persons  entitled  to  receive  it,  and  charge  the  same  to  the  fund  which 
receives  credit  from  the  payment  of  taxes  under  the  provisions  of  this  act:  Pro- 
vided, however,  that  all  applications  for  such  refunding  of  erroneous  tax  shall  be 
made  within  six  months  from  the  allowance  of  such  debts  or  the  reversal,  correc- 
tion or  alteration  of  said  order. 

When  Bond  Required  in  Case  of  Deferred  Payments. 

S.  7.  (As  amended  by  St.  1903,  c.  195.)  Any  person  or  corporation  bene- 
ficially interested  in  the  reversion  or  remainder  of  any  property  chargeable 
with  a  tax  under  this  act,  and  executors,  administrators  and  trustees  thereof, 
may  elect  within  one  year  from  the  transfer  thereof  as  herein  provided,  not  to 
pay  such  tax  until  the  person  or  persons  beneficially  interested  therein  shall 
come  into  the  actual  possession  or  enjoyment  thereof.  If  it  be  personal 
property,  the  person  or  persons  so  electing  shall  give  a  bond  to  the  state  in 
the  penalty  of  three  times  the  amount  of  such  tax,  with  such  sureties  as  the 
judge  of  probate  of  the  proper  county  may  approve,  conditioned  for  the  pay- 
ment of  such  tax  and  interest  thereon  at  such  time  and  period  as  the  person 


1899,  c.  188.]  MICHIGAN.  625 

or  persons  beneficially  interested  therein  may  come  into  the  actual  possession 
or  enjoyment  of  such  property,  which  bond  shall  be  executed  and  filed 
and  a  full  return  of  such  property  upon  oath  made  to  the  probate  court 
within  one  year  from  the  date  of  the  transfer  thereof,  as  herein  provided,  and 
such  bond  must  be  renewed  every  five  years:  Provided,  that  the  time  fixed  herein 
for  making  such  election  may  be  extended  by  the  court  in  its  discretion  for  a  period 
not  to  exceed  two  years. 

When  Bequest  to  Executors,  etc.,  Subject  to  Tax. 

S.  8.  (As  amended  by  St.  1903,  c.  195.)  If  a  testator  bequeath  or  devise 
his  property  to  one  or  more  executors  or  trustees  in  lieu  of  their  commissions 
or  allowances,  to  an  amount  exceeding  the  commissions  or  allowances  pre- 
scribed by  law  for  an  executor  or  trustee,  the  excess  in  value  of  the  property  so 
bequeathed  or  devised  above  the  amount  of  commissions  or  allowances  pre- 
scribed by  law  shall  be  taxable  under  this  act. 

Transfers  by  Foreign  Executors,  etc* 

S.  9.  (As  amended  by  St.  1903,  c.  195.)  If  a  foreign  executor,  adminis- 
trator or  trustee  shall  assign  or  convey  any  stock  or  obligation  in  this  state 
standing  in  the  name  of  a  decedent,  or  in  trust  for  a  decedent,  liable  to  any 
such  tax,  the  tax  shall  be  paid  to  the  treasurer  of  the  proper  county  on  the 
transfer  thereof;  and  any  corporation,  person  or  persons  having  control  over 
any  such  assets,  shall  not  deliver  or  transfer  the  same  to  any  person  or  cor- 
poration other  than  an  executor,  administrator,  trustee  or  guardian  duly 
qualified  under  the  laws  of  this  state,  until  the  tax  to  which  the  same  is 
liable  has  been  paid  as  provided  in  this  act.  No  safe  deposit  company,  trust 
company,  bank  or  other  institution,  person  or  persons  holding  securities  or 
assets  of  a  decedent  shall  deliver  or  transfer  the  same  to  the  executors,  adminis- 
trators, or  legal  representatives  of  said  decedent  or  their  assignees  unless  notice 
of  the  time  and  place  of  such  intended  delivery  or  transfer  be  served  upon  the 
county  treasurer  by  said  company,  bank,  institution,  person  or  persons,  at  least 
five  days  prior  to  the  said  delivery  or  transfer.  And  it  shall  be  lawful  for  the 
said  county  treasurer  and  is  hereby  made  his  duty  personally  or  by  representative 
to  examine  said  securities  or  assets  at  the  time  of  or  prior  to  such  delivery  or 
transfer.  Failure  to  serve  such  notice  or  to  allow  such  examination  on  the  de- 
livery or  transfer  herein  prohibited  shall  render  such  safe  deposit  company,  bank, 
or  other  institution,  person  or  persons  liable  to  the  payment  of  the  tax  due  or  to 
become  due  upon  said  securities  or  assets  in  pursuance  of  the  provisions  of  this 
act. 

The  attorney  general  has  ruled  that  any  foreign  executor  or  ad- 
ministrator must  take  out  ancillary  administration  in  the  state 
for  the  purpose  of  settling  the  tax. 

The  Michigan  statute  seems  to  contain  no  penalty  or  liability 
on  a  domestic  corporation  transferring  its  own  stock,  and  so  the 
tax  would  seem  not  to  be  easily  collectible  against  the  estates  of 
non-resident  stockholders  in  Michigan  corporations.  For  example, 
Calumet  &  Hecla  and  Osceola  mining  stock  can  be  transferred 
without  reference  to  the  state  authorities. 


626  STATUTES  ANNOTATED.  iMich.  St. 

Jurisdict  on  of  Probate  Court. 

S,  10.  (As  amended  by  St.  1903,  c.  195.)  The  probate  court  of  every  county 
of  this  state  having  jurisdiction  to  grant  letters  testamentary  or  of  adminis- 
tration upon  the  estate  of  a  decedent  whose  property  is  chargeable  with  any 
tax  under  this  act,  or  to  appoint  a  trustee  of  such  estate  or  any  part  thereof, 
or  to  give  ancillary  letters  thereon,  shall  have  jurisdiction  to  hear  and  determine 
all  questions  arising  under  the  provisions  of  this  act  and  to  do  any  act  in 
relation  thereto  authorized  by  law  to  be  done  by  a  judge  of  probate  in  other 
matters  or  proceedings  coming  within  his  jurisdiction,  and  if  two  or  more 
probate  courts  shall  be  entitled  to  exercise  any  such  jurisdiction,  the  judge 
of  probate  first  acquiring  jurisdiction  hereunder  shall  retain  the  same,  to  the 
exclusion  of  every  other  judge  of  probate.  Every  petition  for  ancillary  letters 
testamentary  or  ancillary  letters  of  administration  shall  set  forth  a  true  and  cor- 
rect statement  of  all  the  decedent's  property  in  this  state  and  the  value  thereof. 

Appraisal. 

S.  11.  (As  amended  by  St.  1907,  c.  155.)  The  judge  of  probate,  upon  the 
application  of  any  interested  party,  including  the  auditor  general  and  county 
treasurers,  or  upon  his  own  motion,  shall  as  often  as  and  whenever  occasion 
may  require,  appoint  a  competent  person  as  appraiser  to  fix  the  clear  market 
value  at  the  time  of  the  transfer  thereof  of  property  which  shall  be  subject  to 
the  payment  of  any  tax  imposed  by  this  act,  a  description  of  which  property 
and  the  names  and  residences  of  the  persons  to  whom  it  passes  shall  be  given 
by  the  judge  of  probate  to  such  appraiser.  If  the  property,  upon  the  transfer 
of  which  the  tax  is  imposed,  shall  be  an  estate,  income  or  interest  for  a  term 
of  years  or  for  life,  or  determinable  upon  any  future  or  contingent  estate,  or 
shall  be  a  remainder  or  reversion  or  other  expectancy,  real  or  personal,  the 
entire  property  or  fund  by  which  such  estate,  income  or  interest  is  supported, 
or  of  which  it  is  a  part,  shall  be  appraised  immediately  after  such  transfer, 
or  as  soon  thereafter  as  may  be  practicable,  at  the  clear  market  value  thereof 
as  of  that  date:  Provided,  however,  that  when  such  estate,  income  or  in- 
terest shall  be  of  such  a  nature  that  its  clear  market  value  cannot  be  ascertained 
at  such  time,  it  shall  be  appraised  in  like  manner  at  the  time  when  such  value  first 
became  ascertainable.  The  value  of  every  future  or  contingent  or  limited  estate, 
income,  interest  or  annuity,  dependent  upon  any  life  or  lives  in  being,  shall  be 
determined  by  the  rule,  method  or  standard  of  mortality  and  value  employed 
by  the  commissioner  of  insurance  in  ascertaining  the  value  of  policies  of  life 
insurance  companies,  except  that  the  rate  of  interest  for  computing  the  present 
value  of  all  future  and  contingent  interests  or  estates  shall  be  five  per  centum  per 
annum..  The  commissioner  of  insurance  shall,  upon  request  of  the  auditor 
general,  prepare  such  tables  of  values,  expectancies  and  other  matters  as  may  be 
necessary  for  use  in  computing,  under  the  provisions  of  this  act,  the  value  of  life 
estates,  annuities,  reversions  and  remainders,  which  shall  be  printed  and  fur- 
nished by  the  auditor  general  to  the  several  judges  of  probate  upon  request: 
Provided  further,  that  the  clear  market  value  of  the  transfer  of  a  money  legacy, 
presently  taxable,  shall  for  the  purposes  of  this  act  be  taken  to  be  the  face  value 
of  the  money  at  the  date  of  death  of  decedent. 

Appraisers*  Proceedings.  —  Compensation. 

S.  12.  (As  amended  by  St.  1903,  c.  195.)  Every  such  appraiser  shall  forth- 
with give  notice  by  mail  to  all  such  persons  as  he  is  notified  by  the  judge  of 


1899,  c.  188.]  MICHIGAN.  627 

probate  are  interested  in  the  property  to  be  appraised,  and  to  the  county  treas- 
urer, of  the  time  and  place  when  he  will  appraise  the  property.  He  shall  at  such 
time  and  place  appraise  the  same  at  its  clear  market  value  as  herein  prescribed, 
and  for  that  purpose  said  appraiser  is  authorized  to  issue  subpoenas  to  compel 
the  attendance  of  witnesses  before  him,  and  to  take  the  evidence  of  such 
witnesses  under  oath  concerning  such  property  and  the  value  thereof,  and  he 
shall  make  report  thereof  and  of  such  value  in  writing  to  said  judge  of  pro- 
bate, together  with  the  depositions  of  the  witnesses  examined  and  such 
other  facts  in  relation  thereto  and  to  the  said  matter  as  the  said  judge  of 
probate  may  order  and  require.  Every  appraiser  shall  be  reimbursed  for  his 
actual  and  necessary  traveling  and  other  expenses  and  shall  be  entitled  to  three 
dollars  per  day  for  every  day  actually  and  necessarily  employed  in  such  appraise- 
ment. The  fees  of  the  necessary  witnesses  shall  be  the  same  as  those  now  paid  to 
witnesses  subpoenaed  to  attend  a  court  of  record.  A  statement  in  detail  of  such 
compensation  and  disbursements  as  are  authorized  by  this  section  shall  be 
approved  by  the  judge  of  probate  and  paid  by  the  county  treasurer  from  the 
general  or  contingent  fund  of  the  county. 

Appraisal.  —  Report.  —  Appeal.  —  Rehearing. 

S.  13.  (As  amended  by  St.  1903,  c.  195.)  The  report  of  the  appraiser  shall 
be  filed  in  the  office  of  the  judge  of  probate,  and  from  such  report  and  other 
proof  relating  to  any  such  estate  before  the  judge  of  probate,  the  judge  of 
probate  shall  forthwith,  as  of  course,  determine  the  clear  market  value  of  all 
such  estates  as  of  the  date  of  transfer,  and  the  amount  of  tax  to  which  the 
same  is  liable,  or  the  judge  of  probate  may  so  determine  the  clear  market  value 
of  all  such  estates  and  the  amount  of  tax  to  which  the  same  are  liable  without 
appointing  an  appraiser.  The  judge  of  probate  may,  and  shall  on  application 
of  the  attorney  general  or  auditor  general,  require  the  executor,  administrator 
or  trustee  of  any  estate  to  file  with  him  an  itemized  statement  or,  petition 
containing  itemized  statement,  under  oath,  of  the  personal  property  and 
real  property  within  his  knowledge  or  possession  or  under  his  control  as 
such  executor,  administrator  or  trustee,  which  statement  shall  indicate  the 
date  from  which  interest  and  dividends  were  due  and  unpaid  upon  each  item  of  the 
personal  estate,  together  with  the  rate  of  such  interest  and  also  of  the  amount 
and  character  of  any  incumbrances  upon  such  real  estate  at  the  time  of  the  death 
of  said  deceased,  and  other  data,  such  as  debts,  expenses  of  administration  and 
other  charges  which  constitute  proper  deductions  in  reaching  a  taxable  remainder 
under  the  provisions  of  this  act.  The  judge  of  probate  before  determination 
of  the  tax  upon  the  estate  of  decedent  as  a  whole  is  made,  may  determine  the  tax 
upon  any  specific  legacy  or  devise,  or  upon  the  real  estate  of  a  decedent,  and  may 
authorize  and  direct  any  executor  or  administrator  to  pay  to  the  county  treasurer 
a  sum  in  gross  on  account  of  the  inheritance  tax  due  from  the  estate  when  by 
reason  of  claims  made  against  the  estate,  litigation  or  other  unavoidable  cause  of 
delay  the  tax  cannot  be  determined  by  the  court  within  eighteen  months  from  its 
accrual;  but  the  five  per  centum  discount  provided  in  section  four  of  this  act  shall 
not  be  allowed  upon  this  gross  sum.  The  judge  of  probate  in  the  order  determin- 
ing the  tax  upon  such  estate  shall  state  the  amount  authorized  to  be  paid  in  gross 
as  above  provided  and  the  date  of  such  order.  The  commissioner  of  insurance 
shall,  on  the  application  of  any  judge  of  probate,  or  the  auditor  general,  determine 
the  value  of  any  such  future  or  contingent  estate,  income  or  interest  limited,  con- 


628  STATUTES  ANNOTATED.  [Mich.  St. 

tingent,  dependent,  or  determinable  upon  the  life  or  lives  of  persons  in  being 
upon  the  facts  contained  in  any  such  appraiser's  report,  or  facts  stated  by  the 
judge  of  probate,  and  certify  the  same  to  the  auditor  general  or  the  judge  of 
probate,  and  his  certificate  shall  be  prima  facie  evidence  that  the  method  of  com- 
putation adopted  therein  is  correct.  In  case  the  state  shall  appeal  from  the 
appraisement,  assessment  or  determination  of  the  tax,  it  shall  not  be  necessary 
to  give  any  bond.  The  judge  of  probate  shall  immediately  give  notice  upon 
the  determination  by  him  of  the  value  of  any  estate  which  is  taxable  under  this 
act,  and  of  the  tax  to  which  the  same  is  liable,  to  each  heir,  legatee  or  devisee 
or  his  attorney  and  of  the  tax  assessed  upon  his  share  of  the  estate,  by  mailing 
such  notice,  postage  prepaid,  to  the  last  known  address  of  each  of  such  pers  ns, 
or  his  attorney  except  those  who  were  in  court  in  person  or  by  attorney  at  the 
time  the  tax  was  so  determined:  Provided,  that  the  judge  of  probate  shall,  upon 
the  written  application  of  any  person  interested,  including  the  attorney  general, 
file  with  him  within  sixty  days  after  the  determination  by  him  of  any  tax  under 
this  act,  grant  a  rehearing  upon  the  matter  of  determining  such  tax;  and  if,  on 
such  rehearing,  he  shall  modify  his  former  determination  he  shall  enter  an  order 
redetermining  the  tax,  and  make  the  necessary  entries  in  the  book  provided  for 
in  section  seventeen  of  this  act,  and  make  report  thereof  to  the  auditor  general 
and  county  treasurer,  as  provided  in  section  eighteen  of  this  act. 

Proceedings  for  Collection. 

S.  14.  (As  amended  by  St.  1903,  c.  195.)  If  the  auditor  general  or  the  treas- 
urer of  any  county  shall  have  reason  to  believe  that  any  tax  is  due  and  unpaid 
under  this  act,  after  the  refusal  or  neglect  of  the  persons  liable  therefor  to  pay 
the  same,  he  shall  notify  the  attorney  general  in  writing  of  such  failure  or 
neglect,  and  such  attorney  general  may  apply,  or  cause  the  prosecuting 
attorney  of  the  county  to  apply,  in  behalf  of  the  state,  to  the  probate  court 
for  a  citation  citing  the  persons  liable  to  pay  such  tax  to  appear  before  the 
court  on  a  day  specified  not  more  than  three  months  after  the  date  of  such 
citation,  and  show  cause  why  the  tax  should  not  be  paid.  The  judge  of 
probate  upon  such  application  and  whenever  it  shall  appear  to  him  that  any  such 
tax  accruing  under  this  act  has  not  been  paid  as  required  by  law,  shall  issue  such 
citation,  and  the  service  of  such  citation,  and  the  time,  manner  and  proof  thereof 
and  the  hearing  and  determination  thereon,  and  the  enforcement  of  the  determina- 
tion or  order  made  by  the  judge  of  probate  shall  conform  to  the  practice  of  the 
probate  court  in  like  cases  made  and  provided  for  the  servic^  of  citations  out  of 
the  probate  court,  and  the  hearing  and  determination  thereon  a^nd  its  enforcement, 
so  far  as  the  same  may  be  applicable.  In  all  cases  where  an  estate  has  been 
declared  closed  without  fixing  or  payment  of  the  tax  upon  the  transfers  therein, 
and  the  attorney  general  shall  believe  such  transfers  to  be  subject  to  a  tax  and 
real  estate  in  said  estate  to  be  subject  to  the  lien  thereof  and  shall  contemplate 
the  institution  of  proceedings  for  the  fixing  and  enforcing,  or  the  enforcing  of  the 
same  when  it  has  been  fixed,  he,  may  in  his  discretion  file  with  the  register  of  deeds 
of  the  county  a  notice  setting  forth  such  fact,  together  with  a  description  of  the 
real  estate  claimed  to  be  subject  to  the  same,  which  shall  operate  with  the  same 
force  and  effect  as  a  lis  pendens  under  existing  statutes:  Provided,  that  the 
failure  to  file  such  notice  shall  not  in  any  manner  prejudice  the  rights  of  the  state. 
The  judge  of  probate  or  the  probate  clerk  or  register  shall,  upon  the  request  of 


1899,  c.  188.]  MICHIGAN.  629 

the  attorney  general,  prosecuting  attorney,  or  treasurer  of  the  county,  furnish 
one  or  more  transcripts  of  such  decree  which  shall  be  docketed  and  filed  by  the 
county  clerk  of  any  county  of  the  state  without  fees,  in  the  same  manner  and  with 
the  same  effect  as  provided  by  law  for  filing  and  docketing  transcripts,  judgments 
and  decrees  of  circuit  courts  in  this  state.  As  a  cumulative  remedy  for  the  collec- 
tion of  the  tax.  the  state  may  proceed  by  an  action  of  assumpsit  in  any  court  of 
competent  jurisdiction.  Whenever  the  probate  judge  shall  issue  a  citation  and 
take  the  proceedings  specified  in  this  section,  he  shall  certify  such  fact  to  the 
county  treasurer,  together  with  an  itemized  bill  of  all  expenses  incurred  for  the 
services  of  such  citation,  and  other  lawful  disbursements  not  otherwise  paid, 
and  thereupon  the  county  treasurer  shall  pay  the  same  from  the  general  or  contin- 
gent fund  of  the  county.  In  all  proceedings  to  which  any  county  treasurer,  or 
the  auditor  general,  is  cited  to  appear  under  sections  eleven  and  twelve  of  this 
act  and  all  proceedings  arising  or  instituted  hereunder,  the  attorney  general  shall 
represent  the  interests  of  the  state  therein,  the  compensation  and  expenses  of 
necessary  assistants  and  the  expenses  of  the  said  attorney  general  to  be  paid  after 
approval  by  the  attorney  general  on  the  warrant  of  the  auditor  general  out  of  the 
general  fund  in  the  state  treasury. 

Receipts. 

S.  15,  (As  amended  by  St.  1903,  c.  195.)  Any  person  shall,  upon  the  pay- 
ment of  the  sum  of  fifty  cents  to  the  county  treasurer,  be  entitled  to  a 
certified  copy  of  the  receipt  issued  by  the  county  treasurer  under  section  three 
of  this  act  for  the  payment  of  any  tax  under  this  act,  which  receipt  shall  desig- 
nate upon  what  real  property,  if  any,  such  tax  shall  have  been  paid,  by  whom 
paid,  and  whether  in  full  of  such  tax.  Such  receipts  may  be  recorded  in  the 
office  of  the  register  of  deeds  of  the  county  in  which  such  property  is  situated, 
in  a  book  to  be  kept  by  him  for  that  purpose,  which  shall  be  labeled  "Transfer 
Tax." 

Fees  of  County  Treasurer. 

S.  16.  (As  amended  by  St.  1903,  c.  195.)  The  treasurer  of  each  county, 
except  in  counties  where  the  treasurer  is  paid  a  salary  in  lieu  of  fees,  shall  be 
allowed  on  each  and  all  taxes  paid  and  accounted  for  by  him  under  this  act  one 
per  centum.  Such  fees  shall  be  in  addition  to  the  fees  or  compensation  now 
allowed  by  law  to  such  officers,  and  shall  be  paid  out  of  the  general  fund  or 
contingent  fund  of  the  different  counties. 

Records. 

S.  17.  (As  amended  by  St.  1903,  c.  195.)  The  auditor  general  shall  furnish 
to  each  judge  of  probate  a  book,  which  shall  be  a  public  record,  in  which 
he  shall  enter  a  formal  order  containing  the  name  of  every  decedent  upon 
whose  estate  letters  of  administration  or  letters  testamentary  or  ancillary  letters 
have  issued,  the  date  of  death  -and  place  of  residence  at  the  time  of  death 
of  such  decedent,  the  names,  places  of  residence  and  relationship  to  him  of  his 
heirs  at  law,  in  case  he  died  intestate  or  left  estate  not  disposed  of  by  will, 
the  names,  places  of  residence  and  relationship  to  him  of  the  legatees  and  de- 
visees in  the  will  of  the  decedent,  in  case  he  died  testate,  the  ages  of  all  life 
tenants  and  beneficiaries  under  life  estates,  the  clear  market  value  of  his  real 


630  STATUTES  ANNOTATED.  [Mich.  St. 

and  personal  property,  the  clear  market  value  of  the  property,  real  and  per- 
sonal, passing  to  each  heir,  legatee  and  devisee,  and  the  clear  market  value  of 
annuities,  life  estates,  terms  of  years,  and  other  property  of  such  decedent,  or 
given  by  him  in  his  will  and  otherwise,  as  fixed  and  determined  by  the  j  udge 
of  probate,  and  the  amount  of  tax  assessed  thereon,  and  the  amount  of  tax 
assessed  on  the  share  of  each  heir,  legatee  and  devisee,  when  from  the  records  of 
the  court  or  the  testimony  given  there  appears  to  be  property  in  such  estate 
liable  to  tax  under  this  act:  Provided,  the  description  of  no  real  estate  need  be 
given  except  such  as  is  taxable  under  this  act,  and  a  sufficiently  definite  descrip- 
tion shall  be  given  to  fully  identify  such  taxable  real  estate  and  the  persons 
to  whom  the  several  parcels  are  devised.  He  shall  also  enter  in  said  book  the 
name,  date  of  death,  and  place  of  residence  at  time  of  death  of  every  decedent, 
grantor,  vendor  or  donor  who  has  made  a  transfer  of  property  in  contemplation 
of  death  or  intended  to  take  effect  in  possession  or  enjoyment  at  or  after  his 
death,  subject  to  tax  under  this  act;  the  name  and  residence  of  the  grantee,  ven- 
dee or  donee  and  his  relationship  to  the  grantor,  vendor  or  donor,  the  clear  market 
value  as  determined  by  the  judge  of  probate  of  the  property  so  transferred  by 
him  and  the  tax  determined  by  the  court  payable  thereon.  These  entries  shall  be 
made  from  data  contained  in  the  papers  filed  in  the  probate  court  and  testimony 
taken  in  any  proceedings  relating  to  the  estate  of  the  decedent.  The  judge  of 
probate  shall  also  enter  in  such  book  the  amount  of  the  real  and  personal  property 
of  such  decedent  as  shown  by  the  inventory  thereof  when  made  and  filed  in  his 
office.  In  case  the  judge  of  probate  shall  determine  the  amount  of  tax  to  be  paid 
upon  any  specific  legacy  or  devise  or  upon  the  real  estate  of  a  decedent  before  the 
determination  of  the  tax  by  him  upon  the  estate  as  a  whole,  only  such  entries 
need  be  made  in  such  book  in  that  particular  case  as  refer  to  such  legacy  or  devise 
or  real  estate,  but  it  shall  be  distinctly  stated  in  said  book  that  it  is  but  a  partial 
determination  by  the  judge  of  probate  of  the  tax  due  from  the  estate.  Whenever 
the  determination  of  the  tax  in  such  estate  by  the  judge  of  probate  is  general  or 
final,  the  deductions  made  by  the  judge  of  probate  from  the  full  value  of  the 
estate  shall  be  particularly  specified,  so  that  the  several  reasons  for  the  deductions 
made  shall  clearly  appear  upon  the  record;  such  record  so  required  to  be  furnished 
by  the  auditor  general  shall  be  in  the  following  form,  and  shall  be  of  such  size  and 
so  arranged  as  he  shall  determine  will  best  meet  the  requirements  of  this  act. 


ABSTRACT  OF  TAXABLE    INHERITANCES.      VOL.  NO. 

Page    No 

State  of  Michigan. 

The  probate  court  for  the  county  of 

At  a  session  of  said  court  held  at 

said    county    the .  .  .  . ' day    of 

A.  D.  19 

Present,  the  Honorable 


Probate  Judge. 

In  the  matter  of  the  inheritance  tax  upon  transfers  in  the  estate  of . 
deceased. 


Form.]  MICHIGAN.  631 

In  this  matter  it  being  represented  to  me  and  appearing  that  the  said  deceased 
was,  at  the  time  of  his  death  on  the day  of 

a     resident    of and     possessed 

property  the  transfer  of  which  or  some  interest  or  estate  therein  is  taxable  under 
the  inheritance  tax  law  (act  188  of  the  public  acts  of  1899  and 

of  1903);   that ; .  .of 

was  duly  and  regularly  appointed 

of  the  said  estate  and ,  and  that  as  appears 

from  the  inventory  on  file  in  this  court,  the  amount  of  property  belonging  to  said 
estate  is  stated  to  be  as  follows :  — 

Personal  property,   $ ;    real   property,   $ 

It  further  appears  and  I  hereby  find  that  the  debts  of  said  deceased  owing  at 
the  time  of  his  death  (exclusive  of  interest  accruing  thereafter)  amount  to  $ 

;  that  the  funeral  expenses  of  said  deceased  amount  to  $ ; 

and  that  the  expenses  of  administration  of  the  estate  of  said  decedent  (exclusive 
of  all  items  of  disbursement  for  repairs  to  buildings  or  other  property  belonging 
to,  or  taxes  accruing  after  death,  upon  the  estate  of  said  deceased,  all  allowances 
for  the  support  of  widow  and  children  of  said  deceased,  expenses  incurred  in 
contesting  the  will  of  said  deceased,  and  other  items  of  disbursement  for  the 
benefit  of  the  beneficiaries  of  said  estate,  not  strictly  expenses  of  administration) 
amount  to  the  sum  of  $ ;  the  total  debts  and  expenses  of  adminis- 
tration being  $ 

After  due  and  careful  investigation,  examination  and  consideration,  I  find 
and  determine  that  the  clear  market  value  of  all  of  said  decedent's  personal 
property  and  real  estate,  at  the  date  of  his  death,  was  as  follows:  — 

Personal  property,  $ ;    real  property,  $ ;    and  that 

after  deduction  therefrom  of  the  total  debts  and  expenses  of  administration 
(debts  secured  upon  realty  being  deducted  from  the  value  of  the  real  estate,  and 
debts  unsecured  and  secured  on  personalty  being  deducted  from  the  value  of 
the  personalty),  there  remains  subject  to  taxation  under  the  provisions  of  said 
act  before  deducting  statutory  exemptions,  transfers  of  personal  property  to 

the  amount  of  $ ;  and  transfers  of  real  property  to  the  amount  of 

$ ;  and  that  of  said  transfers  certain  interests  hereinafter  set  forth 

in  detail  in  the  schedule  hereto  are  not  presently  taxable  by  reason  of  the  following 
contingency,  rendering  it  impossible  to  determine  presently  the  value  of  the 
interests  passing  and  the  amount  of  the  tax  thereon,  namely, 


And  I  hereby  find  and  determine  that  the  tax  upon  the  presently  taxable 

transfers  in  said  estate  amounts  to  the  sum  of  $ and  find  that  the 

several  names,  residences,  relationships  and  ages,  where  interest  consists  of  life 
estates  or  annuities,  of  the  several  beneficiaries,  together  with  the  character  and 
amount  of  the  several  interests  or  estates  passing  thereto,  the  rate  of  tax  to  which 
each  is  subject,  and  the  portion  of  the  tax  fixed  upon  .apportioned  to,  and  required 
to  be  borne  by  each  of  the  several  taxable  transfers,  is  as  set  forth  in  detail  in 
the  following  schedule:  — 


632 


STATUTES  ANNOTATED. 


[Mich.  St. 


[The  schedule  shall  contain  the  following  headings  for  the  several  columns 
and  space  for  sufficient  entries,  remarks,  etc.] 


Name  of  Heir  at 

Law,  Legatee  or 

Devisee  to  whom 

Estate  Passes. 


B 

Residence. 


Relationship. 


Age  of  Life 
Tenant  or 
Annuitant. 


E 

Rate  of  Tax. 

Per  Cent. 


Value  of  Legacy 

or  Personal 
Estate  Passing. 


Value  of  Personal 
Estate  Exempt. 


Value  of  Legacy 

or  Personal 
Estate  Taxable. 


Amount  of  Tax 

on  Personal 

Estate. 


Value  of  Real 
Estate  Passing. 


Value  of  Real 
Estate  Exempt. 


Value  of  Real 
Estate  Taxable. 


M 


Amount  of  Tax 
on  Real  Estate. 


Value  of  Annui- 
ties, Life  Estates, 
etc.,  Passing. 


Value  of  Annui- 
ties, Life  Estates, 
etc. ,  Exempt. 


Value  of  Annui- 
ties, Life  Estates, 
etc.,  Taxable. 


Amount  of  Tax 

on  Annuities, 

Life  Estates,  etc. 


Total  Amount 
of  Tax. 


Remarks:  —  Including  descriptions  of  real  estate  taxed  and  any  explanations 
necessary  to  a  complete  understanding  of  the  foregoing  entries 


Judge  of  Probate. 

The  form  of  which  said  order,  exclusive  of  the  schedule,  shall  be  varied  to 
meet  the  requirements  of  special  cases,  but  none  of  the  matter  required  thereby 
shall  be  omitted. 

This  form  of  record  indicates  that  debts  secured  by  mortgage 
are  to  be  deducted  from  real  property.  This  form  was  evidently 
copied  from  the  New  York  statute,  but  can  hardly  be  held  in  and 
of  itself  to  establish  a  rule  for  fixing  the  amount  of  the  inheritance 
tax  where  land  of  the  testator  is  subject  to  mortgage.     That  is 


1899,  c.  188.1  MICHIGAN.  633 

done  by  other  provisions  of  the  statute  which  render  the  form 
inserted  inapplicable.  In  re  Fox,  159  Mich.  420,  124  N.  W.  60, 
16  Detroit  Leg.  N.  943. 

Reports. 

S.  18.  (As  amended  by  St.  1903,  e.  195,  and  St.  1911,  c.  73.)  Each  judge  of 
probate  shall,  within  three  days  after  he  shall  have  determined  the  tax  and  entered 
the  order  required  in  the  preceding  section,  make  a  duly  certified  copy  of  such  order 
upon  forms  furnished  by  the  auditor  general,  containing  all  the  data  and  mat- 
ter required  to  be  entered  in  such  book,  one  of  which  shall  be  immediately 
delivered  to  the  county  treasurer,  from  which  data  the  said  county  treasurer 
shall  obtain  the  information  for  making  the  duplicate  receipt  required  by  this 
act,  and  the  other  transmitted  to  the  auditor  general.  If  in  any  calendar 
quarter  beginning  January,  April,  July  or  October  first  in  each  year,  there 
has  been  no  tax  determined,  the  judge  of  probate  shall  make  a  report  to  the 
auditor  general  affirmatively  showing  this  fact.  The  register  of  deeds  of  each 
county  shall,  upon  blanks  prescribed  and  furnished  by  the  auditor  general,  as 
often  as  any  deed  or  other  conveyance  is  filed  or  recorded  in  his  office  of  any  prop- 
erty which  appears  to  have  been  made  in  contemplation  of  death  or  intended  to 
take  eiTect  in  possession  or  enjoyment  after  the  death  of  the  grantor  or  vendor, 
make  reports  in  duplicate  containing  a  statement  of  the  name  and  place  of  resi- 
dence of  such  grantor  or  vendor,  the  name,  relationship  and  place  of  residence 
of  the  grantee  or  vendee,  and  a  description  and  the  value  of  the  property 
transferred  and  the  consideration  for  the  transfer  as  stated  in  the  instrument 
filed  or  recorded,  one  of  which  duplicates  shall  be  immediately  delivered  to  the 
county  treasurer,  and  the  other  transmitted  to  the  auditor  general. 

Whenever  any  non-resident  shall  die  leaving  property,  or  any  interest  therein, 
in  this  state  which  has  not  been  duly  administered  under  the  laws  of  this  state 
and  it  shall  be  necessary  to  have  the  question  of  the  taxation  of  the  transfer 
thereof  determined,  such  question  may  be  presented  and  determined  upon 
petition  to  be  filed  by  the  attorney  general  in  any  probate  court  of  this  state. 
The  said  petition  shall  set  forth  the  name  of  the  decedent;  residence  at  time  of 
death;  the  total  amount  of  property  constituting  said  estate;  a  description  of 
and  the  value  of  all  property  in  Michigan;  and  any  and  all  such  other  data  as 
may  be  necessary  to  inform  the  court  of  the  facts  in  connection  with  such  matter. 
It  shall  be  the  duty  of  the  probate  court  with  which  such  petition  is  filed  to 
fix  a  date  for  hearing  thereon  and  to  give  notice  of  such  hearing  in  such  manner 
as  shall  be  prescribed.  Publication  of  the  notice  of  such  hearing  shall  not  be 
necessary  unless  ordered  by  the  court.  It  shall  be  the  duty  of  the  executor, 
administrator,  trustee  or  any  interested  party  in  said  estate  to  furnish  all  such 
facts,  data,  information,  reports  and  certified  copies  of  proceedings  had  in  con- 
nection with  said  estate  in  any  other  court,  as  shall  be  required  by  the  attorney 
general  or  directed  by  the  probate  court.  The  probate  court  shall  appoint  a 
resident  of  Michigan  to  represent  the  said  estate  at  such  hearing  and  the  person 
so  appointed  shall  perform  such  duties  as  shall  be  required  by  the  court.  The 
person  so  appointed  shall  have  and  possess  all  of  the  powers  of  an  executor  or 
administrator  for  the  purposes  of  this  section,  but  shall  not  be  personally  liable 
for  any  inheritance  tax  in  said  estate  and  shall  not  be  required  to  give  any  bond 
unless  so  directed  by  the  court.     The  said  probate  court  shall  at  the   hearing 


634  STATUTES  ANNOTATED.  [Mich.  St. 

on  said  petition  or  at  an  adjourned  hearing,  determine  whether  the  transfer  of 
such  property  is  taxable  and  if  found  taxable,  he  shall  proceed  as  in  all  other 
cases  to  fix  and  determine  the  amount  thereof.  If  it  is  found  that  the  transfer 
of  such  property  is  not  taxable,  an  order  to  that  effect  shall  be  entered  in  the 
said  probate  court.  A  re-determination  of  said  order  may  be  had  and  an  appeal 
therefrom  may  be  taken  in  the  same  manner  provided  for  in  this  act.  A  certified 
copy  of  all  such  orders  determining  that  there  is  no  inheritance  tax  due  and 
payable  may  be  procured  from  the  probate  court  upon  the  payment  of  fifty 
cents:  Provided,  That  no  order  shall  be  entered  in  any  such  case  until  there  is 
filed  in  said  probate  court  receipts  showing  full  payment  of  all  expenses  incurred 
including  compensation  due  the  person  appointed  to  represent  said  estate, 
all  of  which  expenses  or  compensation  shall  be  paid  by  the  executor,  administra- 
tor, or  any  perso'  interested  in  said  estate:  Provided  further,  That  in  case  it 
may  be  necessary  to  have  any  such  property  subjected  to  regular  probate  pro- 
ceedings in  this  state,  or  if  any  such  estate  shall  have  been  administered  in  this 
state,  the  right  to  proceed  under  this  section  shall  be  discretionary  with  the 
probate  court  This  section  shall  not  operate  to  relieve  any  such  person  as  is 
referred  to  in  section  nine  of  this  act  from  the  liability  therein  expressed  until 
sixty  days  after  the  date  of  entry  of  the  order  determining  that  there  is  no  tax 
upon  the  transfers  in  said  estate,  or  in  case  a  tax  is  determined,  until  proper 
receipts  showing  payment  thereof  have  been  duly  signed  by  the  state  treasurer 
and  countersigned  by  the  auditor  general. 

Reports.  —  Examiners. 

S7  19.  (As  amended  by  St.  1909,  c.  44.)  Each  county  treasurer  shall  make 
a  report  under  oath  to  the  auditor  general  on  January,  April,  July  and  October 
first  of  each  year  of  all  taxes  received  by  him  under  this  act  during  the  preced- 
ing calendar  quarter,  stating  for  what  estate  and  by  whom  and  when  paid. 
If  in  any  calendar  quarter  the  county  treasurer  has  received  no  tax  under 
this  act,  the  report  shall  affirmatively  show  this  fact.  The  form  of  such  report 
shall  be  prescribed  by  the  auditor  general.  If  receipts  issued  by  the  county 
treasurer  and  money  received  thereon  are  not  forwarded  within  the  time  speci- 
fied in  section  three  of  this  act,  he  shall  pay  interest  at  the  rate  of  eight  per 
cent  per  annum  in  addition  to  the  amount  of  such  delinquent  taxes  then  in 
arrears.  The  auditor  general  may  employ  not  to  exceed  two  examiners  whose 
duties  shall  be  to  make  examinations  of  the  records  of  the  several  probate 
courts,  county  treasurers  and  registers  of  deeds  in  this  state,  and  report  their 
findings  to  him  and  perform  such  other  duties  under  the  provisions  of  this  act 
as  the  auditor  general  may  direct,  at  a  salary  of  not  to  exceed  fifteen  hundred 
dollars  per  annum,  payable  in  the  same  manner  as  the  salaries  of  other  state 
officers  are  now  paid.  The  expenses  of  said  examiners  shall  be  paid  out  of  the 
general  fund  in  the  state  treasury  upon  allowance  by  the  state  board  of  audi- 
tors after  approval  by  the  auditor  general.  [From  here  on  is  not  in  1903.]  There 
is  hereby  appropriated  out  of  the  general  fund  in  the  state  treasury  a  sufficient 
amount  of  money  to  carry  out  the  provisions  of  this  section.  The  auditor  general 
shall  add  to  and  incorporate  in  the  state  tax  for  the  year  nineteen  hundred  nine, 
and  each  year  thereafter,  a  sufficient  sum  to  reimburse  the  general  fund  in  the 
state  treasury  for  the  amount  herein  appropriated. 


Practice.]  MICHIGAN.  635 

Application  of  Proceeds. 

S.  20.  (St.  1899,  c.  188.)  All  taxes  levied  and  collected  under  this  act  shall 
be  paid  into  the  state  treasury,  and  be  applied  in  paying  the  interest  upon  the 
primary  school,  university  and  other  educational  funds,  and  the  interest  and 
principal  of  the  state  debt  in  the  order  herein  recited,  until  the  extinguishment 
of  the  state  debt,  other  than  the  amounts  due  to  educational  funds,  when  such 
taxes  shall  be  added  to  and  constitute  a  part  of  the  primary  school  interest  fund, 
in  pursuance  of  and  in  compliance  with  section  one  of  article  fourteen  of  the 
constitution  of  this  state. 

[See  notes  to  the  Act  of  1899,  ante,  p.  613.] 

Definitions. 

S.  21.  (As  amended  by  St.  1907,  c.  328.)  The  word  "estate"  and  "property" 
as  used  in  this  act  shall  be  taken  to  mean  the  property  or  interest  therein  of 
the  testator,  intestate,  grantor,  bargainor  or  vendor,  passing  or  transferred  to 
those  not  herein  specifically  exempted  from  the  provisions  of  this  act,  and  not  as 
the  property  or  interest  therein  passing  or  transferred  to  the  individual  legatees, 
devisees,  heirs,  next  of  kin,  grantees,  donees  or  vendees,  and  shall  include  all 
property  or  interest  therein  whether  situated  within  or  without  this  state  iThe 
rest  of  this  sentence  is  not  in  1903.]  and  including  all  property  represented  or 
evidenced  by  note,  certificate,  stock,  land  contract,  mortgage  or  other  kind 
or  character  of  evidence  thereof,  and  regardless  of  whether  any  such  evidence 
of  property  is  owned,  kept  or  possessed  within  or  without  this  state.  The  word 
"transfer"  as  used  in  this  act  shall  be  taken  to  include  the  passing  of  property 
or  any  interest  therein  in  possession  or  enjoyment,  present  or  future,  by  inheri- 
tance, descent,  devise,  bequest,  grant,  deed,  bargain,  sale  or  gift  in  the  manner 
herein  prescribed.  The  words  "county  treasurer,"  "prosecuting  attorney," 
as  used  in  this  act  shall  be  taken  to  mean  the  county  treasurer  or  prosecuting 
attorney  of  the  county  having  jurisdiction  in  section  ten  of  this  act. 

[See  notes  to  the  Acts  of  1899  and  1903,  ante,  pp.  613,  620.] 


PRACTICE. 

The  following  instructions  were  issued  by  the  auditor  general  in 
1907:  — 

JUDGE  OF  PROBATE. 

In  connection  with  volume  three,  "Record  of  Taxable  Inheritances,"  the 
following  suggestions  and  instructions  should  be  observed  by  the  judges  in  their 
work  under  Act  195,  Public  Acts  of  1903,  commonly  called  the  inheritance  tax  law: 

1.  In  estates  where  there  are  no  taxable  transfers,  no  orders  should  be  made. 
Where  there  are  any  taxable  transfers  in  an  estate,  a  full  report  of  every  transac- 
tion, whether  taxable  or  not,  should  be  made. 

2.  A  description  of  real  estate  that  is  not  taxable  need  not  be  given,  but  a 
sufficiently  definite  description  should  be  given  to  fully  identify  each  parcel  of 
taxable  real  estate  and  the  persons  to  whom  the  several  parcels  are  devised. 


636  STATUTES  ANNOTATED.  rMich. 

3.  The  duplicate  orders  to  the  county  treasurer  and  auditor  general  must  refer 
upon  the  upper  right  hand  corner  of  the  first  page  thereof  to  the  volume  and  page 
of  the  book  from  which  it  was  copied. 

4.  The  orders  should  be  sent  to  the  county  treasurer  and  auditor  general  re- 
spectively within  three  days,  if  possible,  after  the  record  upon  the  book  is  made, 
as  the  auditor  general  cannot  countersign  and  seal  the  receipts  until  such  orders 
are  received. 

5.  When  a  delay  in  the  payment  of  a  tax  of  more  than  eighteen  months  from 
the  date  of  death  of  decedent  occurs,  the  record  upon  the  book  and  the  copies 
thereof,  under  the  head  of  "Remarks"  should  show  the  cause  of  such  delay  if  it 
is  such  as  to  entitle  the  executor  or  administrator  to  a  reduction  of  he  interest 
from  eight  per  cent  to  six  per  cent. 

6.  No  addition  to  the  tax  found  to  be  due  by  the  judge  of  probate  on  account 
of  interest  should  be  made  by  him,  nor  any  deduction  for  payment  within  twelve 
months.    Such  additions  and  deductions  should  be  left  to  the  county  treasurer. 

Legal  and  Administrative  Questions. 

First.     Subjects  of  Taxation. 

1.  The  transfer  of  all  property  of  residents,  without  regard  to  its  location,  is 
taxable.  The  transfer  of  all  property  belonging  to  residents  of  this  state, 
without  regard  to  its  location  (except  real  estate  situate  without  the  state),  is 
taxable,  unless  same  is  exempt.  This  includes  credits  secured  by  mortgages  upon 
lands  situate  in  other  states,  and  stocks  and  bonds  of  foreign  corporations. 

2.  The  transfer  of  all  property  of  non-residents  situate  within  this  state  is 
taxable.  This  includes  securities,  stocks  and  bonds  habitually  kept  or  deposited 
within  this  state,  money  on  deposit  in  banks  in  this  state,  and  stocks  of  corpora- 
tions of  this  state,  whether  within  the  state  or  not. 

3.  Credits  belonging  to  non-residents,  secured  upon  lands  in  this  state  are 
taxable. 

4.  Land  contracts  should  be  treated  as  personal  property  when  given  by  de- 
cedent, as  real  property  when  held  by  decedent. 

5.  Tax  titles  held  by  decedent  should  be  treated  as  personal  property. 
Second.     Exemptions. 

A.  From  the  whole  value  of  the  estate  of  a  decedent,  the  following  exemptions 
or  deductions  are  permissible :  — 

1.  Bequests  or  legacies  to  persons,  corporations  and  organizations  specifically 
exempted.  Religious,  charitable  and  similar  institutions  and  organizations  of  a 
domestic  character  are  specifically  exempted  by  statute.  Foreign  corporations 
are  not  so  exempted. 

2.  The  estate  of  a  decedent  under  $100  in  value. 

3.  The  transfer  of  real  estate  to  persons  of  the  relationship  designated  in 
section  two  of  said  act. 

4.  The  transfer  of  personal  property  under  the  value  of  $2,000  to  the  persons 
mentioned  in  said  section  2. 

5.  Expenses  of  administration. 

6.  Debts  of  decedent. 

7.  Taxes  accrued  and  which  are  a  lien  at  the  date  of  death. 

8.  Funeral  expenses,  except  as  hereafter  noted. 

9.  Monument  or  tombstone  where  provided  for  by  will  or  allowed  by  order 
of    court. 


Practice.!  MICHIGAN.  637 

10.  Bequests  or  devises  to  executors  or  trustees  for  services  as  such  to  the 
amount  of  the  fees  or  commissions  allowed  by  law, 

11.  The  exemptions  provided  for  in  sections  1  and  2  are  allowed  from  each 
distributive  share.  For  example,  a  legacy  of  seventy-five  dollars  to  a  niece  would 
not  be  taxable,  but  a  legacy  of  one  hundred  dollars  or  over  to  a  niece  would  be 
taxable  at  five  per  cent.  In  the  same  way,  a  legacy  to  a  son  of  one  thousand  five 
hundred  dollars  would  not  be  taxable,  but  a  legacy  of  two  thousand  dollars  or 
over  to  a  son  would  be  taxable  at  one  per  cent  for  the  full  amount  of  the  legacy. 

B.  The  following  will  not  be  exempt  or  allowed  to  be  deducted  in  arriving  at 
taxable  values:  — 

1.  Under  section  1,  where  the  established  value  of  each  distributive  share  of 
the  property  of  a  decedent,  either  real  or  personal,  or  a  combination  of  the  two 
is  one  hundred  dollars  or  more,  and  passes  to  persons  or  corporations  not  exempt 
by  law  from  .taxation,  or  to  persons  not  exempt  in  section  two,  such  transfer 
is  taxable  at  five  per  cent. 

2.  Funeral  expenses  where  the  decedent  is  survived  by  her  husband. 

3.  Taxes,  interest  or  insurance  accruing  after  the  date  of  death  of  decedent. 

4.  Expenses  of  repairs  or  improvements  to  property  after  date  of  death. 

5.  Monuments  or  tombstones  provided  by  heirs  or  legatees  without  direction 
in  will  or  order  of  court. 

6.  A  legacy  or  bequest  to  pay  debts  or  satisfy  obligations. 

7.  The  state  inheritance  tax. 

8.  Expense  of  litigatio.i  between  heirs,  devisees  or  legatees 

9.  Loss  or  depreciation  in  value  of  property  after  date  of  death  of  decedent. 

10.  Devises  or  bequests  to  foreign  institutions  or  corporations. 

11.  Devises  or  bequests  to  executors  or  trustees  for  services  in  excess  of  com- 
missions or  allowances  provided  for  by  law. 

12.  Disbursements  made  for  benefit  of  beneficiaries  other  than  expenses  of 
administration. 

13.  Allowances  for  support  of  widow,  or  other  beneficiary. 
Third.     Appraisal  and  Assessment  of  Tax. 

1.  The  established  value  of  the  property  of  a  decedent,  for  the  purpose  of 
taxation  on  the  transfer  thereof,  is  its  actual  true  cash  value  at  the  date  of  death 
of  decedent. 

2.  The  appraisal  can  be  made  either  by  the  judge  of  probate  personally,  or 
by  an  appraiser  appointed  by  the  court  for  that  purpose.  [See  sections  11,  12 
and  13,  Act  195,  Public  Acts  of  1903.] 

3.  When  an  appraiser  is  appointed,  the  report  of  the  appraiser  may  be  followed 
or  disregarded  by  the  judge  of  probate  in  his  discretion  in  determining  the  value 
of  an  estate. 

4  Whenever  in  the  preliminary  steps  for  the  determination  of  the  taxable 
transfer  of  an  estate,  the  judge  of  probate  has  reason  to  believe  that  excessive 
charges  for  expenses  are  being  made,  or  that  a  fraudulent  or  excessive  claim  has 
been  allowed,  he  should,  before  the  allowance  of  said  charges  and  claims  as  a 
deduction  in  fixing  the  tax,  notify  the  attorney  or  auditor  general  so  that  the  state 
may  be  represented  if  it  so  elects. 

6.  In  determining  the  amount  of  debts  of  deceased,  care  should  be  taken  not 
to  include  any  taxes  paid  by  an  executor  or  administrator  unless  the  same  were  a 
lien  on  the  land  at  the  date  of  death  of  decedent. 


638  STATUTES  ANNOTATED.  [Mich.  St. 

6.  Care  should  also  be  taken  that  no  interest  accruing  after  the  death  of  de- 
cedent upon  any  of  decedent's  debts  is  included. 

7.  No  disbursements  of  whatever  character,  made  for  the  benefit  of  benefi- 
ciaries can  be  exempted  as  part  of  the  debts  of  decedent. 

8.  Funeral  expenses  do  not  include  traveling  and  similar  expenses  of  friends  and 
relatives  in  attending  funeral,  but  do  include  burial  and  incidental  expenses. 

9.  Executors  and  administrators  cannot  be  discharged  nor  the  estate  or  trust 
closed  until  receipts,  sealed  and  countersigned  by  the  auditor  general  showing 
payment  of  the  tax,  have  been  produced  and  filed. 

10.  When  the  tax  is  not  heretofore  fixed,  the  notice  to  heirs  of  hearing  final 
account  should  include  notice  that  the  inheritance  tax  will  also  be  determined 
upon  that  date. 

11.  All  estates  or  interest  in  expectancy,  and  reversions  or  remainders,  where 
the  value  of  the  same  is  determinable,  are  presently  taxable  unless  election  is 
made  and  bond  filed  under  section  seven  of  the  inheritance  tax  law.  Only  in 
:hose  cases  where  the  value  of  the  interest  of  any  beneficiary  is  not  presently 
determinable,  or  where  bond  is  given,  can  interest  of  this  character  be  left  until 
the  party  beneficially  entitled  comes  into  possession  thereof. 

12.  The  judge  of  probate  should  require  an  inventory  of  every  estate  as  required 
by  section  9348,  compiled  laws  of  1897. 

13.  Whenever  the  judge  of  probate  is  in  doubt  as  to  the  proper  method  of 
determining  the  tax  by  reason  of  some  peculiarity  not  anticipated  in  the  prepara- 
tion of  these  suggestions  or  instructions,  it  is  recommended  that  he  either  send 
in  a  trial  order  for  examination  by  the  auditor  general,  or  ask  for  the  assistance  of 
an  inheritance  tax  examiner  from  the  auditor  general's  department,  who  will  be 
pleased  to  call  and  assist  in  computing  the  tax  without  expense  to  the  estate  or 
probate  court. 

14.  Especial  care  should  be  taken  by  the  judge  of  probate  and  the  above 
suggestions  thoroughly  considered  before  the  tax  is  determined  in  connection 
with  any  estate. 

COUNTY  TREASURER. 
Instructions  as  to  Use  of  Blanks. 

1.  The  duplicate  statement  and  receipts  in  the  book  furnished  county  treas- 
urers are  numbered  consecutively,  and  should  be  issued  in  chronological  order. 
I-n  the  upper  left-hand  corner  of  the  statement  will  be  found  a  blank  space  for 
reference  to  the  volume  and  number  of  the  order  of  the  judge  of  probate.  This 
volume  and  number  should  always  be  given. 

2.  When  any  inheritance  tax  shall  be  paid  to  the  county  treasurer,  he  shall, 
in  addition  to  duplicate  receipts  required  to  be  issued,  give  the  executor,  adminis- 
trator, trustee  or  other  person  paying  the  tax,  a  simple  receipt  for  the  amount 
received.    [See  section  3,  Act  195,  Public  Acts  of  1903.] 

3.  The  county  treasurer  should  not  issue  a  receipt  to  an  executor  or  adminis- 
trator until  the  order  of  the  judge  of  probate  is  on  file  with  him. 

4.  The  blanks  in  the  form  of  duplicate  statement  and  receipt  should  be  filled 
m  as  indicated  by  parenthetical  instructions  contained  thereon. 

5.  Whenever  any  portion  of  the  tax  upon  a  transfer  is  based  upon  real  estate 
values,  the  description  of  such  real  estate  as  passes  under  the  transfer  to  bene- 
ficiaries liable  to  an  inheritance  tax,  should  be  included  in  the  statement  and 


Practice.]  MICHIGAN.  639 

receipt  issued  by  the  county  treasurer.  Whenever  there  is  not  room  upon  the 
back  of  the  receipt  in  the  space  left  for  the  description,  such  portion  as  cannot 
be  entered  thereon  should  be  placed  upon  paper  similar  in  size  and  quality  to  that 
of  the  receipt  and  attached  firmly  to  the  receipt. 

Legal  and  Administrative  Questions. 

1.  No  deduction  from  the  tax  as  determined  by  the  judge  of  probate  should 
be  made  unless  it  is  paid  to  the  county  treasurer  within  twelve  months  from  the 
date  of  death  of  decedent,  in  which  case  a  discount  of  five  per  cent  should  be 
allowed.  Interest  at  the  rate  of  eight  per  cent  per  annum  from  the  date  of  death 
of  decedent  up  to  the  time  of  payment  of  the  tax  should  be  added  to  the  tax 
determined  by  the  judge  of  probate,  if  it  is  not  paid  within  eighteen  months  from 
the  date  of  death  of  decedent.  Whenever  the  order  of  the  judge  of  probate 
indicates  that  there  was  necessary  litigation  or  unavoidable  delay,  interest  should 
be  charged  at  the  rate  of  six  per  cent  per  annum  from  and  after  the  expiration  of 
eighteen  months  from  the  date  of  death  of  decedent.  [See  section  4,  Act  195, 
Public  Acts  of  1903.] 

2.  Receipts  issued  by  the  county  treasurer  and  the  money  received  thereon 
shall  be  forwarded  to  the  auditor  general  immediately  (within  three  days  from  the 
time  of  payment);  otherwise  he  shall  pay  interest  at  the  rate  of  eight  per  cent 
per  annum  on  such  sum  or  sums  collected  in  addition  to  the  amount  received. 
[See  sections  3  and  19,  Act  195,  Public  Acts  of  1903.] 

3.  The  county  treasurer,  except  in  counties  where  the  treasurer  is  paid  a 
salary  in  lieu  of  fees, shall  be  allowed  one  per  cent  on  all  inheritance  taxes  collected 
and  accounted  for  by  him.  Such  fees  shall  be  in  addition  to  the  fees  or  com- 
pensation now  allowed  by  law  to  such  officers  and  shall  be  paid  out  of  the  general 
or  contingent  fund  of  the  different  counties.  [See  section  16,  Act  195,  Public 
Acts  of  1903.] 

4.  Each  county  treasurer  shall  make  a  report  (on  blank  No.  2673)  to  the 
auditor  general  on  January,  April,  July  and  October  first  of  each  year  of  all  taxes 
received  by  him  under  this  act  during  the  preceding  calendar  quarter,  stating  for 
what  estate  and  by  "whom  and  when  paid.  If,  in  any  calendar  quarter,  the 
county  treasurer  has  received  no  tax  under  this  act,  the  report  shall  affirmatively 
show  this  fact.     [See  section  19,  Act  195,  Public  Acts  of  1903.] 

5.  Section  6,  Act  195,  Public  Acts  of  1903,  provides  for  refunding  taxes,  when 
erroneously  paid,  under  certain  conditions.  County  treasurers  should  not  refund 
under  any  circumstances,  as  the  law  provides  that  all  refundings  shall  be  made 
direct  by  the  auditor  general  to  the  executor,  administrator,  trustee,  person  or 
persons  entitled  to  receive  the  same. 

6.  The  county  treasurer  cannot  accept  a  deposit  to  cover  a  tax  before  the  tax 
is  determined  by  the  judge  of  probate  for  the  purpose  of  taking  advantage  of 
the  five  per  cent  discount  nor  for  the  purpose  of  avoiding  the  eight  per  cent  penalty. 

7.  Especial  care  should  be  taken  by  the  county  treasurer  and  the  suggestions 
contained  in  this  pamphlet  well  considered  before  he  issues  his  receipt  fof  the  tax. 


640  STATUTES  ANNOTATED.  [Minn.  St. 


MINNESOTA. 


List  of  Statutes 

1875. 

Statutes  of  Minnesota,  c.  37. 

1878. 

General  Statutes,  c.  7,  s.  8. 

1885. 

Statutes  of  Minnesota,  c.  103. 

1888. 

General  Statutes  Suppl.,  c.  7,  s.  8. 

1893. 

General  Laws,  c.  1. 

1895. 

"      p.  3. 

1897. 

Statutes,  c.  293.- 

1901. 

"        c.  255. 

1902. 

c.  3. 

1905. 

c.  168. 

1905. 

c.  288. 

1909. 

Revised  Statutes,  ss.  1038-1  to  1038-24. 

1911. 

Statutes,  c.  209. 

1911. 

"        c.  372. 

^ 

In  General. 

Minnesota  has  had  much  difficulty  in  getting  an  inheritance 
tax  that  would  satisfy  the  courts.  Graduated  probate  fees  similar 
to  those  in  Wisconsin,  first  adopted  in  1875  and  extended  in  1885, 
were  held  unconstitutional.  The  same  fate  successively  befell  the 
inheritance  tax  laws  of  1897,  1901  and  1902.  The  act  adopted  in 
1905  survived,  but  none  too  easily.  A  restrictive  constitutional 
amendment  adopted  in  1894,  which  the  legislature  persisted  in  dis- 
regarding, was  supplanted  in  1906  by  another  amendment,  which 
gives  the  legislature  broad  powers  to  impose  inheritance  taxes. 

In  response  to  the  urgent  suggestions  of  the  state  tax  commission 
to  differentiate  between  lineals  and  collaterals  the  legislature 
passed  an  amendment  to  this  effect  in  1909,  but  it  was  vetoed  by 
the  governor,  as  in. his  opinion  it  was  unconstitutional.  The  recent 
legislation  of  1911  has  now,  Jiowever,  made  the  distinction  between 
lineals  and  collaterals  in  a  statute  which  also  radically  decreases 
exemptions  and  increases  rates  which  now  run  as  high  as  15  per 
cent.  This  act  bids  fair  to  withstand  attack,  in  view  of  the 
broad  provisions  of  the  constitutional  amendment  of  1906. 


1905,  c.  168.]  MINNESOTA.  641 

Constitutional  Limitations. 
Minnesota  Constitution,  a.  1. 

S.  8.  Redress  of  injuries  and  wrongs.  Every  person  is  entitled  to  a  certain 
remedy  in  the  laws  for  all  injuries  or  wrongs  which  he  may  receive  in  his  person, 
property  or  character;  he  ought  to  obtain  justice  freely  and  without  pui'chase; 
completely  and  without  denial;  promptly  and  without  delay,  conformably  to 
the  laws.  <, 

Minnesota  Constitution,  a.  6. 

S.  7.  Probate  Court.  There  shall  be  established  in  each  organized  county  in 
the  state  a  probate  court,  which  shall  be  a  court  of  record,  and  be  held  at  such 
times  and  places  as  may  be  prescribed  by  law.  It  shall  be  held  by  one  judge, 
who  shall  be  elected  by  the  voters  of  the  county  for  the  term  of  two  years.  He 
shall  be  a  resident  of  such  county  at  the  time  of  his  election,  and  reside  therein 
during  his  continuance  in  office,  and  his  compensation  shall  be  provided  by  law. 
He  may  appoint  his  own  clerk,  where  none  has  been  elected,  but  the  legislature 
may  authorize  the  election  by  the  electors  of  any  county,  of  one  clerk  or  register 
of  probate  for  such  county,  whose  powers,  duties,  term  of  office  and  compensation 
shall  be  prescribed  by  law.  A  probate  court  shall  have  jurisdiction  over  the 
estates  of  deceased  persons,  and  persons  under  guardianship,  but  no  other  juris- 
diction, except  as  prescribed  by  this  constitution. 

Minn.  Const.  1857,  a.  9,  s.  1,  provided  as  follows:  — 

"All  taxes  to  be  raised  in  this  state  shall  be  as  nearly  equal  as  may  be,  and  all 
property  on  which  taxes  are  to  be  levied  shall  have  a  cash  valuation,  and  be 
equalized  and  uniform  throughout  the  state:  provided  that  the  legislature  may, 
by  general  law  or  special  act,  authorize  municipal  corporations  to  levy  assess- 
ments for  local  improvements.  ..." 

This  paragraph  was  amended  in  1894  by  a  restrictive  provision 
which  has  been  supplanted  by  the  amendment  of  1906. 

Minn.  St.  1905,  c.  168.    Approved  April  13,  1905. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Minnesota:  The  following 
amendment  to  article  nine  of  the  constitution  of  the  state  of  Minnesota,  to  take 
the  place  of  sections  one,  two,  three,  four  and  the  amendment  added  to  the  end 
of  said  article  adopted  in  1896,  relating  to  taxation,  is  hereby  proposed  to  the 
people  of  the  state  of  Minnesota  for  their  approval  or  rejection,  which  amendment 
when  adopted  shall  be  known  as  section  one  of  said  article  nine,  that  is  to  say;  — 

S.  1.  The  power  of  taxation  shall  never  be  surrendered,  suspended  or  con- 
tracted away.  Taxes  shall  be  uniform  upon  the  same  class  of  subjects,  and  shall 
be  levied  and  collected  for  public  purposes,  but  public  burying  grounds,  public 
schoolhouses,  public  hospitals,  academies,  colleges,  universities  and  all  seminaries 
of  learning,  all  churches,  church  property,  and  houses  of  worship,  institutions 
of  purely  public  charity  and  public  property  used  exclusively  for  any  public 
purpose,  shall  be  exempt  from  taxation,  and  there  may  be  exempted  from  taxation 
personal  property  not  exceeding  in  value  $200,  for  each  household,  individual 


642  STATUTES  ANNOTATED,  [Minn.  St. 

or  head  of  a  family,  as  the  legislature  may  determine:  Provided,  that  the  legis- 
lature may  authorize  municipal  corporations  to  levy  and  collect  assessments  for 
local  improvements  upon  property  benefited  thereby  without  regard  to  a  cash 
valuation,  and,  provided  further,  that  nothing  herein  contained  shall  be  con- 
strued to  affect,  modify  or  repeal  any  existing  law  providing  for  the  taxation 
of  the' gross  earnings  of  railroads. 

[This  amendment  was  adopted  in  1906.] 

[See  further  the  constitutional  amendment  of  1894,  post,  p  645.] 

Nature  of  Tax. 

An  inheritance  tax  is  not  a  tax  upon  property  but  upon  the  right 
of  succession.  State  v.  Bazille,  97  Minn.  11,  106  N.  W.  93,  6  L.  R.  A. 
(N.  S.)  732. 

Statute  to  be  Fairly  Construed. 

The  rule  of  strict  construction  ordinarily  applied  to  the  operation 
and  effect  of  statutes  on  taxation  and  to  proceedings  thereunder 
does  not  apply  to  inheritance  taxes.  The  statute  must  be  given  a 
fair  and  reasonable  construction.  State  v.  Bazille,  97  Minn.  11,  106 
N.  W.  93,  6  L.  R.  A.  (N.  S.)  732. 

How  to  Test  the  Validity  of  the  Statute. 

The  constitutionality  of  the  inheritance  tax  was  brought  to  the 
attention  of  the  court  by  an  application  by  the  treasurer  for  a  writ 
of  mandamus  commanding  the  judge  of  probate  to  appoint  ap- 
praisers to  value  certain  legacies  and  devises  for  the  purpose  of 
determining  the  amount  of  the  inheritance  tax  in  State  v.  Bazille, 
97  Minn.  11,  106  N.  W.  93,  6  L.  R.  A.  (N.  S.)  732. 

The  Effect  of  an  Unconstitutional  Statute. 

Where  an  unconstitutional  statute  was  nominally  in  force  at 
the  date  of  a  certain  transfer  and  after  the  transfer  was  made  a 
valid  law  was  passed,  the  transfer  is  subject  to  no  tax  whatever. 
The  act  was  void  from  the  beginning  and  its  nominal  existence  in 
no  way  affected  the  validity  of  the  transactions.  Where  the  trans- 
fer was  made  while  the  unconstitutional  statute  was  in  force  and 
later  before  the  death  of  the  transferor  the  legislature  passed  an 
act  which  was  valid,  the  court  says  that  it  is  possible  that  the  parties 
may  have  had  the  possibilities  of  an  inheritance  tax  in  mind,  but 
the  law  which  the  state  was  attempting  to  apply  was  not  then  in 
force  and  the  case  therefore  does  not  present  the  question  of  the 
effect  of  a  transfer  of  property  with  the  intention  and  for  the 
purpose  of  avoiding  the  operation  of  an  existing  inheritance  tax  law. 


1875,  c.  37.]  MINNESOTA.  643 

State  V.  Probate  Court,  Washington  County,  102  Minn.  268,  286, 
113N.W.  888. 

Avoiding  Tax  by  Transfer  to  Corporation. 

The  transferor  organized  a  corporation  and  conveyed  to  it  his 
property  in  return  for  the  issue  to  him  of  most  of  its  capital  stock. 
His  wife  and  children  all  signed  agreements  by  which  the  transferor 
agreed  to  transfer  to  the  wife  and  children  certain  shares  of  the 
stock  on  their  agreement  to  lease  the  same  stock  to  the  transferor 
for  life,  and  on  the  agreement  that  the  wife  would  transfer  the  stock 
which  she  was  to  receive  to  the  children,  and  who  were  to  lease  it 
to  her  for  life  on  the  same  conditions.  The  court  holds  that  the 
absolute  ownership  of  the  stock  was  not  in  the  original  transferor, 
but  that  the  effect  of  these  transactions  was  to  give  him  a  life 
estate  with  an  interest  in  reversion  in  the  wife  and  children.  The 
court  holds  that  a  life  estate  in  personal  property  although  unknown 
at  common  law  may  now  be  created  and  that  the  original  transferor 
reserved  no  power  of  disposition  of  property,  and  a  will  made  after 
the  transfers  assuming  to  give  the  stock  to  other  persons  would 
have  been  of  no  effect  and  that  therefore  the  stock  did  not  pass 
by  inheritance.  The  court  was  precluded  by  the  stipulation  under 
which  the  case  came  before  it  that  there  was  no  verbal  or  outside 
agreement  not  before  the  court  from  considering  the  question 
whether  the  agreement  was  made  to  avoid  an  inheritance  tax. 
State  V.  Probate  Court,  Washington  County,  102  Minn.  268,  294, 
113  N.  W.  888. 

THE  VOID  STATUTE  OF  1875. 

Minn.  St.  1875,  c.  37. 

S.  4.  For  the  purpose  of  reimbursing  the  county  treasury  for  the  salaries 
provided  to  be  paid  in  this  act  to  the  judge  of  probate,  it  shall  be  the  duty  of  each 
executor,  administrator  or  guardian  to  pay  or  cause  to  be  paid  to  the  county 
treasurer  for  the  use  and  benefit  of  the  county  in  whose  probate  court  proceedings 
are  to  be  instituted  to  settle  the  estate  of  any  deceased  person,  the  following  sums, 
according  to  the  value  of  the  estate  and  property  of  such  deceased  person,  as  shown 
by  the  inventory  and  appraisal,  that  is  to  say:  ten  dollars  when  such  value  shall 
exceed  one  thousand  dollars  and  shall  not  exceed  five  thousand  dollars;  twenty 
dollars  when  the  value  of  such  estate  shall  exceed  the  sum  of  five  thousand  dollars 
and  shall  not  exceed  the  sum  of  ten  thousand  dollars;  thirty  dollars  when  the 
value  of  the  estate  shall  exceed  the  sum  of  ten  thousand  dollars  and  shall  not  ex- 
ceed the  sum  of  fifteen  thousand  dollars;  fifty  dollars  when  the  value  of  the 
estate  shall  exceed  fifteen  thousand  dollars  and  shall  not  exceed  twenty  thousand 
dollars,  and  seventy-five  dollars  in  all  cases  where  the  value  of  the  estate  shall 


644  STATUTES  ANNOTATED.  [Minn.  St. 

exceed  the  sum  of  twenty  thousand  dollars,  and  in  addition  all  sums  necessarily 
expended  in  serving  or  publishing  notices  required  Dy  law:  Provided,  that  in  all 
cases  where  application  is  made  for  the  appointment  of  any  guardian  for  any 
minor  or  minors  residing  out  of  this  state,  but  having  property  therein,  or  for  the 
admission  to  probate  of  a  will  already  probated  in  some  other  state,  the  person 
making  such  application  shall  pay  in  lieu  of  the  sums  above  named  the  sum 
of  ten  dollars,  and  no  other  or  different  sum  shall  be  required  to  be  paid  by  any 
party  seeking  the  aid  of  such  probate  court,  except  as  provided  above. 

Minn.  Gen.  St.  of  1878,  c.  7,  s.  8,  is  a  copy  of  Minn.  St.  1875, 
c.  37,  s.  4. 

Minn.  St.  1885,  c.  103,  approved  March  9,  1885,  amends  Minn. 
St.  1875,  c.  37,  s.  4,  and  Minn.  Gen.  St.  1878,  c.  7,  s.  8,  to  read  as 
follows :  — 

S.  4.  For  the  purpose  of  reimbursing  the  county  treasury  for  the  salaries 
provided  to  be  paid  in  this  act  to  the  judge  of  probate,  it  shall  be  the  duty  of  each 
executor,  administrator,  or  guardian  to  pay  or  cause  to  be  paid  to  the  county 
treasurer  for  the  use  and  benefit  of  the  county  in  whose  probate  court  proceedings 
are  to  be  instituted  to  settle  the  estate  of  any  deceased  person,  minor,  spendthrift 
or  insane  person  the  following  sums  according  to  the  value  of  the  estate  and 
property  of  such  deceased  person,  minor,  spendthrift,  or  insane  persons,  shown  by 
the  inventory  and  appraisal,  that  is  to  say  ten  (10)  dollars  when  such  value  shall 
exceed  two  thousand  (2,000)  dollars  and  shall  not  exceed  five  thousand  (5,000) 
dollars;  twenty-five  (25)  dollars  when  such  value  shall  exceed  five  thousand  (5,000) 
dollars  and  not  exceed  ten  thousand  (10,000)  dollars;  thirty-five  (35)  dollars  when 
such  value  exceeds  ten  thousand  (10,000)  dollars  and  does  not  exceed  fifteen  thou- 
sand (15,000)  dollars;  fifty  (50)  dollars  when  such  value  exceeds  fifteen  thousand 
(15,000)  dollars  and  does  not  exceed  twenty  thousand  (20,000)  dollars;  seventy- 
five  (75)  dollars  when  such  value  exceeds  twenty  thousand  (20,000)  dollars 
and  does  not  exceed  thirty-five  thousand  (35,000)  dollars;  one  hundred  (100) 
dollars  when  such  value  exceeds  thirty-five  thousand  (35,000)  dollars  and  does 
not  exceed  fifty  thousand  (50,000)  dollars;  two  hundred  (200)  dollars  when  such 
value  exceeds  fifty  thousand  (50,000)  dollars  and  does  not  exceed  seventy-five 
thousand  (75,000)  dollars;  three  hundred  (300)  dollars  when  such  value  exceeds 
seventy-five  thousand  (75,000)  dollars  and  does  not  exceed  one  hundred  thousand 
(100,000)  dollars;  five  hundred  (500)  when  such  value  exceeds  one  hundred  thou- 
sand (100,000)  and  does  not  exceed  one  hundred  and  fifty  thousand  (150,000) 
dollars;  eight  hundred  (800)  dollars  when  such  value  exceeds  one  hundred  and 
fifty  thousand  (150,000)  dollars  and  does  not  exceed  two  hundred  thousand 
(200,000)  dollars;  one  thousand  (1,000)  dollars  when  such  value  exceeds  two  hun- 
dred thousand  (200,000)  dollars  and  does  not  exceed  five  hundred  thousand 
(500,000)  dollars;  five  thousand  (5,000)  dollars  when  such  value  exceeds  five 
hundred  thousand  (500,000)  dollars  and  in  addition  such  executor,  administrator 
or  guardian  shall  pay  all  sums  necessarily  expended  in  serving  or  publishing 
notices  required  by  law.  There  shall  be  no  discrimination  made  between  resident 
and  non-resident  executors,  administrators  or  guardians,  or  the  estate  of  residents 
or  non-residents  of  the  state,  no  other  or  different  sum  shall  be  required  to  be  paid 
by  any  party  asking  the  aid  of  such  probate  court  except  as  provided  above. 


1885,  c.  103.]  MINNESOTA.  645 

The  court  holds  that  there  is  no  question  about  the  power  of  the 
legislature  to  require  suitors  to  pay  reasonable  fees  and  costs,  but  it 
regards  this  inheritance  tax  as  taxes  in  the  ordinary  sense  of  that 
word.  The  court  finds  that  the  arbitrary  sums  exacted  and  the 
fact  that  there  is  no  probable  correspondence  between  the  sums 
to  be  paid  and  the  character  and  extent  of  the  service  which  may 
be  required,  show  that  this  payment  is  an  exaction  as  "taxes."  If 
estates  are  taxable  in  this  manner  at  all  an  exemption  of  estates  not 
exceeding  two  thousand  dollars  is  contrary  to  the  requirement  of 
the  constitution.  Therefore  this  statute  is  void  as  imposing  a  tax 
which  is  not  equal. 

The  exaction  of  these  arbitrary  sums  is  further  obnoxious  to  the 
Minnesota  constitution  providing  that  justice  shall  be  obtained 
freely  and  without  purchase.  Suitors  in  this  probate  court  of 
exclusive  jurisdiction  should  not  be  required  to  pay  as  a  condition 
to  their  suit  being  entertained  a  tax  measured  by  the  value  of  their 
property  and  without  regard  to  the  nature  or  extent  of  the  judicial 
proceedings  which  may  be  invoked  or  become  necessary.  State  v. 
Gorman,  40  Minn.  232,  41  N.  W.  948,  2  L.  R.  A.  701. 

The  case  just  cited  has  been  understood  as  an  authority  that  the 
requirement  of  our  constitution  that  all  taxes  to  be  raised  in  this 
state  shall  be  as  nearly  equal  as  may  be  applied  to  excise  and  impost 
taxes,  and  therefore  a  statute  laying  an  inheritance  tax  would  be 
unconstitutional.  "It  is  not  quite  clear  whether  this  decision  was 
based  upon  the  proposition  that  the  tax  was  one  laid  upon  property 
or  upon  the"  privilege  of  having  estates  settled  and  distributed  in 
the  probate  court.  If  the  former — which  was  probably  the  case  — 
the  decision  is  not  an  authority  for  or  against  the  right  of  the 
legislature  to  levy  an  inheritance  tax  under  section  1,  article  9,  of  the 
constitution.  "If  the  word  'taxes,'  as  used  in  this  section  as 
it  originally  stood,  includes  excise  and  impost  taxes,  it  by  no 
means  follows  that  a  statute  laying  an  inheritance  tax,  which  aimed 
at  practical  equality,  would  not  be  valid."  Per  Start,  C.  J.,  in  Drew 
V.  Tifft,  79  Minn.  175,  183,  81  N.  W.  839,  47  L.  R.  A.  525,  79 
Am.  St.  Rep.  446. 

The  Constitutional  Amendment  of  1894. 

Minnesota  Constitution  1893,  First  Amendment.     Adopted  November  6, 

1894. 

And  provided  further,  that  there  may  be  by  law  levied  and  collected  a  tax 

upon  all  inheritances,  devises,  bequests,  legacies  and  gifts  of  every  kind  and 

description  above  a  fixed  and  specified  sum   of  any  and  all  natural  persons  and 


646  STATUTES  ANNOTATED.  [Minn.  St. 

corporations.    Such  tax  above  such  exempted  sum  may  be  uniform,  or  it  may  be 
graded  or  progressive,  but  shall  not  exceed  a  maximum  tax  of  five  per  cent. 

Minnesota  was,  so  far  as  the  court  was  advised,  the  only  state 
whose  constitution  in  express  terms  limited  the  power  of  the  legis- 
lature in  the  laying  of  an  inheritance  tax.  Drew  v.  Tifft,  79  Minn. 
175,  81  N.  W.  839,  47  L.  R.  A.  525,  79  Am.  St.  Rep.  446.  [See, 
however,  Alabama,  ante,  p.  3t3.] 

The  clearly  disclosed  object  of  the  amendment  to  the  Minnesota 
constitution,  1894,  was  to  authorize  an  inheritance  tax  law  similar 
tc  those  in  force  in  other  states  of  this  country.  The  Minnesota 
constitution  provides  that  the  tax  may  be  "uniform,  graded  or 
progressive."  Authority  to  classify  persons  and  property  for  the 
purpose  of  taxation  is  well  settled  and  graded  or  progressive  taxation 
is  intimately  associated  with  that  of  classification  and  perhaps 
amounts  substantially  to  the  same  thing.  State  v.  Bazille,  97  Minn. 
11,  106  N.  W.  93,  6.  L.  R.  A.  (N.  S.)  732. 

The  proviso  in  the  Minn.  Const.,  a.  9,  s.  1,  as  to  an  inheritance 
tax  was  added  in  1894,  presumably  to  meet  the  difficulties  the  court 
found  in  the  case  of  State  v.  Gorman,  40  Minn.  232,  41  N.  W.  948, 
2  L.  R.  A.  701.  This  amendment  was  incorporated  into  the  existing 
constitution  and  the  section  in  question  must  be  construed  pre- 
cisely as  if  the  proviso  had  been  a  part  of  the  original  section ;  hence 
the  mandate  of  equality  qualifies  the  provisions  of  the  amendment 
and  applies  to  the  whole  section.  The  court  therefore  holds  that 
the  requirement  of  equality  in  taxation  applies  to  inheritance 
taxes  exactly  as  it  does  to  taxes  on  property  except  as  expressly 
provided  in  the  last  clause  of  the  section.  Drew  v.  Tifft,  79  Minn. 
175,  81  N.  W.  839,  47  L.  R.  A.  525,  79  Am.  St.  Rep.  446. 

THE  VOID  STATUTE  OF  1897. 

Minn.  St.  1897,  c.  293. 

An  Act  for  a  tax  on  gifts,  inheritances,  devises,  bequests  and 

legacies  in  certain  cases. 

S.  1.  A  tax  shall  be  and  is  hereby  Imposed  upon  the  transfer  of  any  personal 
property,  of  the  value  of  five  thousand  (5,000)  dollars  or  over,  or  of  any  interest 
therein  or  income  therefrom,  in  trust  or  otherwise,  to  persons  or  corporations  not 
exempt  by  law  from  taxation  on  real  or  personal  property,  in  the  following  cases: — 

First:  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  from  any 
person  dying  seized  or  possessed  of  the  property  while  a  resident  of  the  state. 

Second:  When  the  transfer  is  by  will  or  intestate  law,  of  property  within 
the  state,  and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of 
his  death. 


1897,  c.  293.]  MINNESOTA.  647 

Third:  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  non-resident, 
when  such  non-resident's  property  is  within  this  state,  by  deed,  grant,  bargain, 
sale  or  gift,  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  donor, 
or  intending  to  take  effect,  in  possession  or  enjoyment,  at  or  after  such  death. 
Such  tax  shall  also  be  imposed  when  any  such  person  or  corporation  becomes 
beneficially  entitled,  in  possession  or  expectancy,  to  any  property  or  the  income 
thereof,  by  any  such  transfer,  whether  made  before  or  after  the  passage  of  this  act. 
Such  tax  shall  be  at  the  rate  of  five  (5)  per  cent  upon  the  clear  market  value  of 
such  property,  except  as  otherwise  prescribed  in  the  next  section. 

Exemption  of  Realty  Void. 

Under  the  Minn.  Const.,  a.  9,  s.  1,  a  statute  laying  an  inheritance 
tax  must  include  real  property  as  well  as  personal,  and  there  can 
be  no  discrimination  in  this  respect;  therefore,  the  act  of  1897  is 
unconstitutional.  Drew  v.  Tifft,  79  Minn.  175,  81  N.  W.  839,  47 
L.  R.  A.  525,  79  Am.  St.  Rep.  446. 

Exemption  of  Persons  Exempt  by  General  Law. 

The  act  is  further  unconstitutional  as  it  excepts  from  its  operation 
persons  and  corporations  whose  property  is  exempt  by  law  from 
taxation  under  the  provision  of  the  Minn.  Const.,  a.  9,  s.  1.  Such 
a  statute  must  lay  the  tax  upon  all  bequests,  devises  and  gifts  to 
any  and  all  natural  persons  and  corporations.  Drew  v.  Tifft,  79 
Minn.  175,  81  N.  W.  839,  47  L.  R.  A.  525,  79  Am.  St.  Rep.  446. 

Tax  should  be  only  on  Excess  above  Exemption. 

This  act  is  void  for  inequality  because  it  leaves  the  tax  upon  the 
entire  devise,  bequest  or  distributive  share  if  of  the  specified  value 
and  not  upon  the  excess  above  a  fixed,  specified,  exempted  sum  as 
the  amendment  of  1894  to  the  Minnesota  constitution  requires. 
Drew  V.  Tifft,  79  Minn.  175,  81  N.  W.  839,  47  L.  R.  A.  525,  79 
Am.  St.  Rep.  446. 

Minn.  St.  1897,  c.  293. 

S.  2.  When  the  property  or  any  beneficial  interest  therein  passes  by  any  such 
transfer  to  or  for  the  use  of  father,  mother,  husband,  wife,  child,  brother,  sister, 
wife  or  widow  of  a  son,  or  the  husband  of  a  daughter,  or  any  children  adopted 
as  such,  in  conformity  with  the  laws  of  this  state,  of  the  decedent,  grantor,  donor 
or  vendor,  or  to  any  person  to  whom  any  such  decedent,  grantor,  donor  or  vendor 
for  not  less  than  ten  (10)  years  prior  to  such  transfer,  stood  in  the  mutually 
acknowledged  relation  of  a  parent,  or  to  any  lineal  descendant  of  such  decedent, 
grantor,  donor  or  vendor,  born  in  lawful  wedlock,  such  transfer  of  property 
shall  not  be  taxable  under  this  act,  unless  it  is  personal  property  of  the  value 


648  STATUTES  ANNOTATED  [Minn.  St. 

of  ten  thousand  (10,000)  dollars  or  more,  in  which  case  it  shall  be  taxable 
under  this  act  at  the  rate  of  one  (1)  per  centum  upon  the  clear  market  value 
of  such  property. 

Classification  by  Relationship  Upheld. 

This  act  is  not  unconstitutional  for  the  reason  that  it  taxes  lineal 
heirs  and  distributees  at  1  per  cent  and  collateral  heirs  at  5  per  cent. 
** There  is  a  natural  reason  for  taxing  the  privilege  of  the  latter  of 
receiving  the  property  at  a  higher  rate  than  that  of  the  former"  and 
the  amendment  of  1894  to  the  Minnesota  constitution  "authorizes 
such  graduation  of  the  tax."  Drew  v.  Tift,  79  Minn.  175,  81  N.  W. 
839,  47  L.  R.  A.  525,  79  Am.  St.  Rep.  446.  See  to  the  same  effect 
dictum  in  State  v.Bazille,  97  Minn.  11,  106  N.  W.  93,  6  L.  R.  A. 
(N.  S.)  732. 

Distinction  between  Exemptions  to  Lineals  and  Collaterals. 

The  amendment  of  1894  to  the  Minnesota  constitution  provides 
that  an  inheritance  tax  may  be  laid  on  inheritances  above  a  fixed 
and  specified  sum,  and  that  such  tax  may  be  uniform  or  it  may 
be  graded  or  progressive.  These  are  exceptions  to  the  rule  of 
equality  in  taxation  and  authorize  the  exemption  of  inheritances 
to  the  extent  of  a  fixed  and  uniform  sum.  The  exemption,  however, 
must  be  uniform  and  apply  equally  to  all  persons  and  corporations, 
and  therefore  a  larger  exemption  to  lineals  of  ten  thousand  dollars 
than  to  collaterals  of  five  thousand  dollars  makes  the  statute  void. 
Drew  V.  Tifft,  79  Minn.  175,  81  N.  W.  839,  47  L.  R.  A.  625,  79  Am. 
St.  Rep.  446. 

Minn.  St.  1897,  c.  293,  ss.  3  to  17,  provide  for  the  assessment  and 
collection  of  the  tax.    Section  18  covers  the  definition  of  terms. 

THE  VOID  STATUTE  OF  1901. 
Minn.  St.  1901,  c.  255. 

S.  1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  property 
real,  personal  or  mixed,  tangible  or  intangible,  over  which  this  state  has  juris- 
diction; or  of  any  interest  therein,  or  income  therefrom  in  trust  or  otherwise, 
when  the  value  of  such  property,  interest  or  income  exceeds  five  thousand  dollars 
($5,000),  in  the  following  cases:  — 

First:  When  the  transfer  is  by  will,  or  by  the  intestate  laws  of  this  state  from 
any  person  dying,  deceased  or  possessed  of  the  property  while  a  resident  of  this 
state. 

Second:  When  the  transfer  is  by  will,  or  intestate  law  of  property  within  the 
state  and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

Third:  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  non- 
resident when  such  non-resident's  property  is  within  the  state,  by  deed,  grant, 
bargain,  sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor,  vendor 


1901,  c.  255.]  MINNESOTA.  649 

or  donor,  or  intending  to  take  effect  in  possession  or  enjoyment  at  or  after  such 
death. 

Such  tax  is  also  imposed  when  any  person  or  corporation  becomes  beneficially 
entitled  in  possession  or  expectancy  to  any  property  or  the  income  thereof  by 
any  such  transfer,  whether  made  before  or  after  the  passage  of  this  act. 

Such  tax  shall  be  at  the  rate  of  five  per  cent  of  the  clear  market  value  of  such 
property,  interest  or  income,  except  as  otherwise  provided  in  the  next  section; 
provided,  that  any  estate,  property,  interest  or  income  so  transferred,  that  shall 
be  valued  at  five  thousand  dollars  ($5,000),  or  less,  shall  be  exempt  from  and 
not  subject  to  the  tax  hereby  imposed. 

S.  2.  When  such  property  interest  or  income,  or  any  beneficial  interest  therein 
passes  by  any  such  transfer  to  the  use  of  a  father,  mother,  husband,  wife,  child, 
brother,  sister,  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter,  or  any  child 
adopted  as  such,  in  conformity  with  the  laws  of  this  state,  of  the  decedent, 
grantor,  donor  or  vendor,  or  to  any  person  to  whom  such  decedent,  grantor, 
donor  or  vendor,  for  not  less  than  ten  (10)  years  prior  to  such  transfer,  stood  in 
the  mutually  acknowledged  relation  of  parent,  or  to  any  lineal  descendant  of  such 
decedent,  grantor,  donor  or  vendor,  born  in  lawful  wedlock,  then  such  tax  shall 
be  at  the  rate  of  one  per  cent  upon  the  clear  market  value  of  the  property,  inter- 
est or  income  so  transferred,  in  excess  of  said  sum  of  five  thousand  dollars  ($5,000). 

Exemptions  Void. 

This  statute  was  in  all  probability  intended  to  meet  the  require- 
ments of  Drew  v.  Tifft,  79  Minn.  175,  81  N.  W.  839,  47  L.  R.  A.  525, 
79  Am.  St.  Rep.  446.  The  court,  however,  decides  that  the  statute 
is  still  unconstitutional,  as  there  is  a  flagrant  want  of  uniformity 
and  equality  not  only  as  between  collateral  and  lineal  descendants 
but  also  as  between  collaterals.  The  tax  is  imposed  upon  any  trans- 
fer to  collaterals  which  exceeds  five  thousand  dollars,  and  not  upon 
the  excess  over  and  above  that  amount  but  upon  the  whole  value 
where  it  exceeds  five  thousand  dollars,  and  the  court  holds  that  this 
is  clearly  unequal,  as  if  the  value  of  the  transfer  should  be  five 
thousand  one  hundred  dollars  the  tax  would  be  laid  upon  the  whole 
amount,  while  the  person  receiving  less  than  five  thousand  dollars 
would  pay  no  tax  at  all.  State  v.Bazille,  87  Minn.  500,  92  N.  W.  415, 
94  Am.  St.  Rep.  718. 

Section  18  provides  that  the  words  "estate"  and  "property"  as 
used  in  the  act  shall  be  taken  to  mean  the  personal  property  of  the 
testator.  This  section  limits  the  effect  of  the  statute  to  personal 
property  and  is  therefore  void,  as  decided  in  the  case  of  Drew  v.  Tifft, 
79  Minn.  175,  81  N.  W.  839,  47  L.  R.  A.  525,  79  Am.  St.  Rep.  446; 
State  V.  Bazille,  87  Minn.  500,  92  N.  W.  415,  94  Am.  St.  Rep.  718. 

Minn.  St.  1901,  c.  255,  ss.  3  to  18,  cover  the  appraisal  of  the  prop- 
erty and  the  collection  and  payment  of  the  tax. 


650  STATUTES  ANNOTATED.  [Minn.  St. 

THE  VOID  STATUTE  OF  1902. 

Minn.  St.  1902,  c.  3.    Approved  March  12,  1902. 

S.  1.  Subject  to  Tax.  A  tax  shall  be  and  is  hereby  imposed  upon  all  inherit- 
ances, devises,  bequests,  legacies  and  gifts  of  every  kind  and  description,  the  value 
whereof  exceeds  ten  thousand  dollars,  and  upon  such  excess  only. 

S.  2.  Rates  of  Tax.  When  such  inheritance,  devise,  bequest,  legacy  or  gift 
is  for  the  use  or  benefit  of  a  father,  mother,  husband,  wife,  child,  brother,  sister, 
grandchild,  nephew  or  niece,  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter 
or  any  child  legally  adopted,  of  the  decedent  or  donor,  or  to  any  person  to  whom 
such  decedent  or  donor  for  not  less  than  ten  years  prior  to  the  taking  effect  of 
such  inheritance,  devise,  bequest,  legacy  or  gift,  stood  in  the  mutually  acknowl- 
edged relation  of  parent,  or  to  any  lineal  descendant  of  such  decedent  or  donor 
born  in  lawful  wedlock,  then  such  tax  shall  be  at  the  rate  of  one-half  of  1  per 
centum,  and  in  all  other  cases  at  the  rate  of  10  per  centum  upon  the  full  and  true 
value  of  such  inheritance,  devise,  bequest,  legacy  or  gift,  to  be  computed  upon 
the  valuation  thereof  in  excess  of  $10,000. 

This  act  is  void,  as  it  provides  for  a  tax  of  10  per  cent  on  collaterals 
and  the  Minn.  Const.,  a.  9,  s.  1,  limits  the  tax  to  5  per  cent.  State 
V.  Harvey,  90  Minn.  180,  95  N.  W.  764. 

Void  in  its  Entirety. 

Where  the  Minn.  St.  1902,  c.  3,  is  void,  as  the  tax  on  collaterals 
is  10  per  cent  while  the  constitution  only  permits  a  tax  of  5  per  cent, 
it  was  urged  that  the  tax  as  to  lineal  heirs  is  within  the  constitutional 
limitation  and  is  separate  and  distinct  from  the  tax  as  to  the 
collateral  heirs,  and  therefore  the  statute  might  be  sustained  as 
to  lineals.  The  courc  replies  to  this  claim  that  any  such  statute 
would  be  unconstitutional,  as  all  must  be  taxed  or  none.  Quoting 
Drew  V.  Tifft,  79  Minn.  175,  81  N.  W.  839,  47  L.  R.  A.  525,  79  Am. 
St.  Rep.  446.    State  v.  Harvey,  90  Minn.  180,  95  N.  W.  764. 

The  claim  was  made  that  the  greater  includes  the  less  and  that 
a  10  per  cent  tax  included  a  5  per  cent  tax  and  that  therefore  the 
statute  might  be  upheld  as  imposing  a  tax  valid  to  the  extent  of 
5  per  cent.  The  court,  however,  finds  that  the  rate  of  taxation  and 
the  whole  thereof  ordained  by  the  legislature  is  absolutely  void 
and  the  statute  is  in  legal  effect  one  in  which  the  rate  of  taxation 
as  to  collateral  heirs  and  other  parties  is  left  blank.  Such  being 
the  case  the  court  has  no  more  power  to  fill  by  construction  the 
blank  in  the  statute  by  reading  into  it  a  rate  of  taxation  which 
will  be  within  the  limitation  of  the  constitution  than  it  has  to 
decree  an  inheritance  tax  in  advance  of  any  legislation  on  the  subject. 
State  V.  Harvey,  90  Minn.  180,  95  N.  W.  764. 

[Ss.  3  to  22  cover  the  assessment  and  collection  of  the  tax.] 


1905,  c.  288.]  MINNESOTA.  651 

THE  VALID  STATUTE  OF  1905. 

Minn.  St.  1905,  c.  288.    Approved  and  in  effect  April  19,  1905. 

An  Act  providing  for  taxation  of  and  fixing  the  rate  of  taxation 
ON  inheritances,  devises,  bequests,  legacies  and  gifts,  and  providing  for  the 
manner  of  payment  as  well  as  the  manner  of  enforcing  payment  thereof. 

Transfers  Taxable.  —  Exemptions. 

S.  1.  A  tax  shall  be  and  is  hereby  imposed  upon  all  inheritances,  devises, 
bequests,  legacies  and  gifts  of  every  kind  and  description,  of  any  and  all  persons 
and  corporations,  the  value  of  which  exceeds  ten  thousand  dollars  ($10,000), 
and  upon  such  excess  only. 

Not  Retroactive. 

This  act  has  no  application  to  property  which  was  actually  sold 
and  disposed  of  before  the  date  of  its  enactment.  State  v.  Probate 
Court,  Washington  County,  102  Minn.  268,  285,  113  N.  W.  888. 

All  Gifts  to  each  Individual  should  be  Consolidated    in 
Reckoning  Exemptions. 

Where  a  will  provides  tor  the  creation  of  a  trust  estate  and  the 
payment  of  the  principal  to  him  in  instalments  as  he  reaches 
certain  designated  ages,  there  is  but  one  legacy  to  him  and  but  one 
exemption  of  ten  thousand  dollars  under  the  Minn.  St.  1905.  Where 
the  exemption  of  ten  thousand  dollars  has  already  been  deducted 
from  the  first  instalment  of  the  residue  of  the  estate,  which  has 
akeady  been  paid  to  him,  there  can  be  no  further  exemption  as  to 
him.  State  v.  Probate  Court,  100  Minn.  192,  197,  110  N.  W.  865. 
See  further,  notes  to  section  2,  post. 

Rates. 

S.  2.  Such  tax  shall  be  computed  upon  the  full  and  true  value  of  such  inherit- 
ance, devise,  bequest,  legacy  or  gift,  above  such  excess,  at  the  following  rates, 
viz.:  — 

1.  When  such  valuation  is  over  ten  thousand  dollars  ($10,000)  and  less  than 
fifty  thousand  dollars  ($50,000),  the  rate  shall  be  one  and  one-half  (1^)  per  cent 
thereof. 

2.  When  such  valuation  is  fifty  thousand  dollars  ($50,000)  or  over  and  less 
than  one  hundred  thousand  dollars  ($100,000),  the  rate  shall  be  three  (3)  per 
cent  thereof. 

3.  When  such  valuation  is  one  hundred  thousand  dollars  ($100,000)  or  over, 
the  rate  shall  be  five  (5)  per  cent  thereof. 


652  STATUTES  ANNOTATED.  [Minn.  St. 

Construction  of  Rates  and  Exemptions. 

The  use  of  the  word  "excess"  in  section  2  is  an  inadvertence; 
the  intention  of  the  legislature  was  to  tax  everything  above  ten 
thousand  dollars  and  the  word  ''exemption"  was  the  undoubted 
intention  of  the  legislature  and  might  be  supplied;  properly  con- 
strued the  section  lays  a  tax  upon  all  inheritances  in  excess  of  an 
exemption  of  ten  thousand  dollars.  The  court  further  finds  that 
this  section  did  not  intend  to  give  an  exemption  of  twenty  thousand 
dollars  to  persons  coming  within  the  first  class  receiving  less  than 
ten  thousand  dollars.  The  statute  did  not  mean  that  unless  the 
inheritance  exceeds  the  sum  of  ten  thousand  dollars  over  and  above 
the  previously  fixed  exemption  of  ten  thousand  dollars  no  tax  is 
imposed  at  all,  while  those  of  the  class  who  receive  over  ten  thou- 
sand dollars  and  less  than  fifty  thousand  dollars  are  taxed  at  the 
rate  there  prescribed  on  the  whole  amount.  The  court  holds  that 
this  is  not  the  intention  of  the  statute  but  that  the  manifest  in- 
tention was  to  lay  the  tax  upon  all  inheritances  between  the  values 
of  ten  thousand  dollars  and  fifty  thousand  dollars.  State  v.  Bazille, 
97  Minn.  11,  106  N.  W.  93,  6  L.  R.  A.  (N.  S.)  732. 

State  V.  Vance,  97  Minn.  532,  106  N.  W.  98,  follows  in  all  respects 
State  V.  Bazille,  97  Minn.  11,  106  N.  W.  93,  6  L.  R.  A.  (N.  S.)  732. 

Sections  2  of  this  statute  contains  two  verbal  errors.  In 
section  2  the  use  of  the  word  "excess"  instead  of  the  word  "ex- 
emption" is  a  mistake  in  the  first  paragraph.  Section  2  contains 
a  mistake  in  inserting  the  words  "over  ten  thousand  dollars,"  in 
subdivision  1,  section  2.  The  court  thinks  the  use  of  these  words 
was  evidently  an  abortive  attempt  to  make  it  clearer  that  ten 
thousand  dollars  of  an  inheritance  should  be  exempt  from  tax,  but 
it  is  plainly  repugnant  to  the  first  paragraph  of  section  2  which 
provides  that  the  tax  shall  be  computed  on  the  value  of  the  inherit- 
ance above  the  exemption.  Subdivision  1  must  be  construed,  there- 
fore, as  if  the  words  "over  ten  thousand  dollars"  had  been  omitted. 
So  construing  the  statute  the  court  finds  that  an  inheritance  tax 
must  be  computed  in  all  cases  upon  the  true  value  of  the  in- 
heritance above  an  exemption  of  ten  thousand  dollars;  but  when 
such  valuation  is  less  than  fifty  thousand  dollars  the  tax  rate 
is  one  and  one-half  per  cent  thereof;  but  when  such  valuation 
is  fifty  thousand  dollars  or  over  and  less  than  one  hundred  thou- 
sand dollars  the  rate  is  3  per  cent;  that  when  such  valuation  is 
one  hundred  thousand  dollars  or  over  the  rate  is  5  per  cent;  and 
that  a  tax  on  a  legacy  of  the  total  value  of  fifty-eight  thousand 


1905,  c.  288.]  MINNESOTA.  653 

dollars  should  be  at  the  rate  of  one  and  one-half  per  cent.  It  is 
clear  from  State  v.  Bazille,  97  Minn.  11,  106  N.  W.  93,  6  L.  R.  A. 
(N.  S.)  732,  that  it  was  the  intention  to  hold  in  that  case  that  a  tax 
was  laid  upon  all  inheritances  less  than  fifty  thousand  dollars  in 
value  above  the  exemption  at  the  rate  of  only  one  and  one-half 
per  cent.    State  v.  Probate  Court,  111  Minn.  297,  126  N.  W.  1070. 

Progressive  Feature  Upheld.  —  Equality. 

''The  authority  to  make  the  tax  graded  or  progressive  was  in- 
corporated in  the  law  advisedly,  and  in  view  of  the  well-known 
and  firmly  established  system  of  such  taxation  in  force  in  this 
country,  basfed  upon  the  wise  and  wholesome  doctrine  that  ability 
to  pay  is  the  true  basis  for  all  taxation.  Though  it  results  in  a 
measure  in  inequality,  it  conforms  to  a  system  sanctioned  and 
supported  by  the  authorities  generally,  and  is  not  repugnant  to 
constitutional  principles.  Three  distinct  classes  are  created  by  the 
statute,  and  there  is  absolute  equality  between  the  members  of 
each.  The  same  exemption  is  allowed  to  those  of  all  classes,  and  the 
same  rate  of  taxation  is  imposed  upon  members  coming  within  the 
several  classes."  Per  Brown,  J.,  in  State  v.Bazille,  97  Minn,  11,  22, 
106  N.  W.  93,  6  L.  R.  A.  (N.  S.)  732. 

"It  is  insisted  that  the  proviso  authorizing  the  inheritance  tax 
must  be  construed  in  connection  with  the  equality  mandate,  and 
that,  properly  construed,  the  tax,  although  it  may  be  graded  or 
progressive,  must,  as  respects  graded  or  progressive  features,  be  made 
as  nearly  equal  as  may  be,  and  that  the  statute  does  not  conform 
to  this  requirement.  Counsel  contend  that  this  construction  is 
sustained  by  the  Drew  case.    In  this  we  do  not  concur. 

"The  history  of  taxation  is,  in  harmony  with  all  human  affairs,  one 
of  evolution.  Its  progress  from  the  earliest  times  to  the  present 
day  is  one  of  constant  development,  in  keeping  with  the  advancing 
intelligence  of  man,  unrolling  step  by  step,  with  changing  economic 
and  social  conditions,  tardily,  however,  new  methods  and  means 
of  subjecting  untaxed  property  to  the  tax  rolls.  Originally  public 
revenue  was  raised  by  voluntary  contributions  from  the  citizens; 
later,  in  response  to  appeals  and  solicitations  of  the  rulers;  and 
finally,  when  voluntary  contributions  ceased,  as  at  the  present 
day,  by  compulsory  assessments  enforced  by  the  operation  of  law. 
With  this  latter  method  came  the  demand;  born  of  injustice  and 
oppression,  for  uniformity  and  equality,  and  provisions  securing 
it  have  long  been  a  part  of  the  fundamental  law  of  all  democratic 


654  STATUTES  ANNOTATED.  [Minn.  St. 

forms  of  government.  Formerly  tangible  property  only  was  taxed. 
Franchises  of  corporations,  special  privileges,  and  other  intangible, 
yet  valuable,  property  rights,  never  reached  the  tax  lists.  But 
in  more  recent  times  new  species  of  property,  'new  in  kind,  unsub- 
stantial in  character,  vast  in  extent,  enormous  in  value,'  have, 
owing  to  industrial  growth  and  commercial  enterprise,  come  rapidly 
into  existence  (Jaggard,  J.,  in  State  v.  Western  Union  Tel.  Co.,  96 
Minn.  22,  104  N.  W.  567),  and  methods  and  means  of  reaching  and 
subjecting  the  same  to  its  share  of  the  public  burdens  have  developed 
and  been  put  into  practical  operation  by  the  legislatures  and  courts 
of  this  country.  Ability  or  faculty  to  pay  has  come  to  be  the  test 
in  determining  the  justness  of  taxation.  It  is  not  only  the  basis  of 
taxation  but  the  goal  toward  which  society  is  steadily  working.  It 
lies  instinctively  and  unconsciously  at  the  bottom  of  all  of  our 
endeavors  at  reform."    Seligman,  Tax.  72. 

"The  equity  and  fairness  of  this  theory,  in  its  broadest  sense, 
when  we  reflect  upon  the  vast  fortunes  accumulated  as  the  result 
of  especially  advantageous  opportunities  and  facilities  not  possessed 
by  people  in  general,  is  apparent  and  obvious.  It  works  no  injustice 
or  harm  to  those  thus  fortunately  situated,  does  not  injuriously  affect 
productive  or  industrial  agencies,  and  relieves  in  a  measure  those 
witlf  lesser  opportunities,  and  those  to  whom  taxation  is  always 
an  extreme  burden.  This  theory  does  not,  however,  harmonize 
well  with  a  strict  application  of  the  fundamental  mandate  of 
equality,  as  applied  more  particularly  to  the  proportional  system  of 
taxation  in  force  in  this  and  other  states.  We  mean  by  "propor- 
tional system"  a  tax  at  a  fixed  and  uniform  rate,  in  proportion  to 
the  amount  of  taxable  property,  based  upon  a  cash  valuation;  and 
legislatures  and  courts  have  been  not  a  little  embarrassed  in  attempts 
to  apply  it. 

"But  an  examination  of  the  books  discloses  that  the  equality 
mandate  has  been  expanded  and  made  to  yield,  from  time  to  time, 
to  new  and  advancing  social  and  economic  conditions.  The  general 
principle  is  retained,  but  is  applied  with  less  rigor  and  strictness.  In 
our  own  state  it  has  been  enlarged,  extended,  and  departed  from  by 
the  people.  As  it  originally  stood,  our  constitution  in  this  respect 
prevented  the  assessment  of  property  for  local  improvements,  and 
it  was  amended  by  expressly  excepting  such  assessments  from  the 
equality  rule.  Bidwell  v.  Coleman,  11  Minn.  45  (78);  Sperry  v. 
Flygare,  80  Minn.  325,  83  N.  W.  177,  49  L.  R.  A.  757,  81  Am.  St. 
Rep.  261.    The  equality  mandate  applies  as  a  general  rule  to  taxes 


1905,  c.  288.]  MINNESOTA.  655 

upon  property  only,  and  is  generally  held  by  the  courts  of  this 
country  to  have  no  application  to  inheritance  taxation,  because  a 
tax  of  that  nature  is  not  one  upon  property  but  upon  the  right 
of  succession  or  inheritance  (27  Am.  &  Eng.  Enc.  (2d  ed.)  338), 
though  in  this  state  it  was  held  to  apply  to  inheritance  taxes  in 
Drew  V.  Tifft,  supra,  and  also  to  a  similar  statute  in  State  v.  Gorman, 
40  Minn.  232,  234,  41  N.  W.  948,  2  L.  R.  A.  701,  precisely  as  in 
other  taxation,  except  as  otherwise  provided  by  the  amendment 
under  consideration."  Per  Brown,  J.,  in  State  v.Bazille,  97  Minn.  11, 
16,  106  N.  W.  93,  6  L.  R.  A.  (N.  S.)  732. 

Validity  Settled. 

The  validity  of  Minn.  St.  1905,  c.  288,  has  been  fully  established 
by  previous  decisions  of  this  court.  State  v.  Probate  Court,  112  Minn. 
279,  128  N.  W.  18,  19. 

Rate  of  Tax  on  Income. 

Where  payments  of  income  are  provided  for  by  will  the  rate  of 
taxation  will  not  be  increased  from  IJ^  per  cent  to  3  per  cent  under 
the  Minn.  St.  1905,  c.  288,  until  the  value  of  the  right  acquired  by 
the  life  tenant  exceeds  exclusive  of  the  statutory  exemptions  fifty 
thousand  dollars,  and  in  like  manner  the  rate  cannot  be  increased 
to  5  per  cent  until  such  value  exclusive  of  the  exemption  exceeds 
one  hundred  thousand  dollars.  State  v.  Probate  Court,  112  Minn.  279, 
128  N.  W.  18,  22. 

When  Tax  Accrues. 

S.  3.  All  taxes  imposed  by  this  act  shall  take  effect  at  and  upon  the  death  of 
the  decedent  or  donor  and  shall  be  due  and  payable  at  the  expiration  of  one  (1) 
year  from  such  death,  except  as  otherwise  provided  in  this  act;  provided,  however, 
that  taxes  upon  any  devise,  bequest,  legacy  or  gift  limited,  conditioned,  depend- 
ent or  determinable  upon  the  happening  of  any  contingency  or  future  event  by 
reason  of  which  the  full  and  true  value  thereof  cannot  be  ascertained  at  or  before 
the  time  when  the  taxes  become  due  and  payable  as  aforesaid,  shall  accrue  and 
become  due  and  payable  when  the  person  or  corporation  beneficiallv  entitled  there- 
to shall  come  into  actual  possession  or  enjoyment  thereof. 

[See  notes  under  section  15.] 

Deduction  of  Tax. 

S.  9.  If  any  bequest  or  legacy  shall  be  charged  upon  or  payable  out  of  any 
property,  the  heir  or  devisee  shall  deduct  such  tax  therefrom  and  pay  such  tax 
to  the  administrator,  executor  or  trustee,  and  the  tax  shall  remain  a  lien  or 
charge  on  such  property  until  paid;  and  the  payment  thereof  shall  be  enforced 
by  the  executor,  administrator  or  trustee  in  the. same  manner  that  payment 
of  the  bequest  or  legacy  might  be  enforced,  or  by  the  county  attorney  under  sec- 
tion 20  of  this  act.  If  any  bequest  or  legacy  shall  be  given  in  money  to  any 
person  for  a  limited  period,  the  administrator,  executor  or  trustee  shall  retain 


656  STATUTES  ANNOTATED.  [Minn.  St. 

the  tax  upon  the  whole  amount;  but  if  it  be  not  in  money,  he  shall  make  appli- 
cation to  the  court  having  jurisdiction  of  an  accounting  by  him  to  make  an 
apportionment,  if  the  case  requires,  of  the  sum  to  be  paid  into  his  hands  by  such 
legatee  or  beneficiary,  and  for  such  further  order  relative  thereto,  as  the  case 
may  require. 

Tax  Deducted  on  Payment. 

Where  there  is  a  remainder  in  the  hands  of  the  trustees  it  should 
be  distributed  to  the  several  legatees  mentioned  in  the  will  only- 
after  deducting  the  tax  due  on  such  of  them  as  may  exceed  in  value 
ten  thousand  dollars.  State  v.  Probate  Court,  100  Minn.  192,  198, 
110  N.  W.  865. 

Time  of  Appraisal. 

S.  15.  Every  inheritance,  devise,  bequest,  legacy  or  gift  upon  which  a  tax 
is  imposed  under  this  act  shall  be  appraised  at  its  full  and  true  value  immediately 
upon  the  death  of  decedent,  or  as  soon  thereafter  as  may  be  practicable :  Provided, 
however,  that  when  such  devise,  bequest,  legacy  or  gift  shall  be  of  such  a  nature 
that  its  full  and  true  value  cannot  be  ascertained  at  such  time,  it  shall  be  ap- 
praised in  like  manner  at  the  time  such  value  first  becomes  ascertainable. 

Tax  on  Remainders  Accrues  at  Death  of  Testator. 

State  V.  Probate  Court,  100  Minn.  192,  as  to  the  imposition  of  an 
inheritance  tax  on  legatees  or  devisees  at  the  time  of  the  death 
of  the  testator  where  the  possession  is  postponed,  is  quoted  with 
approval  in  State  v.  Probate  Court,  101  Minn.  485,  112  N.  W.  878. 

The  Court  is  to  Assess  only  Present  Tax. 

The  court  holds  that  the  probate  court  had  no  jurisdiction  to 
provide  for  the  future  payment  of  taxes  or  to  determine  when  or 
under  what  circumstances  the  rate  of  taxation  would  increase.  The 
question  before  the  court  is  what  tax  has  accrued  and  the  court 
should  limit  itself  to  that  question.  State  v.  Probate  Court,  112 
Minn.  279,  128  N.  W.  18,  21. 

When  Tax  on  Income  Accrues. 

The  court  affirms 5/a/g  v.  Probate  Court,  100  Minn.  192,  110  N.  W. 
865,  to  the  effect  that  the  taxation  of  a  right  to  income  cannot  be 
made  until  the  income  is  paid.  When  the  testator  gives  the  bene- 
ficial use  of  his  property  for  a  limited  time  to  one  person  after  which 
the  corpuf  of  the  estate  goes  to  another,  it  would  not  be  claimed 
that  the  right  of  each  legatee  is  not  subject  to  taxation.  The  fact 
that  both  bequests  are  to  the  same  individual  should  not  change 
the  result.     To  hold  otherwise  would  defeat  the  entire  purpose 


1905,  c.  288.]  MINNESOTA.  657 

of  the  statute,  which  can  only  be  given  effect  by  insisting  that  when 
the  amount  actually  paid  exceeds  the  exemption  a  tax  based  on 
that  amount  is  then  due.  State  v.  Probate  Court,  112  Minn.  279, 
128  N.  W.  18,  20. 

When  Tax  Accrues  on  Gift  Conditional  on  Reaching  Certain 
Age. 

The  will  provided  that  if  a  certain  grandson  E.  B.  survived  the 
testator  his  estate  should  go  to  trustees  for  the  grandson,  the 
principal  to  be  paid  the  grandson  in  instalments  if  he  should  reach 
various  ages ;  and  if  he  failed  to  reach  the  age  designated  the  trustees 
should  pay  the  balance  in  their  hands  to  certain  persons  and  chari- 
table institutions  designated  in  the  will.  The  testator  died  May  25, 
1905,  and  the  case  was  governed  by  Minn.  St.  1905,  c.  288,  ss.  1, 
3,  4,  6  and  15.  The  court  finds,  construing  these  statutes,  that  they 
provide  a  tax  to  be  paid  within  one  year  after  the  death  of  the 
decedent  except  as  otherwise  provided,  and  further,  that  under  the 
express  provisions  and  provisos  to  sections  3  and  15  a  tax  upon 
any  gift  which  is  limited,  conditional,  depending  or  determinable 
upon  the  happening  of  any  contingency  or  future  event,  so  that  the 
true  value  cannot  be  presently  ascertained,  accrues  and  becomes 
payable  only  when  the  beneficiary  is  entitled  to  the  possession 
or  enjoyment  thereof.  Therefore  under  this  will  the  probate  court 
erred  in  imposing  a  tax  upon  the  transfer  of  the  property  to  the 
trustees,  as  they  took  no  beneficial  interest  in  the  property.  The 
transfer  to  them  was  simply  a  transfer  to  hold  until  the  beneficiaries 
could  be  determined,  which  could  only  be  done  by  the  happening 
of  an  uncertain  future  event.  Whether  the  grandson  would  ever 
be  entitled  to  the  property  depends  upon  the  contingency  of  his 
surviving  to  reach  a  certain  age.  The  attorney  general  contended 
that  the  right  to  receive  the  net  income  from  the  property  so  long 
as  the  grandson  lived  is  a  life  estate  in  the  property,  vesting  in  him 
at  the  time  of  the  testator's  death.  But  the  court  finds  that  the 
payment  of  income  is  limited  in  any  event  to  a  given  number  of 
years,  hence,  the  legacy  has  none  of  the  elements  of  a  life  estate, 
and  the  present  value  of  the  right  to  receive  the  income  for  a  limited 
number  of  years  cannot  be  ascertained  for  the  value  depends  upon 
the  contingency  of  his  living  until  the  limitation  expires. 

It  follows,  therefore,  that  a  tax  on  the  income  will  accrue  and 
become  payable  as  the  time  arrives  for  the  payment  to  the  bene- 
ficiary, and  that  it  is  the  duty  of  the  trustee  to  deduct  the  tax  from 
the  amount  of  any  instalment  of  income  to  which  he  becomes 


658  STATUTES  ANNOTATED.  [Minn.  St. 

entitled  and  pay  the  amount  thereof  to  the  proper  officer.    State  v. 
Probate  Court,  100  Minn.  192,  196,  197,  110  N.  W.  865. 

Conditional  Interests. 

The  testator  who  died  in  1908  left  property  in  trust  to  be  paid 
the  widow  during  her  life,  and  while  she  remained  unmarried  the 
net  income  from  the  estate,  while  if  she  married  she  was  to  receive 
only  one-fourth  of  the  estate  while  the  residue  of  the  estate  was 
bequeathed  to  the  testator's  two  sons,  and  the  court  holds  that  the 
tax  on  this  legacy  is  due  and  payable  when  the  beneficiary  goes  into 
possession.    State  v.  Probate  Court,  112  Minn.  279,  128  N.  W.  18,  20. 

It  was  claimed  that  it  was  impossible  to  ascertain  the  value  of 
an  estate  given  to  one  until  she  marries  when  she  was  to  have  a 
different  interest,  as  no  one  could  say  how  long  she  would  remain 
unmarried.  The  court,  however,  observes  that  when  a  particular 
individual  claims  an  exemption  from  burdens  which  the  law  imposes 
upon  all  alike  and  bases  his  claim  upon  provisions  of  the  statute 
which  refer  exclusively  to  the  methods  to  be  employed,  it  is  the 
duty  of  the  court  to  construe  these  provisions  so  as  if  possible  to 
give  effect  to  the  statutory  intent.  Therefore  when  the  valuation 
takes  place  it  is  to  be  made  as  of  the  date  of  the  testator's  death. 
The  court  avoids  the  difficulty  by  deciding  that  the  probate  court 
should  determine  what  is  the  value  of  each  instalment  as  it  is  actu- 
ally paid  to  the  beneficiary.  From  the  value  of  the  first  payments 
should  be  deducted  the  exemption  of  ten  thousand  dollars  and  the 
tax  computed  upon  the  remainder.  This  avoids  a  possible  result 
that  the  custodians  of  the  estate  would  be  at  liberty  to  transfer  it 
to  the  beneficiaries  in  instalments  and  in  the  meanwhile  be  unable 
to  collect  any  tax  whatever.  State  v.  Probate  Court j  112  Minn.  279, 
128  N.  W.  18,  20.  The  court  relies  somewhat  on  In  re  Millward, 
6  Misc.  (N.  Y.)  425,  27  N.  Y.  Suppl.  286. 

Valuation. 

S.  17.  The  report  of  the  appraisers  shall  be  filed  with  the  probate  court,  and 
from  such  report  and  other  proof  relating  to  any  such  estate  before  the  probate 
court  the  court  shall  forthwith,  as  of  course,  determine  the  true  and  full  value 
of  all  such  estate  and  the  amount  of  tax  to  which  the  same  are  liable;  or  the 
probate  court  may  so  determine  the  full  and  true  value  of  all  such  estates  and 
the  amount  of  tax  to  which  the  same  are  liable  without  appointing  appraisers. 

Omission  of  Means  for  Valuation  of  Life  Estates  is  not  Fatal. 

The  fact  that  the  Minn.  St.  1895,  c.  288,  does  not  provide  any 
method  for  ascertaining  the  value  of  the  life  estate  is  not  material ; 


1905,  c.  288.]  MINNESOTA.  659 

for  the  court  may  in  the  absence  of  express  direction  adopt  some 
practical  way  for  ascertaining  the  value  of  the  life  estate  —  for 
example,  by  referring  to  life  and  annuity  tables.  State  v.  Probate 
Court,  100  Minn.  192,  197,  110  N.  W.  865. 

Jurisdiction  of  Probate  Court. 

Minn.  Const.,  a.  6,  s.  7,  limits  the  probate  courts  to  jurisdiction 
over  estates  of  deceased  persons  and  persons  under  guardianship, 
and  it  was  argued  that  the  provisions  of  Minn.  St.  1905,  c.  288,  as 
to  the  levying  of  assessments  and  collection  of  taxes  was  void. 
But  the  court  holds  that  the  jurisdiction  given  to  the  probate  courts 
under  the  ^constitution  includes  every  matter  necessarily  connected 
with  the  administration  of  the  estate.  The  ascertainment  of  the 
amount  of  the  inheritance  tax  is  a  judicial  question,  and  being  a 
necessary  proceeding  in  the  administration  of  the  estate  of  deceased 
persons  may  be  properly  committed  to  the  probate  court.  State  v. 
Probate  Court,  112  Minn.  279,  128  N.  W.  18,  21. 

Expenses  of  Administration  Deducted. 

The  expenses  of  the  administration  of  the  estate  of  a  deceased 
person  are  proper  to  be  deducted  in  ascertaining  the  value  of  the 
estate  for  the  purposes  of  taxation  under  the  inheritance  tax  law. 
State  v.  Probate  Court,  101  Minn.  485,  487,  112  N.  W.  878. 

Trustee's  Fees  not  Deducted. 

The  will  provides  compensation  for  the  trustee  of  five  thousand 
dollars  a- year  for  ten  years,  or  fifty  thousand  dollars;  and  the  court 
holds  that  the  compensation  of  the  trustee,  earned  not  in  the 
administration  of  the  estate  but  in  the  management  thereof  for  the 
benefit  of  the  legatees  or  devisees,  does  not  come  properly  within 
the  class  or  reason  for  exempting  the  administration  expenses. 
Such  services  have  no  reference  to  closing  the  estate  for  the  purpose 
of  distribution  to  those  entitled  to  it  and  are  not  required  or  essen- 
tial to  the  rights  of  the  heirs  or  legatees.  Continuing  trusts  created 
for  the  benefit  of  those  to  whom  the  property  ultimately  passes 
are  of  voluntary  creation  and  are  intended  for  the  preservation 
of  the  estate.  The  court  relies  somewhat  on  In  re  Gihon,  169  N.  Y. 
443,  62  N.  E.  561,  and  In  re  Silliman,  79  N.  Y.  App.  Div.  98,  80  N.  Y. 
Suppl.  336;  State  v.  Probate  Court,  101  Minn.  485,  487,  112  N.  W. 
878. 

[Sections  omitted  have  not  been  construed  and  provided  for  the  assessment 
and  collection  of  the  tax.] 


660  STATUTES  ANNOTATED.  [Minn.  St. 

THE  LEGISLATION  OF  191L 

Minn.  St.  1911,  c.  209,  amended  the  existing  law  and  was  approved 
April  18,  1911.  Minn.  St.  1911,  c.  372,  was  approved  April  20, 1911, 
and  went  into  effect  July  1,  1911.  It  radically  altered  sections  1 
and  2  of  the  existing  law  and  provided  further  as  follows :  — 

S.  3.  This  act  shall  take  effect  and  be  in  force  from  and  after  July  1,  1911 
provided,  however,  that  the  provisions  of  this  act  shall  apply  only  to  legacies, 
inheritances,  devises  and  transfers  received  from  persons  who  shall  die  sub- 
sequent to  the  passage  of  this  act;  all  gifts,  legacies,  inheritances  and  devises 
heretofore  or  hereafter  received  from  any  person  who  shall  have  died  prior  to 
the  passage  of  this  amendatory  act  shall  be  taxed  and  shall  be  subject  to  the 
provisions  of  sections  1  and  2  of  chapter  288,  Laws  1905,  to  the  same  extent  and 
in  the  same  manner  as  though  this  amendatory  act  had  not  been  passed. 

THE  PRESENT  ACT. 
St.  1911,  c.  209. 
Taxable  Transfers. 

S.  1.  A  tax  shall  be  and  is  hereby  imposed  upon  any  transfer  of  property, 
real,  personal  or  mixed,  or  any  interest  therein,  or  income  therefrom  in  trust 
or  otherwise,  to  any  person,  association  or  corporation,  except  county,  town  or 
municipal  corporation  within  the  state,  for  strictly  county,  town  or  municipal 
purposes,  in  the  following  cases:  — 

(1)  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  from 
any  person  dying  possessed  of  the  property  while  a  resident  of  the  state. 

(2)  When  a  transfer  is  by  will  or  intestate  law,  of  property  within  the  state  or 
within  its  jurisdiction  and  the  decedent  was  a  non-resident  of  the  state  at  the  time 
of  his  death. 

(3)  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  non-resident 
when  such  non-resident's  property  is  within  this  state,  or  within  its  jurisdiction, 
by  deed,  grant,  bargain,  sale  or  gift,  made  in  contemplation  of  the  death  of  the 
grantor,  vendor  or  donor,  or  intended  to  take  effect  in  possession  or  enjoyment 
at  or  after  such  death. 

(4)  Such  tax  shall  be  imposed  when  any  such  person  or  corporation  become 
beneficially  entitled,  in  possession  or  expectancy  to  any  property  or  the  income 
thereof,  by  any  such  transfer  whether  made  before  or  after  the  passage  of  this  act. 

(5)  Whenever  any  person  or  corporation  shall  exercise  a  power  of  appointment 
derived  from  any  disposition  of  property  made  either  before  or  after  the  passage 
of  this  act,  such  appointment  when  made  shall  be  deemed  a  transfer  taxable 
under  the  provisions  of  this  act  in  the  same  manner  as  though  the  property  to 
which  such  appointment  relates  belonged  absolutely  to  the  donee  of  such  power 
and  had  been  bequeathed  or  devised  by  such  donee  by  will ;  and  whenever  any 
person  or  corporation  possessing  such  a  power  of  appointment  so  derived  shall 
omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole  or 
in  part  a  transfer  taxable  under  the  provisions  of  this  act  shall  be  deemed  to  take 
place  to  the  extent  of  such  omission  or  failure,  in  the  same  manner  as  though 
the  persons  or  corporations  thereby  becoming  entitled  to  the  possession  or 
enjoyment  of  the  property  to  which  such  power  related  had  succeeded  thereto 


1911,  c.  209.]  MINNESOTA.  661 

by  a  will  of  the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect 
at  the  time  of  such  omission  or  failure.     (St.  1911,  c.  372.) 
[See  notes  to  the  Act  of  1905,  ante,  p.  651.] 

Rates  and  Exemptions. 

S.  2.  The  tax  so  imposed  shall  be  computed  upon  the  true  and  full  value  in 
money  of  such  property  at  the  rates  hereinafter  prescribed  and  only  upon  the 
excess  of  the  exemptions  hereinafter  granted. 

S.  2a.  When  the  property  or  any  beneficial  interest  therein  passes  by  any 
such  transfer  where  the  amount  of  the  property  shall  exceed  in  value  the  exemp- 
tion hereinafter  specified  and  shall  not  exceed  in  value  fifteen  thousand  dollars 
the  tax  hereby  imposed  shall  be:  — 

(1)  Where  the  person  entitled  to  any  beneficial  interest  in  such  property  shall 
be  the  wife,  or  lineal  issue,  at  the  rate  of  one  per  centum  of  the  clear  value  of 
such  interest  in  such  property. 

(2)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  husband,  lineal  ancestor  of  the  decedent  or  any  child  adopted 
as  such  in  conformity  with  the  laws  of  this  state,  or  any  child  to  whom  such  de- 
cedent for  not  less  than  ten  years  prior  to  such  transfer  stood  in  the  mutually 
acknowledged  relation  of  a  parent;  provided,  however,  such  relationship  began 
at  or  before  the  child's  fifteenth  birthday,  and  was  continuous  for  said  ten  years 
thereafter,  or  any  lineal  issue  of  such  adopted  or  mutually  acknowledged  child, 
at  the  rate  of  one  and  one-half  per  centum  of  the  clear  value  of  such  interest  in 
such  property. 

(3)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  or  a  descendant  of  a  brother  or  sister  of 
the  decedent,  a  wife  of  widow  of  a  son,  or  the  husband  of  a  daughter  of  the  dece- 
dent, at  the  rate  of  three  per  centum  of  the  clear  value  of  such  interest  in  such 
property. 

(4)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  father  or  mother  or  a  descendant 
of  a  brother  or  sister  of  the  father  or  mother  of  the  decedent,  at  the  rate  of  four 
per  centum  of  the  clear  value  of  such  interest  in  such  property. 

(5)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such  prop- 
erty shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  hereinbefore 
stated,  or  shall  be  a  stranger  in  blood  to  the  decedent,  or  shall  be  a  body  politic 
or  corporate,  at  the  rate  of  five  per  centum  of  the  clear  value  of  such  interest  in 
such  property. 

S.  2b.  The  foregoing  rates  in  section  2a  are  for  convenience  termed  the  primary 
rates. 

When  the  amount  of  the  clear  value  of  such  property  or  interest  exceed  fifteen 
thousand  dollars,  the  rates  of  tax  upon  such  excess  shall  be  as  follows:  — 

(1)  Upon  all  in  excess  of  fifteen  thousand  dollars  and  up  to  thirty  thousand 
dollars,  one  and  one-half  times  the  primary  rates. 

(2)  Upon  all  in  excess  of  thirty  thousand  dollars,  and  up  to  fifty  thousand 
dollars,  two  times  the  primary  rates. 

(3)  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  hundred  thousand 
dollars,  two  and  one-half  times  the  primary  rates. 

(4)  Upon  all  in  excess  of  one  hundred  thousand  dollars,  three  times  the  primary 


662  STATUTES  ANNOTATED.  [Minn.  St. 

S.  2c.     The  following  exemptions  from  the  tax  are  hereby  allowed :  — 

(1)  All  property  transferred  to  municipal  corporations  within  the  state  for 
strictly  county,  town  or  municipal  purposes,  shall  be  exempt. 

(2)  Property  of  the  clear  value  of  ten  thousand  dollars  transferred  to  the  widow 
of  the  decedent  or  husband  of  the  decedent,  each  of  the  lineal  issue  of  the  decedent, 
or  any  child  adopted  as  such  in  conformity  with  the  laws  of  this  state,  or  any 
child  to  whom  the  decedent  for  not  less  than  ten  (10)  years  prior  to  such  transfer, 
stood  in  the  mutually  acknowledged  relation  of  a  parent;  provided,  however, 
such  relationship  began  at  or  before  the  child's  fifteenth  birthday,  and  was 
continuous  for  said  ten  years  thereafter,  or  any  lineal  issue  of  such  adopted  or 
mutually  acknowledged  child,  shall  be  exempt. 

(3)  Property  of  the  clear  value  of  three  thousand  dollars  transferred  to  each 
of  the  lineal  ancestors  of  the  decedent  shall  be  exempt. 

(4)  Property  of  the  clear  value  of  one  thousand  dollars  transferred  to  each  of 
the  persons  described  in  the  third  subdivision  of  section  two  a  (2a)  shall  be  exempt. 

(5)  Property  of  the  clear  value  of  two  hundred  and  fifty  dollars  transferred 
to  each  of  the  persons  described  in  the  fourth  subdivision  of  section  two  a  (2a) 
shall  be  exempt. 

(6)  Property  of  the  clear  value  of  one  hundred  dollars  transferred  to  each  of 
the  persons  and  corporations  described  m  the  fifth  subdivision  of  section  two  a 
(2a)  shall  be  exempt;  provided,  however,  that  property  of  the  clear  value  of 
two  thousand  five  hundred  dollars  transferred  to  a  public  hospital,  academy, 
college,  university,  seminary  of  learning,  church  or  institution  of  purely  public 
charity  within  this  state,  shall  be  exempt.     (St.  1911,  c.  372.) 

[See  notes  to  the  Act  of  1905,  ante,  p.  651.] 

A  dfctum  in  State  v.Bazille,  97  Minn.  11,  106  N.  W.  93,  upholds 
the  power  of  the  legislature  to  make  a  distinction  between  collateral 
and  lineal  descendants.  See,  also,  language  used  in  Drew  v.  Tifft, 
79  Minn.  175;  81  N.  W.  839;  47  L.  R.  A.  525;  79  Am.  St.  Rep.  446. 

When  Tax  Accrues.  —  Valuation. 

S.  3.  All  taxes  imposed  by  this  act  shall  take  effect  at  and  upon  the  death 
of  the  person  from  whom  the  transfer  is  made  and  shall  be  due  and  payable  at 
the  expiration  of  one  year  from  such  death,  except  as  otherwise  provided  in  this 
act. 

The  value  of  every  future  or  limited  estate,  income,  interest  or  annuity  depend- 
ent upon  any  life  or  lives  in  being,  shall  be  determined  by  the  rule,  method  and 
standard  of  mortality  and  value  employed  by  the  commissioner  of  insurance 
in  ascertaining  the  value  of  policies  of  life  insurance  and  annuities  for  the  deter- 
mination of  liabilities  of  life  insurance  companies,  except  that  the  rate  of  interest 
for  making  such  computations  shall  be  five  per  centum  per  annum. 

When  any  transfer  is  made  in  trust  for  any  person  or  persons,  or  corporation 
or  corporations,  and  the  right  of  the  beneficiaries  of  said  trust  to  receive  the 
property  embraced  in  said  trust  is  susceptible  of  present  valuation,  then  and  in 
such  case  the  tax  thereon  shall  be  paid  at  the  same  time  and  in  the  same  manner, 
and  in  like  amount,  that  would  be  the  case  if  the  beneficiaries  of  such  trust  re- 
ceived the  same  directly  from  the  decedent  or  the  persons  from  whom  the  property 
is  transferred. 


1911,  c.  209.]  MINNESOTA.  663 

Where  an  estate  for  life  or  for  years  can  be  divested  by  the  act  or  omission 
of  the  legatee  or  devisee,  it  shall  be  taxed  as  if  there  were  no  possibility  of  such 
divesting. 

When  property  is  transferred  in  trust  or  otherwise,  and  the  rights,  interest  or 
estates  of  the  transferee  are  dependent  upon  contingencies  or  conditions  whereby 
they  may  be  wholly  or  in  part  created,  defeated,  extended  or  abridged,  a  tax  shall 
be  imposed  upon  said  transfer  at  the  highest  rate  which,  on  the  happening  of 
any  of  said  contingencies  or  conditions,  would  be  possible  under  the  provisions  of 
this  act,  and  such  tax  so  imposed  shall  be  due  and  payable  forthwith  by  the 
executors  or  trustees  out  of  the  property  transferred;  provided,  however,  that 
on  the  happening  of  any  contingency  whereby  the  said  property,  or  any  part 
thereof,  is  transferred  to  a  person  or  corporation  exempt  from  taxation  under  the 
provisions  of  this  act,  or  to  any  person  taxable  at  a  rate  less  than  the  rate  imposed 
and  paid,  such'person  or  corporation  shall  be  entitled  to  a  return  of  so  much  of 
the  tax  imposed  and  paid  as  is  the  difference  between  the  amount  paid  and  the 
amount  which  said  person  or  corporation  should  pay  under  the  provisions  of  this 
article,  with  interest  thereon  at  the  rate  of  three  per  centum  per  annum  from  the 
time  of  payment.  Such  return  of  overpayment  shall  be  made  in  the  manner 
provided  by  section  21c  (section  9  of  this  act). 

In  estimating  the  value  of  any  estate  or  interest  in  property,  to  the  beneficial 
enjoyment  or  possession  whereof  there  are  persons  or  corporations  presently 
entitled  thereto,  no  allowance  shall  be  made  on  account  of  any  contingent  in- 
cumbrance thereon,  nor  on  account  of  any  contingency  upon  the  happening  of 
which  the  estate  or  property,  or  some  part  thereof  or  interest  therein  might  be 
abridged,  defeated  or  diminished;  provided,  however,  that  in  the  event  of  such 
incumbrance  taking  effect  as  an  actual  burden  upon  the  interest  of  the  beneficiary 
or  in  the  event  of  the  abridgment,  defeat  or  diminution  of  said  estate  or  property, 
or  interest  therein,  as  aforesaid,  a  return  shall  be  made  to  the  person  properly 
entitled  thereto  of  a  proportionate  amount  of  such  tax  on  account  of  the  incum- 
brance when  taking  effect,  or  so  much  as  will  reduce  the  same  to  the  amount 
which  would  have  been  assessed  on  account  of  the  actual  duration  or  extent  of 
the  estate  or  interest  enjoyed.  Such  return  of  tax  shall  be  made  in  the  manner 
provided  by  section  21c  (section  9  of  this  act). 

Where  any  property  shall,  after  the  passage  of  this  act,  be  transferred  subject 
to  any  charge,  estate  or  interest,  determinable  by  the  death  of  any  person,  or  at 
any  period  ascertainable  only  by  reference  to  death,  the  increase  accruing  to  any 
person  or  corporation  upon  the  extinction  or  determination  of  such  charge, 
estate  or  interest,  shall  be  deemed  a  transfer  of  property  taxable  under  the  pro- 
visions of  this  act  in  the  same  manner  as  though  the  person  or  corporation  bene- 
ficially entitled  thereto  had  then  acquired  such  increase  from  the  person  from 
whom  the  title  to  their  respective  estates  or  interests  is  derived. 

The  tax  on  any  devise,  bequest,  legacy,  gift  or  transfer  limited,  conditioned, 
dependent  or  determinable  upon  the  happening  of  any  contingency  or  future 
event,  by  reason  of  which  the  full  and  true  value  thereof  cannot  be  ascertained 
as  provided  for  by  the  provisions  of  this  act  at  or  before  the  time  when  the  taxes 
become  due  and  payable  as  hereinbefore  provided,  shall  accrue  and  become  due 
and  payable  when  the  person  or  corporation  beneficially  entitled  thereto  shall 
come  into  actual  possession  or  enjoyment  thereof. 


664  STATUTES  ANNOTATED.  [Minn.  St. 

Estates  in  expectancy  which  are  contingent  or  defeasible  and  in  which  pro- 
ceedings for  the  determination  of  the  tax  have  not  been  taken  or  where  the 
taxation  thereof  has  been  held  in  abeyance,  shall  be  aporaised  at  their  full,  un- 
diminished value  when  the  persons  entitled  thereto  shall  come  into  the  beneficial 
enjoyment  or  possession  thereof,  without  diminution  for  or  on  account  of  any 
valuation  theretofore  made  of  the  particular  estates  for  purposes  of  taxation,  upon 
which  said  estates  in  expectancy  may  have  been  limited. 

Deduction  of  Tax  by  Administrator,  etc. 

S.  4.  Any  administrator,  executor  or  trustee  having  in  charge  or  in  trust  any 
property  for  distribution  embraced  in  or  belonging  to  any  inheritance,  devise, 
bequest,  legacy  or  gift,  subject  to  the  tax  thereon  as  imposed  by  this  act,  shall 
deduct  the  tax  therefrom  and  within  thirty  days  thereafter  he  shall  pay  over  the 
same  to  the  county  treasurer  as  herein  provided. 

If  such  property  be  not  in  money,  he  shall  collect  the  tax  on  such  inheritance, 
devise,  bequest,  legacy  or  gift  upon  the  appraised  value  thereof,  from  the  person 
entitled  thereto. 

He  shall  not  deliver,  or  be  compelled  to  deliver,  any  property  embraced  in  any 
inheritance,  devise,  bequest,  legacy  or  gift,  subject  to  tax  under  this  act,  to  any 
person  untH  he  shall  have  collected  the  tax  thereon. 

[See  notes  to  the  Act  of  1905,  ante,  p.  656.] 

Payment. 

S.  5.  The  tax  imposed  by  this  act  upon  inheritances,  devises,  bequests  or 
legacies  shall  be  paid  to  the  treasurer  of  the  county  in  which  the  probate  court 
having  jurisdiction,  as  herein  provided,  is  located;  and  the  cax  so  imposed  upon 
gifts  shall  be  payable  to  the  state  treasurer,  and  the  treasurer  to  whom  the  tax 
is  paid  shall  give  the  executor,  administrator,  trustee  or  person  paying  such  tax, 
duplicate  receipts  therefor,  one  of  which  shall  be  immediately  transmitted  to  the 
state  auditor,  whose  duty  it  shall  be  to  charge  the  treasurer  so  receiving  the  tax 
with  the  amount  thereof;  and  where  such  tax  is  paid  to  the  county  treasurer 
he  shall  seal  said  receipt  with  the  seal  of  his  office  and  countersign  the  same  and 
return  it  to  the  executor,  administrator  or  trustee,  whereupon  it  shall  be  a  proper 
voucher  in  the  settlement  of  his  accounts. 

No  executor,  administrator,  or  trustee  shall  be  entitled  to  a  final  accounting  of 
an  estate,  in  the  settlement  of  which  a  tax  may  become  due  under  the  provisions 
of  this  act,  until  he  shall  produce  a  receipt,  so  sealed  and  countersigned  by  the 
state  auditor,  or  a  certified  copy  of  the  same.  All  taxes  paid  into  the  county 
treasury  under  the  provisions  of  this  act  shall  immediately  be  paid  into  the  state 
treasury  upon  the  warrant  of  the  state  auditor  and  shall  belong  to  and  be  a  part  of 
the  revenue  fund  of  the  state. 

Lien.  -^  Liabilities. 

S.  6.  Every  tax  imposed  by  this  act  shall  be  a  lien  upon  the  property  embraced 
in  any  inheritance,  devise,  bequest,  legacy  or  gift  until  paid,  and  the  person  to 
whom  such  property  is  transferred  and  the  administrators,  executors  and  trustees 
of  every  estate  embracing  such  property  shall  be  personally  liable  for  such  tax, 
until  its  payment,  to  the  extent  of  the  value  of  such  property. 


1911,  c.  209.]  MINNESOTA.  665 

Interest. 

S.  7.  If  such  tax  is  not  paid  within  one  year  from  the  accruing  thereof,  interest 
shall  be  charged  and  collected  thereon  at  the  rate  of  seven  (7)  per  centum  per 
annum  from  the  time  the  tax  is  due,  unless,  by  reason  of  claims  upon  the  estate, 
necessary  litigation  or  other  unavoidable  cause  of  delay,  such  tax  cannot  be  de- 
termined as  herein  provided;  in  such  case  interest  at  the  rate  of  six  per  centum 
per  annum  shall  be  charged  upon  such  tax  from  the  accrual  thereof  until  the  cause 
of  such  delay  is  removed,  after  which  seven  (7)  per  centum  shall  be  charg^. 

Power  of  Sale. 

S.  8.  Every  executor,  administrator  or  trustee  shall  have  full  power  to  sell 
so  much  of  the  property  embraced  in  any  inheritance,  devise,  bequest  or  legacy 
as  will  enable  him  to  pay  the  tax  imposed  by  this  act,  in  the  same  manner  as  he 
might  be  entitled  by  law  to  do  for  the  payment  of  the  debts  of  a  testator  or  in- 
testate. 

Legacy  Charged  on  Property. 

S.  9.  If  any  bequest  or  legacy  shall  be  charged  upon  or  payable  out  of  any 
property,  the  heir  or  devisee  shall  deduct  such  tax  therefrom  and  pay  such  tax 
to  the  administrator,  executor  or  trustee,  and  the  tax  shall  remain  a  lien  or 
charge  on  such  property  until  paid;  and  the  payment  thereof  shall  be  enforced 
by  the  executor,  administrator  or  trustee  in  the  same  manner  that  payment 
of  the.  bequest  or  legacy  might  be  enforced,  or  by  the  county  attorney  under 
section  20  of  this  act.  If  any  bequest  or  legacy  shall  be  given  in  money  to  any 
person  for  a  limited  period,  the  administrator,  executor  or  trustee  shall  retain 
the  tax  upon  the  whole  amount;  but  if  it  be  not  in  money,  he  shall  make  applica- 
tion to  the  court  having  jurisdiction  of  an  accounting  by  him  to  make  an  appor- 
tionment, if  the  case  requires,  of  the  sum  to  be  paid  into  his  hands  by  such  legatee 
or  beneficiary,  and  for  such  further  order  relative  thereto,  as  the  case  may  require. 

Refund. 

S.  10.  When  any  tax  imposed  by  this  act  shall  have  been  erroneously  paid, 
wholly  or  in  part,  the  person  paying  the  same  shall  be  entitled  to  a  refundment 
of  the  amount  so  erroneously  paid,  and  the  auditor  of  the  state  shall,  upon  satis- 
factory proofs  presented  to  him  of  the  facts  relating  thereto,  draw  his  warrant 
upon  the  state  treasurer  for  the  amount  thereof,  in  favor  of  the  person  entitled 
thereto;  provided,  however,  that  all  applications  for  such  refunding  of  erroneous 
taxes  shall  be  made  within  three  years  from  the  payment  thereof. 

Proceedings    on  Transfers.  —  Liabilities. 

S.  11.  Subdivision  1.  If  a  foreign  executor,  administrator  or  trustee  shall 
assign  or  transfer  any  stock  or  obligation  in  this  state,  standing  in  the  name  of  a 
decedent  or  in  trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid 
to  the  state  treasurer  on  the  transfer  thereof,  and  no  such  assignment  or  transfer 
shall  be  valid  until  such  tax  is  paid. 

If  any  non-resident  of  this  state  dies  owning  personal  property  in  this  state 
sach  property  may  be  transferred  or  assigned  by  the  personal  representative  of, 
or  trustee  for  the  decedent,  only  after  such  representative  or  trustee  shall  have 
procured  a  certificate  from  the  attorney  general  consenting  to  the  transfer  of 


666  STATUTES  ANNOTATED.  [Minn.  St. 

such  property.  Such  consent  shall  be  issued  by  the  attorney  general  only  in  case 
there  is  no  tax  due  hereunder;  or  in  case  there  is  a  tax,  when  the  same  shall  have 
been  paid. 

Any  personal  representative,  trustee,  heir  or  legatee  of  a  non-resident  decedent 
desiring  to  transfer  property  having  its  situs  in  this  state  may  make  application  to 
the  attorney  general  for  the  determination  of  whether  there  is  any  tax  due  to  the 
state  on  account  of  the  transfer  of  the  decedent's  property  and  such  applicant 
shall  furnish  to  the  attorney  general  therewith  an  affidavit  setting  forth  a  descrip- 
tion of  all  property  owned  by  the  decedent  at  the  time  of  his  death  and  having 
its  situs  in  the  state  of  Minnesota,  the  value  ot  such  property  at  the  time  of  said 
decedent's  death;  also  when  required  by  the  attorney  general,  a  description  of 
and  statement  of  the  true  value  of  all  the  property  owned  by  the  decedent  at  the 
time  of  his  death  and  having  its  situs  outside  the  state  of  Minnesota,  and  also  a 
schedule  or  statement  of  the  valid  claims  against  the  estate  of  the  decedent, 
including  the  expenses  of  his  last  sickness  and  funeral  and  the  expenses  of  ad- 
ministering his  estate.  Such  person  shall  also,  on  request  of  the  attorney  general, 
furnish  to  the  latter  a  certified  copy  of  the  last  will  of  the  decedent  in  case  he  died 
testate,  or  an  affidavit  setting  forth  the  names,  ages  and  residences  of  the  heirs 
at  law  of  the  decedent  in  case  he  died  intestate  and  the  proportion  of  the  entire 
estate  of  such  decedent  inherited  by  each  of  said  persons,  and  the  relation,  if  any, 
which  each  legatee,  devisee,  heir,  or  transferee  sustained  to  the  decedent  or  person 
from  whom  the  transfer  was  made.  Such  affidavits  shall  be  subscribed  and  sworn 
to  by  the  personal  representative  of  the  decedent  or  some  other  person  having 
knowledge  of  the  facts  therein  set  forth. 

The  statements  in  any  such  affidavits  as  to  the  value  or  otherwise  shall  not 
be  biijding  on  the  attorney  general  in  case  he  believes  the  same  to  be  untrue. 
From  the  information  so  furnished  to  him  and  such  other  information  as  he  may 
have  with  reference  thereto,  the  attorney  general  shall,  with  reasonable  expedition, 
determine  the  amount  of  tax,  if  any,  due  to  the  state  under  the  provisions  of  this 
act  and  notify  the  person  making  the  application  of  the  amount  thereof  claimed  to 
be  due.  On  payment  of  the  tax  so  determined  to  be  due  or  in  case  there  is  no 
tax  due  to  the  state,  the  attorney  general  shall  issue  a  consent  to  the  transfer  of 
the  property  so  owned  by  the  decedent. 

No  corporation  organized  under  the  laws  of  the  state  of  Minnesota  shall  transfer 
on  its  books  any  shares  of  its  capital  stock  standing  in  the  name  of  a  non-resident 
decedent,  or  in  trust  for  a  non-resident  decedent,  without  the  consent  of  the 
attorney  general  first  procured  as  hereinbefore  provided  for.  Any  corporation 
violating  the  provisions  of  this  section  shall  be  liable  to  the  state  for  the  amount 
of  any  tax  due  to  the  state  on  a  transfer  of  any  such  shares  of  stock,  and  in  addi- 
tion thereto  a  penalty  equal  to  ten  per  cent  of  the  amount  of  such  tax;  to  be  re- 
covered in  a  civil  action  in  the  name  of  and  for  the  benefit  of  the  state. 

Any  person  aggrieved  by  the  determination  of  the  attorney  general  in  any 
matter  hereinbefore  provided  for,  may,  within  twenty  days  thereafter,  appeal 
to  the  district  court  of  Hennepin  County  or  Ramsey  County,  Minnesota,  by  filing 
with  the  attorney  general  a  notice  in  writing  setting  forth  his  objections  to  such 
determination  and  that  he  appeals  therefrom  and  thereupon  within  ten  days  there- 
after the  attorney  general  shall  transmit  the  original  papers  and  records  which  have 
been  filed  with  him  in  relation  to  such  application  for  consent,  to  the  clerk  of  the 
district  court  to  which  the  appeal  shall  have  been  taken,  and  thereupon  said 


1911,  c.  209.]  MINNESOTA.  667 

court  shall  acquire  jurisdiction  of  such  application  and  proceeding.  Upon  eight 
days'  notice  given  to  the  attorney  general  by  the  appellant,  the  matter  may  be 
brought  on  for  hearing  and  determination  by  such  court  either  in  term  time  or 
vacation,  at  a  general  or  special  term  of  said  court,  or  at  Chambers  as  may  be 
directed  by  order  of  the  court.  The  said  court  may  determine  any  and  all  ques- 
tions of  law  and  fact  necessary  to  the  enforcement  of  the  provisions  of  this  act 
according  to  its  intent  and  purpose,  and  may  by  order  direct  the  correction, 
amendment  or  modification  or  (of)  any  determination  made  by  the  attorney 
general. 

On  such  hearing  either  party  may  introduce  the  testimony  of  witnesses  and 
other  evidence  in  the  same  manner  and  subject  to  the  same  rules  which  govern 
in  civil  actions.  When  necessary,  the  court  may  adjourn  or  continue  its  hearings 
from  time  to  time,  to  enable  the  parties  to  secure  the  attendance  of  witnesses  or 
the  taking  oi  depositions. 

Depositions  may  be  taken  and  used  in  such  proceedings  in  the  same  manner 
as  is  now  provided  by  law  for  the  taking  of  depositions  in  civil  actions. 

The  attorney  general  and  any  person  aggrieved  by  the  order  of  the  district 
court  may  appeal  to  the  supreme  court  from  any  such  order  made  by  said  courts, 
within  the  time  and  in  the  manner  now  provided  by  law  for  the  taking  of  appeals 
from  orders  in  civil  actions. 

Subdivision  2.  No  tax  shall  be  imposed,  however,  upon  any  transfei  of  personal 
property  within  this  state  owned  by  a  non-resident  of  this  state  at  the  time  of  his 
death,  where  by  the  laws  of  the  state  of  the  decedent's  domicile,  an  inheritance, 
succession  or  transfer  tax  is  imposed  on  transfers  of  personal  property  of  decedents, 
provided  the  laws  of  such  state  exempt,  or  do  not  impose  a  tax  upon  transfers  of 
personal  property  of  residents  of  Minnesota  having  its  situs  in  such  vState.  It 
is  hereby  expressly  declared  that  the  inclusion  in  this  act  of  the  provisions  of  this 
subdivision  is  not  an  indispensable  inducement  to  the  passage  of  this  act  and  if 
at  any  time  the  provisions  of  this  subdivision  shall  be  held  to  be  unconstitutional, 
the  other  provisions  of  this  act  shall  not  be  invalidated  thereby. 

Duty  of  Company  Holding  Securities. 

S.  12.  No  safe  deposit  company,  bank  or  other  institution,  person  or  persons 
holding  securities  or  assets  of  a  decedent,  shall  deliver  or  transfer  the  same  to 
the  executors,  administrators  or  legal  representatives  of  said  decedent,  or  upon 
their  order  or  request,  unless  notice  of  the  time  and  place  of  such  intended  transfer 
be  served  upon  the  county  treasurer,  personally  or  by  representative,  to  examine 
said  securities  at  the  time  of  such  delivery  or  transfer.  If  upon  such  examination 
the  county  treasurer  or  his  said  representatives  shall  for  any  cause  deem  it  ad- 
visable that  such  securities  or  assets  should  not  be  immediately  delivered  or  trans- 
ferred, he  may  forthwith  notify  in  writing  such  company,  bank,  institution  or 
person  to  defer  delivery  or  transfer  thereof  for  a  period  not  to  exceed  ten  days  from 
the  date  of  such  notice,  and  thereupon  it  shall  be  the  duty  of  the  party  notified  to 
defer  such  delivery  or  transfer  until  the  time  stated  in  such  notice  or  until  the 
revocation  thereof  within  such  ten  days.  Failure  to  serve  the  notice  first  above 
mentioned,  or  to  allow  such  examination,  or  to  defer  the  delivery  of  such  securities 
or  assets  for  the  time  stated  in  the  second  of  said  notices,  shall  render  said  safe 
deposit  company,  trust  company,  bank  or  other  institution,  person  or  persons, 
liable  to  the  payment  of  the  tax  due  upon  the  said  security  or  assets,  pursuant 
to  the  provisions  of  this  act. 


668  STATUTES  ANNOTATED.  [Minn.  St. 

Notice  and  Proceedings. 

S.  13.  Upon  the  presentation  of  any  petition  to  any  probate  court  of  this  state 
for  letters  testamentary  or  of  administration,  or  for  ancillary  letters,  testamentary 
or  of  administration,  the  probate  court  shall  cause  a  copy  of  the  citation  or  order 
for  the  hearing  of  such  petition  to  be  served  upon  the  county  treasurer  of  his 
county  not  less  than  ten  days  prior  to  such  hearing.  The  court  shall  thereupon, 
as  soon  as  practicable  after  the  granting  of  any  such  letters,  proceed  to  ascertain 
and  determine  the  value  of  every  inheritance,  devise,  bequest  or  legacy  embraced 
in  or  payable  out  of  the  estate  in  which  such  letters  are  granted  and  the  taxes  due 
thereon.  The  county  treasurers  of  the  several  counties,  and  the  attorney  general, 
shall  have  the  same  rights  to  apply  for  letters  of  administration  as  are  conferred 
upon  creditors  by  law. 

Appraisers. 

S.  14.  The  probate  court  may,  in  any  matter  mentioned  in  the  preceding 
section,  either  upon  its  own  motion  or  upon  the  application  of  any  interested 
party,  including  county  treasurers  and  the  attorney  general,  and  as  often  as  and 
when  occasion  requires,  appoint  one  or  more  impartial  and  disinterested  persons 
as  appraisers  to  appraise  the  true  and  full  value  of  the  property  embraced  in  any 
inheritance,  devise,  bequest,  or  legacy,  subject  to  the  payment  of  any  tax  imposed 
by  this  act. 

Time  of  Appraisal. 

S.  15.  Every  inheritance,  devise,  bequest,  legacy,  transfer  or  gift  upon  which 
a  tax  is  imposed  under  this  act  shall  be  appraised  at  its  full  and  true  value  immedi- 
ately upon  the  death  of  decedent,  or  as  soon  thereafter  as  may  be  practicable; 
provided,  however,  that  when  such  devise,  bequest,  legacy,  transfer  or  gift  shall 
be  of  such  a  nature  that  its  true  and  full  value  cannot  be  ascertained,  as  herein 
provided  at  such  time,  it  shall  be  appraised  in  like  manner  at  the  time  such  value 
first  becomes  ascertainable. 

[See  notes  to  the  Act  of  1905,  ante,  p.  656.] 

Appraisers.  —  Proceedings.  —  Compensation. 

S.  16.  The  appraisers  appointed  under  the  provisions  of  this  act  shall  forth- 
with give  notice  by  mail  to  all  persons  known  to  have  a  claim  or  interest  in  the 
inheritance,  devise,  bequest,  legacy  or  gift  to  be  appraised,  including  the  county 
treasurer,  attorney  general,  and  such  persons  as  the  probate  court  may  by  order 
direct,  of  the  time  and  place  when  they  will  make  such  appraisal.  They  shall  at 
such  time  and  place  appraise  the  same  at  its  full  and  true  value,  as  herein  prescribed, 
and  for  that  purpose  the  probate  court  appointing  said  appraisers  is  authorized 
and  empowered  to  issue  subpoenas  and  compel  the  attendance  of  witnesses  before 
such  appraisers  at  the  place  fixed  by  the  appraisers  as  the  place  where  they  will 
meet  to  hear  such  testimony  and  make  such  appraisal.  Such  appraisers  may 
administer  oaths  or  affirmations  to  such  witnesses  and  require  them  to  testify 
concerning  any  and  all  property  owned  by  the  decedent  and  the  true  value  thereof 
and  any  disposition  thereof  which  may  have  been  made  by  the  decedent  during 
his  life  time  or  otherwise.  The  appraisers  shall  make  a  report  in  writing,  setting 
forth  their  appraisal  of  the  property  embraced  in  each  legacy,  inheritance,  de- 
vise or  transfer,  including  any  transfer  made  in  contemplation  of  death,  with 


1911,  c.  209.]  MINNESOTA.  669 

the  testimony  of  the  witnesses  examined  and  such  other  facts  in  relation  to  the 
property  and  its  appraisal  as  may  be  requested  by  the  attorney  general,  or  directed 
by  the  order  of  the  probate  court.  Such  report  shall  be  in  writing  and  one  copy 
thereof  shall  be  filed  in  the  probate  court  and  the  others  shall  be  mailed  to  the 
attorney  general  at  his  office  in  the  city  of  St.  Paul,  Minnesota. 

Every  appraiser  shall  be  entitled  to  compensation  at  the  rate  of  $3.00  per  day, 
and  in  extraordinary  cases  such  additional  sum  per  day,  not  exceeding  $7.00 
altogether  as  may  be  allowed  by  the  probate  judge,  for  each  day  actually  and 
necessarily  employed  in  such  appraisal,  and  his  actual  and  necessary  traveling 
expenses,  and  such  witnesses  and  the  officer  or  person  serving  any  such  subpoena 
shall  be  entitled  to  the  same  fees  as  are  allowed  witnesses  or  sheriffs  for  similar 
services  in  courts  of  record.  The  compensation  and  fees  claimed  by  any  person 
for  services  performed  under  this  act  shall  be  approved  by  the  judge  of  probate 
who  shall  certify  the  amount  thereof,  to  the  state  auditor,  who  shall  examine 
the  same,  and,  if  found  correct,  he  shall  draw  his  warrant  upon  the  state  treasury 
for  the  amount  thereof  in  favor  of  the  person  entitled  thereto. 

Such  warrants  shall  be  paid  out  of  the  moneys  appropriated  for  the  payment 
of  the  expenses  of  inheritance  tax  collections. 

[See  notes  to  the  Act  of  1905,  s.  17,  ante,  p.  658.] 

Appraisers'  Report. 

S.  17.  The  report  of  the  appraisers  shall  be  filed  with  the  probate  court,  and 
from  such  report  and  other  proof  relating  to  any  such  estate  before  the  probate 
court  the  court  shall  forthwith,  as  of  course,  determine  the  true  and  full  value 
of  all  such  estate  and  the  amount  of  tax  to  which  the  same  are  liable;  or  the 
probate  court  may  so  determine  the  full  and  true  value  of  all  such  estates  and  the 
amount  of  tax  to  which  the  same  are  liable  without  appointing  appraisers. 

Notice  of  Appraisal. 

S.  18.  The  probate  court  shall  immediately  give  notice,  upon  the  determina- 
tion of  the  value  of  any  inheritance,  devise,  bequest,  legacy,  transfer  or  gift 
which  is  taxable  under  this  act,  and  the  tax  to  which  it  is  liable,  to  all  parties 
known  to  be  interested  therein,  including  the  state  auditor,  attorney  general 
and  the  county  treasurer. 

Such  notice  shall  be  given  by  serving  a  copy  on  the  attorney  of  all  persons 
who  may  have  appeared  by  attorney,  and  as  to  persons  who  have  not  so  appeared, 
by  mail,  where  the  addresses  of  the  persons  to  be  notified  are  known  or  can  be 
ascertained,  otherwise  such  notice  shall  be  given  by  publishing  said  notice  once 
in  a  qualified  newspaper.  The  expense  of  such  publication  shall  be  certified  and 
paid  by  the  state  treasurer  in  the  same  manner  as  hereinbefore  provided  for  the 
payment  of  the  fees  and  expenses  of  appraisers. 

Objections  to  Assessment. 

S.  19.  Within  thirty  days  after  the  assessment  and  determination  by  the 
probate  court  of  any  tax  imposed  by  this  act,  the  attorney  general,  county  treas- 
urer or  any  person  interested  therein,  may  file  with  said  court  objections  thereto, 
in  writing,  and  praying  for  a  reassessment  and  redetermination  of  such  tax. 
Upon  any  objection  being  so  filed  the  probate  court  shall  appoint  a  time  for  the 


670  STATUTES  ANNOTATED.  [Minn.  St- 

hearing  thereof  and  cause  notice  of  such  hearing  to  be  given  to  the  attorney  general, 
county  treasurer  and  all  parties  interested  at  least  ten  days  before  the  hearing 
thereof.  Such  notice  shall  be  served  in  the  manner  provided  for  in  section  18, 
as  amended  by  section  7  of  this  act. 

At  the  time  appointed  in  such  notice  the  court  shall  proceed  to  hear  such 
objections  and  any  evidence  which  may  be  offered  in  support  thereof  or  opposi- 
tion thereto;  and  if,  after  such  hearing,  said  court  shall  be  of  the  opinion  that  a 
reassessment  or  redetermination  of  such  tax  should  be  made,  it  shall,  by  order, 
set  aside  the  assessment  and  determination  theretofore  made  and  order  a  re- 
assessment in  the  same  manner  as  if  no  assessment  had  been  made,  or  the  said 
court  may,  without  ordering  a  resubmission  to  appraisers,  set  aside  the  assess- 
ment and  determination  theretofore  made  and  fix  and  determine  the  value  of  the 
property  embraced  in  any  legacy,  inheritance,  devise  or  transfer  and  fix  and  de- 
termine the  amount  of  the  tax  thereon  in  accordance  with  the  appraisal  thereto- 
fore filed,  so  far  as  the  same  is  not  in  dispute,  and  in  accordance  with  the  evidence 
introduced  by  the  respective  parties  in  interest  as  to  any  items  of  the  appraisers' 
report  which  may  have  been  objected  to  by  any  party  interested,  including  the 
attorney  general  and  the  personal  representatives  of  the  decedent. 

In  any  case  where  objections  are  filed  by  the  attorney  general  as  hereinbefore 
provided  for,  he  shall,  within  ten  days  before  the  time  set  by  the  court  for  the 
hearing  thereof,  file  with  the  clerk  of  the  court  a  bill  of  particulars  setting  forth 
the  items  in  any  such  report  objected  to  and  as  to  which  he  proposes  to  offer 
testimony;  he  shall  also  mail  a  copy  thereof,  within  said  time,  to  the  personal 
representative  of  the  decedent  or  the  attorney  or  attorneys  for  the  latter.  In 
case  objections  are  filed  by  any  other  person,  he  or  she  shall  likewise  file  such  a  bill 
of  particulars  with  the  court  and  serve  a  copy  thereof  upon  the  attorney  general 
within  ten  days  after  the  filing  of  the  objections. 

Citation. 

S.  20.  If  the  treasurer  of  any  county  shall  have  reason  to  believe  that  any 
tax  is  due  and  unpaid  under  this  act  after  the  refusal  or  neglect  of  the  persons 
liable  therefor  to  pay  the  same,  he  shall  notify,  in  writing,  the  county  attorney 
of  his  county,  of  such  failure  or  neglect,  and  such  county  attorney,  if  he  have 
probable  cause  to  believe  that  such  tax  is  due  and  unpaid,  shall  apply  to  the 
probate  court  for  a  citation,  citing  the  persons  liable  to  pay  such  tax  to  appear 
before  the  court  on  a  day  specified,  not  more  than  three  months  from  the  date  of 
such  citation,  and  show  cause  why  the  tax  should  not  be  paid.  The  judge  of  the 
probate  court,  upon  such  application,  and  whenever  it  shall  appear  to  him  that 
any  such  tax  accruing  under  this  act  has  not  been  paid  as  required  by  law,  shall 
issue  such  citation,  and  the  service  of  such  citation,  and  the  time,  manner  and  proof 
thereof,  and  the  hearing  and  determination  thereon,  shall  conform  as  near  as 
may  be  to  the  provisions  of  the  probate  code  of  this  state,  and  whenever  it  shall 
appear  that  any  such  tax  is  due  and  payable  and  the  payment  thereof  cannot 
be  enforced  under  the  provisions  of  this  act  in  said  probate  court,  the  person  or 
corporation  from  whom  the  same  is  due  is  hereby  made  liable  to  the  state  for 
the  amount  of  such  tax,  and  it  shall  be  the  duty  of  the  county  attorney  of  the 
proper  county  to  sue  for  in  the  name  of  the  state  and  enforce  the  collection  of  such 
tax,  and  all  taxes  so  collected  shall  be  forthwith  paid  into  the  county  treasury. 
It  shall  be  the  duty  of  said  county  attorney  to  appear  for  and  represent  the 
county  treasurer  on  the  hearing  of  such  citation. 


1911,  c.  209.1  MINNESOTA.  671 

Records. 

S.  21.  The  auditor  of  state  shall  furnish  to  each  probate  court  a  book  which 
shall  be  a  public  record,  and  in  which  shall  be  entered  by  the  judge  of  said  court 
the  name  of  every  decedent  upon  whose  estate  an  application  has  been  made 
for  the  issue  of  letters  of  administration,  or  letters  testamentary  or  ancillary  letters, 
the  date  and  place  of  death  of  such  decedent,  names  and  places  of  residence  and 
relationship  to  decedent  of  the  heirs  at  law  of  such  decedent,  the  estimated  value 
of  the  property  of  such  decedent,  names  and  places  of  residence  and  relationship 
to  decedent  of  the  heirs  at  law  of  such  decedent,  the  names  and  places  of  residence 
of  the  legatees,  devisees  and  other  beneficiaries  in  any  will  of  any  such  decedent, 
the  amount  of  each  legacy,  and  the  estimated  value  of  any  property  devised  therein 
and  to  whom  devised. 

These  entries  shall  be  made  from  data  contained  in  the  papers  filed  on  such 
application  or  m.  any  proceeding  relating  to  the  estate  of  the  decedent. 

The  judge  of  probate  shall  also  enter  in  such  book  the  amount  of  the  property 
of  any  such  decedent,  as  shown  by  the  inventory  thereof,  when  made  and  filed  in 
his  office,  and  the  returns  made  by  any  appraisers  appointed  by  him  under  this 
act,  and  the  value  of  all  inheritances,  devises,  bequests,  legacies  and  gifts  inherited 
from  such  decedent,  or  given  by  such  decedent  in  his  will  or  otherwise  as  fixed 
by  the  probate  court  and  the  tax  assessed  thereon,  and  the  amounts  of  any 
receipts  for  payment  thereof  filed  with  him. 

The  state  auditor  shall  also  furnish  forms  for  the  reports  to  be  made  by  such 
judge  of  probate,  which  shall  correspond  with  the  entries  to  be  made  in  such  book. 

Each  judge  of  probate  shall,  on  the  first  day  of  January,  April,  July  and 
October  of  each  year,  make  a  report  in  duplicate  upon  the  forms  furnished  by  the 
state  auditor  containing  all  the  data  and  matters  required  to  be  entered  in  such 
book,  one  of  which  shall  be  immediately  delivered  to  the  county  treasurer  and  the 
other  transmitted  to  the  auditor  of  state. 

The  register  of  deeds  of  each  county  shall,  at  the  same  time,  make  reports  in 
duplicate  to  the  auditor  of  state,  containing  a  statement  of  any  conveyance  filed 
or  recorded  in  his  office  of  any  property  which  appears  to  have  been  made  or 
intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of  the  grantor 
or  vendor,  with  the  name  and  place  of  residence  of  the  vendor  or  vendee,  and  the 
description  of  the  property  transferred,  as  shown  by  such  instrument,  one  of 
which  duplicates  shall  be  immediately  delivered  to  the  county  treasurer  and  the 
other  transmitted  to  the  auditor  of  state. 

Compromise  of  Tax. 

S.  21  a.  The  attorney  general,  by  and  with  the  consent  and  approval  of  the 
state  auditor,  in  case  of  the  estate  of  a  non-resident  decedent  whose  estate  has  not 
been  probated  in  this  state,  and  the  consent  and  approval  of  the  probate  judge 
in  the  case  of  any  estate  probated  in  this  state,  expressed  in  writing,  is  hereby 
authorized  and  empowered  to  enter  into  an  agreement  with  the  trustees  of  any 
estate  in  which  remainders  or  expectant  estates  are  of  such  a  nature  or  so  disposed 
and  circumstanced  that  the  taxes  are  not  presently  payable  or  where  the  interests 
of  the  legatees  or  devisees  are  or  were  not  ascertainable  under  the  provisions  of 
this  chapter,  at  the  time  fixed  for  the  appraisal  and  determination  of  the  tax 
on  estates  and  interests  transferred  in  fee,  and  to  thereby  compound  the  tax 
upon  such  transfers  upon  such  terms  as  are  deemed  equitable  and  expedient; 
to  grant  a  discharge  to  said  trustees  on  account  thereof  upon  payment  of  the 


672  STATUTES  ANNOTATED.  [Minn.  St. 

taxes  provided  for  in  such  composition  agreement;  provided,  however,  that  no 
such  composition  shall  be  conclusive  in  favor  of  said  trustees  as  against  the 
interests  of  such  cestui  que  trust  as  may  possess  either  present  rights  of  enjoyment, 
or  fixed,  absolute  or  indefeasible  rights  of  future  enjoyment  or  of  such  as  would 
possess  such  rights  in  the  event  of  the  immediate  termination  of  any  particular 
estate,  unless  they  consent  thereto  either  personally  or  by  duly  authorized 
attorney,  when  competent,  or  by  guardian  or  committee.  Composition  agree- 
ments made,  affected  and  entered  into  under  the  provisions  of  this  section  shall 
be  executed  in  triplicate,  and  one  copy  thereof  filed  in  the  probate  court  of  the 
county  in  which  the  tax  is  to  be  paid,  one  copy  in  the  office  of  the  attorney  general 
and  one  copy  shall  be  delivered  to  the  persons  paying  the  tax  thereunder. 

The  attorney  general  shall  not  consent  to  the  assignment  or  delivery  of  any 
property  embraced  in  any  legacy,  devise  or  transfer  from  a  non-resident  decedent 
to  a  non-resident  trustee  thereof  under  the  provisions  of  section  11,  as  amended 
by  section  2  of  this  act,  where  the  property  embraced  in  such  legacy,  devise  or 
transfer  is  so  circumstanced  and  disposed  of  that  the  tax  thereon  cannot  be 
presently  ascertained,  but  is  so  circumstanced  and  disposed  of  as  to  authorize 
him  to  enter  into  a  composition  agreement  with  reference  to  the  tax  on  any 
estate  or  interest  therein  as  herein  provided,  until  the  tax  on  the  transfer  of  any 
such  estate  or  interest  shall  have  been  compounded  and  the  tax  paid  as  herein- 
before provided  for;  or  in  lieu  thereof  the  trustee  or  other  person  to  whom  the 
possession  of  such  property  is  delivered  shall  have  made,  executed  and  delivered 
to  the  attorney  general  a  bond  to  the  state  of  Minnesota  in  an  amount  equal  to 
the  amount  of  tax  which  in  any  contingency  may  become  due  and  owing  to  the 
state  on  account  of  the  transfer  of  such  property,  such  bond  to  be  approved  by 
the  attorney  general  and  conditioned  for  the  payment  to  the  state  of  Minnesota 
of  any  tax  which  may  accrue  to  the  state  under  this  act  on  the  subsequent  transfer 
or  delivery  of  the  possession  of  such  property  to  any  person  beneficially  entitled 
thereto.  The  provisions  of  sections  4523,  4524  and  4525,  Revised  Laws  1905, 
shall  apply  to  the  execution  of  said  bond  and  the  qualification  of  the  surety  or 
sureties  thereon. 

No  property  having  its  situs  in  this  state  embraced  in  any  legacy  or  devise 
bequeathed  or  devised  to  a  non-resident  trustee  and  circumstanced  or  disposed 
of  as  last  hereinbefore  described,  shall  be  decreed  or  distributed  by  any  court  of 
this  state  to  such  non-resident  trustee  until  he  shall  have  compounded  and  paid 
the  tax  as  provided  for  in  this  section;  or  in  lieu  thereof  given  a  bond  to  the  state 
as  provided  for  in  this  section  with  reference  to  transfers  of  property  owned  by 
non-resident  decedents. 

Proceedings  to  Obtain  Information. 

S.  21  b.  The  attorney  general  is  hereby  authorized  and  empowered  to  issue 
a  citation  to  any  person  whom  he  may  believe  or  have  reason  to  believe  has  any 
knowledge  or  information  concerning  any  property  which  he  believes  or  has 
reason  to  believe  has  been  transferred  by  any  person  and  as  to  which  there  is 
or  may  be  a  tax  due  to  the  state  under  the  provisions  of  this  act,  and  by  such 
citation  require  such  person  to  appear  bef9re  him  at  a  time  and  place  to  be  desig- 
nated in  such  citation  and  testify  under  oath  as  to  any  fact  or  information  within 
his  knowledge  touching  the  quantity,  value  and  description  of  any  such  property 
and  its  ownership  and  the  disposition  thereof  which  may  have  been  made  by 
any  person,  and  to  produce  and  submit  to  the  inspection  of  the  attorney  general, 


1911,  c.  209]  MINNESOTA.  673 

any  books,  records,  accounts  or  documents  in  the  possession  of  or  under  the 
control  of  any  person  so  cited.  The  attorney  general  shall  also  have  power  to 
inspect  and  examine  the  books,  records  and  accounts  of  any  person,  firm  or  cor- 
poration, including  the  stock  transfer  books  of  any  corporation,  for  the  purpose 
of  acquiring  any  information  deemed  necessary  or  desirable  by  him  for  the  proper 
enforcement  of  this  act  and  the  collection  of  the  full  amount  of  the  tax  which  may 
be  due  to  the  state  hereunder.  Any  and  all  information  acquired  by  the  attorney 
general  under  and  by  virtue  of  the  means  and  methods  provided  for  by  this  section 
shall  be  deemed  and  held  by  him  as  confidential  and  shall  not  be  disclosed  by  him 
except  so  far  as  the  same  may  be  necessary  for  the  enforcement  and  collection 
of  the  inheritance  tax  provided  for  by  this  act. 

Refusal  of  any  person  to  attend  before  the  attorney  general  in  obedience  to 
any  such  citation,  or  to  testify,  or  produce  any  books,  accounts,  records  or 
documents  in  hi§  possession  or  under  his  control  and  submit  the  same  to  inspec- 
tion of  the  attorney  general,  when  so  required,  may,  upon  application  of  the 
attorney  general,  be  punished  by  any  district  court  in  the  same  manner  as  if  the 
proceedings  were  pending  in  such  court. 

Witnesses  so  cited  before  the  attorney  general,  and  any  sheriff  or  other  officer 
serving  such  citation  shall  receive  the  same  fees  as  are  allowed  in  civil  actions; 
to  be  paid  by  the  attorney  general  out  of  funds  appropriated  for  the  enforcement 
of  this  act. 

Proceedings  for  Refund. 

S.  21  c.  Whenever,  under  the  provisions  of  section  3  of  this  act,  as  amended, 
any  person  or  corporation  shall  be  entitled  to  a  return  of  any  part  of  a  tax  pre- 
viously paid,  he  shall  make  application  to  the  attorney  general  for  a  determination 
of  the  amount  which  he  is  entitled  to  have  returned,  and  on  such  application  shall 
furnish  the  attorney  general  with  affidavits  and  other  evidence  showing  the  facts 
which  entitle  him  to  such  return  and  the  amount  he  is  entitled  to  have  returned. 
The  attorney  general  shall  thereupon  determine  the  amount,  if  any,  which  the 
applicant  is  entitled  to  have  returned,  and  shall  certify  his  findings  in  regard 
thereto  to  the  state  auditor  who  shall  thereupon  issue  his  warrant  on  the  state 
treasurer  for  the  amount  so  certified  by  the  attorney  general  and  deliver  such 
warrant  to  the  persons  entitled  to  the  refund. 

It  shall  be  the  duty  of  the  state  treasurer  to  pay  such  warrants  out  of  any 
funds  in  the  state  treasury  not  otherwise  appropriated.  The  moneys  necessary  to 
pay  such  warrants  are  hereby  appropriated  out  of  any  moneys  in  the  state  treasury 
not  otherwise  appropriated. 

Any  person  aggrieved  by  the  determination  of  the  attorney  general  may  appeal 
to  the  district  court  in  the  manner  and  with  the  same  effect  as  is  provided  for  in 
section  11,  as  amended  by  section  2  of  this  act. 

Warrant  to  County  Treasurers. 

S.  21  d.  On  or  before  the  first  of  November  in  each  year  the  state  auditor  shall 
compute  the  amount  of  inheritance  tax  which  has  been  paid  into  the  state  treasury 
by  the  county  treasurers  of  the  several  counties  of  this  state,  from  estates  of 
residents  thereof,  during  the  preceding  fiscal  year  ending  July  31st,  and  thereupon 
draw  his  warrant  on  the  state  treasurer  in  favor  of  each  county  from  which 
any  tax  shall  have  been  received  during  the  fiscal  year  ending  July  31st  next 
preceding,  for  ten  per  cent  of  the  amount  of  the  inheritance  tax  money  so  received 


674  STATUTES  ANNOTATED.  [Minn.  St. 

from  each  county  respectively,  less  ten  per  cent  of  any  tax  which  has  been  returned 
under  the  provisions  of  the  last  preceding  section  and  which  was  originally  paid 
to  the  county  treasurer  of  any  such  county,  and  transmit  the  same  to  the  county 
auditor  of  each  county,  to  be  placed  to  the  credit  of  the  county  revenue  fund; 
provided,  however,  that  the  provisions  of  this  section  shall  apply  only  to  such 
moneys  as  shall  be  received  as  a  tax  on  transfers  from  persons  who  shall  die 
subsequent  to  the  passage  of  this  amendatory  act. 

It  shall  be  the  duty  of  the  state  treasurer  to  pay  such  warrants  out  of  any  funds 
in  the  state  treasury  not  otherwise  appropriated.  The  moneys  necessary  to 
pay  such  warrants  are  hereby  appropriated  out  of  any  moneys  in  the  state 
treasury  not  otherwise  appropriated. 

Seal. 

S.  21  e.  The  attorney  general  shall  provide  himself  with  a  seal  whereon  shall 
be  inscribed  the  words:  "Attorney  General,  State  of  Minnesota,  Inheritance 
Tax."  All  his  formal  official  acts  done  and  performed  under  the  provisions  of 
this  act  shall  be  authenticated  with  such  seal. 

Assistant  Attorney  General. 

S.  21  f.  The  attorney  general  is  hereby  authorized  to  designate  one  of  his 
assistants  as  "assistant  attorney  general  in  charge  of  inheritance  tax  matters." 
Such  designation  shall  be  in  writing  and  filed  in  the  office  of  the  secretary  of  state 
and  shall  continue  in  force  until  revoked  by  the  attorney  general.  The  assistant  so 
designated,  so  long  as  such  designation  remains  unrevoked,  shall  have  and  may 
exercise  all  the  rights,  powers  and  privileges  conferred  on  the  attorney  general 
by  tKe  provisions  of  this  act  and  all  the  duties  and  obligations  hereby  imposed 
upon  the  attorney  general  are  likewise  imposed  upon  the  assistant  so  designated. 

Chapter  288,  Laws  1905,  approved  April  19,  1905. 

Chapter  209,  Laws  1911,  approved  April  18,  1911. 


Miss.  Cons.]  MISSISSIPPI.  675 


MISSISSIPPI. 

In  General. 

There  is  no  inheritance  tax  at  present  in  Mississippi. 

Constitutional  Limitations. 
Mississippi  Constitution  1890,  a.  4. 

S.  112.  Taxation  shall  be  uniform  and  equal  throughout  the  state.  Property 
shall  be  taxed  in  proportion  to  its  value.  The  legislature  may,  however,  impose 
a  tax  per  capita  upon  such  domestic  animals  as  from  their  nature  and  habits 
are  destructive  of  other  property.  Property  shall  be  assessed  for  taxes  under 
general  laws,  and  by  uniform  rules,  according  to  its  true  value.  But  the  legislature 
may  provide  for  a  special  mode  of  valuation  and  assessment  for  railroads,  and 
railroad  and  other  corporate  property,  or  for  particular  species  of  property 
belonging  to  persons,  corporations  or  associations  not  situated  wholly  in  one 
county.  But  all  such  property  shall  be  assessed  at  its  true  value,  and  no  county 
shall  be  denied  the  right  to  levy  county  and  special  taxes  upon  such  assessment 
as  in  other  cases  of  property  situated  and  assessed  in  the  county 


676  STATUTES  ANNOTATED.  [Mo.  Cons. 


MISSOURI. 


In  General. 

Missouri's  first  attempt  at  a  collateral  inheritance  tax  in  1895 
was  held  unconstitutional.  A  second  attempt  in  1899  fared  better. 
Collateral  inheritances  only  are  taxed.  The  rate  is  uniformly  5 
per  cent  and  there  is  no  amount  exempted.  The  inheritances 
exempt  are  those  to  father,  mother,  husband,  wife,  lineal  descendant 
and  adopted  child.  This  law  has  produced  from  $200,000  to  $400,- 
000  annually.  An  interesting  detail  is  that  the  proceeds  of  the  tax 
are  devoted  to  the  support  of  the  University  of  Missouri,  providing 
a  sort  of  compulsory  bequest  for  higher  education  from  every  estate. 

Missouri  taxes  stock  of  a  Missouri  corporation  owned  by  a 
non-resident;  it  taxes  stock  of  a  corporation  organized  elsewhere 
owning  property  in  Missouri,  and  it  apparently  taxes  slock  of  a 
foreign  corporation  owned  by  a  non-resident  if  the  stock  certificate 
is  kept  in  Missouri. 

Constitutional  Limitations. 
Missouri  Revised  Statutes  1899,  Vol.  1.    Missouri  Constitution,  a.  4. 

S.  43.  Appropriations,  order  of.  All  revenue  collected  and  moneys  received 
by  the  state  from  any  source  whatsoever  shall  go  into  the  treasury,  and  the 
general  assembly  shall  have  no  power  to  divert  the  same,  or  to  permit  money  to 
be  drawn  from  the  treasury,  except  in  pursuance  of  regular  appropriations  made 
by  law.  All  appropriations  of  money  by  the  successive  general  assemblies  shall 
be  made  in  the  following  order:  — 

First,  For  the  payment  of  all  interest  upon  the  bonded  debt  of  the  state  that 
may  become  due  during  the  term  for  which  each  general  assembly  is  elected. 

Second,  For  the  benefit  of  the  sinking  fund,  which  shall  not  be  less  annually 
than  two  hundred  and  fifty  thousand  dollars. 

Third,  For  free  public  school  purposes. 

Fourth,  For  the  payment  of  the  cost  of  assessing  and  collecting  the  revenue. 

Fifth,  For  the  payment  of  the  civil  list. 

Sixth,  For  the  support  of  the  eleemosynary  institutions  of  the  state. 

Seventh,  For  the  pay  of  the  general  assembly,  and  such  other  purposes  not 
herein  prohibited  as  it  may  deem  necessary;  but  no  general  assembly  shall  have 
power  to  make  any  appropriation  of  money  for  any  purpose  whatsoever,  until 
the  respective  sums  necessary  for  the  purposes  in  this  section  specified  have  been 
set  apart  and  appropriated  or  to  give  priority  in  its  action  to  a  succeeding  over 


Mo.  Cons.]  MISSOURI.  677 

Missouri  Constitution  1875,  a.  10. 

S.  3.  Taxes  for  public  purposes  only.  —  Must  be  uniform.  Taxes  may 
be  levied  and  collected  for  public  purposes  only.  They  shall  be  uniform  upon 
the  same  class  of  subjects  within  the  territorial  limits  of  the  authority  levying 
the  tax,  and  all  taxes  shall  be  levied  and  collected  by  general  laws. 

Missouri  Constitution  1909,  a.  10. 

S.  4.  Taxes  in  proportion  to  value.  All  property  subject  to  taxation 
shall  be  taxed  in  proportion  to  its  value. 

S.  6.  Property  exempt  from  taxation.  The  property,  real  and  personal, 
of  the  state,  counties  and  other  municipal  corporations,  and  cemeteries,  shall  be 
exempt  from  taxation.  Lots  in  incorporated  cities  or  towns  or  within  one  mile 
of  the  limits  of  any  such  city  or  town,  to  the  extent  of  one  acre,  and  lots  one  mile 
or  more  distant  Jrom  such  cities  or  towns,  to  the  extent  of  five  acres,  with  the 
buildings  thereon,  may  be  exempted  from  taxation,  when  the  same  are  used 
exclusively  for  religious  worship,  for  schools,  or  for  purposes  purely  charitable ;  also, 
such  property,  real  or  personal,  as  may  be  used  exclusively  for  agricultural  or  horti- 
cultural societies:  Provided,  That  such  exemptions  shall  be  only  by  general  law. 

S.  7.  Other  exemptions  void.  All  laws  exempting  property  from  taxation, 
other  than  the  property  above  enumerated,  shall  be  void. 

List  of  Statutes. 

1895.  Statutes  of  Missouri,   p.  278. 

1897.  "         "  "        p.  237. 

1899.  "         "  "        p.  328. 

1899.  Revised  Statutes  of  Missouri,  p.  185,  a.  16,  ss.  299-322. 

1901.  Statutes  of  Missouri,    p.  43. 

1903.  p.  52. 

1909.  "         "  "        p.  56,  s.  11. 

1909.  RevisedStatutesof  Missouri,  Vol.  1,  a.  14,  ss.  309  to  331. 

Inheritance  Tax  is  a  **Tax." 

Mo.  Const.,  a.  10,  s.  3,  provides  that  "taxes  may  be  levied  and 
collected  for  public  purposes  only."  The  court  notices  the  argument 
that  an  inheritance  tax  is  not  a  tax,  strictly  speaking,  but  a  bonus 
or  price  exacted  as  a  condition  upon  which  persons  take  the  estate 
whose  owner  is  dead.  But  still  the  vital  point  remains  that  by 
whatever  name  this  burden  may  be  called,  still  it  falls  within  the 
purview  of  the  word  "taxes,"  in  its  generic  sense  in  the  constitution, 
as  that  word  includes  every  character  and  kind  of  tax,  general  or 
special.  The  power  of  the  state  to  demand  such  a  bonus  is  referable 
only  to  the  taxing  power.  State  v.  Switzler,  143  Mo.  287,  315,  45 
S.  W.  245,  40  L.  R.  A.  280,  65  Am.  St.  Rep.  653. 

How  to  Attack  the  Statute. 

The  validity  of  the  Mo.  St.  1899,  p.  186,  was  attacked  by  cer- 
tiorari in  State  v.  Henderson,  160  Mo.  190,  60  S.  W.  1093. 


678  STATUTES  ANNOTATED.  [Mo.  St. 

THE  VOID  STATUTES  OF  1895  AND  1897. 

Mo.  St.  1895,  p.  278. 

An  Act  providing  for  the  endowment  of  the  state  university,  and 
for  the  establishment  and  endowment  of  free  scholarships  of  merit  therein  in 
each  county.  , 

Objections  to  the  title  of  Mo.  St.  1895  were  not  considered  by 
the  court,  which  found  the  act  void  on  other  grounds,  in  State  v. 
Switzler,  143  Mo.  287,  331,  45  S.  W.  245,  40  L.  R.  A.  280,  65  Am. 
St.  Rep.  653. 

Mo.  St.  1895,  p.  278,  s.  1.    Approved  April  1,  1895. 

S.  1.  All  property  conveyed  by  will,  or  by  the  death  of  an  intestate,  or  by 
deed,  grant,  bargain,  sale  or  gift,  made  or  intended  to  take  effect  in  possession 
or  enjoyment  after  the  death  of  the  grantor,  or  bargainor,  or  any  person  or 
persons,  either  directly  or  in  trust,  or  otherwise,  whereby  a  beneficial  interest 
shall  be  created  in  possession  or  expectancy  to  any  property  or  the  income  thereof, 
to  any  person  other  than  the  father,  mother,  husband,  wife  or  direct  lineal  de- 
mendant  of  the  testator,  intestate,  grantor  or  bargainor,  except  property  conveyed 
for  some  educational,  charitable  or  religious  purpose  exclusively,  shall  be  subject 
to  the  payment  of  a  collateral  succession  tax  of  five  dollars  for  each  and  every  one 
hundred  dollars  of  the  clear  market  value  of  such  property,  where  the  money  or 
property  affected  shall  be  ten  thousand  dollars  or  less  in  value,  and  where  the 
morjey  or  property  affected  exceeds  ten  thousand  dollars  in  value,  the  same  shall 
be  subject  to  a  tax  of  five  dollars  for  each  and  every  one  hundred  dollars  of  the 
clear  market  value  thereof,  up  to  and  including  ten  thousand  dollars  in  value,  and 
a  tax  of  seven  and  one-half  dollars,  in  addition,  for  every  such  one  hundred  dollars 
in  value  in  excess  of  ten  thousand  dollars;  and  for  the  enforcement  and  collection 
of  such  tax  there  is  hereby  created  against  the  property  affected  thereby  a  first 
lien  in  favor  of  the  state  of  Missouri,  upon  which  a  civil  action  may  be  prosecuted 
in  any  court  having  competent  jurisdiction;  and  when  collected,  such  tax  shall 
be  paid  into  the  county  treasury,  of  the  county  where  the  testator,  intestate, 
grantor  or  bargainor  resided,  or  in  the  case  where  there  is  no  such  residence 
in  the  state,  then  such  tax  shall  be  paid  into  the  county  treasury  of  the  county 
where  such  property  exists  or  is  situate.  All  taxes  provided  by  this  section, 
which  shall  not  be  paid  within  one  year  after  the  death  of  the  person  rendering 
such  property  subject  to  taxation,  shall  bear  interest  at  the  same  rate,  from  the 
date  of  the  death  of  such  person,  as  is  now  provided  by  law  for  delinquent  taxes, 
and  suits  therefor  may  be  prosecuted  by  the  same  person  provided  by  law  for 
the  purpose  of  instituting  suits  for  delinquent  taxes,  unless  the  county  court  shall 
make  an  order  requiring  the  prosecuting  attorney  to  institute  suits  for  the  re- 
covery of  such  collateral  succession  taxes. 

Classification  by   Relationship   Upheld.  —  Progressive  Tax 
Condemned. 

The  court  seems  to  approve  of  discrimination  among  classes  of 
relatives  and  disapprove  of  a  tax  graduated  according  to  the  value 


1895,  p.  278.]  MISSOURI.  679 

of  the  interest  received.  The  statute  of  1895  is  void  as  contravening 
Mo.  Const.,  a.  10,  s.  3,  as  it  is  not  "uniform  upon  the  same  class 
of  subjects  within  the  territorial  limits  of  the  authority  levying 
the  tax."  It  is  clear  that  where  the  amount  of  property  received 
is  made  the  basis  of  the  tax,  uniformity  is  only  attainable  by 
levying  the  same  per  cent  upon  all  property  belonging  to  persons 
bearing  the  same  relation  to  the  decedent. 

While  the  legislature  might  perhaps  distribute  the  collaterals 
according  to  the  different  degrees  of  kinship  to  the  decedent,  and 
levy  a  different  rate  upon  the  different  degrees,  yet  when  it  ignores 
all  such  natural  classification  and  makes  the  amount  of  money 
received  by  each  the  test  of  classification  it  runs  counter  to  another 
principle  that  is  wellnigh  universally  accepted,  that  a  uniform  rate 
of  taxation  secures  equality  of  burden.  To  levy  a  different  rate 
simply  because  the  amount  of  each  man's  holding  is  different  would 
produce  favoritism  and  destroy  that  principle  of  equality  before 
the  law  which  is  the  boast  of  free  government.  If  it  be  urged  that 
the  one  receiving  the  larger  bounty  enjoys  the  greater  privilege, 
still  the  principle  of  uniformity  answers  that  the  value  of  his  right 
to  receive  is  in  direct  proportion  to  the  value  of  the  property  to  which 
he  succeeds,  and  must,  if  taxation  is  to  be  uniform,  be  taxed  in  that 
proportion  or  according  to  one  uniform  rate.  State  v.  Switzler,  143 
Mo.  287,  333,  45  S.  W.  245,  40  L.  R.  A.  280,  65  Am.  St.  Rep.  653. 

Void  as  a  Property  Tax. 

The  statutes  of  1895  and  1897  are  void  as  property  taxes,  imposing 
an  additional  burden  on  property.  State  v.  Henderson,  160  Mo. 
190,  215,  60  S.  W.  1093. 

A  testator  died  December  6,  1896,  and  his  will  was  probated 
December  7,  1896,  and  the  court  holds  that  the  questions  involved 
are  governed  by  Mo.  St.  1895,  as  by  its  terms  the  devolution  of  the 
property  and  the  right  of  the  state  to  tax  accrues  immediately 
upon  the  death  of  the  testator.  The  Mo.  Const.,  a.  10,  s.  4,  does 
not  render  Mo.  St.  1895  unconstitutional  if  it  is  a  succession  tax,  as 
such  a  tax  is  not  a  tax  upon  property  in  the  ordinary  sense,  but  is 
in  the  nature  of  an  excise  or  bonus  exacted  by  the  state  upon  the 
privilege  or  right  to  inherit  or  succeed  to  an  estate. 

Mo.  St.  1895,  as  amended  in  1897,  requires  the  tax  to  be  levied 
upon  the  appraised  value  of  the  whole  estate  left  by  the  deceased. 
The  tax  is  at  once  levied  upon  that  estate  and  the  personal  repre- 
sentatives of  the  deceased,  not  the  devisees  and  legatees,  are  required 


680  STATUTES  ANNOTATED.  [Mo.  St. 

to  pay  the  tax.  The  mere  calling  such  a  tax  a  succession  tax  does 
not  make  it  different  from  an  ordinary  tax  upon  property  and  the 
effect  and  operation  are  identical  with  an  ordinary  property  tax. 
But  the  court  holds  that  the  language  of  the  act  imposes  a  tax 
directly  upon  the  property  of  the  decedent  and  not  upon  those  who 
may  succeed  to  his  estate,  and  if  it  is  a  property  tax  it  is  unconsti- 
tutional, as  it  subjects  the  estate  to  an  additional  property  tax  to 
that  levied  upon  all  other  like  property  in  the  state  for  the  same 
year  and  is  not  levied  in  proportion  to  its  value.  State  v.  Switzler, 
143  Mo.  287, 330, 45  S.  W.  245, 40  L.  R.  A.  280,  65  Am.  St.  Rep.  653. 

Mo.  St.  1895,  approved  April  1,  1895,  p.  278,  s.  2,  provides  a  filing  fee  for 
corporations. 

Mo.  St.  1895,  p.  278.     Approved  April  1,  1895. 

S.  5.  All  taxes  or  fees  or  moneys  collected  or  received  under  the  provisions 
of  this  act  during  each  month  by  any  county  official,  and  for  the  purpose  of  this 
act  the  city  of  St.  Louis  shall  be  affected  through  its  corresponding  officers  as  if 
it  were  a  county,  shall  be  paid  during  the  first  week  of  the  following  month  to 
the  county  treasurer,  who  shall  thereupon  credit  three-fourths  of  the  moneys 
so  received  to  a  fund  hereby  created,  to  be  known  as  "the  state  university  scholar- 
ship fund,"  and  remit  the  remaining  one-fourth  to  the  state  treasurer;  and  from 
all  taxes  and  fees  received  from  corporations,  and  all  escheats  received  under  the 
provisions  of  this  act,  the  state  treasurer  shall  monthly,  in  the  same  manner, 
reserve  one-fourth,  and  remit  the  remaining  three-fourths  in  each  instance  to  the 
county  treasurer  of  the  county  in  which  the  corporation  is  located  or  from  which 
the  escheat  came,  to  be  credited  to  "the  state  university  scholarship  fund"  of 
such  county. 

Public  Purpose. 

The  legislature  has  a  right  to  levy  an  inheritance  tax  so  long  as 
it  is  for  a  public  purpose.  State  v.  Switzler,  143  Mo.  287,  316,  45 
S.  W.  245,  40  L.  R.  A.  280,  65  Am.  St.  Rep.  653. 

Scholarship  Fund  not  a  Public  Purpose. 

The  act  of  1895  levied  an  inheritance  tax  for  the  purpose  of  an 
endowment  for  the  state  university  and  further  to  be  paid  to 
students  "while  attending  the  university  for  defraying  the  expenses 
of  such  attendance,"  in  what  was  known  as  the  State  University 
scholarship  fund.  It  was  argued  that  this  was  no  different  from 
providing  free  tuition  at  the  State  University.  But  the  court  says 
it  is  one  thing  to  provide  for  the  establishment  and  maintenance 
of  a  system  of  public  education  and  a  wholly  different  thing  to 
support  private  individuals  who  attend  a  university  and  public 
schools  by  public  taxation;    and  the  court  concludes  that  the  tax 


1899,  p.  328.]  MISSOURI.  681 

is  levied  for  a  purely  private  purpose  and  for  that  reason  is  in 
contravention  of  the  constitution  of  Missouri.  State  v.  Switzler, 
143  Mo.  287,  326,  45  S.  W.  245,  40  L.  R.  A.  280,  65  Am.  St.  Rep.  653. 
The  case  of  State  v.  Switzler  was  followed  in  declaring  the  act  of 
1895  void  as  not  for  a  public  purpose  in  Simmons  Medicine  Co.  v. 
Ziegenhein,  145  Mo.  368,  47  S.  W.  10. 

Mo.  St.  1895,  approved  April  1,  1895,  p.  278,  ss.  6-11  cover  the  collection  and 
expenditure  of  the  money  provided  by  the  statute. 

The  act  of  1897,  p.  237,  repealed  the  progressive  feature  of  the 
original  statute  of  1895  and  added  specific  provisions  for  the  valu- 
ation of  inheritances  and  enforcing  collection  of  taxes.  State  v. 
Switzler,  143  Mo.  28,  313,  45  S,  W.  245,  40  L.  R.  A.  280,  65  Am. 
St.   Rep.  653. 

The  statute  of  1897  is  void.  See  notes  to  the  Act  of  1895,  supra, 
p.  679. 

THE  VALID  STATUTE  OF  1899. 

Mo.  St.  1899,  p.  328. 

An  Act  to  tax  collateral  inheritances,  legacies,  gifts  and  conveyances, 
in  certain  cases,  to  provide  revenue  for  educational  purposes,  for  the  main- 
tenance and  support  of  the  Missouri  state  university  and  its  departments. 
How  and  when  collected  and  where  deposited. 

S.  1.  All  property  which  shall  pass  by  will,  or  by  the  intestate  law  of  this 
state  from  any  person  who  may  die  seized  or  possessed  of  the  same  while  a  resident 
of  this  state,  or,  if  decedent  was  not  a  resident  of  this  state  at  the  time  of  death, 
which  property  or  any  part  thereof  shall  be  within  this  state,  or  any  interest  therein 
or  income  therefrom,  which  shall  be  transferred  by  deed,  grant,  bargain,  sale  or 
gift,  made  or  intended  to  take  effect  in  possession  or  enjoyment  after  the  death 
of  the  grantor,  bargainor,  vendor  or  donor,  to  any  person  or  persons,  or  to  any 
body  politic  or  corporate,  either  directly  or  in  trust  or  otherwise,  or  by  reason 
whereof  any  person  or  body  politic  or  corporate  shall  become  beneficially  entitled 
in  possession  or  expectancy,  to  any  property  or  the  income  thereof,  other  than  to 
or  for  the  use  of  the  father,  mother,  husband,  wife,  legally  adopted  children  or 
direct  lineal  descendant  of  the  testator,  intestate,  grantor,  bargainor,  vendor 
or  donor,  except  property  conveyed  for  some  educational,  charitable  or  religious 
purpose  exclusively  shall  be  and  is  subject  to  the  payment  of  a  collateral  inheritance 
tax  of  five  dollars  for  each  and  every  one  hundred  dollars  of  the  clear  market  value 
of  such  property,  and  at  and  after  the  same  rate  for  every  less  amount,  to  be  paid 
to  the  collector  of  revenue  of  the  proper  county,  and  for  the  purposes  of  this  act 
the  city  of  St.  Louis  shall  be  afi^ected  through  its  corresponding  officers  as  if  it 
were  a  county,  for  the  use  of  the  state  as  hereinafter  provided;  and  for  the  en- 
forcement and  collection  of  Such  tax  there  is  hereby  created  against  the  property 
affected  thereby  a  first  Hen  in  favor  of  the  state  of  Missouri,  upon  which  a  civil 
action  may  be  prosecuted  in  any  court  having  proper  jurisdiction;  and  all  heirs, 
next  of  kin,  legatees  and  devisees,  administrators,  executors  and  trustees,  grantees, 
vendees  and  donees  shall  be  liable  for  any  and  all  such  taxes  until  the  same  shall 


682  STATUTES  ANNOTATED.  [Mo.  St. 

have  been  paid  as  hereinafter  directed:  Provided,  that  all  collateral  inheritance, 
taxes  shall  be  sued  for  within  five  years  after  they  are  due  and  legally  demandable, 
otherwise  they  shall  cease  to  be  a  lien  as  against  any  purchasers  of  the  property: 
Provided  further,  that  the  word  "property,"  as  used  in  this  section,  shall  be  taken 
to  mean  the  property  or  interest  therein  passing  or  transferred  to  individual  legatees, 
devisees,  heirs,  next  of  kin,  grantees,  vendees  or  donees,  and  not  as  the  property 
or  interest  therein  of  the  testator,  intestate,  grantor,  bargainor,  vendor  or  donor. 

Uniform,  though  confined  to  Collateral  Inheritances. 

The  act  of  1899  does  not  violate  the  rule  as  to  uniformity  pre- 
scribed by  Mo.  Const.,  a.  10,  s.  3,  as  the  statute  imposes  the  same 
per  cent  upon  all  inheritances  which  are  taxed;  that  is,  collateral 
inheritances.  The  court  says  that  the  legislature  has  seen  fit 
to  make  the  classification  and  unless  it  is  so  arbitrary  that  the  court 
can  say  beyond  doubt  that  it  transcends  constitutional  limitations 
the  court  is  bound  to  accept  it.  The  court  finds  no  provision  of  the 
constitution  which  it  violates  and  accordingly  it  seems  to  be  a 
natural  and  reasonable  classification.  State  v.  Henderson,  160  Mo. 
190,  216,  60  S.  W.  1093. 

Not  a  Property  Tax. 

The  statute  of  1899  does  not  impose  a  tax  upon  the  property  of 
the  decedent  in  addition  to  its  burden  in  common  with  all  other 
property,  as  was  the  casein  the  acts  of  1895  and  1897;  but  it  is 
levied  only  upon  its  transmission  by  will,  descent  or  grant.  It  is 
a  bonus  or  duty  levied  upon  the  right  or  privilege  of  the  devisee, 
heir  or  distributee  of  receiving  his  share.  While  referring  to  the 
property,  devised  or  inherited  it  does  so  only  to  secure  uniformity 
among  the  beneficiaries  receiving  the  property,  the  object  being 
to  tax  each  in  proportion  to  his  or  her  interest  received  and  for 
that  privilege.    State  v.  Henderson,  160  Mo.  190,  215,  60  S.  W.  1093. 

Not  Void  as  an  Appropriation. 

This  statute  is  not  obnoxious  to  the  Mo.  Const.,  a.  4,  s.  43,  which 
provides  the  order  of  payment  of  money  received  into  the  treasury. 
It  was  contended  that  this  act  which  provides  that  the  receipts 
from  the  inheritance  tax  law  shall  be  appropriated  to  the  state 
university  is  itself  an  appropriation  of  the  money,  as  every  dollar 
raised  thereby  is  instantly  and  perpetually  appropriated  to  the 
maintenance  of  the.  university.  The  court  replies  that  the  statute 
itself  forbids  expenditure  save  in  pursuance  of  regular  appropriations 
of  the  general  assembly.  State  v.  Henderson,  160  Mo.  190,  213, 
60  S.  W.  1093. 


1899,  p.  328.1  MISSOURI.  683 

Exemptions  Valid. 

It  was  argued  that  the  exemptions  in  the  act  of  1899  violated 
Mo.  Const.,  a.  10,  ss.  6  and  7,  which  limit  the  amount  of  property 
which  may  be  exempted  from  taxation,  and  as  this  statute  pre- 
scribes no  limit  to  the  amount  of  property  it  is  therefore  void.  The 
argument  is  predicated  on  the  fact  that  this  is  a  property  tax,  as 
the  section  of  the  constitution  relied  upon  deals  directly  with  prop- 
erty taxation.  But  the  court  holds  that  this  is  valid,  as  the  statute 
is  not  a  property  tax.  State  v.  Henderson,  160  Mo.  190, 217, 60  S.  W. 
1093. 

Sections  2  to  23  cover  the  assessment  and  collection  of  the  tax. 

Application  of  Proceeds  Valid. 

Mo.  Const.,  a.  4,  s.  43,  provides  that  all  revenue  in  money 
received  by  the  state  shall  go  into  the  treasury  and  that  all  appropria- 
tions shall  be  made  in  the  order  set  forth  in  the  section.  It  was 
argued  that  this  means  that  all  revenue  shall  go  into  one  common 
general  fund  unfettered  and  unpledged  and  that  these  words  pro- 
hibit the  creation  of  any  special  fund  in  the  treasury  to  be  supplied 
out  of  revenue  provided  by  the  general  assembly;  and  that  there- 
fore the  Mo.  St.  1899,  which  provided  that  the  receipts  from  the 
inheritance  tax  should  be  accredited  to  the  "state  seminary  moneys" 
rendered  the  act  void.  The  court  replies  that  the  constitution  itself 
provides  elsewhere  for  special  funds  and  holds  that  the  constitution 
simply  requires  the  general  assembly  to  proceed  in  the  order  desig- 
nated in  passing  its  appropriation  bills.  In  prescribing  the  order 
for  the  passage  of  the  appropriation  bill  there  was  no  intention  to 
create  special  liens  upon  the  money  in  the  treasury  or  give  any 
priority  of  payment  to  one  appropriation  over  another.  State  v. 
Henderson,  160  Mo.  190,  211,  60  S.  W.  1093. 

AMENDMENTS. 

Mo.  St.  1901,  p.  43,  amends  Revised  Statutes  1899,  c.  1,  s.  302, 
by  providing  that  one-fifth  instead  of  one-eighth  of  the  receipts 
shall  be  turned  over  to  the  school  of  mines  and  metallurgy. 

Mo.  St.  1903,  p.  52,  amended  Revised  Statutes  1899,  c.  1,  a.  16, 
s.  321,  by  giving  the  probate  judge  one-half  instead  of  one-fifth  of 
the  sums  collected  by  the  county  collectors.- 

Mo.  St.  1909,  p.  56,  s.  11,  makes  an  appropriation  from  the 
inheritance  tax. 


684  STATUTES  ANNOTATED.  [Mo.  St. 

THE  PRESENT  ACT. 

[References  are  to  the  Missouri  Revised  Statutes  of  1909.] 
S.  309.     Estates  subject  to  payment  of  collateral  inheritance  tax.     All 

property  which  shall  pass  by  will,  or  by  the  intestate  laws  of  this  state  from  any 
person  who  may  die  seized  or  possessed  of  the  same  while  a  resident  of  this  state, 
or,  if  decedent  was  not  a  resident  of  this  state  at  the  time  of  death,  which  property 
or  any  part  thereof  shall  be  within  this  state,  or  any  interest  therein  or  income 
therefrom  which  shall  be  transferred  by  deed,  grant,  bargain,  sale  or  gift,  made 
or  intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of  the  grantor, 
bargainor,  vendor  or  donor,  to  any  persons,  or  to  any  body  politic  or  corporate, 
either  directly  or  in  trust  or  otherwise,  or  by  reason  whereof  any  person  or  body 
politic  or  corporate  shall  become  beneficially  entitled  in  possession  or  expectancy, 
to  any  property  or  the  income  thereof,  other  than  to  or  for  the  use  of  the  father, 
mother,  husband,  wife,  legally  adopted  children,  or  direct  lineal  descendant  of 
the  testator,  intestate,  grantor,  bargainor,  vendor  or  donor,  except  property 
conveyed  for  some  educational,  charitable  or  religious  purpose  exclusively,  shall 
be  and  is  subject  to  the  payment  of  a  collateral  inheritance  tax  of  five  dollars 
for  each  and  every  one  hundred  dollars  of  the  clear  market  value  of  such  property 
and  at  and  after  the  same  rate  for  every  less  amount,  to  be  paid  to  the  collector 
of  revenue  of  the  proper  county,  and  for  the  purposes  of  this  article,  the  city  of 
St.  Louis  shall  be  affected  through  its  corresponding  officers  as  if  it  were  a  county, 
for  the  use  of  the  state  as  hereinafter  provided;  and  for  the  enforcement  and 
collection  of  such  tax  there  is  hereby  created  against  the  property  affected  thereby 
a  first  lien  in  favor  of  the  state  of  Missouri,  upon  which  a  civil  action  may  be 
prosecuted  in  any  court  having  a  proper  jurisdiction;  and  all  heirs,  next  of  kin, 
legatees,  and  devisees,  administrators,  executors  and  trustees,  grantees,  vendees 
and  donees  shall  be  liable  for  any  and  all  such  taxes  until  the  same  shall  have  been 
paid  as  hereinafter  directed:  Provided,  that  all  collateral  inheritance  taxes  shall 
be  sued  for  within  five  years  after  they  are  due  and  legally  demandable,  otherwise 
they  shall  cease  to  be  a  lien  as  against  any  purchasers  of  the  property:  Provided, 
further,  that  the  word  "property,"  as  used  in  this  section,  shall  be  taken  to  mean 
the  property  or  interest  therein  passing  or  transferred  to  individual  legatees, 
devisees,  heirs,  next  of  kin,  grantees,  vendees  or  donees,  and  not  as  the  property 
or  interest  therein  of  the  testator,  intestate,  grantor,  bargainor,  vendor  or  donor. 
[See  notes  to  the  Acts  of  1895  and  1899,  ante,  pp.  678,  682.] 

S.  310.  Tax,  when  due  and  payable.  All  taxes  imposed  by  this  article, 
except  as  hereinafter  provided,  shall  be  due  and  payable  at  the  death  of  the  person 
rendering  such  property  subject  to  such  taxation,  and  interest  at  the  same  rate 
as  is  now  provided  by  law  for  delinquent  taxes,  shall  be  charged  and  collected 
thereon  for  such  time  as  said  tax  is  not  paid:  Provided,  that  if  said  tax  is  paid 
within  one  year  from  the  accruing  thereof  no  interest  shall  be  charged  or  collected 
thereon,  and  if  said  tax  is  paid  within  six  months  from  the  accruing  thereof  a 
discount  of  five  per  cent  shall  be  allowed  and  deducted  from  said  tax:  Provided, 
further,  that  if  by  reason  of  claims  made  upon  the  estate,  necessary  litigation  or 
other  unavoidable  caiise  or  delay  the  estate  of  the  decedent  or  any  part  thereof 
can  not  be  settled  up  at  the  end  of  the  year  from  his  or  her  decease,  the  probate 
court,  or  the  judge  thereof  in  vacation,  may  make  necessary  extensions  of  time 
for  the  payment  of  such  taxes,  but  no  single  extension  shall  exceed  one  year. 


1909  V.  1,  a.  14.]  MISSOURI.  685 

and  in  such  cases  oniy  six  per  cent  per  annum  shall  be  charged  upon  the  said 
tax  from  the  death  of  the  decedent  to  the  expiration  of  the  period  for  which  the 
extension  of  time  was  granted,  after  which  interest,  at  the  same  rate  as  is  now 
provided  by  law  for  delinquent  taxes  shall  be  charged;  and  in  all  cases  the  tax 
on  real  estate  shall  remain  a  lien  on  the  real  estate  on  which  the  same  is  chargeable 
until  paid,  and  the  executors,  administrators  or  trustees  shall  give  a  bond,  to  the 
people  of  the  state  of  Missouri,  in  a  penalty  of  three  times  the  amount  of  the  said 
tax,  with  such  sureties  as  the  probate  judge  of  the  proper  county  may  approve, 
conditioned  for  the  payment  of  said  tax,  and  interest  thereon,  at  the  expiration 
of  such  period,  which  bond  shall  be  filed  in  the  office  oi  said  probate  judge. 

S.  311.  When  and  to  whom  collector  shall  account.  The  collector  of 
each  county  shall,  on  or  before  the  fifteenth  day  of  each  month,  pay  to  the  state 
treasurer  all  taxes,  collected  or  received  by  him  under  the  provisions  of  this 
article,  before  the  first  day  of  said  month,  deducting  therefrom  his  commissions, 
as  provided  in  section  331  of  this  article,  and  all  lawful  disbursements  made  by 
him,  in  accordance  with  the  provisions  of  this  article,  upon  the  certificate  of  the 
probate  judge  of  his  county  of  which  collection  and  payment  he  shall  make  a 
report  under  oath  to  the  state  auditor,  on  or  before  the  fifth  day  of  each  month, 
stating  for  what  estate  paid,  and  in  such  form  and  containing  such  particulars 
as  the  state  auditor  may  prescribe;  and  for  any  failure  to  make  such  monthly 
payments  he  shall  be  subject  to  the  penalty  prescribed  by  section  11474,  of  the 
Revised  Statutes  of  1909. 

S.  312.    Money  to  be  deposited  by  state  treasurer.  —  How  used.    The 

moneys  received  by  the  state  treasurer  under  the  provisions  of  this  article  shall 
be  deposited  in  the  state  treasury  to  the  credit  of  the  fund  now  existing  in  the 
state  treasury  and  known  as  the  "state  seminary  moneys,"  for  the  maintenance, 
support  and  better  equipment  of  the  buildings,  apparatus,  books,  instruction, 
etc.,  of  the  university  of  the  state  of  Missouri,  to  an  amount  not  exceeding  in  any 
one  year  the  equivalent  of  one-tenth  of  one  mill  upon  every  dollar  of  the  assessed 
valuation  of  taxable  property  of  this  state  for  said  year:  Provided,  that  one-fifth 
of  all  such  moneys  so  received  shall  be  devoted  to  the  use  of  the  school  of  mines 
and  metallurgy,  a  department  of  the  said  university:  Provided  further,  that  if  the 
net  amount  deposited  in  any  one  year  by  the  state  treasurer  under  the  provisions 
of  this  article  to  the  credit  of  the  "state  seminary  moneys"  be  not  equivalent  to 
one-tenth  of  one  mill  upon  every  dollar  of  the  assessed  valuation  of  taxable  prop- 
erty of  this  state  for  the  said  year,  it  shall  be  the  duty  of  the  state  treasurer  to 
make  good  this  deficiency  out  of  the  first  moneys  received  under  the  provisions 
of  this  article  in  the  next  succeeding  year:  Provided,  further,  that  all  said  moneys 
shall  be  disbursed  in  pursuance  of  regular  appropriations  of  the  general  assembly, 
in  accordance  with  the  provisions  of  section  1450  of  the  Revised  Statutes  of  1909. 
[See  notes  to  the  Acts  of  1895  and  1899,  ante,  pp.  680,  682.] 

S.  313.  When  state  treasurer  shall  deposit  moneys  received  to  credit 
of  "Educational  fund."  The  moneys  received  by  the  state  treasurer  under 
the  provisions  of  this  article  which  shall  exceed  in  any  one  year  the  amount  re- 
quired by  section  312  of  this  article  to  be  deposited  to  the  credit  of  the  "state 
seminary  moneys,"  shall  be  deposited  in  the  state  treasury  to  the  credit  of  a  fund 
to  be  known  as  the  "educational  fund,"  which  is  hereby  created  and  established. 


686  STATUTES  ANNOTATED.  [Mo.  St. 

The  moneys  deposited  in  the  said  fund  shall  be  appropriated  by  the  general  as- 
sembly for  public  educational  purposes. 

S.  314.  When  and  how  tax  is  paid  on  remainders,  reversions  or  other 
estates  in  expectancy,  real  or  personal.  When  any  grant,  gift,  legacy  or 
inheritance  upon  which  a  tax  is  imposed  by  section  309  of  this  article,  shall  be 
a  remainder,  reversion  or  other  expectancy,  real  or  personal,  the  tax  on  such 
estate  shall  not  be  payable,  nor  interest  begin  to  run  thereon,  until  the  person  or 
persons  liable  for  the  same  shall  come  into  actual  possession  of  such  estate  by 
the  termination  of  the  estate  for  life  or  years,  and  the  tax  shall  be  assessed  upon 
the  value  of  the  estate  at  the  time  the  right  of  possession  accrues  to  the  owner 
as  aforesaid:  Provided,  that  in  all  such  cases  the  tax  on  real  estate  shall  remain 
a  lien  on  the  real  estate  on  which  the  same  is  chargeable  until  paid :  Provided, 
further,  that  the  person  or  persons,  or  body  politic  or  corporate  beneficially  in- 
terested in  the  property  as  aforesaid  shall  make  a  full,  verified  return  of  said 
property  to  the  probate  judge  of  the  proper  county  and  file  the  same  in  his  office 
within  one  year  from  the  death  of  the  decedent,  and  within  that  period  give  a 
bond  in  form  and  to  the  effect  prescribed  in  section  310  of  this  article,  conditioned 
for  the  payment  of  said  tax  at  such  time  or  period  as  the  right  of  possession  shall 
accrue  to  the  owner  or  the  representatives  of  said  owner  as  aforesaid,  and  in  case 
of  failure  so  to  do,  the  tax  shall  be  immediately  payable  and  collectible  on  the 
clear  market  value  of  the  estate,  to  be  determined  as  hereinafter  provided :  Pro- 
vided further,  that  the  owner  shall  have  the  right  to  pay  the  tax  at  any  time  prior 
to  his  or  her  coming  into  possession,  and  in  such  cases,  the  tax  shall  be  assessed 
in  the  manner  hereinafter  provided,  on  the  value  of  the  estate  at  the  time  of  the 
payment  of  the  tax,  after  deducting  the  value  of  the  life  estate  or  estates  for 
years. 

S.  315.  Property  bequeathed  to  executors  or  trustees  in  lieu  of  com- 
missions, excess  above  fair  compensation  subject  to  tax.  Where  a 
testator  bequeaths  or  devises  property  to  one  or  more  executors  or  trustees  in 
lieu  of  their  commissions  or  allowances,  which  property  otherwise  would  be 
liable  to  said  tax,  or  appoints  them  his  residuary  legatees,  and  said  bequests, 
devises  or  residuary  legacies  exceed  what  would  be  a  fair  compensation  of  their 
services,  such  excess  shall  be  subject  to  the  payment  of  the  said  tax;  the  rate  of 
compensation  to  be  fixed  by  the  probate  court  having  jurisdiction  in  the  case. 

S.  316.  Administrators  or  trustees  not  required  to  deliver  specific 
legacy  or  other  property  until  tax  is  paid,  etc.  Any  administrator,  execu- 
tor or  trustee  having  in  charge  or  trust  any  legacy  or  property  for  distribution, 
subject  to  the  said  tax,  shall  deduct  the  amount  Of  the  tax  therefrom,  or  if  the 
legacy  or  property  be  not  money,  he  shall  demand  payment  of  the  amount  of  the 
tax  thereon  upon  the  appraised  value  thereof  from  the  legatee  or  person  entitled 
to  such  property,  and  he. shall  not  deliver,  or  be  compelled  to  deliver,  any  specific 
legacy  or  property  subject  to  tax  until  he  shall  have  collected  the  tax  thereon; 
and  in  case  of  neglect  or  refusal  on  the  part  of  said  legatee  or  person  to  pay  the 
same,  such  specific  legacy  or  property,  or  so  much  thereof  as  shall  be  necessary 
shall  be  sold  by  such  administrator,  executor  or  trustee  at  public  sale,  after 
notice  to  such  legatee  or  person,  and  the  balance  that  may  be  left  in  the  hands 
of  the  administrator,  executor  or  trustee,  after  deducting  the  amount  of  the  said 


1909,  V.  1,  a.  14.]  MISSOURI.  687 

tax,  shall  be  distributed,  as  is  or  may  be  directed  by  law;  and  whenever  any  such 
legacy  or  property  shall  be  charged  upon  or  payable  out  of  real  estate,  the  heir 
or  devisee  before  paying  the  same,  shall  deduct  the  amount  of  the  said  tax  there- 
from, and  pay  the  amount  so  deducted  to  the  executor  or  other  trustee,  and 
the  same  shall  remain  a  charge  on  such  real  estate  until  paid  and  the  payment 
thereof  shall  be  enforced  by  the  executor  or  other  trustee  in  the  same  manner 
that  the  payment  of  such  legacy  or  property  might  be  enforced,  or  by  the  prosecu- 
ting attorney  of  the  proper  county  as  provided  in  section  329  of  this  article. 

S.  317.  Duty  of  executor  or  trustee  when  legacy  or  property  subject 
to  tax  is  given  for  limited  period.  If  the  legacy- or  property  subject  to  the 
tax  imposed  by  this  article  be  given  in  money  to  any  person  for  a  limited  period, 
the  executor  or  other  trustee  shall  retain  the  tax  upon  the  whole  amount,  but 
if  it  be  not  in  money,  he  shall  make  application  to  the  court  having  jurisdiction 
of  an  accounting  by  him,  to  make  an  apportionment,  if  the  case  require  it,  of  the 
sum  to  be  paid  into  his  hands  by  such  legatee  or  person,  and  for  such  further 
action  relative  thereto  as  the  case  may  require. 

S.  318.  Tax  coming  into  hands  of  executor,  etc.,  shall  be  paid  to 
county  collector,  receipt  sent  state  treasurer,  etc.  Every  sum  of  money 
retained  by  an  executor,  administrator  or  other  trustee,  or  paid  into  his  hands, 
for  any  tax  imposed  by  this  article  on  any  property,  shall  be  paid  by  him  within 
thirty  days  thereafter,  to  the  collector  of  revenue  of  the  county  in  which  the 
probate  court,  having  jurisdiction  of  the  estate  or  accounts,  is  situated,  and  the 
said  collector  shall  give,  and  every  executor,  administrator  or  other  trustee  shall 
take  duplicate  receipts  from  him  of  such  payment,  one  of  which  receipts  he  shall 
immediately  send  to  the  state  treasurer,  whose  duty  it  shall  be  to  charge  the 
collector  so  receiving  the  tax  with  the  amount  thereof,  and  shall  seal  said  receipt 
with  the  seal  of  his  office  and  countersign  the  same  and  return  it  to  the  executor, 
administrator  or  other  trustee,  whereupon  it  shall  be  a  proper  voucher  in  the 
settlement  of  his  accounts,  but  an  executor,  administrator  or  other  trustee. shall 
not  be  entitled  to  credits  in  his  accounts,  nor  be  discharged  from  liability  for  such 
tax,  unless  he  shall  produce  a  receipt  so  sealed  and  countersigned  by  the  state 
treasurer,  or  a  copy  thereof  certified  by  him. 

S.  319.  When,  how  and  by  whom  proportion  of  tax  is  repaid  to  legatee, 
etc.  Whenever  any  debts  shall  be  proven  against  the  estate  of  a  decedent, 
after  the  payment  of  legacies  or  distribution  of  property  from  which  the  said  tax 
has  been  deducted  or  upon  which  it  has  been  paid,  and  a  refund  is  made  by  the 
legatee,  devisee,  heir  or  next  of  kin,  a  proportion  of  the  tax  so  paid  shall  be  repaid 
to  him  by  the  executor,  administrator  or  other  trustee,  if  the  said  tax  has  not 
been  paid  to  the  county  collector  or  by  the  county  collector  if  the  tax  has  been  paid 
to  him.  The  county  collector  shall  pay  such  sums,  upon  the  order  of  the  probate 
judge,  out  of  any  money  that  he  has  in  his  possession  or  shall  receive  on  account 
of  the  tax  imposed  by  the  provisions  of  this  article.  The  state  auditor  shall 
credit  the  county  collector  with  all  such  sums  paid  by  him  upon  the  order  of  the 
probate  judge. 

S.  320.  Duty  of  executor  or  trustee  to  notify  probate  court,  when  real 
estate  of  decedent  is  subject  to  tax.    Whenever  any  of  the  real  estate  of  which 


688  STATUTES  ANNOTATED.  [Mo.  St. 

any  decedent  may  die  seized  shall  be  subject  to  the  tax  provided  by  this  article, 
it  shall  be  the  duty  of  the  executors,  administrators  or  other  trustees  to  give 
information  thereof,  in  writing,  to  the  probate  judge  of  the  court  ha\  ing  jurisdic- 
tion of  the  estate  of  the  decedent,  within  six  months  after  they  undertake  the 
execution  of  their  expected  duties,  or  if  the  fact  be  not  known  to  them  within 
that  period,  within  one  month  after  the  same  shall  have  come  to  their  knowledge, 
and  it  shall  be  the  duty  of  the  owners  of  such  estate,  immediately  upon  the 
vesting  of  the  estate,  to  give  information  thereof,  in  writing,  to  the  probate 
judge  aforesaid. 

S.  321.  Transfers  of  stocks  or  loans  in  this  state,  liable  to  tax,  made 
by  foreign  executors,  administrators  or  trustees.  —  Tax  when  and  where 
paid  and  who  liable  for  failure  to  pay.  Whenever  any  foreign  executor,  ad- 
ministrator or  other  trustee  shall  assign  or  transfer  any  stocks  or  loans  in  this  state 
standing  in  the  name  of  a  decedent,  or  in  trust  for  a  decedent,  which  shall  be  liable 
for  the  tax  imposed  by  the  provisions  of  this  article,  such  tax  shall  be  paid,  on  the 
transfer  thereof,  to  the  collector  of  the  county  where  the  transfer  is  made;  other- 
wise the  corporation  permitting  such  transfer  shall  become  liable  to  pay  such  tax: 
Provided,  that  such  corporation  had  knowledge  before  such  transfer  that  said 
stocks  or  loans  were  liable  for  such  tax. 

S.  322.  Probate  court  to  appoint  competent  person  as  appraiser  to  fix 
valuation  of  estates  subject  to  payment  of  tax.  The  probate  judge  of  the 
court  having  jurisdiction  of  the  estate  of  the  decedent,  upon  the  application  of  any 
interested  party,  including  county  collectors,  or  upon  his  own  motion,  shall,  as 
often  and  whenever  occasion  may  require,  appoint  a  competent  person  as  appraiser 
to  fix  *he  valuation  of  estates  which  shall  be  subject  to  the  payment  of  any  tax 
imposed  by  this  article.  Every  such  appraiser  shall  forthwith  give  notice  by 
mail  to  all  persons  known  to  have  a  claim  or  interest  in  the  property  to  be  appraised 
including  the  county  collector  of  revenue,  and  to  such  persons  as  the  probate 
judge  may  by  order  direct,  of  the  time  and  place  when  he  will  appraise  such 
estate  or  property.  He  shall  at  such  time  and  place  appraise  the  same  at  its 
clear  market  value,  at  the  time  of  the  death  of  the  decedent,  excluding  therefrom 
an  amount  equivalent  to  the  sum  of  all  of  the  lawful  debts  of  the  decedent,  and 
for  that  purpose  the  said  appraiser  is  authorized  to  issue  subpoenas  and  to  compel 
the  attendance  of  witnesses  before  him  and  to  take  the  evidence  of  such  witnesses 
under  oath  concerning  such  property  and  the  value  thereof;  and  he  shall  make 
report  thereof  and  of  such  value,  in  writing,  to  the  said  probate  judge,  together 
with  the  depositions  of  the  witnesses  examined,  and  such  other  facts  in  relation 
thereto,  and  to  the  said  matter  as  said  probate  judge  may  order  or  require.  Every 
appraiser  shall  be  paid  on  the  certificate  of  the  probate  judge,  at  the  rate  of  three 
dollars  per  day  for  every  day  actually  and  necessarily  employed  in  such  appraisal, 
and  his  actual  and  necessary  traveling  expenses,  and  the  fees  paid  such  witnesses, 
which  fees  shall  be  the  same  as  those  now  paid  to  witnesses  subpoenaed  to  attend 
in  courts  of  record,  by  the  county  collector  out  of  any  funds  he  may  have  in  his 
hands  on  account  of  any  tax  imposed  under  the  provisions  of  this  arcicle. 

S.  323.  Report  of  appraiser  to  be  filed  in  probate  court,  assessment  of 
cash  value,  amount  of  tax,  etc.  The  report  of  the  appraiser  shall  be  filed  in 
the  office  of  the  probate  judge,  and  from  such  report  and  other  proof  relating 


1909,  V.  1,  a.  14.]  MISSOURI.  689 

to  any  such  estate  before  the  probate  judge,  the  probate  judge  shall  forthwith 
assess  and  fix  the  cash  value  of  all  estates  and  the  amount  of  tax  to  which  the  same 
are  liable;  or,  the  probate  judge  may  so  determine  the  cash  value  of  all  such 
estates  and  the  amount  of  the  tax  to  which  the  same  are  liable  without  appointing 
an  appraiser.  The  value  of  every  limited  estate,  income,  interest  or  annuity  de- 
pendent upon  any  life  or  lives  in  being  shall  be  determined  by  the  rule,  method 
and  standards  or  [of]  mortality  and  value,  which  are  employed  by  the  superinten- 
dent of  the  insurance  department  in  ascertaining  the  value  of  policies  of  life  insurance 
and  annuities,  save  that  the  rate  of  interest  for  computing  the  value  of  such  estates 
or  interest  shall  be  five  per  centum  per  annum;  and  the  superintendent  of  the 
insurance  department  shall,  on  the  application  of  any  probate  judge,  determine 
the  value  of  such  limited  estates  or  interests  upon  the  facts  contained  in  such 
report,  and  certify  the  same  to  the  probate  judge,  and  his  certificate  shall  be 
conclusive  evidence  that  the  method  of  computations  adopted  therein  is  correct. 
Any  person  dissatisfied  with  the  appraisement  or  assessment  and  determination 
of  tax,  may  appeal  therefrom  to  the  probate  judge  within  sixty  days  from  the 
fixing,  assessing  and  determination  of  the  tax  by  the  probate  judge  as  herein 
provided,  upon  filing  in  the  office  of  the  probate  judge  a  written  notice  of  appeal 
which  shall  state  the  grounds  upon  which  the  appeal  is  taken  and  on  paying  or 
giving  security,  approved  by  the  probate  judge,  to  pay  all  costs  of  the  proceeding. 
The  probate  judge  shall  immediately  give  notice,  upon  the  determination  by  him 
as  to  the  value  of  any  estate  which  is  taxable  under  this  article  and  of  the  tax  to 
which  it  is  liable,  to  all  persons  known  to  be  interested  therein. 

S.  324.  Duty  of  state  auditor  when  he  believes  the  value  of  an  estate 
has  been  fraudulently  or  erroneously  determined.  Within  two  years  after 
the  entry  of  an  order  or  decree  of  a  probate  judge  determining  the  value  of  an 
estate  and  assessing  the  tax  thereon,  the  state  auditor  may,  if  he  believe  that 
such  appraisal,  assessment  or  determination  has  been  fraudulently,  collusively 
or  erroneously  made,  make  application  to  the  circuit  judge  of  the  judicial  circuit 
in  which  the,  former  owner  of  such  estate  resided  for  a  reappraisal  thereof.  The 
judge  to  whom  such  application  is  made  may  thereupon  appoint  a  competent 
pet-son  to  reappraise  such  estate.  Such  appraiser  shall  possess  the  powers,  be 
subject  to  the  duties  and  receive  the  compensation  provided  by  sections  322  and 
323  of  this  article  Such  compensation  shall  be  payable  by  the  county  collector 
of  revenue  out  of  any  funds  he  may  have  on  account  of  any  tax  imposed  under 
the  provisions  of  this  article,  upon  the  certificate  of  the  judge  appointing  him. 
The  report  of  such  appraiser  shall  be  filed  with  the  judge  by  whom  he  was  ap- 
pointed, and  thereafter  the  same  proceedings  shall  be  taken  and  had  by  and  before 
such  judge  as  are  herein  provided  to  be  taken  and  had  by  and  before  the  judge  of 
the  probate  court.  The  determination  and  assessment  of  such  judge  of  the  cir- 
cuit court  shall  supersede  the  determination  of  the  probate  judge,  and  shall  be 
filed  by  such  circuit  judge  in  the  office  of  the  state  auditor. 

S.  325.  Appraiser  taking  any  fee  or  reward  from  executors,  etc.,  guilty 
of  misdemeanor.  Any  appraiser  appointed  by  virtue  of  this  article  who  shall 
take  any  fee  or  reward  from  any  executor,  administrator,  trustee,  legatee,  next 
of  kin  or  heir  of  any  decedent,  or  from  any  other  person  liable  to  pay  said  tax, 
or  any  portion  thereof,  shall  be  guilty  of  a  misdemeanor,  and  upon  conviction 
in  any  court  having  jurisdiction  of  misdemeanor,  he  shall  be  fined  not  less  than 


690  STATUTES  ANNOTATED.  [Mo.  St. 

two  hundred  and  fifty  dollars  nor  more  than  five  hundred  dollars,  and  imprisoned 
not  exceeding  ninety  days,  and  in  addition  thereto  the  probate  judge  shall  dis- 
miss him  from  such  service  and  he  shall  be  disqualified  from  serving  hereafter  as 
an  appraiser. 

S.  326.  Probate  court  given  jurisdiction  to  hear  all  questions  arising 
as  to  tax,  duty  of  prosecuting  attorney  and  attorney  general,  etc.  The 
court  of  probate,  having  either  principal  or  auxiliary  jurisdiction  of  the  settlement 
of  the  estate  of  the  decedent,  shall  have  jurisdiction  to  hear  and  determine  all 
questions  in  relation  to  said  tax  that  may  arise,  affecting  any  devise,  legacy  or 
inheritance  under  this  article,  subject  to  appeal  as  in  other  cases,  and  the  prose- 
cuting attorney  of  the  proper  county  shall  represent  the  interests  of  the  state  in 
any  such  proceedings:  Provided,  that  in  any  such  proceedings  carried  on  appeal 
to  either  of  the  courts  of  appeal  or  the  supreme  court  the  attorney  general  shall 
represent  the  interest  of  the  state. 

S.  327.  State  auditor  to  furnish  books  and  forms  for  reports  to  probate 
judge,  entries,  etc.  The  state  auditor  shall  furnish  to  each  probate  judge  a 
book,  which  shall  be  a  public  record,  and  in  which  he  shall  enter  the  name  of  every 
decedent  upon  whose  estate  an  application  to  him  has  been  made  for  the  issue  of 
letters  of  administration  or  letters  testamentary,  the  date  and  place  of  death  of 
such  decedent,  the  estimated  value  of  his  real  and  personal  property,  the  names, 
places,  residences  and  relationship  to  him  of  his  heirs-at-law,  the  names  and 
places  of  residence  of  the  legatees  and  devisees  in  any  will  of  any  such  decedent, 
the  amount  of  each  legacy  and  the  estimated  value  of  any  real  property  devised 
therein,  and  to  whom  devised.  These  entries  shall  be  made  from  the  data  con- 
tained in  the  papers  filed  on  any  such  application,  or  in  any  proceeding  relating 
to  the  'estate  of  decedent.  The  probate  judge  shall  also  enter  in  such  book  the 
amount  of  the  personal  property  of  any  decedent,  as  shown  by  the  inventory 
thereof  when  made  and  filed  in  his  office,  and  the  returns  made  by  any  appraiser 
appointed  by  him  under  this  article,  and  the  value  of  annuities,  life  estates,  terms 
of  years  and  other  property  of  any  such  decedent  or  given  by  him  in  his  will  or 
otherwise,  as  fixed  by  the  probate  judge,  and  the  tax  assessed  thereon,  and  the 
amount  of  any  receipts  for  payment  of  any  tax  on  the  estate  of  such  decedent 
under  this  article  filed  with  him.  The  state  auditor  shall  also  furnish  to  each  pro- 
bate judge  forms  for  the  reporcs  to  be  made  by  such  probate  judge,  which  shall 
correspond  with  the  entries  to  be  made  in  such  book. 

S.  328.  Probate  judge  shall  make  reports  to  county  collector  and  state 
auditor,  when.  Each  probate  judge  shall,  on  January,  April,  July  and  October 
first  of  each  year,  make  a  report  in  duplicate,  upon  the  forms  furnished  by  the 
state  auditor,  containing  all  the  data  and  matters  required  to  be  entered  in  the 
book  aforesaid,  one  of  which  shall  be  immediately  delivered  to  the  county  collec- 
tor of  revenue  and  the  other  transmitted  to  the  state  auditor.  The  recorder  of 
each  county  shall  at  the  same  times  make  reports  in  duplicates,  containing  a 
statement  of  any  deed  or  other  conveyance  filed  or  recorded  in  his  office  of  any 
property,  which  appears  to  have  been  made  or  intended  to  take  effect  in  possession 
or  enjoyment  after  the  death  of  the  grantor  or  vendor,  the  name  and  place  of 
residence  of  such  grantor  or  vendor,  the  name  and  place  of  residence  of  the 
grantee  or  vendee,  and  a  description  of  the  property  transferred,  one  of  which  dup- 
licate shall  be  immediately  delivered  to  the  county  collector  of  revenue  and  the 
other  transmitted  to  the  state  auditor. 


1909,  V.  1,  a.  14.1  MISSOURI.  691 

S.  329.  Necessary  proceedings  to  cite  persons  to  appear  before  probate 
court  to  show  cause  why  tax  should  not  be  paid,  duty  of  collector  and 
prosecuting  attorney.  If  the  collector  of  revenue  of  any  county  shall  have 
reason  to  believe  that  any  tax  is  due  and  unpaid  under  this  article,  after  the 
refusal  or  neglect  of  the  persons  liable  therefor  to  pay  the  same,  he  shall  notify 
the  prosecuting  attorney  of  the  county,  in  writing,  of  such  failure  or  neglect, 
and  such  prosecuting  attorney,  if  he  have  probable  cause  to  believe  that  such  tax 
is  due  and  unpaid,  shall  apply  to  the  probate  court  for  a  citation,  citing  the 
persons  liable  to  pay  such  tax  to  appear  before  the  court  on  the  day  specified, 
not  more  than  three  months  after  the  date  of  such  citation,  and  show  cause  why 
the  tax  should  not  be  paid.  The  probate  judge,  upon  such  application,  and 
whenever  it  shall  appear  to  him  that  any  such  tax  accruing  under  this  article  has 
not  been  paid,  as  required  by  law,  shall  issue  such  citation,  and  the  service  of  such 
citation,  and  the  hearing  and  determination  thereon  and  the  enforcement  of  the 
determination  or  decree  made  by  the  probate  judge  and  the  fees  and  costs  in  such 
cases  shall  be  the  same  as  those  now  provided,  or  which  may  hereafter  be  provided, 
in  cases  in  the  probate  courts  of  this  state,  and  the  probate  judge  shall  allow 
as  costs  in  the  said  case  such  fees  to  said  prosecuting  attorney  as  he  may  deem 
reasonable.  Whenever  the  probate  judge  shall  certify  that  there  was  probable 
cause  for  issuing  a  citation  and  taking  the  proceedings  specified  in  this  section, 
the  state  auditor  shall  credit  the  collector  of  the  county  with  all  expenses  incurred 
for  the  service  of  citations  and  other  lawful  disbursements.  In  proceedings  to 
which  any  county  collector  is  cited  as  a  party  under  section  322  of  this  article, 
the  state  auditor  is  authorized,  in  his  discretion,  to  designate  and  retain  counsel 
to  represent  such  county  collector  therein,  and  to  direct  such  county  collector 
to  pay  the  expenses  thereby  incurred  out  of  the  funds  which  may  be  in  his  hands 
on  account  of  this  tax. 

S.  330.  Collector  shall  issue  receipt  under  official  seal  to  any  person 
upon  payment  of  twenty-five  cents,  showing  real  estate  upon  which  tax 
is  paid,  ^tc.  Any  person  shall,  upon  payment  of  the  sum  of  twenty-five  cents, 
be  entitled  to  a  receipt  from  the  county  collector  of  any  county,  or  at  his  option, 
to  a  copy  of  a  receipt  that  may  have  been  given  by  such  collector  for  the  payment 
of  any  tax  under  this  article,  under  the  official  seal  of  said  collector,  which 
receipt  shall  designate  on  what  real  property,  if  any,  of  which  any  decedent  may 
have  died  seized,  such  tax  shall  have  been  paid,  by  whom  paid,  and  whether 
in  full  of  said  tax,  and  said  receipt  may  be  recorded  in  the  recorder's  office  in 
which  said  property  is  situate,  in  a  book  to  be  kept  by  said  recorder  for  such 
purpose,  which  shall  be  labeled  "inheritance  tax." 

S.  331.  Collector  entitled  to  certain  per  centum,  in  addition  to  other 
fees.  The  collector  of  each  county  shall  be  allowed  to  retain,  on  all  taxes  paid 
and  accounted  for  by  him  in  each  year,  under  this  article,  in  addition  to  his  salary 
or  fees  now  allowed  by  law,  five  per  centum  on  the  first  twenty  thousand  dollars 
so  paid  and  accounted  for  by  him,  and  three  per  centum  on  all  additional  sums 
so  paid  and  accounted  forl)y  him:  Provided  that  said  collector  shall,  every  three 
months,  pay  one-half  of  all  the  sums  so  retained  by  him,  during  such  period, 
to  the  probate  judge  of  the  said  county  for  the  use  of  said  probate  judge  and  to 
defray  the  clerical  expense  arising  in  the  office  of  said  probate  judge  in  connection 
with  proceedings  under  this  article. 


692  STATUTES  ANNOTATED.  [Mont.  St. 


MONTANA. 


In  General. 

Montana's  inheritance  tax  was  adopted  in  1897.  The  exemptions 
apply  to  the  estate  as  a  whole,  not  to  the  individual  shares. 

Montana  is  not  taxing  stock  of  Montana  corporations  owned  by 
non-residents,  though  the  statute  contains  a  provision  holding  the 
corporation  responsible  for  the  tax  if  it  transfers  stock  with  actual 
or  constructive  knowledge  that  it  is  subject  to  the  tax.  It  is  there- 
fore rather  surprising  to  find  that  Montana  taxes  stock  of  non- 
residents in  foreign  corporations  which  own  property  in  Montana. 
It  is  not  the  practice  to  require  an  inventory  of  a  non-resident's 
estate. 

The  act  contains  a  curious  provision  for  including  in  the  valuation 
for  the  purpose  of  the  tax  the  "increase"  of  property  of  the  estate 
up  to  the  time  of  final  distribution.  This  should  have  the  effect 
of  hastening  the  settlement  of  estates  as  far  as  possible. 


Constitutional  Limitations. 

Montana  Constitution  1889,  a.  12. 

S.  1.  The  necessary  revenue  for  the  support  and  maintenance  of  the  state 
shall  be  provided  by  the  legislative  assembly,  which  shall  levy  a  uniform  rate  of 
assessment  and  taxation,  and  shall  prescribe  such  regulations  as  shall  secure  a 
just  valuation  for  taxation  of  all  property,  except  that  specially  provided  for  in 
this  article.  The  legislative  assembly  may  also  impose  a  license  tax,  both  upon 
persons  and  upon  corporations  doing  business  in  the  state. 

Montana  Constitution  1889,  a.  12. 

S.  11.  Taxes  shall  be  levied  and  collected  by  general  laws  and  for  public 
purposes  only.  They  shall  be  uniform  upon  the  same  class  of  subjects  within  the 
territorial  limits  of  the  authority  levying  the  tax. 


List  of  Statutes.     ' 

1897.     Statutes  of  Montana,  p.  83. 

1905.  "         "  "  p.  94,  c.  46. 

1907.     Revised  Codes,  Vol.  2,  c.  13,  ss.  7724  to  7751. 


1897,  p.  83.]  MONTANA.  693 

THE  STATUTE  OF  1897. 
The  Montana  statute  is  modeled  after  the  New  York  statute 
of  1885.    State  v.  District  Court,  41  Mont.  357,  109  P.  438,  442. 

Mont.  St.  1897,  p.  83.    Approved  March  4,  1897. 

An  Act  to  establish  a  tax  on  direct  and  collateral  inheritances, 

BEQUESTS  AND  DEVISES  to  provide  for  its  collection  and  direct  the  disposition 

of  its  proceeds. 

S.  1.  After  the  passage  of  this  act,  all  property  which  shall  pass  by  will  or  by 
the  intestate  laws  of  this  state,  from  any  person  who  may  die,  seized  or  possessed 
of  the  same,  while  a  resident  of  this  state,  or  if  such  decedent  was  not  a  resident  of 
this  state,  at  the  time  of  his  death,  which  property,  or  any  part  thereof,  shall  be 
within  this  state,  or  any  interest  therein  or  income  therefrom,  which  shall  be 
transferred  by  deed,  grant,  sale  or  gift  made  in  contemplation  of  the  death  of  the 
grantor  or  bargainor,  or  intended  to  take  effect  in  possession  or  enjoyment  after 
such  death  to  any  person  or  persons,  or  to  any  body  politic  corporate,  in  trust  or 
otherwise,  or  any  property,  which  shall  be  in  this  state  or  the  proceeds  of  all 
property  outside  of  this  state,  which  may  come  into  this  state,  and  which  may  be 
or  should  be  distributed  in  this  state  to  any  such  heirs,  devisees  or  legatees,  by 
reason  whereof  any  person  or  corporation  shall  become  beneficially  entitled 
in  possession  or  expectancy,  to  any  such  property,  or  to  the  income  thereof,  other 
than  to  or  for  the  use  of  his  or  her  father,  mother,  husband,  wife,  lawful  issue, 
brother,  sister,  the  wife  or  widow  of  the  son,  or  the  husband  of  a  daughter,  or 
any  child  or  children  adopted  as  such  in  conformity  with  the  laws  of  the  state 
of  Montana,  and  any  lineal  descendant  of  such  decedent  born  in  lawful  wedlock, 
shall  be  and  is  subject  to  a  tax  of  five  dollars  on  every  hundred  dollars  of  the  market 
value  of  such  property,  and  at  a  proportionate  rate  for  any  less  amount,  to  be  paid 
to  the  treasurer  of  the  proper  county  hereinafter  defined  for  the  use  of  said 
county  and  state  in  the  proportions  hereafter  stated;  and  all  administrators, 
executors  and  trustees  shall  be  liable  for  any  and  all  such  taxes  until  the  same  have 
been  paid  as  hereinafter  directed.  When  the  beneficial  interests  to  any  personal 
property  or  income  therefrom  shall  pass  to  or  for  the  use  of  any  father,  mother, 
husband,  wife,  child,  brother,  sister,  wife  or  widow  of  the  son,  or  the  husband 
of  a  daughter,  or  any  child  or  children  adopted  as  such  in  conformity  with  the 
laws  of  the  state  of  Montana,  or  to  any  person  to  whom  the  deceased,  for  not  less 
than  ten  years  prior  to  death,  stood  in  mutually  acknowledged  relation  of  a  parent, 
or  to  any  lineal  descendant  born  in  lawful  wedlock;  in  every  such  case  the  rate 
of  tax  shall  be  one  dollar  on  every  hundred  dollars  of  the  clear  market  value  of 
such  property,  and  at  and  after  the  same  rate  for  every  less  amount,  provided, 
that  an  estate  which  may  be  valued  at  a  less  sum  than  seventy-five  hundred 
dollars  shall  not  be  subject  to  any  such  tax  or  duty.  In  all  other  cases  the  rate 
shall  be  five  dollars  on  each  and  every  hundred  dollars  of  the  clear  market  value 
of  all  property  and  at  the  same  rate  for  any  amount,  provided,  that  an  estate 
which  may  be  valued  at  a  less  sum  than  five  hundred  dollars  shall  not  be  subject 
to  any  such  duties  or  tax,  provided,  further,  that  said  tax  shall  be  levied  and 
collected  upon  the  increase  of  all  property,  arising  between  the  date  of  death  and 
the  date  of  the  decree  of  distribution,  and  upon  all  estates  which  have  been 
probated  before,  and  shall  be  distributed  after  the  passage  and  taking  effect  of 
this  act. 


694  STATUTES  ANNOTATED.  [Mont.  St. 

Nature  of  Tax. 

This  act  is  not  a  property  tax  but  is  a  tax  on  the  right  of  succes- 
sion, although  the  statute  expressly  says  that  "all  property"  shall 
be  subject  to  a  tax.  The  court  relies  upon  State  v.  Hamlin,  86 
Me.  495,  30  A.  76,  41  Am.  St.  Rep.  569,  25  L.  R.  A.  632,  and  on 
State  V.  Ferris,  53  Ohio  St.  314,  41  N.  E.  579,  where  the  statutes 
also  on  their  face  were  upon  the  "property."  Gelsthorpe  v.  Furnell, 
20  Mont.  299,  51  P.  267,  268,  39  L.  R.  A.  170. 

Mont.  Const.,  a.  12,  s.  3,  provides  that  mines  and  mining  claims 
shall  be  taxed  at  the  price  paid  the  United  States  therefor.  But 
the  court  holds  that  the  inheritance  tax  is  not  a  tax  upon  the  prop- 
erty itself,  but  an  impost  or  excise,  and  is  therefore  not  obnoxious 
to  this  provision  of  the  constitution  even  where  the  estate  consists 
in  large  part  of  mines  or  mining  claims.  In  re  Tuohy,  35  Mont. 
431,  90  P.  170,  172. 

Right  to  Receive  Property  is  Taxed. 

The  most  exact  rule  is  that  which  regards  the  inheritance  tax 
as  upon  the  right  to  receive  property  rather  than  the  right  to  dispose 
of  it.  The  court  relies  upon  State  v.  Ferris,  53  Ohio  St.  314,  41 
N.  E.  579,  and  State  v.  Alston,  94  Tenn.  674,  30  S.  W.  750.  "In 
view  of  the  authorities  cited,  it  must  be  conceded  that  the  general 
assembly  has  the  power  to  pass  an  inheritance  tax  for  purposes 
of  general  revenue,  unless  prohibited  by  the  constitution  of  our 
state.  Properly  understood,  it  is  not  the  right  to  transmit,  but 
the  right  and  privilege  to  receive,  that  is  taxed.  The  right  to 
dispose  of  property  during  the  lifetime  of  the  owner  cannot  be 
separated  from  the  property  itself,  and  therefore  to  tax  the  right 
of  disposal  by  contract  in  the  lifetime  of  the  owner,  even  though 
it  take  effect  at  his  death,  is  to  tax  the  property  itself.  But  the 
right  to  dispose  of  the  property  by  will  or  descent,  taking  effect 
after  the  death  of  the  owner,  is  not  so  closely  connected  with  the 
right  of  property,  and  it  is  not  clear  that  such  right  may  not 
be  taxed.  But,  when  the  right  to  receive  the  property  is  con- 
sidered, it  is  clear  that  the  right  is  distinct  and  separate  from  the 
property  itself,  and  the  state  may  tax  this  right  to  receive  property; 
and  this  is  so  whether  the  property  is  disposed  of  by  the  owner 
during  his  lifetime,  or  at  his  death.  This  right  to  receive  property 
is  under  the  control  of  the  legislature,  and  it  has  the  power  to 
regulate  and  lay  such  burdens  thereon  as  it  may  see  fit,  within  the 
provisions  of  the  constitution.    To  regulate  by  taxation  or  otherwise 


1897,  p.  83.1  MONTANA.  695 

the  privilege  or  right  to  receive  property  is  not  in  conflict  with  the 
first  section  of  the  bill  of  rights,  which  recognizes  the  inalienable 
right  of  acquiring,  possessing  and  protecting  property.  Were  it 
otherwise,  all  our  laws  as  to  wills,  descent,  distribution  and  con- 
veyances would  be  unconstitutional."  Per  Burkett,  ].,'m  State  v. 
Ferris,  53  Ohio  St.  314,  41  N.  E.  579.  Gelsthorpe  v.  Furnell,  20  Mont. 
299,  51  P.  267,  39  L.  R.  A.  170. 

Measure  by  Valuation  of  Property  Upheld. 

"In  nearly  all  inheritance  tax  laws  the  statutes  provide  for  the 
appraising  of  property  to  be  inherited,  but  the  object  of  such  valua- 
tion is  not  to  tax  the  property  itself.  It  is  to  arrive  at  a  measure 
of  price  by  which  the  privilege  of  inheriting  can  be  valued."  Per 
Hunt,  J.,  inGelsthorpew  Furnell,  20  Mont.  299,  51  P.  267,  39 L.  R.  A. 
170. 

Exemptions  Upheld. 

This  statute  exempts  successions  valued  at  a  less  sum  than 
seven  thousand  five  hundred  dollars  and  the  court  holds  that  this 
exemption  does  not  make  the  statute  void  as  wanting  in  uniformity. 
The  legislature  is  not  prevented  by  the  constitution  from  the 
exercise  of  discretion  as  to  what  classes  of  rights  or  privileges  it 
may  enumerate  as  subject  to  taxation,  provided  the  tax  imposed 
is  uniform  in  its  application  to  all  rights  and  privileges  within  the 
class  defined.  Gelsthorpe  v.  Furnell,  20  Mont.  299,  51  P.  267, 
39  L.  R.  A.  170. 

Real  Estate. 

The  statute  provides  that  the  rate  except  to  direct  descendants 
and  the  husband  and  wife  of  the  decedent  shall  be  five  per  cent  and 
that  when  the  beneficial  interest  of  any  personal  property  passes 
to  a  direct  descendant  the  rate  shall  be  one  per  cent.  Real  estate 
passing  under  a  will  to  the  widow  of  testator  is  not  subject  to  tax. 
Hinds  V.  Wilcox,  22  Mont.  4,  55  P.  355. 

**Tax  shall  be  Levied  and  Collected  upon  the  Increase  of  all 
Property.' 

The  argument  was  made  that  the  words  "increase  of  all  property" 
included  only  those  estates  the  property  of  which  is  of  such  a 
character  that  it  increases  in  kind,  as  for  instance  when  it  consists 
in  whole  or  in  part  of  live  stock,  such  as  sheep,  cattle,  etc.    But  the 


696  STATUTES  ANNOTATED.  [Mont.  Codes. 

court  holds  that  following  the  common  acceptance  of  the  word 
"increase"  an  increase  means  increase  in  value  as  well  as  increase 
in  kind.  The  court  upholds  the  method  pursued  by  the  lower 
court  which  appointed  an  appraiser  to  ascertain  the  value  of  the 
estate  for  the  purpose  of  enabling  it  to  fix  the  amount  of  inheritance 
tax  to  be  paid  by  the  executor  prior  to  the  final  distribution  among 
its  devisees.    In  re  Tuhy,  35  Mont.  674,  90  P.  170. 

How  to  Attack  Assessment. 

The  Montana  Revised  Code,  section  7724,  is  attacked  by  cer- 
tiorari and  the  court  does  not  take  up  the  question  whether  cer- 
tiorari or  prohibition  is  the  proper  remedy  to  review  an  order  of 
the  district  court  laying  an  inheritance  tax.  State  v.  District  Court, 
41  Mont.  357,  109  P.  438,  442. 

S.  2.  When  any  grant,  gift,  legacy  or  succession  upon  which  a  tax  is  imposed 
by  section  1,  of  this  act,  shall  be  an  estate,  income  or  interest  for  a  term  of  years, 
or  for  life,  or  determinable  upon  any  future  or  contingent  event,  or  shall  be  a  re- 
mainder, or  reversion  or  other  expectancy,  real  or  personal,  the  entire  property 
or  fund  by  which  such  estate,  income  or  interest  is  supported,  or  which  is  a  part, 
shall  be  appraised  immediately  after  death  of  the  deceased,  and  the  market  value 
thereof  determined,  in  the  manner  provided  in  section  15  of  this  act,  and  the  tax 
prescfibed  by  this  act  shall  be  immediately  due  and  payable  to  the  treasurer 
of  the  proper  county,  and,  together  with  the  interest  thereon,  shall  be  and  remain 
a  lien  on  said  property  until  the  same  is  paid;  provided,  that  the  person  or 
persons,  or  body  politic  or  corporate,  beneficially  interested  in  the  property 
chargeable  with  said  tax,  may  elect  not  to  pay  the  same  until  they  shall  come 
into  the  actual  possession  or  enjoyment  of  such  property,  and  in  that  case,  such 
person  or  persons  or  body  politic  or  corporate  shall  execute  a  bond  to  the  state 
of  Montana  in  a  penalty  of  twiec  the  amount  of  tax,  including  interest  at  ten  per 
cent  per  annum,  arising  upon  the  personal  estate,  with  such  sureties  as  the  clerk 
of  the  district  court  of  the  proper  county  may  approve,  conditioned  for  the 
payment  of  said  tax,  and  interest  thereon,  at  such  time  or  period  as  they  or  their 
representatives  may  come  into  the  actual  possession  or  enjoyment  of  such  prop- 
erty, which  bond  shall  be  filed  in  the  office  of  the  clerk  of  the  district  court  of  the 
proper  county;  provided  further,  that  such  person  or  corporation  shall  make  a  full 
and  verified  return  of  such  property  to  said  court,  and  file  the  same  in  the  office  of 
the  clerk  of  the  district  court  for  said  county  and  a  duplicate  thereof  in  the  office 
of  the  clerk  and  recorder  of  said  county  within  one  year  from  the  death  of  the 
deceased,  and  within  that  period  enter  into  such  security  and  bond,  and  renew 
the  same  every  three  years. 

S  28.  This  act  shall  apply  to  all  estates  remaining  undistributed  at  the  time 
this  law  shall  take  effect,  and  the  tax  shall  be  determined  and  collected  as  in  other 
cases,  and  it  shall  take  effect  and  be  in  force  from  and  after  its  passage  and 
approval  by  the  governor. 


1907,  s.  7724.]  MONTANA.  697 

Retroactive  Feature  Upheld. 

This  act  applies  to  estates  which  have  been  probated  before  its 
passage  and  are  to  be  distributed  after  it  takes  effect.  Testamentary 
dispositions  under  Montana  statutes  are  presumed  to  vest  at  the 
testator's  death  and  the  rights  of  heirs  and  legatees  to  take  and 
receive  their  shares  are  vested  immediately  upon  the  death  of  the 
testator,  as  the  right  to  a  distributive  share  in  an  estate  vests 
directly  upon  the  death  of  the  intestate.  This  right  is  valuable 
and  may  be  sold  or  mortgaged  and  no  law  can  be  so  changed  as  to 
deprive  the  owner  of  it  and  bestow  it  upon  another  without  his 
consent;  but  on  the  other  hand  a  vested  right  is  held  subject  to 
the  laws  for  the  enforcement  of  public  duties.  Therefore,  a  right 
to  take  a  legacy  may  be  subject  to  the  laws  for  the  assessment  and 
collection  of  a  tax  as  a  premium  upon  the  right  and  privilege  to 
receive  the  inheritance,  as  much  as  it  is  subject  to  laws  which 
authorize  the  taxation  of  the  very  property  bequeathed.  Gelsthorpe 
V.  Furnell,  20  Mont.  299,  51  P.  267,  270,  39  L.  R.  A.  170.  The 
court  relies  upon  In  re  McPherson,  104  N.  Y.  306,  10  N.  E.  685. 

Sections  3  to  26  provide  for  the  assessment  and  collection  of  the  tax. 

Mont.  St.  1905,  c.  46,  amends  Mont.  St.  1897,  p.  83,  s.  20,  by 
striking  out  the  provision  making  it  a  misdemeanor  for  any  county 
attorney  or  his  partner  or  any  one  connected  with  him  by  blood 
or  marriage  to  act  as  attorney  for  any  person  liable  under  the  act. 

THE  PRESENT  ACT. 

Montana  Revised  Codes  of  1907. 

S.  7724.  Inheritance  tax,  Property  subject  to.  After  the  passage  of  this 
act,  all  property  which  shall  pass  by  will  or  by  the  intestate  laws  of  this  state, 
from  any  person  who  may  die,  seized  or  possessed  of  the  same,  while  a  resident  of 
this  state,  or  if  such  decedent  was  not  a  resident  of  this  state,  at  the  time  of  his 
death,  which  property  or  any  part  thereof,  shall  be  within  this  state,  or  any 
interest  therein  or  income  therefrom,  which  shall  be  transferred  by  deed,  grant, 
sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor  or  bargainor,  or 
intended  to  take  effect  in  possession  or  enjoyment  after  such  death  to  any  person 
or  persons,  or  to  any  body  politic  corporate,  in  trust  or  otherwise,  or  any  property, 
which  shall  be  in  this  state  or  the  proceeds  of  all  property  outside  of  this  state, 
which  may  come  into  this  state,  and  which  may  be  or  should  be  distributed  in 
this  state  to  any  such  heirs,  devisees  or  legatees,  by  reason  whereof  any  person  or 
corporation  shall  become  beneficially  entitled  in  possession  or  expectancy,  to  any 
such  property,  or  to  the  income  thereof,  other  than  to  or  for  the  use  of  his  or  her 
lawful  issue,  brother,  sister,  the  wife  or  widow  of  the  son,  or  the  husband  of  a 
daughter,  or  any  child  or  children  adopted  as  such  in  conformity  with  the  laws 


698  STATUTES  ANNOTATED.  [Mont.  Codes. 

of  the  state  of  Montana,  and  any  lineal  descendant  of  such  decedent  born  in 
lawful  wedlock,  shall  be  and  is  subject  to  a  tax  of  five  dollars  on  every  hundred 
dollars  of  the  market  value  of  such  property,  and  at  a  proportionate  rate  for  any 
less  amount,  to  be  paid  to  the  treasurer  of  the  proper  county  hereinafter  defined 
for  the  use  of  said  county  and  state  in  the  proportions  hereafter  stated;  and  all 
administrators,  executors,  and  trustees  shall  be  liable  for  any  and  all  such  taxes 
until  the  same  have  been  paid  as  hereinafter  directed.  When  the  beneficial  in- 
terests to  any  personal  property  or  income  therefrom  shall  pass  to  or  for  the  use  of 
any  father,  mother,  husband,  wife,  child,  brother,  sister,  wife  or  widow  of  the 
son,  or  the  husband  of  a  daughter,  or  any  child  or  children  adopted  as  such  in 
conformity  with  the  laws  of  the  state  of  Montana,  or  to  any  person  to  whom  the 
deceased,  for  not  less  than  ten  years  prior  to  death,  stood  in  mutually  acknowl- 
edged relation  of  a  parent,  or  to  any  lineal  descendant  born  in  lawful  wedlock; 
in  every  such  case  the  rate  of  tax  shall  be  one  dollar  on  every  hundred  dollars  of 
the  clear  market  value  of  such  property,  and  at  and  after  the  same  rate  for  every 
less  amount,  provided,  that  an  estate  which  may  be  valued  at  a  less  sum  than 
seventy-five  hundred  dollars  shall  not  be  subject  to  any  such  tax  or  duty.  In  all 
other  cases  the  rate  shall  be  five  dollars  on  each  and  every  hundred  dollars  of  the 
clear  market  value  of  all  property  and  at  the  same  rate  for  any  amount,  provided, 
that  an  estate  which  may  be  valued  at  a  less  sum  than  five  hundred  dollars  shall 
not  be  subject  to  any  such  duties  or  tax,  provided,  further,  that  said  tax  shall  be 
levied  and  collected  upon  the  increase  of  all  property  arising  between  the  date 
of  death  and  the  date  of  the  decree  of  distribution,  and  upon  all  estates  which 
have  been  probated  before,  and  shall  be  distributed  after  the  passage  and  taking 
effect  of  this  act. 

[See  notes  to  the  Act  of  1897,  ante,  p.  681.] 

[It  seems  to  have  been  intended  to  exempt  from  taxation  real  estate  passing 
to  direct  heirs.  The  language  of  the  statute  is  very  much  confused,  and  as  it 
reads,  real  estate  passing  to  lawful  issue,  brother,  sister,  wife  or  widow  of  son, 
husband  of  daughter,  adopted  child  and  lineal  descendant  of  adopted  child  is 
not  taxed;  but  real  estate  passing  to  father,  mother,  husband  or  wife  is  taxed 
b%.—Ed\ 

Power  over  Estate  of  Non-Resident. 

The  testator  died  domiciled  in  Ireland  owning  real  estate  in 
Montana.  It  was  claimed  by  the  petitioners  that  the  inheritance 
tax  is  imposed  not  upon  the  property  but  upon  the  right  or  privilege 
to  take,  and  that  the  court  must  therefore  have  jurisdiction  not 
only  of  the  distribution  but  also  of  the  distributees,  in  order  to 
levy  the  tax;  and  that  since  neither  of  these  essentials  exists  there 
can  be  no  lawful  levy  of  the  tax  in  this  case.  But  the  court  says 
that  the  delivery  provided  by  section  7675  serves  all  the  purposes 
of  distribution  and  the  power  to  direct  the  delivery  is  tanta- 
mount to  the  power  to  order  distribution  directly  to  the  persons 
entitled  to  take.  State  v.  District  Court,  41  Mont.  357,  109 
P.  438,  441. 


1907,  s.  7725.1  MONTANA. 

Rates.  —  Exemptions. 

Mont.  Revised  Code,  section  7724,  provided  that  an  estate  which 
may  be  valued  at  a  less  sum  than  five  hundred  dollars  shall  not  be 
subject  to  any  such  duty  or  tax.  Where  an  estate  is  of  value  in 
excess  of  five  hundred  dollars  and  all  the  legatees  must  be  paid  in 
money,  none  of  the  exemptions  apply;  hence  the  whole  of  the  estate 
is  subject  to  the  tax.  It  may  be  that  when  the  time  comes  to  fix 
the  amount  to  be  paid,  a  part  of  it  will  have  to  be  fixed  at  one  rate 
and  part  of  it  at  another,  according  as  the  relationship  of  the  testator 
to  the  legatees  is  made  to  appear.  Such  a  proportion  of  the  amount 
as  will  go  to  a  favored  class,  if  any  of  the  legatees  fall  within  that 
class,  will  be  subject  to  a  tax  at  the  lower  rate  and  the  rest  at  the 
higher  rate,  but  these  proportions  will  be  easily  ascertainable  when 
the  facts  appear.  Payment  of  the  tax  is  in  no  wise  dependent  upon 
the  distribution  of  the  estate  or  upon  the  amount  of  the  specific 
legacies  or  distributive  shares.  It  is  due  and  payable  upon  the  value 
of  the  estate  at  the  death  of  the  decedent.  Therefore,  while  under 
the  requirements  contained  in  the  Mont.  Revised  Code,  section 
7675,  the  power  to  order  distribution  according  to  the  terms  of  the 
will  may  be  assumed  to  have  been  taken  from  the  state  court  and 
it  must,  when  an  estate  is  ready  for  distribution,  order  its  delivery 
to  the  executor  or  administrator  having  charge  of  the  administration, 
this  does  not  relieve  the  estate  from  the  burden  of  the  tax,  nor 
impair  the  power  of  the  court  to  collect  it.  State  v.  District  Courts 
41  Mont.  357,  109  P.  438,  440. 

S.  7725.  Appraisement  of  contingent  or  determinable  estates.  When 
any  grant,  gift,  legacy  or  succession  upon  which  a  tax  is  imposed  by  section 
7724  (1)  of  this  act,  shall  be  an  estate,  income  or  interest  for  a  term  of  years,  or 
for  life,  or  determinable  upon  any  future  or  contingent  event,  or  shall  be  a  re- 
mainder, or  reversion  or  other  expectancy,  real  or  personal,  the  entire  property 
or  fund  by  which  such  estate,  income  or  interest  is  supported,  or  which  is-a  part, 
shall  be  appraised  immediately  after  death  of  the  deceased,  and  the  market  value 
thereof  determined,  in  the  manner  provided  in  section  7738  (15)  of  this  act, 
and  the  tax  prescribed  by  this  act  shall  be  immediately  due  and  payable  to  the 
treasurer  of  the  proper  county,  and,  together  with  the  interest  thereon,  shall 
be  and  remain  a  lien  on  said  property  until  the  same  is  paid;  provided,  that  the 
person  or  persons,  or  body  politic  or  corporate,  beneficially  interested  in  the 
property  chargeable,  with  said  tax,  may  elect  not  to  pay  the  same  until  they  shall 
come  into  the  actual  possession  or  enjoyment  of  such  property,  and  in  that  case, 
such  person  or  persons  or  body  politic  or  corporate  shall  execute  a  bond  to  the 
state  of  Montana  in  a  penalty  of  twice  the  amount  of  tax,  including  interest 
at  ten  per  cent,  per  annum,  arising  upon  the  personal  estate,  with  such 'sureties  as 
the  clerk  of  the  district  court  of  the  proper  county  may  approve,  conditioned  for 
the  payment  of  said  tax,  and  interest  thereon,  at  such  time  or  period  as  they  or 


700  STATUTES  ANNOTATED.  [Mont.  Codes. 

their  representatives  may  come  into  the  actual  possession  or  enjoyment  of  such 
property,  which  bond  shall  be  filed  in  the  office  of  the  clerk  of  the  district  court 
of  the  proper  county;  provided  further,  that  such  person  or  corporation  shall 
make  a  full  and  verified  return  of  such  property  to  said  court,  and  file  the  same  in 
the  office  of  the  clerk  of  the  district  court  for  said  county  and  a  duplicate  thereof 
in  the  office  of  the  clerk  and  recorder  of  said  county  within  one  year  from  the  death 
of  the  deceased,  and  within  that  period  enter  into  such  security  and  bond,  and 
renew  the  same  every  three  years 

7726.  Devise  or  bequest  to  executor  in  lieu  of  fees.  Whenever  a  decedent 
appoints  or  names  one  or  more  executors  or  trustees,  and  makes  a  bequest  or 
devise  of  property  to  them  in  view  of  commissions  or  allowances,  which  otherwise 
would  be  liable  to  said  tax  or  appoints  them  his  residuary  legatees,  and  said  be- 
quests, devises  or  residuary  legacies  exceed  what  would  be  a  reasonable  com- 
pensation for  their  services,  such  excess  shall  be  liable  to  said  tax;  and  the  district 
court  in  which  the  probate  proceedings  are  pending  shall  fix  the  compensation. 

7727.  When  tax  due.  —  Interest.  All  taxes  imposed  by  this  act,  unless 
otherwise  herein  provided  for,  shall  be  due  and  payable  at  the  death  of  the  decedent 
and  if  the  same  are  paid  within  ten  months,  no  interest  shall  be  charged  and 
collected  thereon,  but  if  not  so  paid,  interest  at  the  rate  of  ten  per  centum  per 
annum  shall  be  charged  and  collected  from  the  time  said  tax  accrues;  provided, 
that  if  said  tax  is  paid  within  six  months  from  the  accruing  thereof  a  discount  of 
three  per  centum  shall  be  allowed  and  deducted  from  said  tax.  And  in  all  cases 
where  the  executors,  administrators  or  trustees  do  not  pay  such  tax  within 
ten  months  from  the  death  of  the  decedent,  they  shall  be  required  to  give  bond 
in  the  fdrm  and  to  the  effect  prescribed  in  section  772.5  (2)  of  this  ac  t  for  the 
payment  of  said  tax  with  interest. 

7728.  Penalty  for  non-payment.  The  penalty  of  ten  per  centum  imposed 
by  section  7727  (4)  hereof  for  non-payment  of  said  tax  thereof,  shall  not  be 
charged  in  where,  by  reason  of  claims  made  upon  the  estate,  necessary  litigation 
or  other  unavoidable  causes  of  delay,  the  estate  of  any  decedent  or  a  part  thereof 
cannot  be  settled  at  the  end  of  eighteen  months  from  the  death  of  the  decedent; 
and  in  such  cases  only  seven  per  centum  shall  be  charged  upon  said  tax  from 
the  expiration  of  said  eighteen  months  until  the  cause  of  delay  is  removed. 

7729.  Duty  of  executor  to  deduct  tax  from  legacy.  Any  administrator, 
executor  or  trustee  having  in  charge  or  trust,  any  legacy,  or  property  for  dis- 
tribution subject  to  said  tax,  shall  deduct  the  tax  therefrom,  or  if  the  legacy  or 
property  be  not  money,  he  shall  collect  the  tax  thereon  upon  the  market  value 
thereof,  from  the  legatee  or  person  entitled  to  such  property,  and  he  shall  not 
deliver,  or  be  compelled  to  deliver,  any  specific  legacy  or  property  subject  to 
tax  to  any  person  until  he  shall  have  collected  the  tax  thereon,  and  whenever 
any  such  legacy  shall  be  charged. upon  or  payable  out  of  the  real  estate,  the  execu- 
tor, administrator,  or  trustee  shall  collect  said  tax  therefrom,  and  the  same  shall 
remain  a  charge  on  such  real  estate  until  paid;  if,  however,  such  legacy  be  given 
in  money,  to  any  person  for  a  limited  period,  the  executor,  administrator  or  trustee 
shall  retain  the  tax  on  the  whole  amount.  But  if  it  be  not  in  money,  he  shall  make 
application  to  the  district  court  of  the  proper  county  to  make  an  apportionment, 


1907,  ss.  7730-33.1  MONTANA  701 

if  the  case  require  it,  of  the  same  to  be  paid  into  his  hands  by  such  legatee  or 
legatees  and  for  such  other  order  relative  thereto  as  the  case  may  require. 

Appraisal. 

Under  Montana  Code,  sections  7725,  7727,  there  is  an  implication 
that  the  measure  for  computing  the  amount  of  a  tax  is  the  value  of 
the  estate  as  it  is  made  to  appear  by  appraisement  of  it  in  the 
ordinary  way.  These  sections  are  not  exclusive  but  section  7729 
is  an  additional  provision  intended  to  apply  also  in  any  case  and 
at  any  time,  when  in  the  opinion  of  the  court  the  circumstances 
require  an  appraisement  to  be  made ;  for  appraisement  may  be  had 
"as  often  as  and  whenever  occasion  may  require."  Section  7729 
was  intended  to  apply  where  the  payment  was  delayed,  as  in  case 
of  future  uncertain  interests,  and  it  is  impossible  to  appraise  at 
once.     State  v.  District  Court,  41  Mont.  357,  109  P.  438. 

7730.  Power  of  executor  to  sell  property  to  pay  tax.  All  executors, 
administrators  and  trustees  shall  have  full  power  to  sell  so  much  of  the  property 
of  the  decedent  as  shall  enable  them  to  pay  said  tax  in  the  same  manner  as  they 
may  be  enabled  by  law  to  do  for  the  payment  of  debts  of  the  estate,  and  the  amount 
of  said  tax  shall  be  paid  as  hereinafter  directed. 

7731.  Payment  to  county  treasurer  and  receipts.  Every  sum  of 
money  retained  by  an  executor,  administrator,  or  trustee,  or  paid  into  his  hands, 
for  any  tax  on  property  shall  be  paid  by  him  within  ten  days  thereafter  to  the 
treasurer  of  the  county  in  which  the  probate  proceedings  are  pending,  and  the 
said  treasurer  shall  give,  and  every  executor,  administrator  or  trustee  shall 
take  duplicate  receipt  for  such  payment,  one  of  which  said  receipts  said  executor, 
administrator,  or  trustee  shall  immediately  send  to  the  treasurer  of  the  state  whose 
duty  it  shall -be  to  charge  the  County  Treasurer  so  receiving  the  taxwith  the  amount 
thereof  due  the  state  and  said  state  treasurer  shall  seal  said  receipt  with  the  seal 
of  his  office,  if  he  have  one,  and  countersign  the  same,  and  return  it  to  the  executor, 
administrator,  or  trustee,  whereupon  it  shall  be  a  proper  voucher  in  the  settle- 
ment of  his  accounts;  and  an  executor,  administrator,  or  trustee  shall  not  be 
entitled  to  credits  in  his  accounts,  nor  be  discharged  from  liability  for  such  tax, 
nor  shall  said  estate  be  distributed  unless  he  shall  produce  a  receipt  so  sealed 
and  countersigned  by  the  state  treasurer  or  a  copy  thereof  certified  by  him. 

7732.  Liability  of  executor's  bond.  The  bond  of  an  executor  or  adminis- 
trator shall  be  liable  for  all  moneys  he  may  receive  under  this  article  of  taxes,  or 
for  proceeds  of  sale  of  real  estate  received  by  him  thereunder,  or  pursuant  thereto. 

7733.  Proceedings  upon  failure  of  executor  to  pay  tax.  If  any  executor 
or  administrator  or  trustee  shall  fail  to  perform  the  duties  imposed  upon  him 
by  this  article  the  district  court  upon  petition  of  the  county  treasurer,  or  any  per- 
son interested  in  said  estate  may  revoke  his  administration  and  his  bond  shall  be 
liable,  and  the  same  proceedings  shall  be  had  against  him  as  if  his  administration 
had  been  revoked  for  any  other  cause. 


702  STATUTES  ANNOTATED.  Mont.  Codes. 

7734.  Administrators  de  bonis  non.  The  power  and  duty  of  an  administra- 
tor de  bonis  non,  or  with  the  will  annexed,  or  the  public  administrator  shall  be 
the  same  under  this  article  as  those  of  an  executor  or  administrator,  and  he  shall 
be  subject  to  the  same  duties  and  liabilities 

7735.  Reduction  of  tax  upon  refund  to  pay  debts.  Whenever  any  debts 
shall  be  proven  against  the  estate  of  the  deceased,  after  the  payment  of  legacies 
or  distribution  of  property  from  which  the  said  tax  has  been  deducted  or  upon 
which  it  has  been  paid,  and  a  refund  is  made  by  the  legatee,  devisee,  heir,  or  next 
of  kin,  a  proportion  of  the  tax  so  deducted  or  paid  shall  be  repaid  to  him  by  the 
executor,  administrator  or  trustee  if  the  said  tax  has  not  been  paid  to  the  county 
treasurer  or  state  treasurer,  or  by  them,  in  the  proper  proportionate  shares,  if 
it  has  been  so  paid. 

7736.  Refund  of  erroneous  collection.  When  any  amount  of  said  tax  shall 
have  been  paid  erroneously  to  the  county  and  state  treasurer,  or  to  either  of 
them,  it  shall  be  lawful  for  them,  on  satisfactory  proof  rendered  to  the  clerk  of 
the  district  court,  in  the  case  of  the  county  treasurer,  and  to  the  state  auditor 
in  the  case  of  the  state  treasurer,  of  such  erroneous  payment,  to  refund  and  pay 
to  the  executor,  administrator,  person  or  persons  who  have  paid  any  such  tax  in 
error,  the  county's  and  state's  proportionate  amount  of  such  tax  so  paid  provided 
that  all  such  applications  for  repayment  of  such  tax  shall  be  made  within  two  years 
from  the  date  of  such  payment. 

7737.  Foreign  executors.  Tax  on  stocks  or  loans.  Whenever  any  foreign 
executor  or  administrator  shall  assign  or  transfer  any  stocks  or  loans  in  this 
state,  standing  in  the  name  of  the  decedent,  or  held  in  trust  for  a  decedent,  which 
shall  be  liable  to  the  said  tax,  such  tax  shall  be  paid  to  the  treasurer  of  the  proper 
county  on  the  transfer  thereof;  otherwise,  the  corporation  permitting  such  trans- 
fer shall  become  liable  to  pay  such  tax;  provided  that  such  corporation  had 
actual  or  constructive  knowledge  before  such  transfer  that  said  stocks  or  loans 
are  liable  to  said  tax. 

7738.  Appraisement  of  estate.  When  the  value  of  an  inheritance,  devise, 
bequest,  or  other  interest  subject  to  the  payment  of  said  tax,  is  uncertain,  the 
district  court  in  which  the  probate  proceedings  are  pending,  or  the  judge  thereof 
on  his  own  motion,  or  on  the  application  of  any  interested  party  shall  appoint 
some  competent  person  as  appraiser,  as  often  as,  and  whenever  occasion  may  re- 
quire, whose  duty  it  shall  be  forthwith  to  give  such  notice,  by  registered  mail,  to 
all  persons  known  to  have  or  claim  any  interest  in  such  property,  and  to  such  persons 
as  the  court  may  direct,  of  the  time  and  place  at  which  he  will  appraise  such 
property,  and  at  such  time  and  place  to  appraise  the  same,  and  to  make  the  report 
thereof,  in  writing,  to  said  court,  together  with  such  other  facts  in  relation  thereto, 
as  said  court  may  by  order  require,  to  be  filed  with  the  clerk  of  such  court;  and 
from  this  report  the  said  court,  shall  by  order,  forthwith  assess  and  fix  the  market 
value  of  all  inheritances,  devises,  bequests  or  other  interests,  and  the  tax  to  which 
the  same  is  liable,  and  shall  immediately  cause  notice  thereof  to  be  given,  by  regis- 
tered mail,  to  all  persons  known  to  be  interested  therein;  and  the  value  of  every 
future  or  contingent,  or  limited  estate,  income,  or  interest,  shall  for  the  purpose 
of  this  act,  be  determined  by  the  rule,  method  and  standards  of  mortality,  and  of 


1907.  s.  7739.]  MONTANA.  703 

values  that  are  set  forth  in  the  actuaries'  combined  experience  tables  of  mortality 
for  ascertaining  the  values  of  policies  of  life  insurance  and  annuities,  and  for 
the  determination  of  the  liabilities  of  life  insurance  companies,  save  that  the  rate 
of  interest  be  assessed  in  computing  the  present  value  of  all  future  interest  and 
contingencies  shall  be  at  seven  per  cent,  per  annum;  and  the  value  of  such  future, 
or  contingent,  or  limited  estate,  income,  or  interest,  shall  be  determined  in  the 
usual  manner  upon  the  facts  contained  in  such  report,  and  shall  be  certified  to 
the  court,  which  said  certificate  shall  be  made  by  some  one  known  to  the  court 
to  be  familiar  with  the  method  of  procedure  by  companies,  and  his  certificate, 
verified  by  oath,  shall  be  prima  facie  evidence  that  the  method  of  computation 
adopted  therein  is  correct.  The  said  appraiser  shall  be  paid  by  the  county  treas- 
urer out  of  any  funds  that  he  may  have  in  his  hands  on  account  of  said  tax,  and 
the  certificate  of  the  court,  at  the  rate  of  five  dollars  per  day  for  every  day  actually 
and  necessarily  employed  in  said  appraisement,  together  with  the  actual  and 
necessary  traveling  expenses,  a  sworn  statement  of  which  must  be  filed  with  the 
clerk  of  the  district  court  in  which  the  probate  proceedings  are  pending.  The  per- 
son designated  by  the  court  or  judge  thereof,  to  make  the  computations,  in  this 
section  required,  shall  receive  such  compensation  as  the  court  or  judge  thereof 
shall  deem  reasonable  and  just. 

Notice  of  Appraisal. 

This  section  gives  sufficient  notice  to  satisfy  the  constitution  of 
the  appraisal  and  assessment  of  the  tax.  The  clause  provides  for 
notice  "by  registered  mail"  and  the  provision  lays  upon  the  court 
the  duty  to  fix  the  time  for  the  appraisement  within  such  reasonable 
limits  as  will  give  every  person  interested  the  opportunity  to  be 
present  and  have  a  hearing  if  he  so  desires.  This  may  be  difficult, 
as  where,  in  the  case  at  bar,  the  testator  died  in  Ireland,  where  he 
resided,  but  the  task  is  no  more  difficult  for  the  court  in  Montana 
than  for  the  court  in  Ireland. 

The  statute  further  provides  that  after  the  tax  has  been  assessed 
the  court  shall  immediately  give  notice  by  registered  mail,  and 
this  is  an  additional  notice  which  requires  knowledge  by  the  court 
of  the  names  and  whereabouts  of  all  interested  persons,  and  this 
knowledge  it  is  presumed  the  court  will  get.  The  Montana  statute 
(Revised  Code,  section  7724,  et  seq.)  is  modeled  after  the  New  York 
statute  of  1885  and  the  provisions  contained  in  it  for  the  giving  of 
notice  are  substantially  identical  with  those  contained  in  the 
Montana  statute.  They  were  examined  by  the  New  York  court 
in  the  Matter  of  McPherson,  104  N.  Y.  306,  10  N.  E.  685;  State  v. 
District  Court,  41  Mont.  357,  109  P.  438,  442. 

7739.  Misconduct  of  appraiser.  Any  appraiser,  appointed  by  virtue  of 
this  act,  who  shall  take  any  fee  or  reward  from  an  executor,  administrator,  trustee, 
legatee,  next  of  kin,  or  heir  of  any  decedent  or  from  any  other  person  liable  to 
pay  said  tax,  or  his  or  their  attorney,  or  any  other  person,  or  any  portion  thereof, 


704  STATUTES  ANNOTATED.  [Mont.  Codes. 

shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  thereof,  shall  be  fined  not 
less  than  one  hundred  dollars  nor  more  than  five  hundred  dollars,  or  imprisonment 
inthecounty  jail  ninety  days,or  both  such  fine  and  imprisonment,  and  in  addition 
thereto,  the  court  shall  dismiss  him  from  such  service.  The  district  courts  shall 
have  concurrent  jurisdiction  with  the  justices  of  the  peace  courts  for  all  violations 
of  the  law  mentioned  in  this  section. 

7740.  Jurisdiction  of  courts.  The  district  court  of  the  county  in  which  is 
situate  the  real  property  of  the  decedent,  who  was  not  a  resident  of  this  state, 
or  in  the  county  in  which  the  decedent  was  a  resident  at  the  time  of  his  death, 
shall  have  jurisdiction  to  hear  and  determine  all  questions  in  relation  to  the  tax 
arising  under  the  provisions  of  this  act,  and  the  court  first  acquiring  jurisdiction 
hereunder  shall  retain  the  same  to  the  exclusion  of  every  other. 

7741.  Citation  to  compel  payment.  If  it  shall  appear  to  the  district  court, 
or  judge  thereof,  that  any  tax  accruing  under  this  act,  has  not  been  paid  according 
to  law,  the  court  or  judge  shall  issue  a  citation,  citing  the  person  known  to  own 
any  interest  or  part  of  the  property  liable  to  the  tax  to  appear  before  the  court 
on  a  day  certain,  not  more  than  ten  weeks  from  the  date  of  said  citation,  and  show 
cause  why  said  tax  should  not  be  paid.  The  service  of  such  citation  and  the 
time,  manner,  and  proof  thereof,  and  the  hearing  and  determination  thereof, 
and  the  enforcement  of  the  determination  or  decree  shall  conform  to  the  pro- 
visions of  chapter  12,  of  title  12  of  the  Code  of  Civil  Procedure;  and  the 
clerk  of  the  court,  shall  upon  the  request  of  the  county  attorney  or  county 
treasurer  furnish  without  fee,  one  or  more  transcripts  of  such  decree,  and  the 
same  shall  be  docketed  and  filed  in  the  office  of  the  county  clerk  and  recorder 
of  any  cpunty  in  the  state,  and  in  the  ofiice  of  the  clerk  of  the  district  court  of 
any  county  in  the  state,  in  the  same  manner  and  with  the  same  effect  as  provided 
by  section  6807  (1197)  of  the  said  Code  of  Civil  Procedure  for  filing  transcript  of 
judgment,  or  of  an  original  docket. 

7742.  Proceedings  upon  failure  to  administer  estates.  In  all  cases 
where  any  estate,  real,  personal  or  mixed,  shall  be  subject  to  the  direct  or  collat- 
eral inheritance  tax  imposed  by  this  act,  and  no  administration  is  taken  on  the 
estate  of  the  person  who  died  seized  and  possessed  thereof,  within  ninety  days 
after  the  death  of  said  person,  the  clerk  of  the  district  court  of  the  county  in  which 
administration  should  be  granted,  or  taken  out,  shall  issue  a  citation  for  the  parties 
entitled  to  administration,  to  show  cause  wherefore  they  do  not  administer; 
provided,  however,  that  when  any  real  estate  shall  be  subject  to  said  tax  and  no 
administration  has  been  taken  out  on  the  estate  of  the  person  who  died  seized 
thereof,  the  district  court  of  the  county  where  said  real  estate  shall  be  situate, 
may  on  the  application  of  any  one  interested  in  said  real  estate,  or  of  the  county  or 
state  treasurer  appoint  an  appraiser  to  value  the  same,  as  provided  in  this  act, 
and  the  amount  of  the  tax  which  may  be  found  due  on  said  property  shall  be  paid 
to  the  county  treasurer  and  disposed  of  the  same  as  other  taxes  provided  for  in 
this  act. 

7743.  Collection  by  suit.  Whenever  the  treasurer  of  any  county  shall  have 
reason  to  believe  that  any  tax  is  due  and  unpaid  under  this  act,  after  the  refusal 
or  neglect  of  the  persons  interested  in  the  property  liable  to  said  tax,  to  pay  the 


1907,  ss.  7744-48.]  MONTANA.  705 

same,  he  shall  notify  the  county  attorney  of  the  proper  county,  in  writing,  of  such 
failure  to  pay  such  tax,  and  the  county  attorney  so  notified,  if  there  is  a  probable 
cause  to  believe  a  tax  is  due  and  unpaid,  shall  prosecute  the  proceedings  in  the 
district  court  of  the  proper  county,  as  provided  in  sections  7741  (18)  and  7742 
(19)  of  this  act,  for  the  enforcement  and  collection  of  such  tax. 

7744.  Clerk's  quarterly  statement.  The  clerk  of  the  district  court  shall, 
every  three  months,  make  a  statement  in  writing,  to  the  county  treasurer,  of  the 
property  from  which,  or  the  party  from  which,  he  has  reason  to  believe,  or  knows, 
a  tax  under  this  act,  is  due  and  unpaid. 

7745.  Costs  of  collection.  Whenever  the  district  court  of  any  county  or  the 
judge  thereof  shall  certify  that  there  is  probable  cause  for  issuing  a  citation,  and 
taking  the  proceedings  specified  in  section  7741  (18)  of  this  act,  to  the  state 
auditor,  the  state  auditor  shall  allow  said  claim,  and  shall  draw  his  warrant  on  the 
state  treasurer  in  favor  of  the  county  treasurer  of  the  county  wherein  said  pro- 
ceedings were  taken  or  had  for  all  expenses  incurred  for  services  of  said  citation, 
and  his  other  lawful  expenses  that  have  not  otherwise  been  paid ;  provided  that  if 
it  shall  appear  to  the  district  court  that  the  party  to  whom  the  citation  is  issued 
was  wilfully  endeavoring  to  evade  the  terms  and  provisions  of  this  act,  and  the 
payment  of  the  tax  hereunder,  the  costs  of  said  proceeding  shall  be  taxed  to  him 
and  execution  shall  issue  therefor  in  the  same  manner  as  on  judgments  in  the 
district  court. 

7746.  Record  of  clerk  of  court.  The  clerk  of  the  district  court  of  each 
county  shall  keep  a  book  in  which  he  shall  enter  the  value  of  inheritances,  devises, 
bequests  and  other  interests  subject  to  the  payment  of  said  tax,  and  the  tax, 
assessed  thereon,  and  the  amounts  of  any  receipts  for  the  payments  thereon  filed 
with  him,  which  book  shall  be  kept  by  him  as  public  records. 

7747.  County  treasurer.  Annual  report.  The  treasurer  of  each  county 
shall  collect  all  taxes  that  may  be  due  and  payable  under  this  act,  and  he  shall 
pay  to  the  state  sixty  per  cent  thereof,  and  the  state  treasurer  shall  give  him 
a  receipt  therefor.  The  county  treasurer  shall  make  a  report  under  oath  to  the 
state  auditor  between  the  first  and  fifteenth  days  of  December  of  each  year  of 
said  tax  so  paid,  stating  for  what  estate  paid,  and  in  such  form  aiid  containing 
such  particulars  as  the  auditor  may  prescribe ;  and  for  all  such  taxes  collected  by 
him  and  not  paid  to  the  state  treasurer  by  the  first  day  of  June  and  January  of 
each  year  he  shall  be  liable  upon  his  official  bond. 

7748.  Record  of  receipts.  Any  person  or  body  politic  or  corporate,  shall, 
upon  the  payment  of  the  sum  of  fifty  cents,  be  entitled  to  a  receipt  from  the 
county  treasurer  of  any  county,  or  a  copy  of  the  receipt  at  his  option,  that  may 
have  been  given  by  said  treasurer  for  the  payment  of  any  tax  under  this  act, 
which  said  receipt  shall  be  countersigned  by  the  clerk  of  the  district  court  and  the 
seal  of  the  district  court  attached  thereto,  and  shall  designate  on  what  real 
property,  if  any,  of  which  decedent  may  have  died  seized,  said  tax  has  been 
paid,  and  by  whom  paid,  and  whether  or  not  it  is  in  full  of  said  tax,  and  the 
description  of  the  property  upon  which  said  tax  is  paid;  and  the  said  receipt  may 
be  recorded  in  the  office  of  the  county  clerk  and  recorder  of  the  county  in  which 


706  STATUTES  ANNOTATED.  [Mont.  Codes. 

said  property  is  situate,  in  a  book  to  be  kept  by  said  clerk  for  such  purpose,  which 
shall  be  properly  indexed  and  labeled  "District  and  Collateral  Tax." 

7749.  Distribution  of  tax.  Sixty  per  cent  of  the  taxes  levied  and  col- 
lected under  this  act,  shall  be  paid  into  the  treasurer  of  this  state  for  the  use  of 
the  general  fund,  and  forty  per  cent  thereof  into  the  treasurer  of  the  county  for 
the  use  of  the  general  school  fund. 

7750.  Inconsistent  acts  repealed.  All  acts  and  parts  of  acts  inconsistent 
with  the  provisions  of  this  act,  are  hereby  repealed,  as  far  as  they  affect  the  pro- 
visions hereof. 

7751.  Estates  to  which  applicable.  This  act  shall  apply  to  all  estates  re- 
maining undistributed  at  the  time  this  law  shall  take  effect,  and  the  tax  shall  be 
determined  and  collected  as  in  other  cases,  and  it  shall  take  effect  and  be  in  force 
from  and  after  its  passage,  and  approval  by  the  governor. 


Neb.  St.]  NEBRASKA.  707 


NEBRASKA. 


In  General. 

Nebraska  enacted  its  inheritance  tax  in  1901.  The  exemptions 
apply  to  each  individual  share  rather  than  to  the  estate  as  a  whole, 
though  the  language  creating  the  five  hundred  dollar  exemption 
is  ambiguous. 

It  is  a  fair  construction  of  the  statute  that  stock  in  a  Nebraska 
corporation  owned  by  a  non-resident  is  subject  to  the  tax,  especially 
as  there  is  a  provision  holding  the  corporation  responsible  if  it 
transfers  stock  for  a  foreign  executor  before  the  tax  is  paid,  if  it  has 
knowledge  that  the  stock  is  subject  to  tax.  The  tax  authorities 
are  not  collecting  a  tax  on  such  stock  at  present  if  the  certificate 
is  kept  outside  the  state. 

The  proceeds  of  the  inheritance  tax  are  to  be  spent  for  the  im- 
provement of  county  roads. 


Constitutional  Limitations. 

Nebraska  Constitution  1875,  a.  9. 

S.  1.  The  legislature  shall  provide  such  revenue  as  may  be  needful,  by  levying 
a  tax  by  valuation,  so  that  every  person  and  corporation  shall  pay  a  tax  in  propor- 
tion to  the  value  of  his,  her,  or  its  property  and  franchises,  the  value  to  be  ascer- 
tained in  such  manner  as  the  legislature  shall  direct;  and  it  shall  have  power  to 
tax  pedlers,  auctioneers,  brokers,  hawkers,  commission-merchants,  showmen, 
jugglers,  inn-keepers,  liquor-dealers,  toll-bridges,  ferries,  insurance,  telegraph 
and  express  interests  or  business,  venders  of  patents,  in  such  manner  as  it  shall 
direct  by  general  law,  uniform  as  to  the  class  upon  which  it  operates. 


List  of  Statutes. 

1901,  c.  54,  p.  414. 

1905,  c.  117,  p.  523. 

1907,  c.  103,  p.  356. 

1907,  c.  104. 

1911,  c.  107,  p.  386. 

Compiled  Statutes  1905,  ss.  5176  to  5196, 


708  STATUTES  ANNOTATED.  [Neb.  St. 

THE  STATUTE  OF  1901. 

Nebraska  St.  1901,  c.  54,  p.  414.    Approved  April  1,  1901. 

S.  1.  All  property,  real,  personal  and  mixed  which  shall  pass  by  will  or  by  the 
intestate  laws  of  this  state  from  any  person  who  may  die  seized  or  possessed  of 
the  same  while  a  resident  of  this  state,  or,  if  decedent  was  not  a  resident  of  this 
state  at  the  time  of  his  death,  which  property  or  any  part  thereof  shall  be  within 
this  state,  or  any  interest  therein  or  income  therefrom,  which  shall  be  transferred 
by  deed,  grant,  sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor, 
or  bargainor  or  intended  to  take  effect,  in  possession  or  enjoyment  after  such 
death,  to  any  person  or  persons  or  to  any  body  politic  or  corporate,  in  trust  or 
otherwise,  or  by  reason  thereof  any  person  or  body  corporate  shall  become  bene- 
ficially entitled  in  possession  or  expectation  to  any  property  or  income  thereof, 
shall  be  and  is  subject  to  a  tax,  at  the  rate  hereinafter  specified  to  be  paid  to  the 
treasurer  of  the  proper  county  for  the  use  of  the  state,  and  all  heirs,  legatees  and 
devisees,  administrators,  executors  and  trustees  shall  be  liable  for  any  and  all 
such  taxes  until  the  same  shall  have  been  paid  as  hereinafter  directed.  When  the 
beneficial  interests  to  any  property  or  income  therefrom  shall  pass  to  or  for  the 
use  of  any  father,  mother,  husband,  wife,  child,  brother,  sister,  wife  or  widow  of 
the  son,  or  husband  of  the  daughter,  or  any  child  or  children  adopted  as  such  in 
conformity  with  the  laws  of  the  state  of  Nebraska,  or  to  any  person  to  whom  the 
deceased  for  not  less  than  ten  years  prior  to  death  stood  in  the  acknowledged  re- 
lation of  a  parent,  or  to  any  lineal  descendant  born  in  lawful  wedlock,  in  every  such 
case  the  rate  of  tax  shall  be  one  dollar  on  every  one  hundred  dollars  of  the  clear 
market  value  of  such  property  received  by  each  person,  and  at  the  same  rate  for 
every  l^ss  amount;  provided,  that  any  estate  which  may  be  valued  at  a  less  sum 
than  ten  thousand  dollars  shall  not  be  subject  to  any  such  duty  or  the  taxes,  and 
the  taxes  to  be  levied  in  the  above  case  only  upon  the  excess  of  ten  thousand  dol- 
lars received  by  each  person;  when  the  beneficial  interests  to  any  property  or 
income  therefrom  shall  pass  to  or  for  the  use  of  any  uncle,  aunt,  niece,  nephew 
or  other  lineal  descendant  of  the  same,  in  every  such  case  the  rate  of  such  tax  shall 
be  two  dollars  on  every  one  hundred  dollars  of  the  clear  market  value  of  such  prop- 
erty received  by  each  person  on  the  excess  of  two  thousand  dollars  so  received  by 
each  person;  In  all  other  cases  the  rate  shall  be  as  follows:  on  each  and  every 
hundred  dollars  of  the  clear  market  value  of  all  property  and  at  the  same  rate 
for  any  less  amount,  two  dollars;  on  all  estates  ot  ten  thousand  dollars  and  less, 
three  dollars;  on  all  estates  of  over  ten  thousand  dollars  not  exceeding  twenty 
thousand  dollars,  four  dollars;  on  all  estates  of  over  twenty  thousand  dollars 
and  not  exceeding  fifty  thousand  dollars,  five  dollars;  and  on  all  estates  over  fifty 
thousand  dollars,  six  dollars;  provided  that  an  estate  in  the  above  case  which 
may  be  valued  at  a  sum  less  than  five  hundred  dollars  shall  not  be  subject  to  any 
duty  or  tax. 

S.  2  provides  for  taxation  of.  remainder  interests. 

S.  3  provides  that  taxes  imposed  shall  be  due  and  payable  at  the  death  of  the 
decedent. 

S.  4  covers  the  assessment  and  collection  of  the  tax. 


1905,  c.  117.]  NEBRASKA.  709 

THE  AMENDMENTS  OF  1905. 

Neb.  St.  1905,  c.  117,  s.  1.     Approved  March  8,  1905. 

S.  1.  Sections  amended.  That  sections  10706,  10711,  10713,  10715  and 
10724  respectively  of  Cobbey's  Annotated  Statutes  for  1903  be  amended  to  read 
as  follows:  — 

S.  10706.  Inheritance  tax.  —  Rate.  All  property,  real,  personal  and  mixed 
which  shall  pass  by  will  or  by  the  intestate  laws  of  this  state  from  any  person  who 
may  die  seized  or  possessed  of  the  same  while  a  resident  of  this  state,  or,  if  decedent 
was  not  a  resident  of  this  state  at  the  time  of  his  death,  which  property  or  any  part 
thereof  shall  be  within  this  state,  or  any  interest  therein  or  income  therefrom 
which  shall  be  transferred  by  deed,  grant,  sale  or  gift  made  in  contemplation  of 
the  death  of  the  grantor  or  bargainor  or  intended  to  take  effect,  in  possession 
or  enjoyment  after  such  death,  to  any  person  or  persons  or  to  any  body  politic 
or  corporate,  in  trust  or  otherwise,  or  by  reason  thereof  any  person  or  body 
corporate  shall  become  beneficially  entitled  in  possession  or  expectation  to 
any  property  or  income  thereof,  shall  be  and  is  subject  to  a  tax  at  the  rate  here- 
after specified  to  be  paid  to  the  treasurer  of  the  proper  county  for  the  use  of  a 
permanent  road  fund  as  hereinafter  provided,  and  all  heirs,  legatees,  devisees 
administrators,  executors  and  trustees  shall  be  liable  for  any  and  all  such  taxes 
until  the  same  shall  have  been  paid  as  hereafter  directed.  When  the  beneficial 
interest  to  any  property  or  income  therefrom  shall  pass  to  or  for  the  use  of  any 
father,  mother,  husband,  wife,  child,  brother,  sister,  wife  or  widow  of  the  son, 
or  husband  of  the  daughter,  or  any  child  or  children  adopted  as  such  and  conforma- 
tive  with  the  laws  of  the  state  of  Nebraska,  or  to  any  person  to  whom  the  deceased 
for  not  less  than  ten  years  prior  to  death  stood  in  the  acknowledged  relation  of  a 
parent,  or  to  any  lineal  descendant  born  in  lawful  wedlock,  in  every  such  case  the 
rate  of  tax  shall  be  one  dollar  on  every  one  hundred  dollars  of  the  clear  market 
value  of  such  property  received  by  each  person,  and  at  the  same  rate  for  less 
amount;  provided,  that  any  estate  which  may  be  valued  at  a  less  sum  than  ten 
thousand  dollars  shall  not  be  subject  to  any  such  duty  or  the  taxes,  and  the  taxes 
to  be  levied  in  the  above  case  only  upon  the  excess  of  ten  thousand  dollars  received 
by  each  person;  when  the  beneficial  interest  to  any  property  or  income  therefrom 
shall  pass  to  or  from  the  use  of  any  uncle,  aunt,  niece,  nephew,  or  other  lineal 
descendant  of  the  same,  in  every  such  case  the  rate  of  such  tax  shall  be  two 
dollars  on  every  one  hundred  dollars  of  the  clear  market  value  of  such  property 
received  by  each  person  on  the  excess  of  two  thousand  dollars  so  received  by  each 
person.  In  all  other  cases  the  rate  shall  be  as  follows:  On  each  and  every  one 
hundred  dollars  of  the  clear  market  value  of  all  property  and  at  the  same  rate  for 
any  less  amount,  two  dollars;  on  all  estates  of  ten  thousand  dollars  and  less,  three 
dollars;  on  all  estates  of  over  ten  thousand  dollars  and  not  exceeding  twenty 
thousand  dollars,  four  dollars;  on  all  estates  of  over  twenty  thousand  dollars  and 
not  exceeding  fifty  thousand  dollars,  five  dollars;  and  on  all  estates  over  fifty 
thousand  dollars,  six  dollars;  provided  that  an  estate  in  the  above  case  which 
may  be  valued  at  a  sum  less  than  five  hundred  dollars  shall  not  be  subject  to  any 
duty  or  tax 


710  STATUTES  ANNOTATED.  [Neb.  St. 

Nature  of  Tax. 

This  act  is  a  tax  upon  the  right  to  succession  to  property,  that  is, 
upon  the  right  to  receive  the  property  from  the  estate  of  the  de- 
cedent and  not  upon  the  estate  itself.  State  v.  Vinsonhalery  74 
Neb.  675,  105  N.  W.  472. 


Certainty. 

The  court  does  not  decide  whether  some  clause  or  clauses  of 
the  act  of  1901  as  amended  in  1905,  are  void  for  uncertainty.  State 
V.  Vinsonhaler,  74  Neb.  675,  105  N.  W.  472. 

Tax  is  on  each  Beneficiary  and  is  Uniform. 

The  act  of  1901,  as  amended  in  1905,  in  that  part  of  the  section 
beginning  with  the  words  "in  all  other  cases,"  in  some  instances 
requires  the  tax  to  be  levied  upon  the  whole  estate  and  it  was  there- 
fore argued  that  this  is  a  tax  upon  property,  and  not  being  uniform 
was  therefore  unconstitutional.  For  the  purposes  of  this  taxation 
the  estates  seem  to  be  classified  according  to  their  value,  but  it  does 
not  follow  that  the  tax  is  placed  upon  the  property  constituting 
the  gross  estate  of  the  decedent.  The  tax  is  placed  upon  the  estate 
received  by  each  heir  or  devisee,  and  its  rate  is  uniform  as  to  its 
class,  and  this  classification  is  reasonable  and  within  the  province 
of  the  legislature.  State  v.  Vinsonhaler,  74  Neb.  675,  105  N.  W.  472, 
474. 

Double  Taxation  Upheld. 

It  was  argued  that  as  the  beneficiaries  had  paid  one  inheritance 
tax  in  New  York,  equity  and  good  conscience  dictated  that  a 
second  burden  should  not  be  laid  in  Nebraska.  The  court  remarks 
that  "the  question  presented  is  not  one  of  general  equities,  but  of 
jurisdiction.  It  has  been  held,  and  logically,  that  the  taxing  authori- 
ties must  be  controlled  solely  by  the  laws  of  the  state,  and  not  by 
proceedings  in  another  and  distinct  jurisdiction,  to  ascertain  whether 
or  not  a  certain  tax  should  be  levied  or  collected.  Payment  in  one 
state  is  not  a  defence  when  called  upon  to  pay  in  the  other  unless 
so  provided  by  law.  Mann  v.  Carter,  74  N.  H.  345,  68  A.  130,  15 
L.  R.  A.  (N.  S.)  150,  Blackstone  v.  Miller,  188  U.  S.  189,  206,  207, 
23  Sup.  Ct.  277,  47  L.  Ed.  439."  Per  Root,  J.,  in  In  re  Douglas 
County,  84  Neb.  506,  121  N.  W.  593. 


'1907,  c.  104.]  NEBRASKA.  711 

Stock  of  Non-Resident  Trustee. 

The  testator  had  in  1905  executed  a  certain  trust  agreement 
by  which  he  conveyed  all  his  property  by  voluntary  deed  to  a 
trustee,  a  resident  of  New  York  City,  who  took  actual  possession 
of  the  securities  at  that  time  and  transferred  them  to  New  York, 
where  they  did  after  that  remain.  The  securities  have  been  kept 
intact  and  the  dividends  paid  to  the  testator  during  his  life.  The 
court  holds  that  for  the  purposes  of  taxation  the  shares  in  the  stock 
of  a  Nebraska  corporation  were  within  the  state  of  Nebraska  and 
therefore  subject  to  the  inheritance  tax.  It  further  appeared  that 
the  deed  provided  that  the  settlor  reserved  the  right  to  limit  in  his 
will  the  terms  upon  which  the  beneficiaries  might  enjoy  his  bounty 
and  if  he  did  make  his  will  then  devolution  of  the  property  was 
subject  to  the  laws  of  Nebraska  and  subject  to  its  inheritance  tax. 
In  re  Douglas  County,  84  Neb.  506,  121  N.  W.  593. 

S.  10711.  Same.  — Payment.  — Time.  Every  sum  of  money  retained  by 
any  executor,  administrator  or  trustee  or  paid  into  his  hands  for  any  tax  on  any 
property  shall  be  paid  by  him  within  thirty  days  thereafter  to  the  treasurer  of  the 
proper  county,  and  the  said  treasurer  or  treasurers  shall  give  and  every  executor, 
administrator  or  trustee  shall  take  a  receipt  from  him  of  said  payments.  The 
words  "proper  county"  shall  be  taken  to  mean  the  county  in  which  the  property 
was  situated  and  subject  to  taxation  at  the  time  of  the  death  of  the  owner. 

S.  10713.  Refund  of  tax.  Whenever  debts  shall  be  proved  against  the  estate 
of  the  deceased  after  distribution  of  legacies  from  which  the  inheritance  tax 
had  been  deducted  in  compliance  with  this  act,  and  the  legatee  is  required  to 
refund  any  portion  of  the  legacy,  a  proportion  of  the  said  tax  shall  be  paid  to 
him  by  the  executor  or  administrator,  if  the  said  tax  has  not  been  paid  into  the 
county  treasury  or  by  the  county  treasurer  if  it  has  been  so  paid. 

S.  10715.  When  any  amount  of  the  said  tax  shall  have  been  paid  erroneously 
to  the  county  treasurer  it  shall  be  lawful  for  him,  on  satisfactory  proof  rendered 
to  him  of  said  erroneous  payment,  to  refund  and  pay  to  the  executor,  administra- 
tor or  trustee,  person  or  persons  who  have  paid  any  such  tax  in  error  the  amount 
of  such  tax  so  paid  provided  that  all  applications  for  the  repayment  of  the  said 
tax  shall  be  made  within  two  years  of  the  date  of  said  payment. 

Neb.  St.  1905,  c.  117,  approved  March  8,  1901,  amended  Neb.  St.  1901,  c.  54, 
(Cobbey's  Annotated  Statutes,  section  10724),  by  appropriating  the  inheritance 
tax  to  a  permanent  road  fund. 

AMENDMENTS  IN  1907. 

Neb.  St.  1907,  c.  103,  approved  April  6,  1907,  amends  Cobbey's  Annotated 
Statutes,  section  10706,  to  read  as  printed  post,  p.  712,  section  5176  of  the 
present  act. 

Neb.  St.  1907,  c.  104,  approved  March  18,  1907,  amends  Cobbey's  Annotated 
Statues,  sections  10724,  10716,  to  read  as  printed  post,  pp.  714,  716,  sections 
5186  and  5194  of  the  present  act. 


712  STATUTES  ANNOTATED.  Neb.  St. 

THE  PRESENT  ACT. 

Nebraska  Compiled  Statutes  1905. 

5176  S.  1.  Property  taxable.  —  Rate.  All  property,  real,  personal  and  mixed 
which  shall  pass  by  will  or  by  the  intestate  laws  of  this  state  from  any  person  who 
may  die  seized  or  possessed  of  the  same  while  a  resident  of  this  state,  or,  if  decedent 
was  not  a  resident  of  this  state  at  the  time  of  his  death,  which  property  or  any 
part  thereof  shall  be  within  this  state,  or  any  interest  therein  or  income  there- 
from, which  shall  be  transferred  by  deed,  grant,  sale  or  gift  made  in  contemplation 
of  the  death  of  the  grantor,  or  bargainor,  or  intended  to  take  effect,  in  possession 
or  enjoyment  after  such  death,  to  any  person  or  persons  or  to  any  body  politic  or 
corporate  in  trust  or  otherwise,  or  by  reason  thereof  any  person  or  body  corporate 
shall  become  beneficially  entitled  in  possession  or  expectation  to  any  property  or 
income  thereof,  shall  be  and  is  subject  to  a  tax,  at  the  rate  hereinafter  specified 
to  be  paid  to  the  treasurer  of  the  proper  county  for  the  use  of  the  state  and  all 
heirs,  legatees  and  devisees,  administrators,  executors  and  trustees  shall  be  liable 
for  any  and  all  such  taxes  until  the  same  shall  have  been  paid  as  hereinafter  di- 
rected. When  the  beneficial  interests  to  any  property  or  income  therefrom  shall 
pass  to  or  for  the  use  of  any  father,  mother,  husband,  wife,  child,  brother,  sister, 
wife  or  widow  of  the  son,  or  husband  of  the  daughter,  or  any  child  or  children 
adopted  as  such  in  conformity  with  the  laws  of  the  state  of  Nebraska,  or  to  any 
person  to  whom  the  deceased  for  not  less  than  ten  years  prior  to  death  stood  in 
the  acknowledged  relation  of  a  parent,  or  to  any  lineal  descendant  born  in  lawful 
wedlock  in  every  such  case  the  rate  of  tax  shall  be  one  dollar  on  every  one  hundred 
dollars  of  the  clear  market  value  of  such  property  received  by  each  person,  and 
at  the  same  rate  for  every  less  amount;  provided,  that  any  estate  which  may  be 
value^  at  a  less  sum  than  ten  thousand  dollars  shall  not  be  subject  to  any  such 
duty  or  the  taxes,  and  the  taxes  to  be  levied  in  the  above  case  only  upon  the  excess 
of  ten  thousand  dollars  received  by  each  person;  when  the  beneficial  interests  to 
any  property  or  income  therefrom  shall  pass  to  or  for  the  use  of  any  uncle,  aunt, 
niece,  nephew  or  other  lineal  descendant  of  the  same,  in  every  such  case  the  rate 
of  such  tax  shall  be  two  dollars  on  every  one  hundred  dollars  of  the  clear  market 
value  of  such  property  received  by  each  person  on  the  excess  of  two  thousand 
dollars  so  received  by  each  person;  In  all  other  cases  the  rate  shall  be  as  follows: 
On  each  and  every  hundred  dollars  of  the  clear  market  value  of  all  property  and 
at  the  same  rate  for  any  less  amount,  up  to  five  thousand  dollars,  two  dollars; 
on  all  estates  of  over  five  thousand  dollars  and  not  exceeding  ten  thousand  dollars, 
tjhree  dollars;  on  all  estates  of  over  ten  thousand  dollars  not  exceeding  twenty 
thousand  dollars,  four  dollars;  on  all  estates  of  over  twenty  thousand  dollars  and 
not  exceeding  fifty  thousand  dollars,  five  dollars;  and  on  all  estates  over  fifty 
thousand  dollars,  six  dollars;  provided  that  an  estate  in  the  above  case  which  may 
be  valued  at  a  sum  less  than  five  hundred  dollars  shall  not  be  subject  to  any 
duty  or  tax.    [1901,  c.  54.    Amended  1905,  H.  R.  90;   1907,  S.  F.  41.] 

[See  notes  to  the  Act  of  1905,  ante,  p.  710.] 

5177  S.  2.  Estates  for  life.  —  Remainder.  —  Tax  when  payable.  When 
any  person  shall  bequeath  or  devise  any  property  or  interest  therein  or  income 
therefrom  to  mother,  father,  husband,  wife,  brother,  or  sister,  the  widow  of  the 
son,  or  the  lineal  descendant,  during  the  life  or  for  a  term  of  years  with  remainder 
to  the  collateral  heir  of  the  decedent,  or  to  the  stranger  in  blood  or  to  a  body  cor- 


Comp.  1905.J  NEBRASKA.  713 

porate  at  their  decease  on  the  expiration  of  such  term,  the  said  life  estate  or  estates 
for  a  term  of  years  shall  be  subject  to  the  tax  prescribed  in  section  1,  and  the 
property  so  passing  shall  be  appraised  immediately  after  the  death  at  what  was 
the  fair  market  value  thereof  at  the  time  of  the  death  of  the  decedent  in  the 
manner  hereinafter  provided,  and  after  deducting  therefrom  the  value  of  said 
life  estate,  or  term  of  years,  the  tax  prescribed  by  this  act  on  the  remainder  shall 
be  immediately  due  and  payable  to  the  treasurer  of  the  proper  county,  the  interest 
thereon  shall  be  and  remain  a  lien  on  said  property  until  the  same  is  paid;  Pro- 
vided, that  the  person  or  persons  or  body  corporate  beneficially  interested  in 
the  property  chargeable  with  said  tax  elect  not  to  pay  the  same  until  they  have 
come  into  actual  possesssion  or  enjoyment  of  such,  in  that  case  such  person  or 
persons  or  body  corporate  shall  give  a  bond  to  the  state  of  Nebraska  in  a  penal 
sum  three  times  the  amount  of  the  tax  arising  upon  such  estate,  with  such  sureties 
as  the  county  judge  may  approve,  conditioned  for  the  payment  of  said  tax  at 
such  time  or  period  as  they  or  their  representatives  may  come  into  the  actual 
possession  or  enjoyment  of  said  property,  which  bond  shall  be  filed  in  the  office 
of  the  clerk  of  the  proper  county;  Provided,  further,  that  such  person  shall  make 
a  full  verified  return  of  said  property  to  said  county  judge,  and  file  the  same  in 
his  office  within  one  year  from  the  death  of  the  decedent,  and  within  that  period 
enter  into  such  securities  and  may  renew  the  same  for  five  years. 

5178  S.  3.  Taxes  when  payable.  —  Interest.  All  taxes  imposed  by  this 
act,  unless  otherwise  herein  provided  for,  shall  be  due  and  payable  at  the  death 
of  the  decedent,  and  interest  at  the  rate  of  seven  per  cent  per  annum  shall  be 
charged  and  collected  therefrom  for  such  time  as  such  taxes  are  not  paid;  Pro- 
vided, that  if  said  tax  is  paid  within  one  year  from  the  accruing  thereof, 
interest  shall  not  be  charged  or  collected  thereon,  and  in  all  cases  where  the 
executors  and  administrators  or  trustees  do  not  pay  such  tax  within  one  year  from 
the  death  of  the  decedent  they  shall  be  required  to  give  a  bond  in  the  form  and 
to  the  effect  prescribed  in  section  two  of  this  act,  for  the  payment  of  said  tax 
together  with  interest.     (As  amended  by  St.  1911,  c.  107.) 

5179  S.  4.  Executors,  administrators,  duties.  Any  administrator,  executor 
or  trustee  having  any  charge  or  trust  in  legacies  or  property  for  distribution 
subject  to  said  tax,  shall  deduct  the  tax  therefrom,  or  if  the  legacy  or  property 
be  not  money,  he  shall  collect  the  tax  thereon  upon  the  appraised  value  thereof 
from  the  legatee  or  person  entitled  to  such  property,  and  he  shall  not  deliver  or 
be  compelled  to  deliver  any  specific  legacy  or  property  subject  to  tax  to  any  person 
until  he  shall  have  collected  the  tax  thereon,  and  whenever  any  such  legacy  shall 
be  charged  upon  or  payable  out  of  real  estate,  the  heir  or  devisee  before  paying 
the  same  shall  deduct  such  tax  therefrom  and  pay  the  same  to  the  executor,  ad- 
ministrator or  trustee,  and  the  same  shall  remain  a  charge  upon  such  real  estate 
until  paid,  and  the  payment  thereof  shall  be  enforced  by  the  executor,  adminis- 
trator or  trustee  in  the  same  manner  that  the  said  payment  of  said  legacies  might 
be  enforced ;  if,  however,  such  legacy  be  given  in  money  to  any  person  for  a  limited 
period,  he  shall  retain  the  tax  upon  the  whole  amount,  but  if  it  be  not  in  money 
he  shall  make  application  to  the  court  having  jurisdiction  of  his  accounts  to  make 
apportionment  if  the  case  requires  it  of  the  sum  to  be  paid  into  his  hands 
by  such  legatees,  and  for  such  further  order  relative  thereto  as  the  case  may 
require. 


714  STATUTES  ANNOTATED.  [Neb.  St. 

5180  S.  5.  Same.  —  Sale  of  property.  All  executors,  administrators  and 
trustees  shall  have  full  power  to  sell  so  much  of  the  property  of  the  decedent  as 
will  enable  them  to  pay  said  tax,  in  the  same  manner  as  they  may  be  enabled  to 
do  by  law,  for  the  payment  of  debts  of  their  testators  and  intestates  and  the 
amount  of  said  tax  shall  be  paid  as  hereinafter  directed. 

5181  S.  6.  Same.  —  Payment  of  tax.  —  Voucher  on  settlement.  Every 
sum  of  money  retained  by  any  executor,  administrator  or  trustee  or  paid  into  his 
hands  for  any  tax  on  any  property,  shall  be  paid  by  him  within  thirty  days  there- 
after to  the  treasurer  of  the  proper  county,  and  the  said  treasurer  or  treasurers 
shall  give,  and  every  executor,  administrator  or  trustee  shall  take  a  receipt  from 
him  of  said  payments.  The  words  "proper  county"  shall  be  taken  to  mean  the 
county  in  which  the  property  was  situated  and  subject  to  taxation  at  the  time 
of  the  death  of  the  owner.    [Amended  1905,  H   R.  90-] 

5182  S.  7.  Trust  estates.  Whenever  any  of  the  real  estate  of  which  any  de- 
cedent may  die  seized  shall  pass  to  any  body  corporate  or  to  any  person  or  persons 
or  in  trust  for  them  or  some  of  them,  it  shall  be  the  duty  of  the  executor,  adminis- 
trator or  trustee  of  such  decedent  to  give  information  thereof,  in  writing,  to  the 
treasurer  of  the  county  where  said  real  estate  is  situated,  within  six  months  after 
they  undertake  the  execution  of  their  expected  duties,  or  if  the  facts  be  not  known 
within  that  period,  then  within  one  month  after  the  same  shall  have  come  to  their 
knowledge. 

5183  S.  8.  Debts.  —  Refunding  tax.  Whenever  debts  shall  be  proved  against 
the  estate  of  the  deceased  after  distribution  of  legacies  from  which  the  inheritance 
tax  had  been  deducted  in  compliance  with  this  act,  and  the  legatee  is  required 
to  refu^nd  any  portion  of  the  legacy,  a  proportion  of  the  said  tax  shall  be  paid 
to  him  by  the  executor  or  administrator;  if  the  said  tax  has  not  been  paid  into 
the  county  treasury  or  by  the  county  treasurer  if  it  has  been  so  paid.  [Amended 
1905,  H.  R.  90.] 

5184  S.  9.  Foreign  executor.  —  Transfer  of  stocks  or  loans.  Whenever 
any  foreign  executors  or  administrators  shall  assign  or  transfer  any  stocks  or 
loans  in  this  state  standing  in  the  name  of  the  decedent,  or  in  trust  for  a  decedent 
which  shall  be  liable  to  the  said  tax,  such  tax  shall  be  paid  to  the  treasury  or 
treasurer  of  the  proper  county  on  the  transfer  thereof;  otherwise  the  corporation 
making  such  transfer  shall  become  liable  to  pay  such  taxes,  provided  that  such 
corporation  has  knowledge  before  such  transfer  that  said  stocks  or  loans  are  liable 
for  such  taxes. 

5185  S.  10.  Erroneous  taxes.  —  Refunding.  When  any  amount  of  the  said 
tax  shall  have  been  paid  erroneously  to  the  county  treasurer  it  shall  be  lawful 
for  him,  on  satisfactory  proof  rendered  to  him  of  said  erroneous  payment,  to 
refund  and  pay  to  the  executor,  administrator  or  trustee,  person  or  persons  who 
have  paid  any  such  tax  in  error,  the  amount  of  such  tax  so  paid  provided  that  all 
applications  for  the  repayment  of  the  said  tax  shall  be  made  within  two  years 
of  the  date  of  said  payment.     [Amended  1905,  H.  R.  90.] 

5186  S.  11.    Appraisement.    In  order  to  fix  the  value  of  property  of  persons 
ate  shall  be  subject  to  the  payment  of  said  tax,  the  county  judge. 


whose  estate  shall  be  sul 


Comp.  1905.1  NEBRASKA.  715 

whenever  an  estate  appears  to  be  subject  to  the  tax  provided  by  this  act  or  upon 
the  application  of  any  interested  party,  shall  appoint  some  competent  person 
as  appraiser  as  often  as,  or  whenever  occasion  may  require,  whose  duty  it  shall  be 
forthwith  to  give  such  notice  by  mail  to  all  persons,  and  to  such  persons  as  the 
county  judge  may  by  order,  direct,  of  the  time  and  place  he  will  appraise  such 
property;  and  at  such  time  and  place  to  appraise  the  property  at  the  fair  market 
value,  of  the  same,  and  for  that  purpose  the  appraiser  is  authorized  by  leave 
of  the  county  judge  to  use  subpoenas  and  to  compel  the  attendance  of  witnesses 
before  him,  and  to  take  the  evidence  of  such  witnesses  under  oath  concerning 
guch  property,  and  the  value  thereof,  and  he  shall  make  a  report  thereof  ana  of 
such  value  in  writing  to  the  county  judge,  with  the  depositions  of  the  witnesses 
and  such  other  facts  relating  thereto,  as  the  county  judge  may  by  order  require 
to  be  filed  with  the  records  of  the  county  court,  and  from  this  report  the  county 
judge  shall  forthwith  determine  and  fix  the  then  cash  value  of  all  estates,  annuities 
and  life  estates  for  terms  of  years  growing  out  of  said  estates,  and  the  tax  to 
which  the  same  is  liable,  and  shall  give  immediate  notice  through  the  mails  to  all 
parties  known  to  be  interested  therein.  Any  person  or  persons  dissatisfied  with 
the  appraisement  or  assessment,  may  appeal  therefrom  to  the  county  court  of  the 
proper  county  within  sixty  days  after  the  making  and  filing  of  such  appraisement 
or  assessment,  conditioned  upon  the  giving  of  security  to  the  court  to  pay  all 
costs,  together  with  all  taxes  that  may  be  fixed  by  the  court.  The  said  appraisers 
shall  be  paid  by  the  county  treasurer  out  of  any  funds  he  may  have  in  his  hands 
on  account  of  said  tax,  on  the  certificate  of  the  county  judge  a  reasonable  fee  to 
be  fixed  by  the  county  judge  together  with  legal  mileage.  Witnesses  shall  be 
allowed  the  sum  of  $2.00  per  day  for  every  day's  attendance  before  the  appraisers 
or  county  court,  together  with  legal  mileage.  The  officer  serving  process  under  this 
act  shall  receive  the  same  fees  and  mileage  as  is  now  provided  by  law  for  similar 
services,  and  the  county  judge  for  services  performed  under  this  act  shall  receive 
the  same  fees  as  is  now  provided  by  law  for  similar  services.  All  costs  made  or 
incurred  under  this  act  shall  be  paid  by  the  county  treasurer  out  of  any  funds 
he  may  have  in  his  hands  on  account  of  said  tax,  on  certificate  of  the  county  judge. 
[Amended  March  18,  '07;  S.  F.  21,  s.  2.] 

5187  S.  12.  Appraiser.  —  Malfeasance.  Any  appraiser  appointed  under 
the  authority  and  by  virtue  of  this  act  who  shall  take  any  fee  or  reward  from  any 
executor,  administrator,  trustee,  legatee,  next  of  kin,  or  heir  of  any  decedent,  or 
from  any  person  or  corporation  liable  to  pay  said  tax  or  any  portion  thereof, 
shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  in  any  court  of  competent 
jurisdiction,  he  shall  be  fined  not  less  than  one  hundred  dollars  nor  more  than 
five  hundred  dollars,  and  in  addition  thereto  the  county  judge  shall  dismiss  him 
from  such  service. 

5188  S.  13.  Jurisdiction  over  questions.  The  county  court  in  the  county 
in  which  the  real  property  is  situated  of  a  decedent  who  was  not  a  resident  of  the 
state,  or  in  the  county  of  which  the  deceased  was  a  resident  at  the  time  of  his 
death,  shall  have  jurisdiction  to  hear  and  de^rmine  all  questions  in  relation  to  all 
taxes  arising  under  this  act,  and  the  county  court  first  acquiring  jurisdiction  here- 
under shall  retain  the  same  to  the  exclusion  of  every  other. 

5189  S.  14.  Taxes  not  paid.  —  Procedure.  If  it  shall  appear  to  the  county 
court  that  any  tax  accruing  under  this  act  has  not  been  paid  according  to  law, 


716  STATUTES  ANNOTATED.  [Neb.  St. 

it  shall  issue  a  summons  commanding  the  persons  or  corporation  liable  to  pay 
such  tax  or  interested  in  such  property  to  appear  before  the  court  on  a  certain 
day  not  more  than  three  months  after  the  date  of  such  summons,  to  show  cause 
why  such  tax  should  not  be  paid.  The  process,  practice  and  pleadings  and  the 
hearing  and  determination  thereof,  and  the  judgment  in  said  court  in  such  cases 
shall  be  the  same  as  those  now  provided  or  those  which  may  be  hereafter  provided 
in  probate  cases  in  the  county  courts  of  this  state  and  the  fees  and  costs  in  such 
cases  shall  be  the  same  as  in  probate  cases  in  the  county  courts  of  this  state. 

5190  S.  15.  Same.  Whenever  the  treasurer  of  any  county  shall  have  reason 
to  believe  that  any  tax  is  due  and  unpaid  under  this  act,  after  the  refusal  or  neglect 
of  the  person  interested  in  the  property  liable  to  pay  said  tax  to  pay  the  same,  he 
shall  notify  the  county  attorney  of  the  proper  county  in  writing  of  such  refusal 
to  pay  said  tax,  and  the  county  attorney  so  notified,  if  he  has  cause  to  believe  a 
tax  is  due  and  unpaid,  shall  prosecute  the  proceeding  in  the  county  court  in  the 
proper  county,  as  provided  in  section  fourteen  of  this  act,  for  the  enforcement 
and  collection  of  this  tax. 

5191  S.  16.  Same.  —  Report.  The  county  judge  and  county  clerk  of  each 
county  shall,  every  three  months,  make  a  statement  in  writing  to  the  county 
treasurer  of  the  county,  of  the  party  from  which  or  the  party  from  whom  they  have 
reason  to  believe  a  tax  under  this  act  is  due  and  unpaid. 

5192  S.  17.    Expenses.    [Repealed.    Laws  1905,  H.  R.  90.] 

5193  S.  18.  Records.  The  secretary  of  state  shall  furnish  to  each  county  judge 
a  book  m  which  he  shall  enter  the  returns  made  by  appraisers,  the  cash  value  of 
annuities,  life  estates  and  terms  of  years  and  other  property  fixed  by  him,  and  the 
tax  assessed  thereon  and  the  amounts  of  any  receipts  for  payments  thereof  filed 
with  him,  which  book  shall  be  kept  in  the  office  of  the  county  judge  as  public 
records. 

5194  S.  19.  Funds.  —  Road  improvements.  The  county  treasurer  of  each 
county  shall  keep  all  money  collected  under  the  provisions  of  this  act  in  a  separate 
and  special  fund  to  be  expended  under  the  direction  of  the  county  board  of  each 
county,  for  the  sole  purpose  of  the  permanent  improvement  of  the  county  roads; 
such  roads  shall  not  be  built  within  the  corporate  limits  of  any  city  or  village,  but 
shall  begin  at  the  limit  of  any  city  or  village  and  extending  therefrom,  in  the  direc- 
tion most  traveled  by  the  public;  to  be  determined  upon  by  the  said  county 
board.  Provided  that  such  improvements  may  be  made  from  the  limit  of  any 
city  of  the  metropolitan  or  first  class  and  through  a  city  of  the  second  class,  or 
village  where  the  road  so  determined  upon  to  be  improved  is  a  main  road  between 
the  country  and  such  city  of  the  metropolitan  or  first  class.  All  contracts  for 
such  permanent  improvements  shall  be  let  by  the  said  board,  by  competitive 
bids  after  the  plans  and  specifications  therefor  drawn  by  the  county  surveyor  or 
engineer  have  been  filed  with  the  county  clerk  of  each  respective  county.  All 
bids  for  the  construction  of  such  roads  shall  be  deposited  with  the  county  judge 
of  the  respective  counties  and  opened  by  him  in  the  presence  of  the  county 
commissioner  and  county  clerk,  and  then  filed  with  the  county  clerk.  All  such  . 
permanent  road  beds  shall  not  be  less  than  twelve  feet  nor  more  than  sixteen  feet  in 


Comp.  1905.1  NEBRASKA.  —  NEVADA.  717 

width,  and  shall  be  constructed  of  the  most  durable  and  approved  material,  and 
the  remaining  part  of  the  said  road  shall  be  constructed  at  one  side  of  the  said 
permanent  part,  and  be  used  as  dirt  road;  Provided  that  it  shall  be  lawful  for 
the  county  commissioners  of  any  county  having  a  population  of  not  more  than 
thirty  thousand  to  use  said  fund  in  the  manner  herein  provided  for  the  improve- 
ment of  any  grade,  bridge,  cut,  fill,  or  dirt  road  leading  into  any  city  or  village 
within  said  county.  Provided,  that  all  money  heretofore  paid  by  the  various 
county  treasurers  to  the  state  treasurer,  under  the  provisions  of  this  act  shall  be, 
upon  proper  vouchers  signed  by  the  county  judge  and  county  treasurer,  paid 
back  to  the  said  county  from  which  said  tax  was  received,  and  said  money  when 
so  refunded  by  the  state  treasurer  shall  be  placed  in  the  special  fund  heretofore 
mentioned  in  each  county  and  shall  be  expended  in  like  manner  and  for  like 
purposes  as  hereinabove  specified.  [Amended  1905,  H.  R.  90;  March  18,  1907; 
S.  F.  21,  s.  l.J 

5195  S.  20.  Receipts.  Any  person  or  body  corporate  shall,  upon  the  payment 
of  fifty  cents,  be  entitled  to  a  receipt  from  the  county  treasurer  of  any  county 
or  the  copy  of  the  receipt  at  his  option,  that  may  have  been  given  by  the  treasurer 
for  the  payment  of  any  tax  under  this  act,  which  receipt  shall  designate  on  what 
real  property,  if  any,  of  which  deceased  may  have  died  seized,  said  tax  has  been 
paid  and  by  whom  paid,  and  whether  or  not  it  is  in  full  of  said  tax,  and  said 
receipt  may  be  recorded  in  the  clerk's  office  of  said  county  in  which  the  property 
may  be  situated,  in  the  book  to  be  kept  by  said  clerk  for  such  purpose. 

5196  S.  21.  Lien.  The  lien  of  the  inheritance  tax  shall  continue  until  the  said 
tax  is  settled  and  satisfied :  Provided,  that  said  lien  shall  be  limited  to  the  property 
chargeable  therewith:  and  Provided  further,  that  all  inheritance  taxes  shall  be 
sued  for  within  five  years  after  they  are  due  and  legally  demandable,  otherwise 
they  shall  be  presumed  to  be  paid  and  cease  to  be  a  lien  as  against  any  purchaser 
of  real  estate. 


NEVADA, 


Constitutional  Limitations. 

Nevada  Constitution,  1864,  a.  10. 

S.  1.  The  legislature  shall  provide  by  law  for  a  uniform  and  equal  rate  of 
assessment  and  taxation,  and  shall  prescribe  such  regulations  as  shall  secure  a 
just  valuation  for  taxation  of  all  property,  real,  personal  and  possessory,  except- 
ing mines  and  mining  claims,  the  proceeds  of  which  alone  shall  be  taxed,  and  also 
excepting  such  property  as  may  be  exempted  by  law  for  municipal,  educational, 
literary,  scientific,  religious  or  charitable  purposes. 

There  is  no  inheritance  tax  at  present  in  Nevada. 


718  STATUTES  ANNOTAfED.  [N.  H.  Const. 


NEW  HAMPSHIRE, 


New  Hampshire's  first  inheritance  tax,  one  per  cent  on  collateral 
inheritances,  enacted  in  1878,  was  held  unconstitutional  in  1882. 
An  amendment  to  the  constitution  in  1903  paved  the  way  for  the 
present  collateral  inheritance  tax  enacted  in  1905.  The  tax  is  on 
collateral  inheritances  only,  the  rate  is  uniformly  5  per  cent,  and 
no  amount  is  exempt.  No  tax  is  levied  on  an  inheritance  to  father, 
mother,  husband,  wife,  lineal  descendant,  brother,  sister,  adopted 
child,  lineal  descendant  of  adopted  child,  wife  or  widow  of  son, 
husband  of  daughter. 

New  Hampshire  taxes  stock  in  a  New  Hampshire  corporation 
owned  by  a  non-resident  and,  moreover,  taxes  registered  bonds 
of  a  New  Hampshire  corporation  owned  by  a  non-resident  though 
kept  outside  the  state.  Corporations  and  individuals  transferring 
or  delivering  securities  or  other  assets  of  non-residents  are  made 
responsible  for  the  tax.  Railroad,  telegraph  or  telephone  stock 
where  the  company  is  organized  in  more  than  one  state  is  taxed 
Only  on  the  proportion  of  the  line  within  New  Hampshire. 

It  is  the  practice  to  require  a  complete  inventory  of  a  non-resi- 
dent's estate. 

New  Hampshire  is  the  only  New  England  state  that  has  no 
provision  whatever  for  preventing  or  reducing  double    taxation. 

Constitutional  Limitations. 
New  Hampshire  Constitution,  1783,  Bill  of  Rights,  a.   12. 

Every  member  of  the  community  has  a  right  to  be  protected  by  it  in 
the  enjoyment  of  his  life,  liberty  and  property.  He  is,  therefore,  bound  to 
contribute  his  share  in  the  expense  of  said  protection,  and  to  yield  his  personal 
service,  when  necessary,  or  an  equivalent.  But  no  part  of  a  man's  property 
shall  be  taken  from  him  or  applied  to  public  uses  without  his  own  consent  or  that 
of  the  representative  body  of  the  people.  Nor  are  the  inhabitants  of  this  state 
controllable  by  any  other  laws  than  those  to  which  they  or  their  representative 
body  have  given  their  consent. 

New  Hampshire  Constitution,  1792,  pt.  2,  a.  5. 

.  .  .  And  further  full  power  and  authority  are  hereby  giv.en  and  granted  to 
the  said  general  court  ...  to  impose  and  levy  proportional  and  reasonable 
assessments,  rates  and  taxes  upon  all  the  inhabitants  of,  and  residents  within 
the  said  state;  and  upon  all  estates  within  the  same;   to  be  issued  and  disposed 


1903,  a.  6.]  NEW  HAMPSHIRE.  719 

of  by  warrant  under  the  hand  of  the  governor  of  this  state  for  the  time  being,  with 
the  advice  and  consent  of  the  council,  for  the  public  service,  in  the  necessary  de- 
fence and  support  of  the  government  of  this  state,  and  the  protection  and  preserva- 
tion of  the  subjects  thereof,  according  to  such  acts  as  are  or  shall  be  in  force  within 
the  same. 

New  Hampshire  Constitution,  1903,  a.  6. 

The  public  charges  of  government  or  any  part  thereof  may  be  raised  by  taxation 
upon  polls,  estates  and  other  classes  of  property,  including  franchises  and  prop- 
erty when  passing  by  will  or  inheritance. 

Progressive  Tax.  The  supreme  court  was  asked  its  opinion 
as  to  the  validity  of  the  progressive  tax  and  replied  that  the  question 
is  new  in  New  Hampshire;  and  on  the  question  whether  in  view 
of  the  constitution  as  it  was  construed  and  understood  prior  to 
1903,  it  was  intended  by  the  amendment  then  made  to  authorize 
a  progressive  tax,  the  court  is  divided  in  opinion  and  therefore 
declines  to  express  any  opinion  whatever.  In  re  Opinion  of  Justices 
(N.  H.  1911),  79  A.  490. 

Classification  by  Relationship  Upheld,  The  court  in  answer  to 
a  request  for  an  opinion  sees  no  objection  to  an  assessment  of 
different  rates  upon  classes  standing  in  different  relation  to  the 
original  owner  of  the  property;  that  the  tax  may  be  assessed  at  a 
different  rate  upon  property  passing  to  direct  heirs  and  to  collateral, 
and  a  distinction  may  be  made  between  relatives  more  or  less 
remote  in  the  direct  line.  In  re  Opinion  of  Justices  (N.  H.  1911), 
79  A.  490. . 

Tax  need  not  be  Proportional.  The  court  holds  that  the  intention 
and  effect  of  the  amendment  of  1903  to  the  constitution  of  New 
Hampshire  was  to  provide  in  addition  to  taxation  as  hereto  defined 
a  different  method  of  meeting  public  charges  by  an  inheritance  tax. 
As  an  inheritance  tax  is  necessarily  disproportional  and  is  unequal 
in  its  lack  of  proportion,  and  it  is  impossible  to  lay  a  proportional 
tax  upon  property  upon  the  occasion  of  death,  it  cannot  have  been 
understood  that  such  impossibility  would  defeat  the  express  power 
to  lay  such  a  tax,  but  it  must  follow  that  the  express  authority 
to  impose  such  a  tax  is  an  authority  to  disregard  the  general  rule 
of  proportion  so  far  as  is  necessary  to  exercise  the  power.  For 
instance,  poll  taxes  are  recognized  by  the  constitution,  but  they  are 
not  proportional,  they  are  constitutional  acts  recognized  by  the 
constitution  and  have  never  been  understood  to  have  been  rendered 
unconstitutional  by  lack  of  proportion  or  inability  to  pay,    Thomp- 


720 


STATUTES  ANNOTATED. 


[N.  H.  St- 


son  V.  Kidder,  74  N.  H.  89,  96,  65  A.  392.  The  constitution  as  it 
was  before  the  amendment  of  1903  provided  that  every  inhabitant 
is  bound  to  contribute  only  his  share,  which,  according  to  the 
uniform  decisions  of  the  New  Hampshire  court  for  more  than  half  a 
century,  cannot  be  more  than  his  proportional  share  of  the  common 
burden.     Curry  v.  Spencer,  61  N.  H.  624,  630,  60  Am.  St.  Rep.  337. 

List  of  Statutes. 


1878. 

Statutes  of  New  Hampshire,  c.  74. 

1878. 

General  Laws,  c. 

64,  p.  163. 

1883. 

Statutes  of  New  Hampshire,  c.  50. 

1883. 

I             a       a 

c.  75. 

1905. 

'              "        " 

c.  40,    p.  432,  ss.  1  to  23. 

1907. 

i              a       a 

c.  64,    p.  63. 

1907. 

<              n       a 

c.  68,    p.  66. 

1907. 

I                It         n 

c.  69,    p.  71. 

1907. 

<                    <<           <4 

c.  82,    p.  85. 

1907. 

<                   H          U 

c.  86,    p.  89. 

1907. 

'                   <4           « 

c.  138,  p.  136. 

1909. 
1911. 

<                   <<          « 

c.  104,  p.  444. 
c.  42,    p.  44. 

History. 

The  New  Hampshire  constitution  of  1783  and  its  antecedents 
and  the  history  of  legislation  in  New  Hampshire  are  discussed  in 
Thompson  v.  Kidder,  74  N.  H.  89,  94,  65  A.  392. 


THE  UNCONSTITUTIONAL  STATUTE  OF  1878. 

N.  H.  St.  1878,  c.  74.    Approved  August  17,  1878. 

S.  1.  All  estates  settled  in  the  probate  courts  of  this  state,  and  all  transfers 
of  property  from  the  dead  to  the  living,  by  gift,  bequest  or  devise,  and  every 
succession  made  under  the  laws  of  this  state,  regulating  the  distribution  of  in- 
testate estates,  exclusive  of  the  just  indebtedness  of  each  and  all  of  said  estates, 
shall  pay  one  per  cent  on  the  value  of  said  estates,  to  be  deducted  from  each  gift, 
bequest  or  distributive  share,  by  the  administrator  or  executor,  so  that  each 
gift,  bequest  or  distributive  share  shall  pay  its  proportional  rate;  provided,  that 
all  legacies  or  property  passing  by  will  or  by  the  laws  of  this  state  to  husband  or 
wife,  children  and  grandchildren  of  the  person  who  died  possessed  as  aforesaid, 
shall  be  exempt  from  tax  or  duty;  provided,  further,  that  any  legacy  or  share  of 
personal  property,  or  any  devise  or  share  of  real  estate,  passing  as  aforesaid, 
to  a  minor  child  of  the  person  who  died  possessed  as  aforesaid,  shall  be  exempt 
from  taxation  under  this  section,  unless  such  legacy  or  share  of  personal  estate, 
and  devise  or  share  of  the  real  estate,  shall  exceed  the  sum  of  one  thousand 
dollars,  in  which  case  the  excess  only  above  that  sum  shall  be  liable  to  such 


1878,  c.  74.]  NEW  HAMPSHIRE.  721 

taxation;  provided,  further,  that  the  aggregate  of  such  legacy  or  share  of  the 
personal  estate,  and  devise  and  share  of  the  real  estate,  shall  not  exceed  the 
sum  of  one  thousand  dollars  to  such  minor  child. 

Power  to  Tax.  —  Nature  of  Right  of  Succession. 

"It  is  not  to  be  questioned  that  the  power  to  tax  is  vested  in  the 
legislature;  that  it  is  unrestricted,  except  when  it  is  opposed  to 
some  provision  of  the  federal  or  state  constitution;  and  that  it 
extends  'to  every  trade  or  occupation,  to  every  object  of  industry, 
use  or  enjoyment,  and  to  every  species  of  possession.'  Nor  is  it 
to  be  questioned  that  the  subject  of  taxation  in  the  present  case  is 
one  within  legislative  control,  because  inheritances,  distributive 
shares,  and  legacies  are  but  creatures  of  the  law;  in  fact,  the  only 
right  to  take  or  dispose  of  property  by  descent  or  devise  is  derived 
from  the  sovereign  power  of  the  state  through  its  laws.  Wills, 
therefore,  and  testaments,  rights  of  inheritance  and  successions, 
are  all  of  them  creatures  of  the  civil  or  municipal  laws,  and  accordingly 
are  in  all  respects  regulated  by  them.  2  Blk.  Com.  12."  Per 
Blodgett,  J.,  in  Curry  v.  Spencer,  61  N.  H.  624,  630,  60  Am.  St.  Rep. 
337. 

Object  of  Statute  is  Immaterial. 

The  fact  that  its  object  was  *'to  defray  the  cost  of  probate  courts" 
is  not  entitled  to  any  weight,  because  the  constitutional  rule  of 
equality  cannot  be  limited  or  qualified  by  any  consideration  of 
expediency  or  convenience.  The  purj^ose  of  the  act  cannot  change 
its  character  in  this  respect.  Curry  v.  Spencer ,  61  N.  H.  624,  631, 
60  Am.  St.  Rep.  337. 

Tax  not  Proportional  and  hence  Void. 

"Immunity  from  disproportional  taxation  being  expressly 
reserved  in  our  bill  of  rights,  and  the  power  of  proportional  taxation 
only  being  granted  the  legislature  by  the  constitution,  we  are 
unaware  of  any  ground  upon  which  the  statute  under  consideration 
(Gen.  Laws,  c.  64)  can  be  upheld ;  for  if  it  is  to  be  regarded  as  a 
tax  on  property,  it  is  open  to  the  objection  of  unequal  and  double 
taxation,  and  if  it  is  to  be  regarded  as  a  tax  on  a  civil  right  or  privilege 
it  is  discriminating  and  disproportional.  See  State  v.  United  States 
&  Can.  Express  Co.,  60  N.  H.  219."  Per  Blodgett,  J.,  in  Curry  v. 
Spencer,  61  N.  H.  624,  631,  60  Am.  St.  Rep.  337.  The  legislature 
"cannot  lawfully  make  discriminations  and  cast  a  burden  upon  one 
class  of  beneficiaries  and  exempt  all  other  classes  from  its  operation; 


722  STATUTES  ANNOTATED.  [N.  H.  St. 

and  it  cannot,  therefore,  for  purposes  of  taxation  exempt  legacies 
and  successions  to  lineal  descendants  and  include  only  those  to 
collaterals  and  others  than  those  specified.  Such  a  tax  is  founded 
upon  pure  inequality,  and  "is  simply  extortion  in  the  name  of 
taxation;  and  it  can  therefore  never  be  sustained  in  this  jurisdiction 
so  long  as  equality  and  justice  continue  to  be  the  basis  of  constitu- 
tional taxation." 

The  court  distinguishes  Eyre  v.  Jacob,  14  Gratt.  (Va.)  422,  and 
Tyson  v.  State,  28  Md.  577,  on  the  ground  that  in  neither  of  the  states 
affected  was  the  constitutional  restriction  on  taxes  the  same  as  in 
New  Hampshire.  Curry  v.  Spencer,  61  N.  H.  624,  631,  60  Am.  St. 
Rep.  337. 

[A  comparison  of  the  constitutions  of  Maryland  and  Virginia, 
however,  fails  to  reveal  any  basis  for  this  distinction.  This  case 
would  seem  now  to  be  generally  discredited.  The  court  in 
Thompson  v.  Kidder,  74  N.  H.  89,  97,  65  A.  392,  explains  this  de- 
cision as  proceeding  on  the  theory  that  the  privileges  of  the  probate 
court  were  in  question. — Ed.  ] 

N.  H.  St.  1878,  ss.  2  to  24  cover,  the  assessment,  collection  and  payment  of 
the  tax. 

N.  H.  St.  1883,  c.  50,  repealed  General  Laws,  c.  64  (the  inheritance  tax), 
approved  August  23,  1883. 

N.  H.  St.  1883,  c.  75,  provided  for  the  refunding  of  taxes  paid  under  the  un- 
constitutional statute  of  1878. 

THE  CONSTITUTIONAL  AMENDMENT  OF  1903. 

[See  ante,  p.  719.] 

THE  VALID  STATUTE  OF  1905. 
Adopted  from  Massachusetts. 

Section  1  of  this  statute  is  almost  a  literal  copy  of  the  Massa- 
chusetts Revised  Laws,  c.  15,  s.  1,  and  the  other  sections  of  the  act 
are  substantially  the  same  as  the  corresponding  sections  of  the 
Massachusetts  act.  Therefore,  existing  decisions  construing  the 
Massachusetts  act  are  adopted  by  the  New  Hampshire  legislature. 
Mann  v.  Carter,  74  N.  H.  345,  347,  68  N.  E.  130. 

N.  H.  St.  1905,  c.  40.     Approved  March  8,  1905. 

S.  1.  All  property  within  the  jurisdiction  of  the  state,  real  or  personal,  and 
any  interest  therein,  whether  belonging  to  inhabitants  of  the  state  or  not,  which 
shall  pass  by  will,  or  by  the  laws  regulating  intestate  succession,  or  by  deed, 


1905,  c.  40.]  NEW  HAMPSHIRE.  723 

grant,  sale  or  gift,  made  or  intended  to  take  effect  in  possession  or  enjoyment 
after  the  death  of  the  grantor,  to  any  person,  absolutely  or  in  trust,  except  to 
or  for  the  use  of  the  father,  mother,  husband,  wife,  lineal  descendant,  brother, 
sister,  adopted  child,  the  lineal  descendant  of  any  adopted  child,  the  wife  or  widow 
of  a  son,  or  the  husband  of  a  daughter,  of  a  decedent,  or  to  or  for  the  use  of  chari- 
table, educational  or  religious  societies  or  institutions  in  this  state,  the  property 
of  which  is  by  law  exempt  from  taxation,  or  to  a  city  or  town  in  this  state  for 
public  purposes,  shall  be  subject  to  a  tax  of  five  per  cent  of  its  value,  for  the  use 
of  the  state;  and  administrators,  executors  and  trustees,  and  any  such  grantees 
under  a  conveyance  made  during  the  grantor's  life,  shall  be  liable  for  such  taxes, 
with  interest,  until  the  same  have  been  paid. 

Validity. 

This  statute  is  constitutional.  The  court  distinguishes  Curry  v. 
Spencer,  61  N.  H.  624,  as  there  the  right  then  in  question  was  the 
right  to  the  privileges  of  the  probate  court  for  the  purposes  of 
administration;  and  if  one  estate  was  entitled  to  be  there  settled 
without  payment  of  fee  all  were.  The  right  under  the  N.  H.  St. 
1905,  however,  is  a  right  to  the  passing  of  property,  and  the  court 
says  that  there  are  good  reasons  why  the  passing  of  property  to  near 
relatives  or  the  gift  of  it  to  charitable  purposes  or  directly  to  the 
public  should  not  be  subject  to  an  exaction  by  the  state.  Reasonable 
exemptions  of  property  have  not  been  considered  to  affect  the 
validity  of  the  tax  upon  other  property,  and  the  exemptions  in  this 
statute  do  not  render  assessment  unreasonable.  Thompson  v. 
Kidder,  74  N.  H.  89,  97,  65  A.  392. 

C},  notes  to  the  constitutional  amendment  of  1903,  ante  p.  719. 

"Within  the  Jurisdiction  of  the  State." 
Corporations  Organized  in  More  than  one  State. 

The  Boston  and  Maine  Railroad  is  incorporated  under  that  name 
in  Maine,  New  Hampshire  and  Massachusetts,  and  has  but  a  single 
issue  of  stock.  It  owns  franchises  and  property  in  all  three  states 
which  make  up  the  market  value  of  all  of  its  stock. 

It  was  contended  that  only  such  proportional  part  of  the  market 
value  of  the  stock  should  be  taxed  in  New  Hampshire  as  the  value 
of  the  franchises  and  property  of  the  corporation  here  situated 
bears  to  the  total  value  of  its  franchises  and  property  wherever 
situated.  The  court  relies  upon  Kingsbury  v.  Chapin,  196  Mass. 
533,  82  N.  E.  700,  and  In  re  Cooley,  186  N,  Y.  220,  78  N.  E.  939, 
and  decides  that  a  due  regard  for  the  language  of  the  statute  as  well 
as  justice  to  the  tax  payer  calls  for  such  a  construction  of  the  law. 

"Under  N.  H.  St.  1905,  c.  40,  s.  1,  the  statute  would  seem  to  be 


724  STATUTES  ANNOTATED.  [N.  H.  St. 

limited  in  its  operation  to  such  property  as  is  located  in  the  state 
or  such  as  by  reason  of  the  domicile  of  the  owner  has  its  legal  situs 
here  and  requires  the  aid  of  our  laws  for  its  transmission. 

"The  Boston  and  Maine  Railroad  is  a  domestic  corporation  in 
each  of  the  states  in  which  it  is  incorporated ;  and  while  the  estate 
of  a  deceased  non-resident  stockholder  requires  the  aid  of  the 
probate  laws  of  this  state  to  effectuate  a  transmission  of  the  stock- 
holder's right  in  the  property  of  the  local  corporation,  their  aid  is 
not  required  to  effectuate  the  transmission  of  his  right  to  property 
of  the  corporation  in  other  states  in  which  it  is  also  chartered ;  and 
the  value  of  the  property  requiring  the  aid  of  our  laws  for  its 
transmission  must,  in  such  case  at  least,  be  taken  as  the  measure 
of  the  tax  called  for  by  our  statute. 

"It  may  be  difficult  to  ascertain  the  exact  value  of  the  plaintiff's 
right  in  the  property  of  the  local  corporation;  but  if  the  tax  is 
assessed  upon  such  a  percentage  of  the  value  of  the  stock  as  the 
amount  of  trackage  within  the  state  bears  to  the  total  trackage  in 
the  several  states  of  its  incorporation,  the  practical  difficulty  may 
be  obviated;  and  it  does  not  appear  that  the  requirements  of  the 
statute  would  not  be  met."  Per  Brigham,  J.,  in  Gardiner  v.  Carter, 
74  N.  H.  507,  510,  69  A.  939.  (This  result  is  embodied  in  the 
present  act,  section  1  — Ed.) 

Situs  of  Interest  in  Savings  Banks  Deposits. 

Where  the  testator  was  domiciled  in  New  Hampshire  and  had 
deposits  in  savings  banks  in  Massachusetts,  she  had  a  direct 
interest  in  the  property  as  well  as  in  the  management  of  the  bank, 
and  her  position  was  in  many  respects  analogous  to  that  of  a 
stockholder  in  a  business  corporation.  She  was  in  fact  one  of  the 
owners  of  the  property  in  the  possession  of  the  incorporated  partner- 
ships, and  therefore,  following  Frothingham  v.  ShaWy  175  Mass.  59, 
65  N.  E.  523,  this  interest  is  subject  to  tax  under  the  inheritance 
tax  of  New  Hampshire.  This  is  property  which  follows  the  person 
of  the  owner  and  for  many  purposes  it  has  situs  here.  Mann  v. 
Carter,  74  N.  H.  345,  68  A.  130. 

Foreign  Executor  should  take  out  Ancillary  Administration. 

Since  the  enactment  of  N.  H.  St.  1905,  c.  40,  a  foreign  executor 
or  administrator  where  any  part  of  his  testator's  or  intestate's 
property  within  the  jurisdiction  of  the  state  is  subject  to  a  tax 
must  take  out  ancillary  administration,  and  an  inventory  should  be 
filed  as  required  by  chapter  40,  section  9;   and  these  steps  should 


1905,  c.  40.]  NEW  HAMPSHIRE.  725 

be  taken  before  application  is  made  to  the  probate  court  under  the 
statute  of  1905,  chapter  40,  section  14.  Petitions  under  pubHc 
statutes,  chapter  189,  section  123,  can  no  longer  be  maintained  if  any 
part  of  the  property  of  the  deceased  within  the  jurisdiction  of  the 
state  is  subject  to  a  tax  under  statute  1905,  chapter  40.  Gardiner 
V.  Carter,  74  N.  H.  507,  510,  69  A.  939. 

Double  Taxation  Upheld. 

Where  the  testator  died  living  in  New  Hampshire  and  having 
savings  banks  deposits  in  Massachusetts  these  deposits  are  subject 
to  tax  in  New  Hampshire  although  they  were  also  subject  to  tax 
in  Massachusetts.  The  court  relies  upon  Blackstone  v.  Miller,  188 
Mass.  189,  206,  207,  and  says  that  "the  fact  that  the  property  may 
be  subject  to  a  similar  burden  in  another  state  does  not  deprive 
this  state  of  its  power  to  impose  the  tax  here  upon  the  property 
which  passes  by  inheritance  or  by  will  under  our  laws."  The  court 
goes  on  to  say  that  this  is  not  double  taxation,  as  the  two  burdens 
are  created  by  two  different  independent  states  for  wholly  different 
local  purposes.    Man.vw.  Carter,  74  N.  H.  345,  68  A.  130. 

Upon  the  question  of  double  taxation  the  court  relies  on  the 
following  cases:  — 

Hartman  Case,  70  N.  J.  Eq.  664,  667;  Hopkins  Appeal,  77  Conn. 
644;  Bridgeport  Trust  Co.,  77  Conn.  657;  Matter  of  Swift,  137  N.  Y. 
77,  18  L.  R.  A.  709;  Matter  of  Houdayer,  150  N.  Y.  37,  34  L.  R.  A. 
235,  55  Am.  St.  Rep.  642;  State  v.  Dalrymple,  70  Md.  294,  3  L.  R. 
A.  372;  Eidman  v.  Martinez,  184  U.  S.  578,  581;  Dos  Passos  Inher. 
Taxes,  29;  Dicey  Conf.  Laws,  682,  et  seq.  But  see  In  re  Joyslin, 
76  Vt.  88. 

"Charitable,  Educational  or  Religious  Societies.'* 

Congregational  and  Baptist  churches  are  religious  societies  and 
public  charitable  associations  or  societies  within  the  meaning  of 
the  act  of  1895,  c.  66.  Carter  v.  Eaton,  75  N.  H.  560,  78  Alt.  643. 
Societies  connected  with  the  Methodist  church  for  religious, 
educational  and  philanthropic  purposes  are  therefore  charitable, 
and  the  fact  that  they  may  more  directly  benefit  their  members 
than  those  who  are  not  members  does  not  deprive  them  of  their 
public  character.  They  are  therefore  exempt  from  taxation  under 
the  act  of  1905.     Carter  v.  Whitcomb,  74  N.  H.  482,  69  A.  779. 

The  Home  Missionary  Society  was  not  entitled  to  an  exemption 
as  it  devoted  substantially  all  its  funds  to  the  support  of  charities 
outside  of  New  Hampshire.     The  question  was  whether  its  charity 


726  STATUTES  ANNOTATED.  [N.  H.  St. 

was  of  such  a  character  and  so  administered  as  to  be  of  any  sub- 
stantial benefit  or  advantage  to  the  people  of  New  Hampshire, 
and  this  was  a  question  of  fact  to  be  determined  upon  competent 
evidence.     Carter  v.  Whitcomb,  74  N.  H.  482,  491,  69  A.  779. 

The  Home  for  Aged  Women  is  a  charitable  corporation  although 
its  beneficiaries  are  required  to  turn  over  to  the  institution  what 
property  they  possess,  and  they  are  required  to  pay  an  established 
fee  upon  their  admission.  Carter  v.  Whitcomb,  74  N.  H.  482,  488, 
69  A.  779. 

A  legacy  to  the  New  Hampshire  Baptist  convention  was  not 
subject  to  the  inheritance  tax.  The  convention  is  authorized  by 
its  charter  to  receive  and  hold  donations  and  use  the  same  for 
"the  purpose  of  promoting  foreign  and  domestic  missions  and  the 
education  of  indigent  and  pious  young  men  for  the  gospel  ministry 
and  any  other  religious  charities  which  they  may  deem  proper." 
The  convention  had  always  confined  its  work  to  this  state,  and 
purposes  to  ask  the  legislature  to  amend  its  charter  so  as  to  prevent 
its  use  of  funds  outside  the  state.  In  view  of  these  facts  it  seems 
clear  that  the  charity  is  of  substantial  benefit  to  the  people  of 
New  Hampshire  and  is  therefore  exempt  from  taxation.  Carter 
v.  Story,  (N.  H.  1911,)  78  A.  1072. 

The  Woman's  Foreign  Missionary  Society,  the  principal  object 
of  which  is  the  "evangelization  of  heathen  women,"  is  not  a  public 
charity,  even  though  there  may  be  heathen  women  in  New  Hamp- 
shire, as  it  was  found  that  none  of  the  funds  of  the  society  could  be 
used  within  the  state  of  New  Hampshire.  "The  expenditure  of 
large  sums  of  money  for  the  enlightenment  upon  religious  subjects 
of  the  natives  of  the  antipodes  evidently  was  not  one  of  the  objects 
the  legislature  intended  to  encourage,  when  in  1895  the  property 
of  charitable  associations  *devoted  exclusively  to  the  uses  and 
purposes  of  public  charity'  was  exempted  from  taxation,  or  when 
in  1905  legacies  to  such  associations  'in  the  state'  were  exempted 
from  the  inheritance  tax."  Per  Walker,  j.,  in  Carter  v.  Whitcomb, 
74  N.  H.  482,  489,  69  A.  779. 

The  Woman's  Relief  Corps  is  a  public  charity  exempt  from  the 
inheritance  tax  although  its  benefits  are  bestowed  only  upon  those 
who  have  been  soldiers  or  upon  their  families  to  the  exclusion  of 
all  others.     Carter  v.  Whitcomb,  74  N.  H.  482,  489,  69  A.  779. 

The  Young  Women's  Christian  Association,  which  holds  gospel 
services,  teaches  English  to  foreigners  and  furnishes  food  and 
lodging  for  women  passing  through  the  city,  for  which  compensa- 


1905,  c.  40.]  NEW  HAMPSHIRE  727 

tion  is  received  from  those  who  are  able  to  pay,  is  religious  and 
charitable  in  its  general  object,  and  is  therefore  entitled  to  exemp- 
tion from  the  inheritance  tax.  So  the  Woman's  Auxiliary  of  the 
Young  Men's  Christian  Association  is  also  charitable  and  exempt 
from  the  inheritance  tax.  Carter  v.  Whitcomb,  74  N.  H.  482,  488, 
69  A.  779. 

Legacy  to  Church  as  Trustee.  A  legacy  was  made  to  a  Baptist 
church  of  three  thousand  dollars,  the  income  of  which  is  to  be 
used  for  the  benefit  of  the  church.  The  court  holds  that  as  the 
church  holds  the  principal  fund  as  trustee  and  can  only  use  the 
income,  and  since  the  income  can  only  be  used  for  church  purposes, 
it  follows  that  the  legacy  is  not  subject  to  the  inheritance  tax. 
Carter  v.  Story,  (N.  H.  1911,)  78  A.  1072  (citing  Carter  v.  Eaton, 
75  N.  H.  560,  78  A.  643). 

Use  Determines  Exemption.  Under  the  New  Hampshire  statute 
of  1905,  as  amended  in  1907,  if  the  gift  is  absolute  it  is  the  use 
made  of  the  property  or  fund  constituting  the  gift  that  determines 
the  exemption,  but  if  it  is  in  trust  it  is  the  use  made  of  the  income 
or  beneficial  interest  that  governs,  for  in  such  case  it  is  that  property 
or  interest  alone  which  comes  into  the  hands  of  the  donee  for  use. 
And  so  where  bonds  are  given  to  churches  as  trustees  the  question 
is  not  whether  the  bonds  should  be  exempt  from  tax,  but  whether 
their  income  in  the  hands  of  the  beneficiaries  should  be  exempt. 
Carter  v.  Eaton,  75  N.  H.  560,  78  A.  643. 

'The  property  of  which  is  by  law  exempt  from  taxation"  does 
not  require  that  the  exemption  shall  only  apply  when  the  asso- 
ciation Holds  all  its  property  free  from  yearly  taxation.  The 
sole  test  suggested  by  the  ...  statute  .  .  .  is  to  ascertain  whether 
the  legatee  is  a  charitable,  educational  or  religious  society  whose 
property  when  used  exclusively  in  carrying  out  the  purposes  of  the 
association  is  exempt  from  taxation.  It  is  the  character  of  the 
institution  and  the  purposes  it  was  organized  to  accomplish  and  its 
liability  or  non-liability  to  taxation  for  property  devoted  to  those 
purposes  that  determine  whether  it  falls  within  or  without  the 
exception  provided  in  the  inheritance  tax  law."  Carter  v.  Whit- 
comb, 74  N.  H.  482,  485,  69  A.  779. 

Whether  inheritance  taxes  are  a  charge  against  the  estate  or  are  to 
be  deducted  from  the  several  legacies  is  a  question  of  the  testator's 
intention.  Where  the  will  directs  the  executors  to  pay  taxes  that 
may  become  due  upon  any  legacies  ''given  by  this  will  to  individ- 
uals," this  language  has  no  reference  to  legacies  given  to  indi- 


728  STATUTES  ANNOTATED.  [N.  H.  St. 

viduals  in  trust  for  establishing  a  charity.  Kingsbury  v.  Bazeley, 
75  N.  H.  13,  70  A.  916. 

The  question  whether  foreign  legacy  taxes  paid  are  to  he  deducted 
or  whether  they  are  an  expense  of  administration  which  should  be 
paid  out  of  the  estate,  leaving  the  legacy  payable  in  full,  is  a 
question  of  intention.  Where  a  testator  makes  no  provision  for 
the  payment  of  such  taxes  from  his  estate,  he  must  have  intended 
the  actual  benefit  to  be  received  by  the  subject  of  his  bounty  to 
be  as  much  less  than  a  sum  named  in  his  will  as  he  is  presumed 
to  have  known  the  state  would  take  for  itself  in  transmitting 
property.  In  a  gift  of  specific  personal  property  located  in  a 
foreign  state  the  amount  demanded  by  such  state  as  the  price  of 
transfer  of  title  would  naturally  be  a  charge  against  the  subject  of 
the  legacy,  not  because  of  the  testator's  presumed  familiarity  with 
the  law  of  the  jurisdiction,  but  because  under  that  law  he  has 
not  the  power  to  transfer  by  will  the  entire  title. 

In  a  gift  of  a  pecuniary  legacy  of  a  certain  amount,  the  apparent 
intention  is  to  benefit  the  legatee  to  the  full  amount  named.  If 
such  will  is  to  be  administered  by  the  law  of  the  jurisdiction  im- 
posing no  inheritance  tax,  or  none  upon  the  class  to  which  the 
legatee  belongs,  the  purpose  to  transmit  the  full  amount  to  such 
legatee  ^would  seem  secure.  The  conclusion  that  a  less  sum  was 
intended  because  at  the  time  of  the  testator's  death  some  portion 
of  his  property  happened  to  be  within  the  jurisdiction  authorizing 
a  tax  upon  such  a  transfer  seems  strained  and  illogical.  To  hold 
that  the  effect  of  the  foreign  law  is  to  reduce  the  legacy  given  by 
the  will  construed  in  accordance  with  the  law  of  the  testator's 
domicile  is  to  permit  the  foreign  law  to  regulate  the  testamentary 
capacity  of  a  citizen  of  this  state;  as  the  foreign  tax  depends  upon 
the  jurisdiction  over  the  property  and  is  not  sustainable  as  a 
regulation  of  the  exercise  of  testamentary  power  by  the  citizen  of 
another  state,  it  follows  that  the  tax  is  merely  a  charge  upon  the  par- 
ticular property  and  not  upon  the  pecuniary  legacies  given  by  the  will . 

No  exact  decision  has  been  found,  though  it  is  ruled  in  consider- 
ing questions  more  or  less  analogous  that  such  taxes  are  to  be 
deducted  from  the  legacy  in  New  York  and  not  in  Massachusetts. 
In  re  Swift,  137  N.  Y.  77,  32  N.  E.  1096,  and  Hooper  v.  Shaw, 
176  Mass.  190,  57  N.  E.  361.  Kingsbury  v.  Bazeley,  75  N.  H. 
13,  70  A.  916. 

"No  ground  can  be  found,  in  the  absence  of  a  direction  either 
express  or  implied  in  the  will,  for  a  pro  rata  distribution  among  all 


1905,  c.  40.]  NEW  HAMPSHIRE.  729 

the  pecuniary  legacies  of  the  sums  paid  as  foreign  death  duties. 
On  account  of  some  legacies  a  charge  may  be  made  in  some  states 
and  not  in  others.  A  deduction  from  a  legacy  on  account  of  a  tax 
imposed  on  others  in  a  particular  jurisdiction  would  not  be  sup- 
ported by  any  basis  of  reason.  The  only  method  which  could  be 
followed  would  be  the  division  of  the  legacies  into  as  many  classes 
as  were  made  by  the  laws  of  all  the  states  in  which  property  was 
found,  and  a  division  of  the  sums  paid  pro  rata  among  each  class. 
This  would  plainly  be  an  administration  of  the  estate  according 
to  laws  which  have  no  force  here,  and  which  cannot,  in  the  absence 
of  legislative  authority  for  such  course,  properly  be  followed.  The 
executors  have  in  hand,  if  they  are  ready  to  settle,  so  much  property. 
The  will,  construed  by  the  law  of  this  state,  directs  how  the  distri- 
bution shall  be  made.  The  fact  that  the  executors  have  less  than 
they  would  have  had,  except  for  the  demands  of  jurisdictions  to 
which  they  were  obliged  to  go  to  get  the  property  and  bring  it 
here  for  distribution,  cannot  alter  the  law  of  the  state  or  the  terms 
of  the  will.  In  the  absence  of  evidence  from  which  a  contrary 
direction  can  be  implied  from  the  will,  the  amount  deducted  by 
other  states  before  permitting  the  transfer  of  property  within  their 
limits  to  the  executor  for  distribution  here  {Greves  v.  Shaw^  173 
Mass.  205,  209,  53  N.  E.  372)  is  not  property  within  this  state  for 
distribution.  The  executors  are  chargeable  only  for  what  has 
come  to  their  hands  —  the  property  less  the  duties  paid.  If  they 
charge  themselves  with  the  full  value  of  the  property,  a  practical 
method  of  accounting  would  permit  them  to  discharge  them- 
selves by  accounting  for  the  foreign  duties  paid  as  expenses  of 
administration." 

In  the  present  case  there  are  no  facts  showing  an  intention  to 
charge  the  pecuniary  legacies  with  foreign  duties  for  the  benefit 
of  the  residuary  legatees.  "There  is  a  class  of  cases,  where  the 
residuary  bequest,  by  reason  of  the  special  circumstances  of  the 
case,  has  been  construed  as  a  particular  legacy,  not  liable  to  fail, 
except  ratably  with  the  other  legacies,  on  account  of  any  un- 
expected deficiency  of  the  estate,  or  to  be  augmented  by  the 
unforeseen  failure  of  the  legacies."  2  Red.  Wills,  447;  Dyose  v. 
Dyose,  1  P.  Wms.  305.  "There  is  nothinginthe  present  case  tending 
to  show  that  the  residuary  bequest  was  intended  as  anything 
except  the  ordinary  disposal  of  a  residuum  which  might  be  left,  while 
the  first  part  of  the  eighty-second  clause  establishes  that  the  testa- 
trix considered  the  possibility  that  the  residuary  legatees  would 


730  STATUTES  ANNOTATED.  IN.  H.  St. 

receive  nothing.  In  the  latter  part  of  the  same  clause  the  testatrix 
directs  her  executors  to  pay  any  and  all  inheritance  and  succession 
taxes  that  may  become  due  upon  any  legacies  given  to  individuals. 
This  implies  a  recognition  of  the  possibility  of  such  taxes,  and,  as 
to  legatees  other  than  individuals,  a  purpose  that  the  duties  legally 
chargeable  upon  such  legacies  should  be  borne  by  them;  but  as  the 
foreign  duties  are  not  due  upon  the  legacies  given  by  the  will,  but  are 
a  deduction  from  property  which  may  be  used  in  carrying  out  the 
purpose  of  the  will,  the  language  is  insufficient  to  require  the  court 
to  administer  the  law  of  all  the  states  in  which  property  may  have 
been  found  and  taxes  paid."  Per  Parsons,  C.  J.,  in  Kingsbury  v. 
5a2e%,  75  N.  H.  13,  70  A.  916,  919. 

S.  2.  If  a  person  bequeaths  or  devises  property  to  or  for  the  use  of  a  father, 
mother,  husband,  wife,  lineal  descendant,  brother,  sister,  an  adopted  child,  the 
lineal  descendant  of  an  adopted  child,  the  wife  or  widow  of  a  son,  or  the  husband 
of  a  daughter,  for  life  or  for  a  term  of  years,  with  the  remainder  to  a  collateral 
heir  or  to  a  stranger  to  the  blood,  the  value  of  such  particular  estate  shall,  within 
three  months  after  the  appointment  of  the  executor,  administrator  or  trustee,  be 
appraised  in  the  manner  provided  in  section  16  and  deducted  from  the  appraised 
value  of  such  property,  and  the  remainder  shall  be  subject  to  a  tax  of  five  per  cent 
of  its  value. 

S.  3  covers  gifts  to  executors. 

Ss.  4— ?2  provide  for  the  appraisal  of  the  property,  assessment,  collection  and 
payment  of  the  tax. 

THE  AMENDMENTS  OF  1907. 

Exemption  of  Charitable,  etc.,  Societies.  N.  H.  St.  1907,  approved  March 
20,  1907,  c.  68,  s.  1,  amended  N.  H.  St.  1905,  c.  40,  s.  1,  by  providing  that  chari- 
table, educational  or  religious  societies  or  institutions  in  this  state  are  exempt  from 
taxation  "when  such  society  or  institution  is  bound  by  the  terms  of  the  will,  deed, 
grant,  sale  or  gift  or  by  the  limitation  of  its  powers  to  devote  such  property  solely 
to  such  uses  and  purposes  that  the  property  in  its  hands  will  be  by  law  exempt 
from  taxation." 

Not  Retroactive. 

The  testator  died  September  21, 1905,  when  the  N.  H.  St.  1905,  c. 
40,  was  in  force.  Before  a  decree  of  distribution  was  made  in  the 
estate  the  statute  of  1907,  c.  68,  became  effective  by  making  the 
exemption  in  the  statute  of  1905  apply  only  when  the  society  exempt 
is  bound  to  devote  its  property  solely  to  such  uses  and  purposes 
that  the  property  in  its  hands  will  be  by  law  exempt  from  taxation. 

The  N.  H.  St.  1907  is  prospective,  as  it  relates  to  property 
"which  shall  pass  by  will."  The  rights  of  the  legatees  became 
fixed  at  the  death  of  the  testator,  and  at  the  same  time  the  right 


1905,  c.  40.]  NEW  HAMPSHIRE.  731 

of  the  public  to  the  tax  accrued,  and  the  legatees'  interest  vested 
at  the  death  of  the  testatrix  or  upon  the  probate  of  the  will.  The 
rights  of  the  parties  to  the  proceeding  must  be  determined  in 
accordance  with  the  statute  of  1905,  which  was  in  force  when  the 
testatrix  died.  Carter  v.  Whitcomh,  74  N.  H.  482,  69  A.  779,  17 
L.  R.  A.  (N.  S.  )  733  n. 

Error  corrected. 

.  N.  H.  St.  1907,  c.  68,  s.  2,  corrects  an  error  in  N.  H.  St.  1905,  s.  2,  by  insert- 
ing the  figures  13  in  place  of  the  figures  16  where  reference  is  made  to  the 
section  on  appraisals. 

Information  by  Executor. 

N.  H.  St.  1905,  c.  40,  s.  9,  is  amended  by  N.  H.  St.  1907,  c.  68,  s.  3,  by  insert- 
ing a  provision  that  every  administrator  shall  prepare  a  statement  in  duplicate, 
showing,  as  far  as  can  be  ascertained,  the  names  of  all  the  heirs-at-law  and  their 
relationship  to  the  decedent,  and  every  executor  shall  prepare  a  like  statement 
showing  the  relationship  to  the  decedent  of  all  legatees  whose  relationship  is 
not  shown  by  the  will,  and  the  age  at  the  time  of  the  death  of  the  decedent  of 
all  legatees  to  whom  property  is  bequeathed  or  devised  for  life  or  for  a  term  of 
years,  and  the  names  of  those,  if  any,  who  have  died  before  the  decedent,  one 
copy  of  which  the  administrator  or  executor  shall  file  with  the  state  treasurer, 
and  the  other  with  the  register  of  probate,  within  thirty  days  after  his  appoint- 
ment; and  when  he  files  his  account  in  the  probate  court,  he  shall  file  a  dupli- 
cate thereof  with  the  state  treasurer. 

Register  to  send  Copies  of  Will,  etc.,  to  State  Treasurer. 

N.  H.  St.  1905,  c.  40,  s.  10,  is  amended  by  N.  H.  St.  1907,  c.  68,  s.  4,  by  striking 
out  the  first  sentence  of  the  section  and  inserting  in  place  thereof  the  following: 
"The  register  of  probate  shall  within  thirty  days  after  it  is  filed,  send  to  the 
state  treasurer,  by  mail,  a  copy  of  every  will  containing  legacies  which  are  sub- 
ject to  a  tax  under  the  provisions  of  this  chapter,  and  a  copy  of  the  inventory 
and  appraisal  of  every  estate,  any  part  of  which  may  be  subject  to  such  a  tax, 
unless  notified  by  the  state  treasurer  that  such  copies  will  not  be  required." 

Refunding. 

N.  H.  St.  1905,  c.  40,  s.  12,  is  amended  by  N.  H.  St.  1907,  c.  68,  s.  5,  by  add- 
ing the  following:  "Whenever  in  such  a  case  the  executor,  administrator  or 
trustee  has  paid  over  the  tax  to  the  state  treasurer,  it  shall  be  repaid  to  him 
by  the  state  treasurer." 

Appraisal. 

N.  H.  St.  1905,  c.  40,  s.  13,  is  amended  by  N.  H.  St.  1907,  c.  68,  s.  6,  by  insert- 
ing after  the  word  "property"  in  the  second  line  of  the  section,  the  words  "at 
the  time  of  the  death  of  the  decedent,"  and  by  striking  out  in  the  seventh  and 
eighth  lines  of  said  section  the  words  "such  return,  when  accepted  by  said  court, 
shall  be  final,"  and  by  inserting  in  the  eighth  line  of  said  section  before  the 
words  "the  fees"  the  words  "one-half  of"  and  by  striking  out  the  words  "party 


732  STATUTES  ANNOTATED.  [N.  H.  St. 

applying  for  such  appraisal"  in  the  ninth  and  tenth  lines  of  said  section  and 
inserting  in  place  thereof  the  words  "state  treasurer,  and  one-half  of  said  fees  shall 
be  paid  by  the  other  party  or  parties  to  said  proceeding,  provided,  however, 
that  in  all  proceedings  arising  under  this  section  said  probate  court  upon 
agreement  of  parties  may  appoint  a  single  disinterested  appraiser  who  shall  upon 
oath  appraise  such  property  as  hereinbefore  provided." 

Lien. 

N.  H.  St.  1905,  c.  40,  s.  14,  is  amended  by  N.  H.  St.  1907,  c.  68,  s.  7,  by  adding 
at  the  end  thereof  the  following:  "Whenever  any  real  estate  or  separate  parcel 
thereof  is  subject  to  a  lien  created  by  this  act,  or  any  amendment  thereof,  the 
probate  court  shall  have  jurisdiction  in  like  proceedings  to  make  such  order  or 
decree  as  will  otherwise  secure  to  the  state  the  payment  of  any  tax  due  or  to 
become  due  on  such  real  estate  or  separate  parcel  thereof,  and  upon  the  per- 
formance of  such  order  or  decree  to  discharge  such  lien." 

Actions  to  Record  Tax. 

N.  H.  St.  1905,  c.  40,  s.  17,  is  amended  by  N.  H.  St.  1907,  c.  68,  s.  8,  by  striking 
out,  in  the  first  line  of  said  section,  the  word  "shall"  and  inserting  in  place 
thereof  the  word  "may"  and  by  striking  out  in  the  second  line  of  said  section  the 
words  "within  six  months"  and  inserting  in  place  thereof  the  words  "at  any 
time." 

Delivery  of  Securities  to  Foreign  Executor. 

N.  H.  St.  1905,  c.  40,  s.  19,  is  amended  by  N.  H.  St.  1907,  c.  82,  by  inserting 
in  the  eleventh  line  thereof,  after  the  word  "transfer"  the  following  sentence: 
"When  such  securities  or  assets  are  liable  to  a  tax  under  the  provisions  of  this 
chapter,  such  tax  shall  be  paid  before  such  delivery  or  transfer,"  and  by  insert- 
ing in  the  twelfth  line  thereof,  after  the  word  "examination"  the  words  "or 
delivery  or  transfer  of  such  securities  or  assets  before  the  payment  of  such  tax 
to  the  state  treasurer." 

Parties  to  Petition  by  Foreign  Administrator. 

N.  H.  St.  1905,  c.  40,  s.  20,  is  amended  by  N.  H.  St.  1907,  c.  68,  by  inserting 
after  the  words  "this  act,"'  in  the  third  line  of  said  section,  the  words  "or  under 
section  23  of  chapter  189  of  the  Public  Statutes." 

Attorney  for  Collection. 

N.  H.  St.  1905,  c.  40,  s.  22,  is  amended  by  N.  H.  St.  1907,  c.  138,  by  substitut- 
ing a  new  provision  authorizing  the  state  treasurer  to  appoint  an  attorney  to 
assist  in  the  collection  of  the  tax  with  assistants  at  a  total  salary  not  to  exceed 
twenty-one  hundred  dollars. 

Remainders. 

N.  H.  St.  1907,  c.  64.     Approved  March  20,  1907. 

S.  1.  In  all  cases  where  there  has  been  or  shall  be  a  devise,  descent  or  bequest, 
liable  to  an  inheritance  tax,  to  take  effect  in  possession  or  to  come  into  actual 


1907,  c.  64.]  NEW  HAMPSHIRE  733 

enjoyment  after  the  expiration  of  one  or  more  life  estates  or  a  term  of  years, 
the  tax  on  such  property,  devise,  descent  or  bequest  shall  not  be  payable,  nor 
interest  begin  to  run  thereon,  except  as  hereinafter  provided,  until  the  person 
or  persons  entitled  thereto  shall  come  into  actual  possession  of  such  property, 
and  the  tax  thereon  shall  be  assessed  on  the  value  of  the  property,  at  the  time  when 
the  right  of  possession  accrues  to  the  person  entitled  thereto  as  aforesaid,  and 
such  person  or  persons  shall  pay  the  tax  upon  coming  into  possession  of  such 
property.  Upon  the  filing  of  the  bond  hereinafter  required  the  executor  or 
administrator  of  the  decedent's  estate  may  settle  his  account  in  the  probate 
court  without  being  liable  for  said  tax,  provided  that  such  person  or  persons  may 
pay  the  tax  at  any  time  prior  to  their  coming  into  possession,  and  in  such  cases 
the  tax  shall  be  assessed  on  the  value  of  the  estate  at  the  time  of  the  payment 
of  the  tax,  after  deducting  the  value  of  the  life  estate  or  estates  for  years;  and 
provided,  further,  that  the  tax  on  real  estate  shall  remain  a  lien  on  the  real 
estate  on  which  the  same  is  chargeable  until  it  is  paid.  Any  person  or  persons 
beneficially  interested  in  remainder  or  reversion  in  any  property  liable  to  a  tax 
upon  which  such  tax  is  postponed  by  the  provisions  of  this  section  shall,  within 
one  year  after  the  date  of  the  death  of  the  decedent  give  bond  to  the  judge  of 
the  probate  court  having  jurisdiction  of  the  estate  of  such  decedent,  in  such 
amount  and  with  such  sureties  as  said  court  may  approve,  conditioned  upon  the 
payment  of  such  tax  at  the  time  or  period  when  such  person  or  persons  shall 
come  into  possession  or  actual  enjoyment  of  the  same.  If  any  such  person  or 
persons  shall  fail  to  file  such  bond  within  the  period  required,  the  tax  shall  be 
due  and  payable  under  the  provisions  of  section  4  of  chapter  40  of  the  Laws 
of  1905. 

S.  2.     This  act  shall  take  effect  upon  its  passage,  but  shall  not  apply  to  the 
estate  of  any  person  who  died  before  the  passage  thereof. 


Compromise  of  Tax. 

N.  H.  St.  1907,  c.  69,  provides  that  the  state  treasurer  may  with  the  approval 
of  the  attorney  general  effect  a  settlement  of  the  tax  where  a  devise,  descent 
or  bequest  is  liable  to  a  legacy  tax  on  a  contingency  or  dependent  upon  the 
exercise  of  a  discretion,  or  where  the  life  tenant  or  tenant  for  years  has  a  power 
of  appointment. 


Bond  by  Executor  who  is  Residuary  Legatee. 

N.  H.  St.  1907,  c.  86,  amends  Public  Statutes,  c.  188,  s.  13,  by  extending  the  pro- 
vision providing  that  the  executor  who  is  a  residuary  legatee  may  give  bond  to 
cover  the  legacy  and  succession  taxes  as  well  as  debts  and  legacies. 


Bond  by  Executor. 

N.  H.  Public  Statutes,  c.  188,  s.  14,  is  amended  by'N.  H.  St.  1907,  c.  86,  s.  2, 
by  providing  that  when  a  will  so  directs  an  executor  or  trustee  under  a  will 
shall  be  exempt  from  giving  a  bond  except  a  bond  for  the  payment  of  debts 
and  legacy  and  succession  taxes. 


734  STATUTES  ANNOTATED.  [N.  H.  Sf 

THE  SUBSTITUTE  ACT  OF  1911. 

N.  H.  St.  1911,  c.  42,  approved  March  9,  1911,  amends  the 
existing  law  by  striking  out  sections  1-21,  and  inserting  new  sec- 
tions in  place  thereof,  which  are  printed  as  the  present  act,  post. 

Title. 

In  Amendment  of  Chapter  40  of  the  Laws  of  1905,  as  amended  by 
Chapter  68  of  the  Laws  of  1907,  relating  to  a  Tax  on  Collateral  Legacies  and 
Successions.      Approved  March  9,  1911. 

To  what  Estates  Applicable. 

S.  2.  This  act  shall  not  apply  to  estates  of  persons  deceased  prior  to  the 
date  when  it  takes  effect,  or  to  property  passing  by  deed,  grant,  bargain,  sale 
or  gift  taking  effect  prior  to  said  date;  but  said  estates  and  property  shall  remain 
subject  to  the  provisions  of  the  laws  in  force  prior  to  the  passage  of  this  act. 
Chapter  64  of  the  Laws  of  1907  is  hereby  repealed,  except  in  so  far  as  it  applies 
to  estates  of  persons  deceased  prior  to  the  passage  of  this  act. 

S.  3.    This  act  shall  take  effect  upon  its  passage. 

THE  PRESENT  ACT. 

N.  H.  St.  1911,  c.  42. 
Transfers  Taxable.  —  Exemptions. 

S.  1.  All  property  within  the  jurisdiction  of  the  state,  real  or  personal, 
and  any  interest  therein,  whether  belonging  to  inhabitants  of  the  state  or  not, 
which  shall  pass  by  will,  or  by  the  laws  regulating  intestate  succession,  or 
by  deed,  grant,  bargain,  sale  or  gift,  made  or  intended  to  take  effect  in 
possession  or  enjoyment  after  the  death  of  the  grantor  or  donor,  to  any 
person,  absolutely  or  in  trust,  except  to  or  for  the  use  of  the  father, 
mother,  husband,  wife,  brother,  sister,  lineal  descendant,  adopted  child,  the 
lineal  descendant  of  any  adopted  child,  the  wife  or  widow  of  a  son,  or 
the  husband  of  a  daughter  of  a  decedent,  or  to  or  for  the  use  of  educa- 
tional, religious,  cemetery,  or  other  institutions,  societies  or  associations  of 
public  charity  in  this  state,  or  for  or  upon  trust  for  any  charitable  purpose  in 
the  state,  or  for  the  care  of  cemetery  lots,  or  to  a  city  or  town  in  this  state  for  pub- 
lic purposes,  shall  be  subject  to  a  tax  of  five  per  cent  of  its  value,  for  the  use  of 
the  state;  and  administrators,  executors,  and  trustees,  and  any  such  grantees 
under  a  conveyance  made  during  the  grantor's  life,  shall  be  liable  for  such  taxes, 
with  interest,  until  the  same  have  been  paid.  An  institution  or  society  shall 
be  deemed  to  be  in  this  state,  within  the  meaning  of  this  act,  when  its  sole  object 
and  purpose  is  to  carry  on  charitable,  religious  or  educational  work  within  the 
state,  but  not  otherwise.  When  the  personal  estate  so  passing  from  any  person 
not  an  inhabitant  of  this  state  shall  consist  in  whole  or  in  part  of  shares  in  any 
railroad  or  street  railway  company  or  telegraph  or  telephone  company  incorpo- 
rated under  the  laws  of  this  state  and  also  of  some  other  state  or  country,  so 
much  only  of  each  share  as  is  proportional  to  the  part  of  such  company's  right 


1911,  c.  42.1  NEW  HAMPSHIRE.  735 

of  way,  lying  within  this  state  shall  be  considered  as  property  of  such  person 
within  the  jurisdiction  of  the  state  for  the  purposes  of  this  act. 

[See  notes  to  the  Acts  of  1878  and  1905,  ante^  pp.  721,  723  et  seq.\ 
Life  Estates.  —  Annuities.  —  Remainder.  —  Valuation. 

S.  2.  When  any  interest  in  property  less  than  an  estate  in  fee  shall  pass  by 
will,  or  otherwise,  as  set  forth  in  section  1,  to  one  or  more  beneficiaries,  with 
remainder  to  others,  the  several  interests  of  such  beneficiaries,  except  such  as 
may  be  entitled  to  exemption  under  the  provisions  of  section  1,  shall  be  subject 
to  said  tax.  The  value  of  an  annuity  or  life  estate  shall  be  determined  by  the 
"actuaries'  Combined  Experience  Tables,"  at  four  per  cent  compound  interest, 
and  the  value  of  any  intermediate  estate  less  than  a  fee  shall  be  so  determined 
whenever  possible.  The  value  of  a  remainder  after  such  estate  shall  be  deter- 
mined by  subtracting  the  value  of  the  intermediate  estate  from  the  total  value 
of  the  bequest  or  devise.  Whenever  such  intermediate  estate  or  remainder  is 
conditioned  upon  the  happening  of  a  contingency,  or  dependent  upon  the  exercise 
of  a  discretion,  so  that  the  value  of  either  cannot  be  determined  by  the  tables 
as  hereinbefore  provided,  the  value  of  the  property  which  is  the  subject  of  the 
bequest  shall  be  determined  as  provided  in  section  13,  and  such  value  having 
thus  been  ascertained  the  state  treasurer  shall,  upon  such  evidence  as  may  be  fur- 
nished by  the  will  and  the  executor's  statement,  or  by  the  beneficiaries  or  other- 
wise, determine  the  value  of  the  interests  of  the  several  beneficiaries,and  the  values 
thus  determined  shall  be  deemed  to  be  the  values  of  such  several  interests  for 
the  purpose  of  the  assessment  of  the  tax,  except  in  so  far  as  they  shall  be  changed 
by  the  court  upon  appeal.  The  executor  or  any  beneficiary  aggrieved  by  such 
determination  of  the  value  of  any  such  interest  by  the  state  treasurer  may  at 
any  time  within  three  months  after  notice  thereof  appeal  therefrom  to  the 
probate  court  having  jurisdiction  of  the  estate  of  the  decedent,  which  court  shall 
determine  such  value  subject  to  appeal  as  in  other  cases.  Whenever  the  identity 
of  the  beneficiary  who  is  to  take  such  a  remainder  is  conditioned  upon  the  hap- 
pening of  a  contingency,  or  dependent  upon  the  exercise  of  a  discretion,  •  the 
state  treasurer  shall  assess  and  collect  the  tax  upon  such  remainder  as  upon  a  tax- 
able legacy,  and  the  executor  shall  be  liable  for  such  tax  as  in  other  cases.  Pro- 
vided, however,  that  if  at  the  termination  of  the  intermediate  estate  such  remainder, 
or  any  portion  thereof,  shall  pass  to  a  person  or  corporation  which  at  the  time 
of  the  death  of  the  decedent  was  exempt  from  such  tax,  such  person  or  corpora- 
tion may  at  any  time  within  one  year  after  the  termination  of  the  intermediate 
estate,  but  not  afterwards,  apply  to  the  probate  court  for  an  abatement  of  the 
tax  on  such  remainder  as  provided  in  section  12,  and  the  state  treasurer  shall 
repay  the  amount  adjudged  to  have  been  illegally  exacted  as  provided  in  said 
section  12,  with  interest  thereon  at  three  per  cent  per  annum  from  the  date  of  the 
payment  of  the  tax.  Provided,  however,  that  the  power  of  the  state  treasurer,  with 
the  approval  of  the  attorney  general,  to  adjust  the  tax  by  compromise  in  certain 
cases,  as  set  forth  in  chapter  69  of  the  Laws  of  1907,  shall  remain  in  force. 

Gifts  to  Executors,  etc.,  in  Lieu  of  Compensation. 

S.  3.  If  a  testator  gives,  bequeaths  or  devises  to  his  executors  or  trustees 
any  property  otherwise  liable  to  said  tax,  in  lieu  of  their  compensation,  the 
value  thereof  in  excess  of  reasonable  compensation,  as  determined  by  the  pro- 
bate court  upon  the  application  of  any  interested  party  or  the  state  treasurer, 
shall  nevertheless  be  subject  to  the  provisions  of  this  chapter. 


736  STATUTES  ANNOTATED.  [N.H.St. 

When  Tax  Accrues. 

S.  4.  All  taxes  imposed  by  the  provisions  of  this  chapter,  including  taxes 
on  intermediate  estates  and  remainders  as  set  forth  in  section  2,  shall  be  due 
and  payable  to  the  state  treasurer  by  the  executors,  administrators  or  trustees, 
at  the  expiration  of  two  years  after  the  date  of  their  giving  bonds.  If  the  pro- 
bate court  has  ordered  the  executor  or  the  administrator  to  retain  funds  to  satisfy 
a  claim  of  a  creditor,  the  payment  of  the  tax  may  be  suspended  by  the  court 
to  await  the  disposition  of  such  claim.  If  the  taxes  are  not  paid  when  due, 
interest  at  the  rate  of  ten  per  cent  per  annum  shall  be  charged  and  collected 
from  the  time  the  same  became  payable;  and  said  taxes  and  interest  shall  be 
and  remain  a  lien  on  the  property,  subject  to  the  taxes  until  the  same  are  paid. 

Tax  to  be  Deducted. 

S.  5.  An  executor,  administrator  or  trustee  holding  property  subject  to 
said  tax  shall  deduct  the  tax  therefrom,  or  collect  it  from  the  legatee  or  person 
entitled  to  said  property,  and  he  shall  not  deliver  property  or  a  specific  legacy 
subject  to  said  tax  until  he  has  collected  the  tax  thereon.  When  a  specific 
bequest  of  personal  property  other  than  money  is  subject  to  a  tax  under  the 
provisions  of  this  act  and  the  legatee  neglects  or  refuses  to  pay  the  tax  upon 
demand,  the  executor  or  trustee  may,  upon  such  notice  as  the  probate  court 
may  direct,  be  authorized  to  sell  such  property,  or  if  the  same  can  be  divided, 
such  portion  thereof  as  may  be  necessary,  and  shall  deduct  the  tax  from  the 
proceeds  of  such  sale,  and  shall  account  to  the  legatee  for  the  balance,  if  any,  of 
such  proceeds  in  lieu  of  the  property.  An  executor  or  administrator  shall 
collect  taxes  due  upon  land  which  is  subject  to  tax  under  the  provisions  hereof 
from  the  heirs  or  devisees  entitled  thereto,  and  he  may  be  authorized  to  sell 
said  land  according  to  the  provisions  of  section  8  if  they  refuse  or  neglect  to 
pay  said  tax. 

Tax  on  Legacy  Charged  on  Real  Estate  to  be  Deducted. 

S.  6.  If  a  legacy  subject  to  said  tax  is  charged  upon  or  payable  out  of  real 
estate,  the  heir  or  devisee,  before  paying  it,  shall  deduct  said  tax  therefrom  and 
pay  it  to  the  executor,  administrator  or  trustee,  and  the  tax  shall  remain  a 
charge  upon  said  real  estate  until  it  is  paid.  Payment  thereof  may  be  enforced 
by  the  executor,  administrator  or  trustee  in  the  same  manner  as  the  payment 
of  the  legacy  itself  could  be  enforced. 

Deduction  of  Tax  in  Case  of  Particular  Estates  and  Remainders. 

S.  7.  When  any  interest  in  property  less  than  an  estate  in  fee  is  devised 
or  bequeathed  to  one  or  more  beneficiaries  with  remainder  to  others,  and  the 
interest  of  one  or  more  of  the  beneficiaries  is  subject  to  said  tax,  the  executor 
shall  deduct  the  tax  upon  such  taxable  interests  from  the  whole  property  thus 
devised  or  bequeathed,  and  whenever  property  other  than  money  is  so  devised 
or  bequeathed  he  may,  unless  the  taxes  upon  all  the  taxable  interests  are  paid 
when  due  by  the  beneficiaries,  be  authorized  to  sell  such  property  or  such  portion 
thereof  as  may  be  necessary,  as  provided  in  sections  5  and  8,  and  having  deducted 
the  unpaid  taxes  on  such  taxable  interests  from  the  proceeds  of  such  sale,  he 
shall  account  for  the  balance  in  lieu  of  the  property  sold  as  in  other  cases. 


1911,  c.  42.]  NEW  HAMPSHIRE.  737 

Power  of  Sale. 

S.  8.  The  probate  court  may  authorize  executors,  administrators  and 
trustees  to  sell  the  real  estate  of  a  decedent  for  the  payment  of  said  tax  in  the 
same  manner  as  it  may  authorize  them  to  sell  real  estate  for  the  payment  of 
debts. 

Information  by  Administrators,  etc.,  to  be  furnished. 

S.  9.  Every  administrator  shall  prepare  a  statement  in  duplicate,  showing 
as  far  as  can  be  ascertained  the  names  of  all  the  heirs-at-law  and  their  relation- 
ship to  the  decedent,  and  every  executor  shall  prepare  a  like  statement  showing 
the  relationship  to  the  decedent  of  all  legatees  named  in  the  will,  and  the  age 
at  the  time  of  the  death  of  the  decedent  of  all  legatees  to  whom  property  is 
bequeathed  or  devised  for  life  or  for  a  term  of  years,  and  the  names  of  those,  if 
any,  who  have  died  before  the  decedent,  and  shall  file  same  with  the  register 
of  probate  at  the  time  of  his  appointment.  Letters  of  administration  shall 
not  be  issued  by  the  probate  court  to  any  executor  or  administrator  until  he  has 
filed  such  statement  in  duplicate,  and  has  given  bond  with  sufficient  sureties  to  pay 
all  taxes  for  which  he  may  be,  or  become,  liable  under  the  provisions  of  this 
act,  and  to  comply  with  all  of  its  provisions.  Every  executor  and  administrator, 
when  he  files  his  account  in  the  probate  court,  shall  file  a  duplicate  thereof  with 
the  state  treasurer.  An  inventory  and  appraisal  under  oath  of  the  whole  of 
every  estate,  any  part  of  which  may  be  subject  to  a  tax  under  the  provisions 
of  this  act,  in  the  form  prescribed  by  the  statute,  shall  be  filed  in  probate  court 
by  the  executor,  administrator  or  trustee  within  three  months  after  his  appoint- 
ment. If  he  neglects  or  refuses  to  comply  with  any  of  the  requirements  of 
this  section  he  shall  be  liable  to  a  penalty  of  not  more  than  one  thousand  dollars, 
which  shall  be  recovered  by  the  state  treasurer  for  the  use  of  the  state,  and 
after  hearing  and  such  notice  as  the  court  of  probate  may  require,  the  said 
court  of  probate  may  remove  said  executor  or  administrator,  and  appoint  another 
person  administrator  with  the  will  annexed,  or  administrator,  as  the  case  may 
be;  and  the  register  of  probate  shall  notify  the  state  treasurer  within  thirty 
days  after  the  expiration  of  said  three  months  of  the  failure  of  any  executor, 
administrator  or  trustee  to  file  such  inventory  and  appraisal  in  his  office. 

Information  to  State  Treasurer. 

S.  10.  The  register  of  probate  shall,  within  thirty  days  after  it  is  filed,  send 
to  the  state  treasurer,  by  mail,  one  copy  of  every  statement  filed  with  him  by 
executors  and  administrators  as  provided  in  section  9,  a  copy  of  every  will  con- 
taining legacies  which  are  subject  to  a  tax  under  the  provisions  of  this  chapter, 
and  a  copy  of  the  inventory  and  appraisal  of  every  estate,  any  part  of  which 
may  be  subject  to  such  a  tax,  unless  notified  by  the  state  treasurer  that  such 
copies  will  not  be  required.  The  fees  for  such  copies  shall  be  paid  by  the  state 
treasurer.  The  register  shall  also  furnish  such  copies  of  papers  and  such  informa- 
tion as  to  the  records  and  files  in  his  office,  in  such  form  as  the  state  treasurer 
may  require.  A  refusal  or  neglect  by  the  register  so  to  send  such  copies,  or 
to  furnish  such  information,  shall  be  a  breach  of  his  official  bond.  The  fees  of 
registers  of  probate  for  copies  furnished  under  the  provisions  of  this  section 
shall  be  one  dollar  for  each  will  or  inventory  not  exceeding  four  full  typewritten 
pages,  eight  by  ten  and  one-half  inches,  and  twenty-five  cents  for  each  page  in 
excess  of  four. 


738  STATUTES  ANNOTATED.  [N.H.St. 

Information  as  to  Real  Estate. 

S.  11.  If  real  estate  of  a  decedent  so  passes  to  another  person  as  to  become 
subject  to  said  tax,  his  executor,  administrator  or  trustee  shall  inform  the  state 
treasurer  thereof  within  six  months  after  his  appointment,  or  if  the  fact  is  not 
known  to  him  within  that  time,  then  within  one  month  after  the  fact  becomes 
known  to  him. 

Assessment  of  Tax.  —  Abatement. 

S.  12.  The  state  treasurer  shall  determine  the  amount  of  all  taxes  due  and 
payable  under  the  provisions  of  this  act,  and  shall  certify  the  amount  so  due 
and  payable  to  the  executor  or  administrator,  if  any,  otherwise  to  the  person  or 
persons  by  whom  the  tax  is  payable;  but  in  the  determination  of  the  amount 
of  any  tax  said  state  treasurer  shall  not  be  required  to  consider  any  payments  on 
account  of  debts  or  expenses  of  administration  which  have  not  been  allowed  by 
the  probate  court  having  jurisdiction  of  said  estate.  The  amount  due  upon 
the  claim  of  any  creditor  against  the  estate  of  a  deceased  person  arising  under 
a  contract  made  after  the  passage  of  this  act,  if  payable  by  the  terms  of  such 
contract  at  or  after  the  death  of  the  deceased  shall  be  subject  to  the  same  tax 
imposed  by  this  chapter  upon  a  legacy  of  like  amount.  The  value  of  legacies 
or  distributive  shares  in  the  estates  of  deceased  persons  for  the  purpose  of  the 
legacy  or  succession  tax  shall  not  be  diminished  by  reason  of  any  claim  against 
the  estate  based  upon  such  a  contract  in  favor  of  the  persons  entitled  to  such 
legacies  or  distributive  shares,  except  in  so  far  as  it  may  be  shown  affirmatively 
by  competent  evidence  that  such  claim  was  legally  due  and  payable  in  the  life- 
time of  the  decedent.  Payment  of  the  amount  so  certified  shall  be  a  discharge 
of  the  tax.  An  executor,  administrator,  trustee  or  grantee,  who  is  aggrieved 
by  any  such  determination  of  the  state  treasurer  and  who  pays  the  tax  assessed 
without  appeal,  may,  within  one  year  after  the  payment  of  such  tax  to  the 
treasurer,  but  not  afterwards,  apply  to  the  probate  court  having  jurisdiction 
of  the  estate  of  the  decedent  for  the  abatement  of  said  tax  or  any  part  thereof, 
and  if  the  court  adjudges  that  said  tax  or  any  part  thereof  was  wrongfully  exacted 
it  shall  order  an  abatement  of  such  portion  of  said  tax  as  was  assessed  without 
authority  of  law,  which  said  order  or  decree  shall  be  subject  to  appeal  as  in 
other  cases.  Upon  a  final  decision  ordering  an  abatement  of  any  portion  of 
said  tax,  the  state  treasurer  shall  repay  the  amount  adjudged  to  have  been 
illegally  exacted  without  any  further  act  or  resolve  making  appropriation  therefor. 
Whenever  a  specific  bequest  of  household  furniture,  wearing  apparel,  personal 
ornaments  or  similar  articles  of  small  value  is  subject  to  a  tax  under  the  pro- 
visions of  this  act,  the  state  treasurer  in  his  discretion  may  abate  such  tax  if 
in  his  opinion  the  tax  is  not  of  sufficient  amount  to  justify  the  labor  and  expense 
of  its  collection. 

Appraisal.  —  Inventory. 

S.  13;  If  an  executor  or  administrator  shall  fail  to  file  an  inventory  and 
appraisal  in  the  probate  court  as  provided  in  section  9  of  this  act,  or  if  the  state 
treasurer  is  not  satisfied  with  the  inventory  and  appraisal  which  is  filed,  the 
state  treasurer  may  employ  a  suitable  person  to  appraise  the  property  and  the 
executor  or  administrator  shall  show  the  property  of  the  decedent  to  such 
appraiser  upon  demand,  and  shall  make  and  subscribe  his  oath  that  the  property 


1911,  c.  42]  NEW  HAMPSHIRE.  739 

thus  shown  includes  all  the  property  of  the  decedent  that  has  come  to  his  knowl- 
edge or  possession.  Such  appraiser  shall  prepare  an  inventory  of  said  property, 
and  shall  appraise  it  at  its  actual  market  value  at  the  time  of  the  decedent's 
death,  and  shall  return  such  inventory  and  appraisal  to  the  state  treasurer. 
The  expense  of  such  appraisal  shall  be  a  charge  upon  the  estate  of  the  decedent 
as  an  expense  of  administration  in  all  cases  where  an  inventory  and  appraisal 
has  not  been  filed  as  provided  in  said  section  9,  otherwise  the  expense  shall  be 
paid  by  the  state  treasurer.  An  executor  or  administrator  who  shall  neglect 
or  refuse  to  show  the  property  of  the  decedent  to  such  appraiser  upon  demand 
or  to  make  and  subscribe  such  oath  shall  be  liable  to  the  same  penalty  as  for 
a  violation  of  the  provisions  of  said  section  9.  Said  tax  shall  be  assessed  upon 
the  actual  market  value  of  the  property  at  the  time  of  the  decedent's  death. 
Such  value  shall  be  determined  by  the  state  treasurer  and  notified  by  him  to  the 
person  or  persons  by  whom  the  tax  is  payable,  and  such  determination  shall 
be  final  unless  the  value  so  determined  shall  be  reduced  by  proceedings  as 
herein  provided.  Upon  the  application  of  any  party  interested  in  the  suc- 
cession, or  of  the  executor,  administrator,  or  trustee,  made  at  any  time  within 
three  months  after  notice  of  such  determination,  the  probate  court  shall  ap- 
point three  disinterested  appraisers,  or  with  the  consent  of  the  state  treasurer, 
one  disinterested  appraiser,  who  first  being  sworn,  shall  appraise  such  property 
at  its  actual  market  value,  as  of  the  date  of  the  death  of  the  decedent  and  shall 
make  return  thereof  to  said  court.  Such  return  when  accepted  by  said  court 
shall  be  final;  provided,  that  any  party  aggrieved  by  such  appraisal  shall  have 
an  appeal  upon  the  matters  of  law.  One-half  of  the  fees  of  said  appraisers,  as 
determined  by  the  judge  of  said  court,  shall  be  paid  by  the  state  treasurer,  and 
one-half  of  said  fees  shall  be  paid  by  the  other  party  or  parties  to  said  proceeding. 

Appeal. 

S.  14.  An  executor,  administrator,  trustee  or  grantee,  who  is  aggrieved 
by  the  assessment  of  any  tax  by  the  state  treasurer  as  provided  in  section  12, 
may  at  aay  time  within  three  months  after  notice  of  such  assessment  appeal 
therefrom  to  the  probate  court  having  jurisdiction  of  the  settlement  of  the 
estate  of  the  decedent,  which  court  shall,  subject  to  appeal  as  in  other  cases, 
hear  and  determine  all  questions  relative  to  said  tax,  and  the  state  treasurer 
shall  represent  the  state  in  any  such  proceeding.  Whenever  any  real  estate 
or  separate  parcel  thereof  is  subject  to  a  lien  created  by  this  act,  or  any 
amendment  thereof,  the  probate  court  shall  have  jurisdiction  in  like  proceedings 
to  make  such  order  or  decree  as  will  otherwise  secure  to  the  state  the  pay- 
ment of  any  tax  due  or  to  become  due  on  such  real  estate  or  separate  parcel 
thereof,  and  upon  the  performance  of  such  order  or  decree  to  discharge  such 
lien. 


Application  for  Administration  by  State  Treasurer. 

S.  15.  If,  upon  the  decease  of  a  person  leaving  an  estate  liable  to  a  tax  under 
the  provisions  of  this  chapter,  a  will  disposing  of  such  estate  is  not  offered  for 
probate,  or  an  application  for  administration  made  within  four  months  after 
such  decease,  the  proper  probate  court,  upon  application  by  the  state  treasurer, 
shall  appoint  an  administrator. 


740  STATUTES  ANNOTATED.  [N.  H.  St. 

Probate  Accounts  not  Allowed  till  Tax  Paid. 

S.  16.  No  account  of  an  executor,  administrator  or  trustee,  shall  be  allowed 
by  the  probate  court  until  the  certificate  of  the  state  treasurer  has  been  filed 
in  said  court,  that  all  taxes  imposed  by  the  provisions  of  this  act  upon  any 
property  or  interest  therein  belonging  to  the  estate  to  be  included  in  said  account, 
and  already  payable,  have  been  paid,  and  that  all  taxes  which  may  become  due 
on  said  estate  have  been  paid,  or  settled  as  hereinbefore  provided,  or  that  the 
payment  thereof  to  the  state  is  secured  by  deposit  or  by  lien  on  real  estate. 
The  certificate  of  the  state  treasurer  as  to  the  amount  of  the  tax  and  his  receipt 
for  the  amount  therein  certified  shall  be  conclusive  as  to  the  payment  of  the  tax, 
to  the  extent  of  said  certification. 

Production  of  Books,  Papers,  etc. 

S.  17.  At  any  time  after  the  expiration  of  two  years  from  the  date  of  the 
bond  of  the  executor  or  administrator  of  any  estate  upon  which  the  tax  has  not 
been  determined  as  provided  in  section  12,  or  upon  which  no  tax  has  been  paid, 
the  state  treasurer  may  require  such  executor  or  administrator,  or  any  person 
or  corporation  interested  in  the  succession  to  appear  at  the  state  treasury,  at 
such  time  as  the  treasurer  may  designate,  and  then  and  there  to  produce  for 
the  use  of  the  treasurer  in  determining  whether  or  not  the  estate  is  subject  to 
said  tax  and  the  amount  of  such  tax,  if  any,  all  books,  papers  or  securities  which 
may  be  in  the  possession  or  within  the  control  of  such  executor,  administrator 
or  beneficiary  relating  to  such  estate  or  tax,  and  to  furnish  such  other  informa- 
tion relating  to  the  same  as  he  may  be  able  and  the  treasurer  may  require. 
Whenever  the  treasurer  shall  desire  the  attendance  of  an  executor,  adminis- 
trator or  beneficiary  as  herein  provided,  he  shall  issue  a  notice  stating  the  time 
when  such  attendance  is  required,  and  shall  transmit  the  same  by  registered 
mail  to  such  person  or  corporation,  fourteen  days  at  least  before  the  date  when 
such  person  or  corporation  is  required  to  appear.  If  a  person  or  corporation 
receiving  such  notice  neglects  to  attend,  or  to  give  attendance  so  long  as  may  be 
necessary  for  the  purpose  for  which  the  notice  was  issued,  or  refuses  to  pro- 
duce such  books,  papers  or  securities,  or  to  furnish  such  information,  such  person 
or  corporation  shall  be  liable  to  a  penalty  of  twenty-five  dollars  ($25.00)  for 
each  offence,  which  shall  be  recovered  by  the  state  treasurer  for  the  use  of  the 
state.  The  state  treasurer  may  commence  an  action  for  the  recovery  of  any 
of  said  taxes  at  any  time  after  the  same  become  payable;  and  also  whenever 
the  judge  of  a  probate  court  certifies  to  him  that  the  final  account  of  an  executor, 
administrator  or  trustee  has  been  filed  in  such  court  and  that  the  settlement 
of  the  estate  is  delayed  because  of  the  non-payment  of  said  tax.  The  probate 
court  shall  so  certify  upon  the  application  of  any  heir,  legatee  or  other  person 
interested  therein,  and  may  extend  the  time  of  payment  of  said  tax  whenever 
the  circumstances  of  the  case  require. 

Liabilities  on  Transfer  of  Stock,  by  Foreign  Executor. 

S.  18.  If  a  foreign  executor,  administrator  or  trustee  assigns  or  transfers 
any  stock  or  obligation  in  any  national  bank  located  in  this  state,  or  in  any 
corporation  organized  under  the  laws  of  this  state,  owned  by  a  deceased  non- 
resident at  the  date  of  his  death  and  liable  to  a  tax  under  the  provisions  of  this 
chapter,  the  tax  shall  be  paid  to  the  state  treasurer  at  the  time  of  such  assign- 


1911,  c.  42.]  NEW  HAMPSHIRE.  741 

ment  or  transfer,  and  if  it  is  not  paid  when  due,  such  executor,  administrator 
or  trustee  shall  be  personally  liable  therefor  until  it  is  paid.  A  bank  located 
in  this  state,  or  a  corporation  organized  under  the  laws  of  this  state  which  shall 
record  a  transfer  of  any  share  of  its  stock  or  of  its  obligations  made  by  a  foreign 
executor,  administrator  or  trustee,  or  issue  a  new  certificate  for  a  share  of  its 
stock  or  of  this  transfer  of  an  obligation  at  the  instance  of  a  foreign  executor, 
administrator  or  trustee,  before  all  taxes  imposed  thereon  by  the  provisions  of 
this  chapter  have  been  paid,  shall  be  liable  for  such  tax  in  an  action  brought 
by  the  state  treasurer. 

Conditions  of  Delivering  Assets  to  Foreign  Executor. 

S.  19.  Securities  or  assets  belonging  to  the  estate  of  a  deceased  non-resident 
shall  not  be  delivered  or  transfered  to  a  foreign  executor,  administrator  or  legal 
representative  of  said  decedent,  unless  such  executor,  administrator  or  legal 
representative  has  been  licensed  to  receive  such  securities  or  assets  by  the  pro- 
bate court  without  serving  notice  upon  the  state  treasurer  of  the  time  and  place 
of  such  intended  delivery  or  transfer,  seven  days  at  least  before  the  time  of 
such  delivery  or  transfer.  The  state  treasurer,  either  personally  or  by  repre- 
sentative, may  examine  such  securities  or  assets  at  the  time  of  such  delivery 
or  transfer.  When  such  securities  or  assets  are  liable  to  a  tax  under  the  pro- 
visions of  this  chapter,  such  tax  shall  be  paid  before  such  delivery  or  transfer. 
Failure  to  serve  such  notice  or  to  allow  such  examination,  or  delivery  or  transfer 
of  such  securities  or  assets  before  the  payment  of  such  tax  to  the  state  treasurer 
shall  render  the  person  or  corporation  making  the  delivery  or  transfer  liable 
in  an  action  brought  by  the  state  treasurer  to  the  payment  of  the  tax  due  upon 
said  securities  or  assets. 

Parties. —  Notice. 

S.  20.  The  state  treasurer  shall  be  made  a  party  to  all  petitions  by  foreign 
executors,  administrators  or  trustees  brought  under  the  provisions  of  this  act, 
or  under  section  23  of  chapter  189  of  the  Public  Statutes,  and  no  decree  shall 
be  made  upon  any  such  petition  unless  it  appears  that  notice  of  such  petition 
has  been  served  on  the  state  treasurer,  fourteen  days  at  least  before  the  return 
day  of  such  petition.  The  state  treasurer  shall  be  entitled  to  appear  in  any 
proceeding  in  any  court  in  which  the  decree  may  in  any  way  affect  the  tax,  and 
no  decree  in  any  such  proceeding,  or  upon  appeal  therefrom,  shall  be  binding 
upon  the  state  unless  personal  notice  of  such  proceeding  shall  have  been  given 
to  the  state  treasurer. 

Books  and  Blanks  provided  by  State  Treasurer. 

S.  21.  The  state  treasurer  shall  provide  the  judges  and  registers  of  pro- 
bate of  the  state  with  such  books  and  blanks  as  are  requisite  for  the  execution 
of  this  act. 


742  STATUTES  ANNOTATED.  [N.  J.  St. 


NEW  JERSEY, 


New  Jersey  has  had  a  collateral  inheritance  tax  since  1892. 
There  have  been  various  revisions,  the  last  one  in  1909. 

A  strict  construction  of  the  constitutional  requirement  that 
the  title  shall  express  the  subject  of  a  statute  has  played  havoc 
with  the  inheritance  taxes,  no  less  than  three  acts  having  been 
declared  ineffective  in  part  for  defective  titles. 

Collateral  inheritances  only  are  taxed,  at  the  uniform  rate  of 
five  per  cent,  with  an  exemption  of  $500  which  applies  to  indi- 
vidual shares,  not  to  the  estate  as  a  whole.  Inheritances  not  taxed 
are  those  to  father,  mother,  husband,  wife,  child,  lineal  descendant, 
brother,  sister,  wife  or  widow  of  son,  husband  of  daughter. 

Under  the  present  law  New  Jersey  is  taxing  stock  in  a  New 
Jersey  corporation  owned  by  a  non-resident.  A  corporation 
which  transfers  such  stock  without  permission  from  the  comp- 
troller is  responsible  for  the  tax  and  subject  to  a  penalty  as  well. 

If  the  entire  estate  of  a  non-resident  passes  to  exempt  heirs,  the 
executor  or  administrator  must  file  with  the  comptroller  a  copy 
of  the  will,  if  any,  and  an  affidavit  setting  forth  the  names  and 
relationship  of  the  beneficiaries,  whereupon  a  waiver  will  be  issued 
permitting  any  New  Jersey  stock  to  be  transferred. 

If  any  portion  of  a  non-resident's  estate  goes  to  other  than 
exempt  heirs,  it  is  necessary  to  file  in  addition  a  complete  inven- 
tory of  the  estate.  In  such  a  case  the  tax  on  the  portion  of  the 
estate  in  New  Jersey  is  that  proportion  of  the  tax  which  the  estate 
would  have  had  to  pay  if  the  deceased  had  been  a  resident  of  New 
Jersey  which  the  New  Jersey  portion  of  the  estate  bears  to  the  entire 
estate. 

The  comptroller  is  authorized  to  make  an  arrangement  to  pay 
a  percentage  of  the  tax  that  may  be  collected  to  any  person  giving 
information  about  estates  of  residents  that  have  not  taken  out 
administration  within  one  year  after  the  date  of  death,  and 
estates  of  non-residents  that  have  any  property  taxable  in  the 
state  if  the  tax  is  not  paid  within  three  months  after  the  death. 


1893,  c.  210.] 

NEW  JERSEY. 

List  of  Statutes. 

1709-1895. 

Gen.  Sts.  of  New  Jersey,  Vol.  3,  p.  3339 

1892. 

Statutes    " 

"        " 

c.  122.  p.  206. 

1893. 

((          It 

u               n 

c.  210,  p.  367. 

1894. 

<(          11 

"           " 

c.  210,  p.  318. 

1898. 

i(          (< 

"          " 

c.    62,  p.  106. 

1902. 

ti                     K 

(           << 

c.  217,  p.  670. 

1903. 

n                a 

<          ,1 

c.    90,  p.  128. 

1906. 

it                <( 

i                a 

c.  22V,  p.  432. 

1906. 

<i                 (< 

I                (t 

c.  228,  p.  432. 

1908. 

il                  n 

'                " 

c.  131,  p.  200. 

1909. 

"               " 

'                " 

c.    31,  p.    49. 

1909. 

^  "               " 

<                (< 

c.  159,  p.  236. 

1909. 

<<               << 

'                " 

c.  209,  p.  304. 

1909. 

It                     4< 

1                 u 

c.  228,  p.  325. 

1909. 

II                     11 

I               It 

c.  238,  p.  375. 

1910. 

11                     11 

I               It 

c.    28,  p.    42. 

743 


(Also  Gen.  Sts.  p.  3339.) 


Constitutional  Limitations. 

New  Jersey  Constitution.     Amendment  of  1844. 

Art.  4,  S.  7,  No.  12.  Property  shall  be  assessed  for  taxes  under  general  laws, 
and  by  uniform  rules,  according  to  its  true  value. 

S.  7,  No.  4.  To  avoid  improper  influences  which  may  result  from  intermixing 
in  one  and  the  same  act  such  things  as  have  no  proper  relation  to  each  other, 
every  law  shall  embrace  but  one  object,  and  that  shall  be  expressed  in  the  title. 
No  law  shall  be  revived  or  amended  by  reference  to  its  title  only;  but  the  act 
revived,  or  the  section  or  sections  amended,  shall  be  inserted  at  length.  No 
general  law  shall  embrace  any  provision  of  a  private,  special  or  local  character. 
No  act  shall  be  passed  which  shall  provide  that  any  existing  law,  or  any  part 
thereof,  shall  be  made  or  deemed  a  part  of  the  act,  or  which  shall  enact  that 
any  existing  law,  or  any  part  thereof,  shall  be  applicable,  except  by  inserting 
it  in  such  act. 

THE  STATUTE  OF  1892. 

N.  J.  St.  1892,  c.  122,  approved  March  23,  1892,  provided  a 
collateral  inheritance  tax  of  five  per  cent.  It  was  repealed  by 
N.J.St.  1893,0.210.    . 

The  acts  of  1892  and  1893  are  void  as  to  realty,  as  the  title  does 
not  mention  real  estate,  which  defect  was  avoided  in  the  act  of 
1894.  Grossman  v.  Hancock,  58  N.  J.  L.  139,  32  A.  689;  Von 
Riper  v.  Heffenheimer,  17  N.  J.  L.  J.  49;  In  re  Dobermiller,  17 
N.  J.  L.  J.  378. 

THE  STATUTE  OF  1893. 

N.  J.  St.  1893,  approved  March  16,  1893,  c.  210,  p.  367,  s.  1, 
provides  for  a  tax  of  five  per  cent  on  collaterals,  with  an  exemption 
where  an  estate  may  be  valued  at  less  than  five  hundred  dollars. 


744  STATUTES  ANNOTATED.  [N.  J.  St. 

The  act  is  void  as  to  real  estate,  as  the  title  does  not  mention 
real  estate.  Grossman  v.  Hancock,  58  N.  J.  L.  139,  32  A.  689; 
Von  Riper  V,  Heffenheimer,  17  N.  J.  L.  J.  49;  In  re  Dobermiller,  17 
N.  J.  L.  J.  ?78. 

Ss.  2-22  cover  the  assessment,  collection  and  payment  of  the  tax. 

S.  4.  And  be  it  enacted.  That  all  taxes  imposed  by  this  act,  unless  otherwise 
herein  provided  for,  shall  be  due  and  payable  at  the  death  of  the  testator,  grantor, 
or  intestate,  as  the  case  may  be,  and  if  the  same  are  paid  within  one  year,  interest 
at  the  rate  of  six  per  centum  per  annum  shall  be  charged  and  collected  thereon, 
but  if  not  so  paid,  interest  at  the  rate  of  ten  per  centum  per  annum  shall  be 
charged  and  collected  from  the  time  said  tax  accrued;  provided,  that  if  said  tax 
is  paid  within  six  months  from  the  accruing  thereof,  interest  shall  not  be  charged 
or  collected  thereon,  but  a  discount  of  five  per  centum  shall  be  allowed  and 
deducted  from  said  tax;  and  in  all  cases  where  the  executors,  administrators  or 
trustees  do  not  pay  such  tax  within  one  year  from  the  death  of  the  decedent  they 
shall  be  required  to  give  a  bond,  in  the  form  and  to  the  effect  prescribed  in  section 
two  of  this  act,  for  the  payment  of  said  tax,  together  with  interest. 

Future  Indeterminate  Interests  are  Taxable. 

N.  J.  St.  1893,  c.  210,  s.  4,  provides  that  all  taxes  imposed  by  the 
act  shall  be  due  at  the  death  of  the  testator  unless  otherwise  pro- 
vided and  it  was  claimed  that  the  necessary  effect  of  this  language 
was  that  the  act  does  not  provide  for  the  imposition  of  a  tax  which 
cannot  be  determined  at  the  death  of  the  testator.  But  this  con- 
tention fails  to  take  account  of  the  phrase  in  this  fourth  section 
that  the  tax  imposed  by  the  act  shall  be  due  and  payable  at  the 
death  of  the  testator  unless  otherwise  provided.  It  also  fails  to 
take  account  of  the  provision  of  section  13,  to  the  effect  that  in 
order  to  fix  the  value  of  property  subject  to  the  tax,  the  surrogate 
or  register  of  the  prerogative  court  shall  "appoint  an  appraiser  as 
often  as  and  whenever  the  occasion  may  require."  The  court 
relies  on  similar  provisions  in  the  New  York  statute  as  construed 
in  In  re  Stewart,  131  N.  Y.  274.  Hoyt  v.  Hancock,  65  N.  J.  Eq. 
688,  55  A.  1004. 

S.  13.  And  be  it  enacted,  That  in  order  to  fix  the  value  of  property  of  persons 
whose  estates  shall  be  subject  to  the  payment  of  said  tax,  the  surrogate  or  register 
of  the. prerogative  court,  on  the  application  of  any  interested  party,  or  upon 
his  own  motion,  shall  appoint-  some  competent  person  as  appraiser  as  often  as, 
and  whenever  occasion  may  require,  whose  duty  it  shall  be  forthwith  to  give 
such  notice  by  mail,  and  to  such  persons  as  the  surrogate  or  register  of  the  pre- 
rogative court  may  by  order  direct,  of  the  time  and  place  he  will  appraise  such 
property,  and  at  such  time  and  place  to  appraise  the  same  at  its  fair  market 
value,  and  make  a  report  thereof  in  writing  to  said  surrogate  or  register  of  the 


1894,  c.  210  NEW  JERSEY.  745 

prerogative  court,  together  with  such  other  facts  in  relation  thereto  as  said 
surrogate  or  register  of  the  prerogative  court  may  by  order  require,  to  be  filed 
in  the  office  of  such  surrogate  or  register  of  the  prerogative  court,  and  from  this 
report  the  said  surrogate  or  register  of  the  prerogative  court  shall  forthwith 
assees  and  fix  the  then  cash  value  of  all  estates,  annuities  and  life  estates,  or 
term  of  years  growing  out  of  said  estates,  and  the  tax  to  which  the  same  is  liable, 
and  shall  immediately  give  notice  thereof  by  mail  to  the  state  comptroller  and 
to  all  parties  known  to  be  interested  therein ;  any  person  or  persons  dissatisfied 
with  said  appraisement  or  assessment  may  appeal  therefrom  to  the  ordinary  or 
orphans'  court  of  the  proper  county,  within  sixty  days  after  the  making  and 
filing  of  such  assessment,  on  paying  or  giving  security,  approved  by  the  ordinary 
or  orphans'  court,  to  pay  all  costs,  together  with  whatever  tax  shall  be  fixed  by 
said  court;  the  said  appraiser  shall  be  paid  by  the  state  treasurer  on  the  warrant 
of  the  comptroller,  on  the  certificate  of  the  ordinary  or  surrogate,  duly  filed 
with  the  comptroller,  at  the  rate  of  three  dollars  per  day  for  every  day  actually 
and  necessarily  employed  in  said  appraisement,  together  with  his  actual  and 
necessary  traveling  expenses. 

[See  notes  to  section  4,  ante,  p.  744.] 

THE  STATUTE  OF  1894. 
History  —  Construction. 

The  New  Jersey  statute  of  1894  was  modelled  after  the  New 
York  act  of  1885,  and  if  the  New  Jersey  legislature  had  made  no 
change  in  that  act  it  would  be  held  upon  well-settled  principles  to 
have  adopted  with  the  act  the  construction  previously  placed 
thereon  by  the  New  York  courts  in  the  case  oi  Enston,  113  N.  Y. 
174,  21  N.  E.  87.  Neilson  v.  Russell,  76  N.  J.  L.  655,  71  A.  286, 
287. 

N.  J.  St.  1894,  c.  210,  p.  318.     Approved  May  15,  1894. 

Taxable  Transfers.  —  Rate. 

S.  1.  Be  it  enacted  by  the  Senate  and  General  Assembly  of  the  State  of 
New  Jersey,  That  after  the  passage  of  this  act  all  property  which  shall  pass  by 
will  or  by  the  intestate  laws  of  this  state  from  any  person  who  may  die  seized 
or  possessed  of  the  same  while  being  a  resident  of  the  state,  and  all  property 
which  shall  be  within  this  state,  and  any  part  of  such  property,  and  any  interest 
therein  or  income  therefrom,  which  shall  be  transferred  by  inheritance,  dis- 
tribution, bequest,  devise,  deed,  grant,  sale  or  gift  aforesaid,  made  or  intended 
to  take  effect  in  possession  or  enjoyment  after  the  death  of  the  intestate,  testator, 
grantor  or  bargainor,  to  any  person  or  persons,  or  to  a  body  politic  or  corporate, 
excepting  churches,  hospitals  and  orphan  asylums,  public  libraries,  bible  and 
tract  societies,  and  all  religious,  benevolent  and  charitable  institutions  and 
organizations,  in  trust  or  otherwise,  or  by  reason  whereof  any  person  or  body 
politic  or  corporate  shall  become  beneficially  entitled",  in  possession  or  expectancy, 
to  such  property,  or  to  the  income  thereof,  other  than  to  or  for  the  use  of  the 
father,  mother,  husband,  wife,  children,  brother  or  sister,  or  lineal  descendants 


746  STATUTES  ANNOTATED.  IN.  J.  St. 

born  in  lawful  wedlock,  or  the  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter, 
shall  be  subject  to  a  tax  of  five  dollars  on  every  hundred  dollars  of  the  clear 
market  value  of  such  property,  to  be  paid  to  the  treasurer  of  the  state  of  New 
Jersey  for  the  use  of  the  state,  and  all  administrators,  executors  and  trustees 
shall  be  liable  for  any  and  all  such  taxes  until  the  same  shall  have  been  paid 
as  hereinafter  directed;  provided,  that  an  estate  which  may  be  valued  at  a 
less  sum  than  five  hundred  dollars  shall  not  be  subject  to  said  duty  or  tax. 

As  to  exemptions,  see  post,  p.  759. 

The  New  Jersey  statute  of  1894  taxes  the  legacy  and  not  the 
estate.  Neilson  v.  Russell  76  N.  J.  L.  655,  71  A.  286,  reversing 
76  N.  J.  L.  27,  69  A.  476. 

Distinguished  from  the  New  York  Act. 

The  New  Jersey  statute  of  1894  modified  the  language  of  the 
New  York  statute  of  1885  by  inserting  at  the  beginning  of  the 
clause  the  words  "all  property"  in  place  of  the  mere  relative  "which," 
and  by  adding  the  words  "inheritance,  distribution,  bequest, 
devise." 

This  act  differs  from  the  New  York  act  of  1892,  which  assumes 
to  tax  the  transfer  of  property  within  the  jurisdiction,  while  the 
New  Jersey  statute  of  1894  does  not  undertake  to  tax  all  transfers 
of  property  within  the  jurisdiction,  but  only  taxes  an  inheritance, 
distribution,  bequest  or  devise.  In  this  respect  the  New  Jersey 
statute  differs  also  from  the  Maryland  statute  construed  in  State 
V.  Dalrymple,  70  Md.  294,  17  A.  82,  3  L.  R.  A.  372.  For  the  same 
reason  the  question  is  different  from  what  it  is  in  Massachusetts  as 
in  Greves  v.  Shaw,  173  Mass.  205,  53  N.  E.  372.  In  short,  the 
New  Jersey  statute  imposes  a  legacy  duty  and  not  a  transfer  or 
succession  tax  as  was  decided  in  reference  to  the  English  statute 
in  Thomason  v.  Advocate  General,  12  CI.  &  F.  1.  Neilson  v. 
Russell,  76  N.  J.  L.  655,  71  A.  286,  reversing  76  N.  J.  L.  27,  69 
A.  476. 

Constitutionality. 

The  act  of  1894  is  not  a  property  tax  and  is  constitutional. 
Neilson  v.  Russell,  76  N.  J.  L.  655,  71  A.  286,  reversing  76  N.  J.  L. 
27,  69  A.  476. 

Double  Taxation  Upheld. 

The  situs  of  personal  property  for  the  purpose  of  a  legacy  or 
succession  tax  is  the  domicile  of  the  decedent  and  the  right  to 
its  imposition  is  not  affected  by  the  statute  of  a  foreign  state 


1894,  c.  210.]  NEW  JERSEY.  747 

which  subjects  to  similar  taxation  such  portion  of  the  personal 
estate  of  any  non-resident  testator  or  intestate  as  he  may  take 
and  leave  there  for  safe  keeping  or  until  it  should  suit  his 
convenience  to  carry  it  away.  In  re  Hartman,  70  N.  J.  Eq.  664, 
62  A.  560. 

"A  Resident  of  the  State." 

The  decedent  was  the  wife  of  an  Episcopal  rector  in  Dover, 
New  Jersey,  who  resided  there  at  the  death  of  the  decedent.  The 
decedent  was  a  wealthy  woman  and  at  the  time  of  her  marriage 
owned  and  resided  in  a  comfortable  property  in  New  York  City, 
and  until  her  death  maintained  her  establishment  in  that  place. 
She  had  repeatedly  declared  that  she  would  never  remove  to 
Dover,  where  her  husband  resided,  for  the  purpose  of  establishing 
her  home  there.  After  the  marriage  her  husband  lived  with  the 
decedent  in  New  York  City  during  the  week,  she  going  with  him  to 
Dover  at  the  end  of  each  week,  where  they  remained  until  the 
beginning  of  the  next  week,  in  order  that  he  might  officiate  during 
the  Sunday  services.  But  she  used  to  spend  about  two  weeks  in 
the  spring  and  the  same  period  in  the  fall  of  each  year  at  the  rectory 
in  Dover  as  a  part  of  her  summer  vacation.  In  May,  1903,  she 
accompanied  her  husband  to  Dover  for  the  purpose  of  attending 
a  church  entertainment,  expecting  to  remain  but  a  day  or  two, 
and  while  there  was  taken  suddenly  ill  and  died.  The  court  holds 
that  the  legal  domicile  of  the  husband  was  in  New  Jersey  and  her 
domicile  was  therefore  also  in  New  Jersey,  according  to  the  estab- 
lished rule  that  where  the  husband  and  wife  are  living  together  as 
members  6f  one  family,  the  residence  of  the  husband  is  considered 
in  law  as  the  residence  of  the  wife.  In  re  Hartman,  70  N.  J.  Eq. 
664,  62  A.  560. 

"Property  which  shall  be  within  this  State." 

The  court  assumes  that  shares  of  stock  in  a  New  Jersey  corpora- 
tion have  a  situs  in  this  state,  and  that  succession  thereto  or 
transfer  thereof  may  be  taxed  by  the  New  Jersey  legislature. 
Neilson  v.  Russell,  76  N.  J.  L.  655,  71  A.  286,  reversing  76  N.  J.  L. 
27,  69  A.  476. 

There  was  no  doubt  expressed  in  Neilson  v.  Russell,  of  the 
power  of  the  legislature  to  tax  the  succession  to  property  located 
in  this  state  of  a  non-resident  decedent.  Dixon  v.  Russell,  79 
N.  J.  L.  490,  76  A.  982,  reversing  78  N.  J.  L.  296,  73  A.  51. 


748  STATUTES  ANNOTATED.  [N.  J.  St. 

** Inheritance,   Distribution,   Bequest  and  Devise." — Non- 
Residents. 

The  court  holds  that  a  legacy  in  an  English  estate  of  stock  in  a 
New  Jersey  corporation  is  not  taxable  by  the  New  Jersey  statute  of 
1894,  even  if  the  court  disregards  the  technical  force  of  the  words 
"inheritance,  distribution,  bequest  and  devise,''  and  looks  at  the  tax 
as  a  succession  tax.  The  tax  cannot  be  sustained  as  a  property 
tax.  The  ground  upon  which  it  can  be  sustained  is  that  the  rights 
of  testamentary  disposition  and  of  succession  are  creatures  of  law, 
and  the  court  thinks  that  it  follows  logically  that  the  only  law 
which  can  impose  the  terms  is  the  law  that  creates  the  right.  In 
this  case  it  is  the  English  law.  The  title  to  the  stock  passed  by 
virtue  of  the  will  to  the  executors  from  the  moment  of  the  testa- 
tor's death,  and  the  probate  was  operative  only  as  the  authenti- 
cated evidence,  not  as  the  foundation  of  the  executors'  title.  The 
English  executors  were  authorized  without  probate  in  this  state  to 
transfer  the  stock. 

The  court  remarks  that  the  New  Jersey  administration  is  ancil- 
lary only  and  the  provisions  of  the  statute  authorizing  the  executors 
to  collect  the  tax  from  the  legatee  or  to  take  it  from  the  legacy 
cannot  be  enforced;  and  after  administration  here  the  balance  of 
the  estate  would  probably  be  transferred  to  the  English  executors 
for  distribution  in  accordance  with  the  laws  of  the  domicile  of 
the  testator.  Neilson  v.  Russell,  76  N.  J.  L.  655,  71  A.  286,  revers- 
ing 76  N.  J.  L.  27,  69  A.  476. 

Where  the  decedent  had  never  resided  in  New  Jersey,  and  was 
not  seized  of  real  estate  in  New  Jersey,  the  court  holds  that  the 
tax  upon  non-residents  was  imposed  only  in  case  of  inheritance, 
distribution,  bequest  and  devise.  The  court  holds  that  these  words 
were  naturally  applicable  to  the  general  succession  to  the  whole 
estate  and  not  to  the  particular  succession  to  a  special  portion  of 
the  estate  which  in  this  case  is  the  stock  of  a  New  Jersey  corpora- 
tion. That  general  succession  was  succession  under  the  foreign 
law  and  therefore  not  taxable  in  this  state.  Astor  v.  State  (N.  J. 
1903),  72  A.  78  (governed  by  Neilson  v.  Russell,  ante). 

Marshaling  Assets. 

The  executor  could  not  release  the  New  Jersey  property  of  a 
resident  of  New  York  from  taxation  by  applying  it  to  the  payment 
.  of  exempt  legacies  and  by  paying  the  taxable  legacies  out  of  the 
New  York  property. 


1894,  c.  210.]  NEW  JERSEY.  749 

The  court  remarks  upon  In  re  James,  144  N.  Y.  6,  38  N.  E.  961, 
where  the  New  York  court  held  that  the  devotion  of  the  New  York 
property  to  the  payment  of  exempt  legacies  rendered  that  property 
immune  from  the  imposition  of  the  collateral  inheritance  tax  under 
a  New  York  statute. 

In  Massachusetts  a  different  rule  has  been  applied,  on  the  ground 
that  the  property  passed  at  the  death  of  the  testator,  in  Kingsbury 
V.  Chapin,  196  Mass.  533,  and  this  rule,  adopted  in  Kingsbury  v. 
C/^a^iw,  has  subsequently  been  followed  in  In  re  Ramsdill,  190  N.  Y. 
492,  83  N.  E.  584,  so  far  as  it  applied  to  intestacy. 

The  court  says  that  there  is  no  ground  apart  from  strictly  specific 
legacies  for  differentiating  the  case  of  intestacy  from  that  of  testacy ; 
and  it  therefore  applies  to  the  case  of  a  testator.  Tilford  v.  Dick- 
inson 79  N.  J.  L.  302,  75  A.  574,  reversed  on  another  point  in  79 
N.  J.  L.  574,  79  A.  1119. 

Taxation  not  Dependent  on  Probate  in  New  Jersey. 

Where  there  is  a  question  whether  a  married  woman  is  domiciled 
within  the  state  of  New  Jersey  or  of  New  York,  the  fact  that  the 
will  was  never  probated  in  New  Jersey,  but  the  probate  was  taken 
out  in  New  York,  does  not  deprive  the  state  of  New  Jersey  of 
jurisdiction  to  levy  an  inheritance  tax  upon  it.  The  authority  of 
the  surrogate  does  not  depend  upon  the  probate  of  the  will  which 
speaks  from  the  death  of  the  testatrix.  In  re  Hartman,  70  N.J. 
Eq.  664,  668,  62  A.  560. 

Power  of  Appointment. 

If  a  testator  died  before  the  passage  of  an  inheritance  tax,  leav- 
ing a  life  interest  by  his  will  with  the  power  of  appointment  in  the 
life  tenant,  it  seems  that  the  interest  acquired  under  the  appoint- 
ment is  not  subject  to  tax,  as  that  interest  is  to  be  considered  as 
acquired  at  the  time  of  the  will  taking  effect.  Hoyt  v.  Hancock, 
65  N.  J.  Eq.  688,  55  A.  1004,  relying  upon  In  re  Harbeck,  161  N.  Y. 
211. 

Gift  of  Bonds  to  Debtor  is  Taxable. 

Where  the  testator  was  the  holder  of  certain  debenture  bonds 
of  a  corporation  and  bequeathed  these  bonds  to  the  corporation, 
it  was  contended  that  no  assessment  could  be  made  upon  this 
legacy,  as  such  a  gift  only  released  to  a  debtor  evidences  of  his  debt 
held  by  his  creditor.     The  court  replies,  however,  that  the  deben- 


750  STATUTES  ANNOTATED.  [N.  J.  St. 

ture  bonds  in  question  were  the  property  of  the  testator  and  that 
when  he  bequeathed  them  to  the  corporation  the  property  passed 
from  him  to  it ;  that  it  might  cancel  the  bonds  or  it  might  properly 
transfer  them  to  any  one  who  might  be  willing  to  pay  their  value 
and  that  the  tax  was  properly  imposed  upon  them.  In  re  Roths- 
child, 72  N.  J.  Eq.  425,  65  A.  1118,  affirming  71  N.  J.  Eq.  210. 

S.  2  provides  for  the  appraisal  of  remainder  interests;  section  3  covers  a  tax 
on  legacies  to  executors;  section  4  provides  that  the  tax  shall  be  due  at  the 
death  of  the  testator;  section  5  covers  the  penalty. 

When  Executor  should  Pay  Tax.  —  Liability  for  Interest  and 
Penalty. 

The  executor  showed  in  his  account  that  he  had  paid  a  certain 
sum  for  inheritance  tax,  including  interest  and  a  penalty,  and  objec- 
tion was  made  to  the  allowance  of  the  account. 

The  court  holds  that  the  executor  is  not  bound  to  pay  the  tax 
until  the  expiration  of  a  year  allowed  him  by  law  within  which  to 
settle  the  estate.  He  is  entitled  to  know  the  amount  payable  for 
the  payment  of  legacies  after  the  debts  are  paid  and  to  have  a 
reasonable  time  thereafter  before  he  pays  the  tax  and  the  legacies. 

The  court  holds,  therefore,  that  the  executor  should  be  allowed 
in  his  account  for  the  principal  of  the  tax  he  has  paid,  together 
with  interest  collected  thereon  under  the  statute  for  one  year ;  and 
that  as  he  is  bound  to  pay  this  tax  on  the  legacies  at  the  expiration 
of  the  year  he  cannot  be  allowed  any  interest  he  has  paid  thereon 
after  that  period.  The  executor  is  personally  chargeable  with  the 
whole  penalty,  and  is  not  entitled  to  be  allowed  in  the  accounting 
for  the  excess  interest  or  penalty.  Wyckoff  v.  O'Neill  72  N.  J. 
Eq.  880,  67  A.  32. 

S.  6  provides  for  the  deduction  of  the  tax;  section  7  gives  the  executors  power 
to  sell  property  to  pay  the  tax;   sections  8  and  9  cover  the  payment  of  the  tax. 

Executor's  Accounts  should  Show  Inheritance  Tax  Payments. 

It  was  suggested  by  the  lower  court  that  the  amount  of  the 
inheritance  tax  paid  did  not  enter  into  the  executor's  accdunt,  as 
the  amount  of  the  tax  on  each  legacy  should  be  deducted  from 
the  legacy  itself  in  settlement  with  the  legatee. 


1894,  c.  210.]  NEW  JERSEY.  751. 

The  court  of  appeals  holds,  however,  that  the  executor  should 
show  in  his  account  every  payment  made  by  him  as  executor. 
The  distribution  of  these  payments  among  the  various  legatees 
is  a  matter  of  subsequent  arrangement  between  him  and  them  when 
he  comes  to  pay  the  legacies.  In  settling  his  account  it  would  be 
better,  doubtless,  if  the  accountant  should  distribute  the  sum 
total  of  the  inheritance  taxes,  showing  just  how  much  was  charge- 
able against  each  legacy.  But  the  failure  to  so  distribute  is  no 
reason  for  disallowing  the  items  in  the  account.  Wyckoff  v. 
O'Neih  72  N.  J.  Eq.  880,  67  A.  32. 

Refund  to  Pay  Debts. 

S.  10.  And  be  it  enacted,  That  whenever  any  debts  shall  be  proven  against  the 
estate  of  a  decedent,  after  the  payment  of  legacies  or  distribution  of  property 
from  which  the  said  tax  has  been  deducted,  or  upon  which  it  has  been  paid,  and 
a  refund  is  made  by  the  legatee,  devisee,  heir  or  next  of  kin,  a  proportion  of  the 
tax  so  paid  shall  be  repaid  to  him  by  the  executor,  administrator  or  trustee,  if 
the  said  tax  has  not  been  paid  to  the  state  treasurer,  or  by  them  if  it  has  been 
so  paid. 

Section  10,  which  authorizes  a  refund  of  taxes  where  the  legatee 
has  been  obliged  to  refund  part  of  the  legacy  to  pay  debts,  shows 
that  it  is  the  legacy  that  is  taxed  and  not  the  estate,  and  shows 
further,  that  an  insolvent  estate  is  not  liable  to  the  tax.  Neilson 
V.  Russell  (N.  J.  Errors  and  Appeals),  71  A.  286,  reversing  69  A. 
476. 

Foreign  Executor  or  Administrator. 

S.  11.  And  be  it  enacted.  That  whenever  any  foreign  executor  or  adminis- 
trator shall  assign  or  transfer  any  stocks  or  loans  in  this  state,  standing  in  the 
name  of  a  decedent,  or  in  trust  for  a  decedent,  which  shall  be  liable  to  the  said 
tax,  such  tax  shall  be  paid  to  the  state  treasurer  on  the  transfer  thereof,  other- 
wise the  corporation  permitting  such  transfer  shall  become  liable  to  pay  such 
tax;  provided,  that  such  corporation  has  knowledge  before  such  transfer  that 
said  stocks  or  loans  are  liable  to  said  tax. 

The  claim  of  the  state  of  New  Jersey  to  tax  non-residents'  stock 
in  New  Jersey  corporations  is  not  helped  by  the  statute  of  1894, 
c.  210,  s.  11,  which  applies  only  to  the  case  of  stock  which  is  liable 
to  the  tax  and  is  intended  to  afford  a  means  of  collection  of  a  tax 
imposed  by  other  sections  and  is  not  of  itself  intended  to  impose 
a  tax.  Neilson  v.  Russell  (N.  J.  Errors  and  Appeals),  71  A.  286, 
reversing  69  A.  476. 

S.  12  provides  that  taxes  erroneously  paid  shall  be  refunded. 


7li8  STATUTES  ANNOTATED.  [N.  J.  St 

AppraisaL 

S.  13.  And  be  it  enacted.  That  in  ordar  to  fix  the  \'alue  (A  propoty  of  persmis 
whose  estates  shall  be  subject  to  the  pay-menc  of  said  tax,  the  surrogate  or  register 
of  the  prerogative  court,  on  the  application  of  any  interested  part>',  or  upon  his 
own  motion,  shall  appoint  some  competent  person  as  appraiser  as  oStca  as^  and 
iHienever  occasion  may  require,  whose  duty  it  shall  be  forthwith  to  give  sadbi 
notioe  by  mail  and  to  suc^  persons  as  the  surrogate  or  roister  of  the  prerogative 
court  may  by  order  direct,  of  the  time  and  place  he  will  apfMraise  such  property, 
and  at  such  time  and  place  to  ai^raise  the  same  at  its  fair  market  value,  and 
make  a  report  therecrf  in  writing  to  said  surrogate  <»*  register  of  the  prerogative 
court,  together  with  such  other  facts  in  rdation  thereto  as  said  surrogate  or 
leipsta'  <tf  the  prerogative  court  may  by  order  require,  to  be  filed  in  the  office 
of  such  surrogate  or  r^ist^  <rf  the  prerogati\-e  court,  and  from  this  rqiort  the 
said  surrogate  <x  register  of  the  prerogati\'e  court  shall  forthwith  assess  and  fix 
the  then  ca^  value  of  all  estates,  annuities  and  life  estates,  <»*  term  of  years 
growii^  out  of  said  estates,  and  the  tax  to  which  the  same  is  liable,  and  shall 
immediatdy  give  notioe  thereof  by  mail  tx>  the  state  comptrcJler  and  in  all 
parties  known  to  be  interested  therein;  any  person  or  persons  dissatisfied  with 
said  ai^raisaDent  <»-  assessmrat  may  appeal  therrfrom  to  the  ordinary  or  orphans' 
court  of  die  proper  county,  within  sixty  days  after  the  making  and  filii^  of  sudi 
assessment,  on  payii%  <h-  giving  security,  approved  by  the  ordinary  or  orpbans' 
court,  to  pay  all  costs,  together  with  whatever  tax  shall  be  fixed  by  said  court; 
the  said  a|^>raiser  shall  be  paid  by  the  state  treasurer  on  the  warrant  <^  the 
comptroller,  on  the  cntificate  of  the  mdinary  or  surrogate,  duly  filed  with  the 
axnptroUer,  at  the  rate  c^  three  dcdlars  per  day  for  every  day  actually  and  neces- 
sarily eiqployed  in  said  af^xaiseocient,  together  with  his  actual  and  necessary 
travriing  expenses. 

Under  the  New  Jersey  statute  of  189i,  section  13,  the  surrogate 
upon  the  application  of  an  interested  party  may  appcnnt  an  ap- 
praiser who  may  assess  the  tax.  Dixon  v.  Russdl,  78  N.  J.  L.  296, 
73  A.  51. 

Yaluatiofi  on  Death. 

Where  propoty  passed  to  the  collateral  relatives  by  wHl,  wfaidi 
speaks  from  the  death  of  the  testatrix,  the  prt^jerty  passed  upon 
the  death  of  the  testatrix  and  was  not  suspended  or  postponed  for 
want  of  probate.  The  tax  is  to  be  assessed  as  of  the  date  of  the 
inheritance,  and  the  amount  of  the  assessment  is  not  affected  by 
the  increase  cm-  depredation  of  the  estate  between  the  death  of  the 
testatrix  and  the  probate  of  tiie  will,  whidi  in  cases  of  contest  may 
"^  cover  a  long  period,  fcM*  the  act  provides  that  aU  taxes  imposed 
"shall  be  due  and  payable  at  the  death  of  the  testator,"  under 
New  Jersey  St.  1894,  c  210,  s,  4.  In  re  Hartman.  70  N.  J.  Eq. 
664,  668,  62  A.  560. 


1894.  c  210.1  NEW  JERSEY.  753 

Valuation  of  Annuities. 

Wliere  the  testator  by  a  codicil  directed  his  residuary  legatee  to 
pay  a  certain  person  a  thousand  dollars  a  year  during  her  life,  this 
is  a  charge  upon  the  residuar>^  estate,  and  therefore  was  property 
which  passed  to  the  annuitant.  The  value  may  properly  be  fLxed 
by  a  determination  of  its  worth  at  testator's  decease  considered  in 
the  light  of  the  legatee's  probability  of  life.  In  re  Rothschild, 
72  N.  J.  Eq.  425,  65  A.  1118,  71  N.  J.  Eq.  210,  affirming  71  N.  J. 
Eq.  210. 

Failure  to  Appeal  not  a  Bar. 

Under  N.  J.  St.  18^  (Gen.  Sts.  p.  3339)  the  surrogate  appointed 
an  appraiser  under  the  pro\4sions  of  section  13  of  this  act  and 
fixed  the  value  of  the  estate  and  gave  notice  thereof  in  the  manner 
prescribed  by  that  section,  and  no  appeal  was  made  either  to  the 
ordinary  or  to  the  orphan's  court  within  sixty  days  after  the  surro- 
gate's assessment  was  made  and  found.  The  tax  was  not  paid  and 
the  state  controller  thereupon  notified  the  prosecutor  of  the  county 
of  the  failure  to  pay  and  the  prosecutor  thereupon  proceeded  under 
the  pro\-isions  of  section  17  of  the  act  to  procure  a  decree  from  the 
orphan's  court  under  the  power  conferred  upon  it  by  the  pro\'isions 
of  section  16.  It  was  contended  that  the  orphan's  court  had  no  ju- 
risdiction to  entertain  the  question  of  liability,  because  the  parties 
interested  were  debarred  from  raising  that  question  by  their  failure 
to  appeal  from  the  surrogate's  assessment  ^*ithin  the  time  limited 
by  the  terms  of  section  13.  The  court,  however,  construes  section 
16  as  empowering  the  orphan's  court  to  determine  whether  the  tax 
should  be  paid  and  to  enforce  its  decree,  and  holds  that  a  party 
interested  must  be  deemed  to  be  permitted  to  interpose  any  objec- 
tion to  such  a  decree.  The  court  distinguishes  In  re  Wolfe,  137 
N.  Y.  205,  construing  section  15  of  the  New  York  act,  which  is 
in  substantially  identical  terms  with  section  13  of  the  New  Jersey 
statute,  on  the  ground  that  the  New  York  act  in  section  15  expressly 
confers  on  the  surrogate's  court  jurisdiction  *'to  hear  and  deter- 
mine all  questions  in  relation  to  the  tax  arising  under  the  pro- 
visions" of  the  act.  The  New  Jersey  statute,  however,  confers 
no  such  jurisdiction  on  the  surrogate,  but  section  15  of  the  New 
Jersey  act  expressly  confers  that  jurisdiction  upon  the  ordinary  or 
orphan's  court.  In  re  Vlneland  Historical  and  Antiquarian  Society, 
66  N.  J.  Eq.  291,  56  A.  1039. 

Section  14  forbids  an  apjaaiser  from  takii^  any  fee  or  reward  from  an 
executM". 


754  STATUTES  ANNOTATED.  [N.  J.  St. 

Jurisdiction  of  Ordinary  or  Orphan's  Court. 

S.  15.  And  be  it  enacted,  That  the  ordinary  or  the  orphan's  court  in  the 
county  in  which  the  real  property  is  situate  of  a  decedent  who  was  not  a  resident 
of  the  state,  or  in  the  county  of  which  the  decedent  was  a  resident  at  the  time 
of  his  death,  shall  have  jurisdiction  to  hear  and  determine  all  questions  in  rela- 
tion to  the  tax  arising  under  the  provisions  of  this  act. 

Sections  16-22  provide  for  the  collection  and  payment  of  the  tax. 

Record  on  Appeal. 

The  record  for  the  Court  of  Appeals  should  print  the  will  of  the 
decedent.     Astor  v.  State  (N.  J.  1903)  72  A.  78. 

Repeal. 

S.  23.  And  be  it  enacted.  That  all  acts  or  parts  of  acts  inconsistent  with  the 
provisions  of  this  act  are  hereby  repealed,  except  so  far  as  herein  re-enacted;  but 
nothing  in  this  repealer  shall  affect  or  impair  the  lien  of  any  taxes  heretofore 
assessed,  or  due  and  payable,  or  any  remedies  for  the  collection  of  the  same,  or  to 
surrender  any  remedies,  powers,  rights  or  privileges  acquired  by  the  state  under 
any  act  heretofore  passed,  or  to  relieve  any  person  or  corporation  from  any  pen- 
alty imposed  by  said  acts;  provided,  however,  thai  the  exception  in  the  first  section 
hereof  in  favor  of  churches,  hospitals,  orphan  asylums,  public  libraries,  bible  and 
tract  societies,  and  all  religious,  benevolent  and  charitable  institutions  and  organ- 
ization^, shall  be  construed  and  held  to  apply  to  any  and  all  bequests,  devises  and 
legacies  heretofore  made,  in  trust  or  otherwise,  to  or  in  favor  of  such  institutions, 
or  any  of  them,  in  all  cases  where  said  tax  shall  not  have  been  paid  prior  to  the 
passage  of  this  act. 

Effect  of  Saving  Clause  in  Repeal . 

N.  J.  St.  1893,  c.  210,  was  superseded  and  repealed  by  the  statute 
of  1894,  p.  318.  "If  the  repealer  was  without  any  saving  clause, 
there  could  be  no  doubt  that  the  tax  in  question  would  be  invalid, 
because  such  a  repealer  would  abolish  the  machinery  by  which  the 
assessment  could  be  laid,  and  such  special  taxes  as  these  can  only 
be  imposed  by  the  machinery  provided  by  the  legislature. 

But  the  repealer  of  the  act  of  1893  was  not  without  a  saving 
clause.  The  repealer  was  of  all  acts  or  parts  of  acts  inconsistent 
with  the  provisions  of  the  act  of  1894  "except  so  far  as  herein  re- 
enacted,"  and  the  provisions  for  the  imposition  of  the  assessment 
were  all  practically  re-enacted.  Besides,  by  the  provisions  of  sec- 
tion 23,  in  which  the  repealer  is  contained,  there  was  a  saving  clause. 
The  language  of  it  is  not  happily  chosen,  but,  in  my  judgment,  the 
proper  construction  is  that  the  repealer  should  not  be  considered 
"to  surrender  any  remedies,  powers,  rights  or  privileges  acquired  by 


1906,  c.  228.]  NEW  JERSEY.  755 

the  state  under  any  act  heretofore  passed."  Under  the  construc- 
tion I  have  given  to  the  act  of  1893,  a  right  was  acquired  by  the 
state  to  impose  a  tax  upon  the  interest  acquired  by  one  who  was 
appointed  by  the  will  of  the  life  beneficiary  to  receive  a  share  of  a 
fund  under  a  power  of  appointment.  By  that  act  the  state  ac- 
quired power  to  enforce  the  right  thus  obtained.  The  act  further 
provided  remedies  for  the  enforcement  of  that  right.  When  the 
legislature  saved  the  rights  and  powers  and  remedies  of  the  state 
under  previous  acts,  I  think  the  repealer  in  no  respect  deprived  the 
state  of  power  to  enforce  such  a  tax."  Therefore  the  state  had 
power  to  collect  the  tax  where  the  testator  died  August  26,  1893, 
leaving  a  power  of  appointment  to  the  life  tenant  who  died  March 
25,  1895,  leaving  a  will  exercising  the  power  of  appointment.  The 
court  holds  that  the  tax  on  this  power  of  appointment  can  be  col- 
lected under  the  statute  of  1893.  Hoyt  v.  Hancock,  65  N.  J.  Eq. 
688,  55  A.  1004. 

AMENDMENTS. 
Exemptions. 

As  to  the  act  of  1898,  see  post  p.  761 

Counsel  for  State  Comptroller. 

N.  J.  St.  1902,  c.  217,  approved  April  9,  1902,  amends  N.  J.  St. 
1894,  c.  210,  s.  17,  by  authorizing  the  state  comptroller  to  retain 
counsel  to  represent  him  in  proceedings  to  collect  the  inheritance 
tax.  .     " 

Remainders. 

N.  J.  St.  1903,  c.  90,  supplements  N.  J.  St.  1894,  by  providing 
that  all  remainder  interests  shall  be  appraised  and  taxed  immedi- 
ately after  the  death  of  the  testator  or  grantor  and  such  tax  shall 
remain  a  lien  until  paid,  but  the  tax  shall  not  become  due  or  pay- 
able until  the  remaindermen  are  entitled  to  possession. 

The  Statutes  of  1906. 

N.  J.  St.  1906,  c.  227,  approved  May  15,  1906,  provides  that 
the  state  comptroller  may  contract  to  pay  a  contingent  fee  to 
persons  who  give  information  in  regard  to  the  inheritance  tax. 

N.  J.  St.  1906,  c.  228.     Approved  May  15,  1906.    . 

An  Act  to  amend  an  Act  entitled,  "An  act  to  tax  intestates'  estates, 
gifts,  legacies,  devises  and  collateral  inheritance  in  certain  cases,"  approved 
May  fifteenth,  one  thousand  eight  hundred  and  ninety-four. 


756  STATUTES  ANNOTATED.  [N.  J.  St. 

Be  it  enacted  by  the  Senate  and  General  Assembly  of  the  State  of  New  Jersey: 

1.  Section  one  of  the  act  to  which  this  act  is  amendatory  be  and  the  same 
hereby  is  amended  to  read  as  follows: 

1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  property, 
real  or  personal,  of  the  value  of  five  hundred  dollars  or  over,  or  of  any  interest 
therein  or  income  therefrom,  in  trust  or  otherwise,  to  persons  or  corporations, 
in  the  foUowmg  cases: 

First.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  Ifrom 
any  person  dying  seized  or  possessed  of  the  property  while  a  resident  of  the  state. 

Second.  When  the  transfer  is  by  will  or  intestate  law,  of  property  within  the 
state,  and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

Third.  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  non-resident, 
when  such  non-resident's  property  is  within  this  state,  by  deed,  grant,  bargain, 
sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  donor, 
or  intended  to  take  effect,  in  possession  or  enjoyment,  at  or  after  such  death. 
Such  tax  shall  also  be  imposed  when  any  such  person  or  corporation  becomes 
beneficially  entitled,  in  possession  or  expectancy,  to  any  property  or  the  income 
thereof  by  any  such  transfer,  whether  made  before  or  after  the  passage  of  this 
act.  Such  tax  shall  be  at  the  rate  of  five  per  centum  upon  the  clear  market 
value  of  such  property,  to  be  paid  to  the  treasurer  of  the  state  of  New  Jersey, 
for  the  use  of  the  state,  and  all  administrators,  executors  and  trustees  shall  be 
liable  for  any  and  all  such  taxes  until  the  same  shall  have  been  paid  as  hereinafter 
directed. 

All  property  passing  to  churches,  hospitals  and  orphan  asylums,  public  libra- 
ries, Bible  and  tract  societies,  and  all  religious,  benevolent  and  charitable  institu- 
tions apd  organizations,  or  to  a  father,  mother,  husband,  wife,  child,  brother  or 
sister,  or  lineal  descendant  born  in  lawful  wedlock,  or  the  wife  or  widow  of  a 
son,  or  the  husband  of  a  daughter,  shall  be  exempt  from  the  payment  of  taxes 
under  this  act,  but  no  other  exemption  of  any  kind  shall  be  allowed. 

This  statute  repealed  the  act  of  1898.  As  to  exemptions,  see 
post,  p.  759. 

After  the  decision  in  Neilson  v.  Russell  (71  A.  286),  the  legis- 
lature passed  New  Jersey  statute  1906,  Public  Laws,  c.  228,  pro- 
viding for  the  imposition  of  a  tax  "when  the  transfer  is  by  will 
or  intestate  law  of  property  within  the  state  and  the  decedent  was 
a  non-resident  of  the  state  at  the  time  of  his  death."  Dixon  v. 
Russell,  78  N.  J.  L.  296,  73  A.  51,  reversed  in  79  N.  J.  L.  490. 

Void  as  to  New  Jersey  Stocks  of  Non-Residetit. 

The  act  of  1906  intended  to  substitute  a  tax  on  the  transfer  of 
property  which  is  the  subject  of  a  legacy  for  a  tax  on  the  legacy 
itself.  This  purpose  was-  not  expressed  in  the  title  and  the  statute 
is  therefore  void  as  applied  to  New  Jersey  stocks  belonging  to  a 
non-resident.  Dixon  v.  Russell,  79  N.  J.  L.  490  A.,  reversing 
78  N.  J.  L.  296,  73  A.  51.  This  case  was  followed  in  Tilford  v. 
Dickinson,  79  N.  J.  L.  302,  79  A.  1119,  reversing  75  A.  574. 


1909,  c.  238.]  NEW  JERSEY.  757 

N.  J.  St.  1906,  c.  228. 

S.  4.  All  taxes  imposed  by  this  act  shall  be  due  and  payable  at  the  death  of  the 
testator,  grantor  or  intestate,  as  the  case  may  be,  unless  otherwise  provided  for 
and  if  the  same  are  paid  within  one  year  a  discount  of  five  per  centum  shajl  be 
allowed  and  deducted  from  such  taxes;  if  not  paid  within  one  year  from  the  date 
of  the  death  of  the  testator,  grantor  or  intestate,  as  the  case  may  be,  such  tax  shall 
bear  interest  at  the  rate  of  ten  per  centum  per  annum,  to  be  computed  from  the 
expiration  of  one  year  from  the  date  of  the  death  of  such  testator,  grantor,  or 
intestate,  until  the  same  is  paid,  and  in  all  cases  where  the  executors,  adminis- 
trators or  trustees  do  not  pay  such  tax  within  one  year  from  the  death  of  the 
decedent  they  shall  be  required  to  give  a  bond,  in  the  form  and  to  the  effect  pre- 
scribed in  section  two  of  the  act  to  which  this  act  is  amendatory,  for  the  payment 
of  such  tax  together  with  interest. 

Jurisdiction  of  Courts. 

N.  J.  St.  1908,  c.  131,  approved  April  9,  1908,  amended  N.  J.  St.  1894,  c.  210, 
s.  15,  to  read  as  follows: 

"That  the  ordinary,  or  the  orphans'  court  of  the  county  in  which  the  real 
property  of  a  non-resident  decedent  is  situate,  or  the  orphans'  court  of  the  county 
in  which  the  decedent  was  a  resident  at  the  time  of  his  death,  or  in  case  of  a  non- 
resident decedent  leaving  no  real  property  within  this  state,  the  orphans'  court 
of  the  county  in  which  the  surrogate  shall  first  assume  jurisdiction,  shall  have 
jurisdiction  to  hear  and  determine  all  questions  in  relation  to  a  tax  arising  under 
the  provisions  of  this  act." 


THE  STATUTES  OF   1909. 
Title  of  Statute  Amended. 

N.  J.  St.  1909,  c.  209,  approved  April  20,  1909,  amends  N.  J.  St. 
1894,  c.  210,  entitled  "An  act  to  tax  intestates'  estates,  gifts, 
legacies,  devises  and  collateral  inheritance,  in  certain  cases,"  to 
read  "An  act  to  tax  the  transfer  of  property  of  resident  and 
non-resident  decedents  by  devise,  bequest,  descent,  distribu- 
tion by  statute,  gift,  deed,  grant,  bargain  and  sale,  in  certain 
cases." 

These  statutes  of  April  20,  1909,  did  not  apply  to  the  estate  of 
one  who  died  March  9,  1909.  Tilford  v.  Dickinson,  79  N.  J.  L. 
574,  79  A.  1119,  reversing  75  A.  574. 

Disposition  of  Receipts. 

N.  J.  St.  1909,  c.  238,  approved  April  21,  1909,  requires  the 
state  treasurer  to  pay  to  the  county  five  per  cent  of  the  transfer 
tax  collected  from  property  of  resident  decedents  in  that  county, 
provided  the  N.  J.  St.  1909,  c.  228,  became  law. 


758  STATUTES  ANNOTATED.  [N.J.St. 

N.  J.  St.  1909,  c.  228,  approved  April  20,  1909,  is  entitled  "An 
act  to  tax  the  transfer  of  property,  of  resident  and  non-resident 
decedents,  by  devise,  bequest,  descent,  distribution  by  statute, 
gift,'deed,  grant,  bargain  and  sale,  in  certain  cases,"  and  provides 
a  complete  inheritance  tax  system. 

This  statute  did  not  apply  to  the  estate  of  one  who  died  before 
its  passage.  Tilford  v.  Dickinson,  79  N.  J.  L.  574,  79  A.  1119,  re- 
versing 79  N.  J.  L.  302,  75  A.  574. 

N.  J.  St.  1909,  c.  228. 

S.  28.  All  acts  and  parts  of  acts  inconsistent  with  the  provisions  of  this  act 
are  hereby  repealed,  but  nothing  in  this  repealer  shall  affect  or  impair  the  lien  of 
any  taxes  heretofore  assessed,  or  any  tax  due  and  payable,  or  any  remedies  for 
the  collection  of  the  same,  or  to  surrender  any  remedies,  powers,  rights  or  privi- 
leges acquired  by  the  state  under  any  act  heretofore  passed,  or  to  relieve  any  per- 
son or  corporation  from  any  penalty  imposed  by  said  acts. 

Property  of  Non-Resident. 

N.  J.  St.  1909,  c.  31,  provides  for  jurisdiction  for  the  taxation 
of  property  in  New  Jersey  of  a  non-resident  decedent  and  author- 
izes the  surrogate  or  the  register  wherever  the  decedent  had  real 
property,  or,  if  he  was  not  the  owner  of  real  property  within  the 
state,  the  surrogate  of  any  county  or  the  register  of  the  prerogative 
court  to  exercise  jurisdiction  over  the  tax. 

N.  J.  St.  1909,  c.  159,  amends  N.  J.  St.  1894,  c.  210,  s.  11,  by 
providing  that  the  tax  shall  be  paid  on  the  transfer  by  a  foreign 
executor,  administrator  or  trustee  of  any  stock  or  obligations  in 
New  Jersey  standing  in  the  name  of  a  decedent  or  standing  in  the 
joint  names  of  such  decedent  and  one  or  more  persons,  or  in  trust 
for  a  decedent.  Corporations  are  further  required  to  give  ten 
days*  notice  to  the  state  comptroller  of  transfer  of  any  such  stock, 
which  transfer  must  not  take  place  without  the  consent  of  the 
comptroller,  as  any  transfer  without  his  consent  makes  the  cor- 
poration liable  to  pay  the  tax  and  to  a  penalty  of  a  thousand 
dollars.  The  chapter  further  provides :  "On  the  transfer  of  property 
in  this  state  of  a  non-resident  decedent,  if  all  or  any  part  of  the 
estate  of  such  decedent,  wherever  situated,  shall  pass  to  persons 
or  corporations  who  would  have  been  taxable  under  this  act,  if 
such  decedent  had  been  a  resident  of  this  state  such  property  located 
within  this  state  shall  be  subject  to  a  tax,  which  said  tax  shall 
bear  the  same  ratio  to  the  entire  tax  which  the  said  estate  of  such 
decedent  would  have  been  subject  to  under  this  act  if  such  non-resi- 


1909,  c.  159.]  NEW  JERSEY.  759 

dent  decedent  had  been  a  resident  of  this  state,  as  such  property 
located  in  this  state  bears  to  the  entire  estate  of  such  non-resident 
decedent,  wherever  situated;  provided,  that  nothing  in  this  clause 
contained  shall  apply  to  any  specific  bequest  or  devise  of  property 
in  this  state." 

EXEMPTIONS. 
Exemptions  Strictly  Construed. 

In  State  v.  N.  Y.  Meeting  of  Friends,  61  N.J.  Eq.  620,  48  A.  227, 
it  was  conceded  that  the  legatee  must  come  clearly  within  the 
words  of  the  New  Jersey  exemption  statute  in  order  to  obtain  an 
exemption.     , 

Burden  on  Legatee  to  Prove  Exemptions. 

The  burden  is  upon  a  legatee  to  show  its  right  to  be  exempted 
as  a  charitable  society.  In  re  Vineland  Historical  and  Antiquarian 
Society,  66  N.  J.  Eq.  291,  56  A.  1039. 

Exemption  Confined  to  Domestic  Corporations. 

Exemptions  in  favor  of  charitable  corporations  under  the  New 
Jersey  statute  of  1894  do  not  cover  corporations  organized  under 
the  laws  of  states  other  than  New  Jersey.  Alfred  University  v. 
Hancock,  69  N.  J.  Eq.  470,  46  A.  178.  In  re  Rothschild,  72  N.  J. 
Eq.  425,  65  A.  1118,  affirming  71  N.  J.  Eq.  210. 

Foreign  corporations  were  exempted  under  the  act  of  1898  and 
not  under  the  act  of  1906.     See  ^05/,  pp.  761,  762. 

Education  is  Charitable. 

Alfred  University,  a  school  of  learning,  having  an  academic, 
collegiate  and  a  theological  department,  is  a  corporation  which  has 
no  capital  stock  and  pays  no  dividends  and  is  primarily  supported 
by  funds  derived  from  public  and  private  charity,  together  with 
tuition  fees.  Whatever  is  received  is  devoted  to  the  object  of 
sustaining  the  institution  and  increasing  its  benefits  to  the  public 
by  extending  and  improving  its  accommodations  and  diminishing 
its  expenses.  A  gift  to  such  an  institution  is  a  bequest  to  a  chari- 
table institution,  and  all  gifts  for  the  promotion  of  education  are 
charitable  in  a  legal  sense  where  the  elements  of  private  gain  are 
wanting  and  where  the  scheme  is  in  part  supported  by  public  or 
private  contributions.  Aljred  University  v.  Hancock,  69  N.  J.  Eq. 
470,46  A.  178. 


760  STATUTES  ANNOTATED.  [N.  J.  St. 

To  the  same  effect  see  In  reVineland  Historical  and  Antiquarian 
Society,  66  N.  J.  Eq.  291,  56  A.  1039. 

Vineland  Historical  and  Antiquarian  Society  is  not  Chari- 
table. —  Powers  and  not  Practice  Decisive  of  Liability. 

Under  N.  J.  St.  1894,  the  Vineland  Historical  and  Antiquarian 
Society  is  not  a  charitable  institution  within  the  meaning  of  the 
language  used  in  section  1  of  the  act.  This  society  was  organized 
under  the  statute  of  1875  to  incorporate  societies  "  for  the  pro- 
motion of  learning."  Gifts  for  educational  purposes  are  gifts  to 
valid  charitable  uses  in  New  Jersey.  But  it  is  not  enough  to  say 
that  the  institution  was  incorporated  under  the  act  for  the  pro- 
motion of  learning  or  avows  itself  to  be  organized  for  the  purpose 
of  promoting  learning.  An  institution  claiming  exemption  on  the 
ground  of  its  educational  character  must  disclose  the  objects  to 
which  it  is  bound  to  devote  its  property.  It  must  appear  that 
the  objects  disclosed  have  some  educational  value  and  that  the 
benefits  and  advantages  of  the  institution  in  respect  to  such  objects 
are  open  to  the  general  public,  or  at  least  to  such  persons  as  may 
seek  them.  The  society  in  question,  however,  has  for  its  object 
to  collect  and  preserve  historical  and  current  accounts  of  events 
and  other  matters  connected  with  the  interests  of  Vineland;  and 
the  court  finds  that  the  society  has  failed  to  show  that  such  a 
collection  is  of  educational  value.  "Such  a  collection  would  not 
resemble  a  library,  but  rather  a  museum." 

It  also  appeared  that  the  legacy  given  to  the  society  was  given 
without  any  limitation  or  condition,  and  therefore  imposed  no 
duty  on  the  society  except  that  which  may  be  inferred  from  the 
terms  contained  in  the  organization  of  the  society  as  a  corporation. 
The  mere  fact,  therefore,  that  the  society  now  opens  its  collection 
to  the  public  would  not  bind  the  society  to  continue  to  do  so. 
In  re  Vineland  Historical  and  Antiquarian  Society,  66  N.  J.  Eq. 
291,  56  A.  1039. 

Where  a  corporation  is  organized  under  a  statute  which  per- 
mits incorporation  for  various  objects,  some  of  which  would  render 
it  exempt  from  taxation,  the  obvious  test  of  exemption  is  not 
incorporation  under  an  act  permitting  incorporation  for  objects 
that  would  exempt,  but  incorporation  for  objects  that  entitle  to 
exemption.  The  corporation  is  not  exempt  unless  it  is  actually 
incorporated  for  objects  which  entitle  it  to  be  exempt.  In  re 
Rothschild,  72  N.  J.  Eq.  425,  65  A.  1118,  affirming  71  N.  J.  Eq. 
210. 


1898,  c.  62.]  NEW  JERSEY.  761 

THE  AMENDMENT  OF   1898. 

N.  J.  St.  1898,  c.  62. 

S.  1.  All  gifts,  grants,  legacies,  bequests  and  devises,  whether  by  will,  deed  or 
otherwise,  of  real  or  personal  property,  by  residents  or  citizens  of  this  state,  to 
any  Bible  or  tract  society,  or  religious  institution,  boards  of  the  church  or  organi- 
zations thereof,  in  trust  or  otherwise,  not  confined  in  their  operations  and  bene- 
factions to  local  or  state  purposes,  but  for  the  general  good  of  the  people 
interested  therein,  of  the  United  States  or  of  foreign  lands,  as  the  board  of  home 
and  foreign  missions  of  various  church  denominations,  shall  not  be  taxed  under 
said  act,  whether  said  societies,  religious  institutions  or  boards  aforesaid,  are  or- 
ganized under  the  laws  of  this  state,  or  incorporated  and  organized  under  the  laws 
of  some  other  state. 

S.  2.  This  provision  of  this  supplement  and  its  exemptions  shall  apply  to  all 
gifts,  grants,  legacies,  bequests  and  devises  aforesaid  on  which  the  tax  has  not 
been  assessed  and  paid. 

Religious  Institutions. 

Under  the  act  of  1898  the  Union  for  Ministerial  Education, 
whose  purpose  is  to  assist  in  educating  for  the  ministry  suitable 
men,  is  a  religious  institution;  so  the  Baptist  Education  Society,  the 
object  of  which  is  to  furnish  the  means  for  instruction  to  young  men 
of  personal  piety,  who  have  a  call  to  the  ministry,  and  the  Ameri- 
can Baptist  Home  Missionary  Society,  whose  object  is  to  promote 
the  preaching  of  the  gospel  in  North  America,  are  all  religious 
institutions.  As  the  first  two  are  not  limited  to  students  of  any 
particular  locality,  this  is  certainly  not  local  in  its  nature,  and  the 
board  of  missions  is  clearly  of  a  general  purpose  also.  Therefore, 
all  three  of  these  institutions  are  exempt  from  payment  of  the 
collateral  inheritance  tax.  In  re  Jones  (N.  J.  1907),  67  A.  1035, 
affirmed  70  A.  1101. 

A  College  with  a  Theological  Department  is  not  a  Religious 
Institution. 

The  court  finds  that  Alfred  University  is  not  included  within  the 
exemption  of  the  act  of  1898,  as  it  is  not  a  Bible  or  tract  society, 
nor  can  it  be  regarded  as  a  religious  institution,  although  it  has 
a  theological  department  which  is  an  adjunct  of  the  principal 
departments  of  the  institution  which  are  academic  and  collegiate. 
If  the  theological  department  is  to  be  regarded  as  religious,  the 
two  others  are  purely  secular.  An  institution  of  such  blended 
secular  and  religious  qualities  can  in  no  sense  be  classed  as  a  reli- 
gious institution.  Alfred  University  v.  Hancock,  69  N.  J.  Eq. 
470,  46  A.  178. 


762  STATUTES  ANNOTATED.  [N.  J.  St. 

The  New  York  Yearly  Meeting  of  Friends  Exempt. 

The  will  of  the  decedent  made  a  bequest  to  the  New  York  Yearly 
Meeting  of  Friends.  The  court  finds  that  this  institution  is  the 
general  governing  body  of  the  Society  of  Friends  and  has  primary 
control  over  the  missionary  purposes  and  general  benefactions  of  such 
minor  bodies  as  act  by  its  authority.  Funds  are  set  apart  for  the  work 
among  the  Indians  and  for  the  benefit  of  former  slaves  in  the  south. 
It  has  missions  in  Mexico,  North  Carolina,  Palestine  and  Japan 
and  China.  Its  membership  is  not  confined  to  the  state  of  New 
York.  It  has  meetings  organized  in  Vermont  and  in  Canada,  and 
membership  in  these  meetings  is  not  confined  to  state  lines.  The 
court  holds  that  there  is  no  difference  between  the  methods  of 
these  meetings  and  the  methods  of  the  boards  of  home  and  foreign 
missions  of  the  various  religious  organizations.  Therefore,  the 
Society  of  Friends  comes  clearly  within  the  statutory  exemption 
of  the  act  of  1898.  State  v.  N.  Y.  Meeting  of  Friends,  61  N.  J.  Eq. 
620,  48  A.  227. 

Foreign  Religious  Corporations  not  Exempt  under  the  Act 
of  1906. 

N.  J.  St.  1906,  Public  Laws,  p.  432,  which  covers  an  exemption 
to  religious  corporations,  repeals  by  implication  the  exemption 
given  under  the  New  Jersey  Public  Laws  of  1898,  p.  106,  and 
therefore,  under  the  statute  of  1906,  a  foreign  religious  corporation 
is  not  exempt  from  the  inheritance  tax.  In  re  Gopsill  (N.  J. 
Prerog.),77  A.  793. 

Public  monuments  or  memorials  are  exempt  under  the  act  of 
1910,  post  p.  771. 

THE  PRESENT  ACT. 

N.  J.  St.  1909,  c.  228. 

An  Act  to  tax  the  transfer  of  property,  of  resident  and  non- 
resident DECEDENTS,  by  devise,  bequest,  descent,  distribution  by  statute, 
gift,  deed,  grant,  bargain  and  sale,  in  certain  cases.  As  to  title  to  statute 
see  notes  to  the  Acts  of  1892,  1893,  1894  and  1906.  ante  p.  000. 

Transfers  Taxable.  —  Rate.  —  Exemptions. 

1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  property! 
real  or  personal,  of  the  value  of  five  hundred  dollars  or  over  or  any  interest  therein 
or  income  therefrom,  in  trust  or  otherwise,  to  persons  or  corporations,  in  the 
following  cases: 

First.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  from 
any  person  dying  seized  or  possessed  of  the  property  while  a  resident  of  the  state. 


1909,  c.  228.]  NEW  JERSEY.  763 

Second.  When  the  transfer  is  by  will  or  intestate  law,  of  property  within  the 
state,  and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

Third.  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  non-resi- 
dent, when  such  non-resident's  property  is  within  this  state,  by  deed,  grant,  bar- 
gain, sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or 
donor,  or  intended  to  take  effect,  in  possession  or  enjoyment,  at  or  after  such 
death. 

Fourth.  When  any  person  or  corporation  comes  into  the  possession  or  enjoy- 
ment, by  a  transfer  from  a  resident  or  non-resident  decedent  when  such  non-resi- 
dent decedent's  property  is  within  this  state,  of  an  estate  in  expectancy  of  any 
kind  or  character  which  is  contingent  or  defeasible,  transferred  by  an  instrument 
taking  effect  after  the  passage  of  this  act,  or  of  any  property  transferred  pursuant 
to  a  power  of  appointment  contained  in  any  instrument  taking  effect  after  the 
passage  of  this  act. 

All  taxes  imposed  by  this  act  shall  be  at  the  rate  of  five  per  centum  upon  the 
clear  market  value  of  such  property,  to  be  paid  to  the  treasurer  of  the  state  of 
New  Jersey,  for  the  use  of  said  state,  and  all  administrators,  executors,  trustees, 
grantees,  donees,  or  vendees,  shall  be  personally  liable  for  any  and  all  such  taxes 
until  the  same  shall  have  been  paid  as  hereinafter  directed,  for  which  an  action  of 
debt  shall  lie  in  the  name  of  the  state  of  New  Jersey. 

Property  passing  to  churches,  hospitals  and  orphan  asylums,  public  libraries, 
bible  and  tract  societies,  religious,  benevolent  and  charitable  institutions  and 
organizations,  or  to  a  father,  mother,  husband,  wife,  child  or  children,  or  lineal 
descendant  born  in  lawful  wedlock,  brother  or  sister,  or  the  wife  or  widow  of  a  son, 
or  the  husband  of  a  daughter,  shall  be  exempt  from  taxation  under  this  act,  but 
no  other  exemption  of  any  kind  shall  be  allowed. 

[See  notes  to  the  Acts  of  1892,  1893,  1894  and  1906,  ante,  pp.  743,  744, 
746,  756.     As  to  exemptions  see  ante,  p.  759.] 

Particular  Estate  and  Remainder. 

2.  Wheri  any  persons  shall  bequeath  or  devise,  convey,  grant,  sell  or  give  any 
property  or  interest  therein,  or  income  therefrom,  to  any  person  or  corporation  for 
life  or  for  a  term  of  years,  and  a  vested  interest  in  the  remainder  or  corpus  of  said 
property  to  any  person,  or  to  any  body  politic  or  corporate,  the  whole  of  said 
property,  so  transferred  as  aforesaid,  shall  be  appraised  immediately  at  its  clear 
market  value,  and  after  deducting  from  such  appraisement  the  value  of  the 
estate  for  life  or  estate  for  a  term  of  years,  the  tax  on  such  life  estate  or  for  a  term 
of  years,  if  taxable  under  this  act,  shall  be  immediately  levied  and  assessed,  and 
the  tax  on  the  remainder  of  the  property  so  as  aforesaid  transferred,  if  such 
property  is  taxable  under  this  act,  shall  be  levied  and  assessed  immediately,  but 
such  tax  shall  not  become  due  or  payable  until  the  time  or  period  arrives  when 
said  remainderman,  or  his  representatives,  shall  become  entitled  to  the  actual 
possession  or  enjoyment  of  such  property,  and  shall  then  become  due  and  payable 
immediately,  and,  if  not  paid  within  thirty  days,  interest  at  the  rate  of  ten  per 
centum  per  annum  shall  be  charged  and  collected  from  the  time  when  said  tax 
became  due  and  payable.  If  the  property  passing  to  a  remainderman,  as  here- 
inabove provided,  be  personal  property,  such  remainderman,  or  the  executor  or 
trustee  of  the  estate,  shall  give  a  bond  to  the  state  of  New  Jersey  in  double  the 
amount  of  the  tax  on  the  property  of  such  remainderman,  conditioned  to  pay  said 


764  STATUTES  ANNOTATED.  [N.  J.  St 

tax,  and  any  interest  which  may  fall  due  thereon,  said  bond  to  be  approved  as  to  the 
form  and  sufficiency  thereof  by  the  attorney  general  of  this  state,  and  any 
executor  or  trustee  who  shall  assign  or  deliver  to  any  such  remainderman  any 
personal  property  liable  to  a  tax  under  this  act,  unless  a  bond  be  given  as  specified 
in  this  section,  or  said  tax  be  paid,  shall  be  personally  liable  for  said  tax  and  all 
interest  due  thereon,  which  liability  may  be  enforced  in  an  action  of  debt  in  the 
name  of  the  state  of  New  Jersey. 

[See  notes  to  the  Act  of  1893,  ante,  p.  744.] 

When    Tax    Accrues  in  Various    Gases.  —  Duties  of  Executors,   etc.  — 
Compromise  of  Tax. 

3.  Where  an  instrument  creates  an  executory  devise,  or  an  estate  in  expectancy 
of  any  kind  or  character  which  is  contingent  or  defeasible,  the  property  trans- 
ferred in  accordance  with  such  executory  devise  or  the  property  in  which  such 
contingent  or  defeasible  interest  is  created  by  any  such  instrument,  shall  be 
appraised  immediately  at  its  clear  market  value,  and  after  deducting  from  such 
appraisement  the  value  of  the  life  estate,  or  estate  for  a  term  of  years,  created  by 
such  instrument,  the  tax  on  such  life  estate,  or  estate  for  a  term  of  years,  if  taxable 
under  this  act,  shall  be  immediately  levied  and  assessed,  but  the  tax  on  the  bal- 
ance of  said  appraised  value  of  such  estate  shall  not  be  levied  or  assessed  until  the 
person  or  corporation  entitled  to  said  property  comes  into  the  beneficial  enjoy- 
ment, seizin  or  possession  thereof,  and  if  taxable,  shall  then  be  taxed.  Where 
an  instrument  creates  a  power  of  appointment,  the  life  estate,  or  estate  for  a  term 
of  years,  created  and  transferred  by  such  instrument,  if  taxable,  shall  be  im- 
mediately appraised  and  taxed  at  its  clear  market  value,  but  the  appraisal  and 
taxation  of  the  interest  or  interests  in  remainder  to  be  disposed  of  by  the  donee  of 
power  shall  be  suspended  until  the  exercise  of  the  power  of  appointment,  and 
shall  then  be  taxed,  if  taxable,  at  the  clear  market  value  of  such  property,  which 
value  of  such  property  shall  be  determined  as  of  the  date  at  the  death  of  the 
creator  of  the  power. 

A  tax  on  an  estate  for  life  or  on  an  estate  for  a  term  of  years,  levied  and  as- 
sessed as  directed  in  this  section,  shall  be  due  and  payable  as  provided  in  section 
five  of  this  act.  All  other  taxes  levied  and  assessed  as  directed  in  this  section 
and  all  taxes  on  any  property  which  may  be  transferred  to  the  residuary  legatees, 
heir  or  next  of  kin  of  any  decedent,  or  which  may  revert  to  the  heir  of  any  dece- 
dent by  reason  of  the  failure  of  any  contingency  upon  which  any  remainder  may 
be  limited,  shall  be  due  and  payable  within  two  months  after  the  person  entitled 
to  the  property  shall  come  into  the  enjoyment,  seizin  or  possession  thereof,  and 
if  not  paid  shall  thenceforth  bear  interest  at  the  rate  of  ten  per  centum  per 
annum  until  paid.  No  executor  or  trustee  shall  turn  over  any  property  of  an 
estate  mentioned  in  this  section  until  the  tax  due  thereon,  and  interest,  if  any, 
shall  have  been  paid  to  the  treasurer  of  this  state,  and  any  executor  or  trustee 
who  shall  turn  over  any  property  prior  to  the  payment  of  the  tax  due  thereon, 
together  with  interest,  shall  be  personally  liable  for  such  tax  and  interest,  which 
said  liability  may  be  enforced  by  an  action  of  debt  in  the  name  of  the  state  of 
New    Jersey. 

The  comptroller  of  the  treasury  of  this  state,  by  and  with  the  consent  of  the 
attorney  general,  expressed  in  writing,  is  hereby  empowered  and  authorized  to 
enter  into  an  agreement  with  the  executors  or  trustees  of  any  estate  in  which  re- 
mainders or  expectant  estates  have  been  of  such  a  nature,  or  so  disposed  and  cir- 


1909,  c.  228.]  NEW  JERSEY.  765 

cumstanced  that  the  taxes  therein  were  held  not  presently  payable,  or  where  the 
interest  of  the  legatees  or  devisees  were  not  ascertainable  at  the  death  of  the  tes- 
tator, grantor,  donor  or  vendor,  and  to  compound  such  taxes  upon  such  terms  as 
may  be  deemed  equitable  and  expedient;  and  to  grant  discharge  to  said  executors 
and  trustees  upon  the  payment  of  the  taxes  provided  for  in  such  composition; 
provided,  however,  that  no  such  composition  shall  be  conclusive  in  favor  of  said 
executors  or  trustees  as  against  the  interest  of  such  cestuis  que  trust  as  may  possess 
either  present  rights  of  enjoyment,  or  fixed,  absolute  or  indefeasible  rights  of  future 
enjoyment,  or  of  such  as  would  possess  such  rights  in  the  event  of  the  immediate 
termination  of  particular  estates,  unless  they  consent  thereto,  either  personally, 
when  competent,  or  by  guardian  or  committee. 
[See  note  to  the  Act  of  1894,  ante,  p.  750.] 

Gift  to  Executors  in  Lieu  of  Commissions. 

4.  Whenever  a  decedent  appoints  or  names  one  or  more  executors  or  trustees, 
and  makes  a  bequest  or  devise  of  property  to  them  in  lieu  of  their  commissions  or 
allowances,  which  otherwise  would  be  liable  to  said  tax,  or  appomts  them  his 
residuary  legatees,  and  said  bequest,  devise  or  residuary  legacy  exceeds  what 
would  be  a  reasonable  compensation  for  their  services,  such  excess  shall  be  liable 
to  said  tax,  and  the  ordinary,  or  the  orphans'  court,  having  jurisdiction  in  the 
case,  shall  fix  such  compensation. 

When  Tax  Due.  —  Discou  nt  Penalty.  —  Lien. 

5.  All  taxes  imposed  by  this  act  shall  be  due  and  payable  at  the  death  of  the 
testator,  intestate,  grantor,  donor,  vendor,  unless  in  this  act  otherwise  provided, 
and  if  the  same  are  paid  within  one  year  a  discount  of  five  per  centum  shall  be 
allowed  and  deducted  from  such  taxes;  if  not  paid  within  one  year  from  the  date 
of  the  death  of  the  testator,  intestate,  grantor,  donor  or  vendor,  such  tax  shall 
bear  interest  at  the  rate  of  ten  per  centum  per  annum,  to  be  computed  from  the 
expiration  of  one  year  from  the  date  of  the  death  of  such  testator,  intestate, 
grantor,  donor  or  vendor;  until  the  same  is  paid,  and  in  all  cases  where  the  executors, 
administrators',  grantees,  donees,  vendees  or  trustees  do  not  pay  such  tax  within 
one  year  from  the  death  of  the  decedent  they  shall  be  required  to  give  a  bond,  in 
the  form  and  effect  prescribed  in  section  two  of  this  act,  for  the  payment  of  such 
tax,  together  with  interest. 

All  taxes  levied  and  assessed  under  this  act  on  the  transfer  of  any  real 
property  shall  be  and  remain  a  lien  on  said  real  property  until  paid. 

When  Penalty  not  Enforced. 

6.  The  penalty  of  ten  per  centum  per  annum  imposed  by  section  five  hereof 
for  the  non-payment  of  said  tax  shall  not  be  charged  where  in  cases  by  reason  of 
claims  made  upon  the  estate,  necessary  litigation  or  other  unavoidable  cause  of 
delay  the  estate  of  any  decedent,  or  a  part  thereof,  cannot  be  settled  at  the  end 
of  a  year  from  the  death  of  the  decedent,  and  in  such  cases  only  six  per  centum 
per  annum  shall  be  charged  upon  the  said  tax  from  the  expiration  of  such  year 
until  the  cause  of  such  delay  is  removed. 

Deduction  of  Tax. 

7.  Any  administrator,  executor  or  trustee  having  in  charge  or  trust  any 
legacy  or  property  for  distribution,  subject  to  said  tax,  shall  deduct   the   tax 


766  STATUTES  ANNOTATED.  [N.  J.  St. 

therefrom,  or  if  the  legacy  or  property  be  not  money  he  shah  collect  the  tax  there- 
on upon  the  appraised  value  thereof  from  the  legatee  or  persons  entitled  to  such 
property,  and  he  shall  not  deliver  or  be  compelled  to  deliver  any  specific  legacy 
or  property  subject  to  tax  to  any  person  until  he  shall  have  collected  the  tax 
thereon,  and  whenever  any  such  legacy  shall  be  charged  upon  or  payable  out  of 
real  estate,  the  heir  or  devisee,  before  paying  the  same,  shall  deduct  said  tax 
therefrom  and  pay  the  same  to  the  executor,  administrator  or  trustee,  and  the 
payment  thereof  shall  be  enforced  by  the  executor,  administrator  or  trustee  in  the 
same  manner  that  the  payment  of  such  legacy  might  be  enforced;  if,  however, 
such  legacy  be  given  in  money  to  any  person  for  a  limited  period  he  shall  retain 
the  tax  upon  the  whole  amount,  but  if  it  be  not  in  money  he  shall  make  application 
to  the  court  having  jurisdiction  of  his  accounts  to  make  an  apportionment,  if 
the  case  require  it,  of  the  sum  to  be  paid  into  his  hands  by  such  legatees,  and  for 
such  further  order  relative  thereto  as  the  case  may  require. 

Power  of  Sale. 

8.  All  executors,  administrators  and  trustees  shall  have  full  power  to  sell  so 
much  of  the  property  of  the  decedent  as  will  enable  them  to  pay  said  tax  in  the 
same  manner  as  they  may  be  enabled  by  law  to  do  for  the  payment  of  debts  of 
their  testators  and  intestates,  and  the  amount  of  said  tax  shall  be  paid  as  herein- 
after directed. 

Payment.  —  Receipts.  —  Records. 

9.  Any  sum  of  money  retained  by  an  executor,  administrator  or  trustee,  or 
paid  into  his  hands  for  any  tax  due  under  this  act,  shall  be  paid  by  him  within 
thirty  days  thereafter,  to  the  treasurer  ot  this  state,  and  the  person  so  paying 
shall  be  entitled  to  receive  a  receipt  signed  by  the  treasurer  of  this  state  and 
countersigned  by  the  comptroller  thereof,  for  such  payment,  which  receipt  shall 
be  a  proper  voucher  in  the  settlement  of  the  account  of  any  such  executor,  admin- 
istrator or  trustee;  such  person  so  paying,  in  addition  to  the  foregoing  receipt, 
shall,  if  the  tax  be  paid  in  part  or  in  whole  upon  real  property,  be  entitled  to 
receive  an  additional  receipt,  signed  by  the  treasurer  of  this  state  and  counter- 
signed by  the  comptroller  thereof,  in  which  shall  be  designated  upon  what  real 
property,  if  any,  said  tax  has  been  paid,  and  by  whom  paid,  and  whether  or  not 
it  is  in  full  of  said  tax  on  said  real  property,  and  said  receipt  may  be  recorded  in 
the  clerk's  office  of  the  county  in  which  said  real  property  is  situated,  in  a  book 
which  shall  be  kept  by  said  clerk  for  such  purpose  and  labelled  "collateral  tax." 

[See  notes  to  the  Act  of  1894,  ante,  p.  750.] 
Information  as  to  Real  Estate. 

10.  Whenever  any  of  the  real  estate  of  which  any  decedent  may  die  seized 
shall  pass  to  any  body  politic  or  corporate,  or  to  any  person  other  than  the 
father,  mother,  husband,  wife,  child,  or  lineal  descendant  born  in  lawful  wedlock, 
brother  or  sister,  wife  or  widow  of  a  son,  or  husband  of  a  daughter,  or  in  trust  for 
them,  or  some  of  them,  it  shall  be  the  duty  of  the  executors,  administrators  or 
trustees  of  such  decedent  to  give  information  thereof  in  writing  to  the  comp- 
troller of  the  treasury  of  this  state  within  six  months  after  they  undertake  the 
execution  of  their  respective  duties,  or,  if  the  fact  be  not  known  to  them  within 
that  period^  then  within  one  month  after  the  same  shall  have  come  to  their 
knowledge. 


1909,  c.  228.]  NEW  JERSEY.  767 

Refund. 

11.  Whenever  any  debts  shall  be  proven  against  the  estate  of  the  decedenti 
after  the  payment  of  the  legacies  or  distribution  of  property  from  which  the 
said  tax  has  been  deducted,  or  upon  which  it  has  been  paid,  and  a  refund  is  made 
by  the  legatee,  devisee,  heir,  or  next  of  kin,  a  proportion  of  the  tax  so  paid  shall 
be  repaid  to  him  by  the  executor,  administrator  or  trustee,  if  the  said  tax  has  not 
been  paid  to  the  state  treasurer,  or  by  the  state  treasurer,  if  the  same  has  been 
paid  into  the  state  treasury. 

[See  notes  to  the  Act  of  1894,  ante,  p.  751.] 

Transfer  by  Foreign  Executor.  —  Property  of  Non-Resident. 

12.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  transfer  any 
stock  or  obligations  in  this  state  standing  in  the  name  of  a  decedent,  or  standing 
in  the  joint  names  of  such  a  decedent  and  one  or  more  persons,  or  in  trust  for 
a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the  treasurer  of  this 
state  on  the  transfer  thereof.  No  corporation  of  this  state  shall  transfer  any 
such  stock,  unless  notice  of  the  time  of  such  intended  transfer  be  served  upon 
the  comptroller  of  the  treasury  of  this  state  at  least  ten  days  prior  to  such  transfer, 
nor  until  said  comptroller  shall  consent  thereto  in  writing.  Any  corporation 
making  such  a  transfer  without  first  obtaining  the  consent  of  the  comptroller 
of  the  treasury  as  aforesaid  shall  be  liable  for  the  amount  of  any  tax  which  may 
thereafter  be  assessed  on  account  of  the  transfer  of  such  stock,  together  with  the 
interest  thereon,  and  in  addition  thereto  a  penalty  of  one  thousand  dollars, 
which  liability  for  such  tax  and  interest  and  said  penalty  herein  prescribed  may 
be  enforced  in  an  action  of  debt  in  the  name  of  the  state  of  New  Jersey. 

On  the  transfer  of, property  in  this  state  of  a  non-resident  decedent,  if  all  or 
any  part  of  the  estate  of  such  decedent  wherever  situated  shall  pass  to  persons 
or  corporations  who  would  have  been  taxable  under  this  act,  if  such  decedent 
had  been  a  resident  of  this  state,  such  property  located  within  this  state  shall  be 
subject  to  a  tax,  which  said  tax  shall  bear  the  same  ratio  to  the  entire  tax  which 
the  said  estate  of  such  decedent  would  have  been  subject  to  under  this  act  if 
such  non-resident  decedent  had  been  a  resident  of  this  state,  as  such  property 
located  in  this  state  bears  to  the  entire  estate  of  such  non-resident  decedent 
wherever  situated;  provided,  that  nothing  in  this  clause  contained  shall  apply 
to  any  specific  bequest  or  devise  of  any  property  in  this  state. 

[See  notes  to  the  Act  of  1894,  ante,  p.  751.] 

Investigation  by  State  Comptroller. 

13.  The  comptroller  of  the  treasury  of  this  state,  either  personally  or  by 
any  of  his  employes,  may  investigate  the  question  of  the  liability  of  any  property 
to  any  tax  due  prior  to  the  passage  of  this  act,  and  if  said  comptroller  is  satisfied 
that  any  taxes  are  due  this  state,  he  shall  report  such  fact  to  the  register  of  the 
prerogative  court,  or  surrogate  of  the  proper  county,  whereupon  said  register 
or  surrogate  shall  cause  said  property  to  be  taxed. 

Mortality  Tables. 

14.  In  determining  the  value  of  a  life  estate,  annuity,  or  estate  for  a  term 
of  years,  the  American  Experience  Table  of  Mortality,  with  interest  at  the  rate 
of  five  per  centum  per  annum,  shall  be  used. 


768  STATUTES  ANNOTATED.  [N.  J.  St. 

Refund  Erroneous  Payments. 

15.  When  any  amount  of  said  tax  shall  have  been  paid  erroneously  to  the 
state  treasurer,  it  shall  be  lawful  for  the  comptroller  of  the  treasury,  on  satis- 
factory proof  rendered  to  him  of  such  erroneous  payments,  to  draw  his  warrant 
on  the  state  treasurer,  in  favor  of  the  executor,  administrator,  person  or  persons 
who  have  paid  any  such  tax  in  error,  or  who  may  be  lawfully  entitled  to  receive 
the  same,  for  the  amount  of  such  tax  so  paid  in  error;  provided,  that  all  such  appli- 
cations for  the  repayment  of  such  tax  shall  be  made  within  two  years  from  the 
date  of  such  payment. 

Comptroller  Notified  by  Register  or  Surrogate. 

16.  The  register  of  the  prerogative  court  and  every  surrogate  of  any  county 
in  this  state  shall,  within  ten  days  after  the  probate  of  any  will,  either  foreign  or 
domestic,  of  the  filing  of  a  copy  of  any  foreign  will,  or  the  taking  out  of  letters  of 
administration,  notify,  in  writing,  the  comptroller  of  the  treasury  of  this  state 
of  such  probate  or  administration;  and  any  surrogate  or  the  register  of  the 
prerogative  court,  failing  to  notify  said  comptroller  in  writing  of  the  probate 
of  any  will,  or  the  filing  of  a  copy  of  any  foreign  will,  or  the  taking  out  of  any 
letters  of  administration,  shall  be  liable  to  a  penalty  of  two  hundred  dollars,  to 
be  recovered  in  an  action  of  debt  in  the  name  of  the  state  of  New  Jersey. 

Comptroller  Empowered  to  Examine  Papers,  Records,  etc. 

17.  The  comptroller  of  the  treasury  of  this  state,  either  personally  or  by  his 
assistant  or  other  employe,  is  hereby  empowered  to  examine  any  and  all  papers, 
documents  and  files  which  now  are  or  hereafter  may  be  filed  or  lodged  with  the 
registex  of  the  prerogative  court,  or  with  the  surrogate  of  any  county  or  with  any 
other  official  of  this  state  or  of  any  municipality  thereof,  or  with  any  person  or 
corporation,  for  the  purpose  of  ascertaining  what,  if  any,  property  is,  or  shall 
be,  liable  to  the  payment  of  the  tax  provided  for  by  this  act.  The  sum  of  ten 
thousand  dollars  is  hereby  appropriated  to  the  comptroller  of  the  treasury  of  this 
state  for  the  purpose  of  enabling  said  comptroller  to  carry  out  the  provisions 
of  this  act. 

Appraisal.  —  Appeal. 

18.  In  order  to  fix  the  value  of  property  of  persons  whose  estates  shall  be 
liable  to  the  payment  of  a  tax  under  this  act,  whether  the  same  be  in  the  owner- 
ship of  a  resident  or  non-resident  decedent,  the  comptroller  of  the  treasury  of 
this  state  on  the  application  of  any  interested  party,  or  upon  his  own  motion, 
shall  appoint  some  competent  person  as  appraiser  as  often  as  and  whenever  occa- 
sion may  require.  Every  such  appraiser  shall  forthwith  give  notice,  by  mail, 
to  such  persons  as  the  comptroller  of  the  treasury  of  this  state  shall  direct,  of 
the  time  and  place  when  and  where  he  will  appraise  such  property.  He  shall 
at  such  time  and  place  appraise  the  same  at  its  fair  market  value,  and  for  that 
purpose  the  said  appraiser  is  authorized  to  issue  subpoenas  and  to  compel  the 
attendance  of  witnesses,  and  to  take  the  evidence  of  such  witnesses  under  oath 
concerning  such  property  and  the  value  thereof,  and  he  shall  make  report  thereof, 
and  of  such  value,  in  writing  to  said  comptroller  of  the  treasury,  together  with 
such  other  facts  in  relation  thereto  as  the  said  comptroller  of  the  treasury  may, 
by  order,  require,  which  report  and  other  data  required  by  said  comptroller 


1909,  c.  228.]  NEW  JERSEY.  769 

shall  be  filed  in  the  office  of  such  comptroller,  and  from  said  report  the  said 
comptroller  of  the  treasury  shall  forthwith  assess  and  fix  the  cash  value  of  such 
estate  and  levy  the  tax  to  which  the  same  is  liable,  and  shall  immediately  give 
notice  thereof,  by  mail,  to  all  parties  known  by  said  comptroller  of  the  treasury 
to  be  interestd  therein.  Any  person  or  corporation  dissatisfied  with  said  appraise- 
ment or  assessment  may  appeal  therefrom  to  the  ordinary  of  this  state  within 
sixty  days  after  the  making  and  fiUng  of  such  assessment,  on  giving  a  bond, 
approved  by  the  ordinary  of  this  state,  conditioned  to  pay  said  tax  so  as  afore- 
said levied  by  the  said  comptroller  of  the  treasury,  together  with  interests  and 
costs,  if  the  said  tax  be  affirmed  by  the  ordinary.  Any  person  failing  to  attend 
before  an  appraiser  after  service  of  a  subpoena,  or  refusing  to  give  evidence 
concerning  any  estate,  shall  be  liable  to  a  penalty  of  two  hundred  dollars,  to  be 
recovered  in  an  action  of  debt  by  the  comptroller  of  the  treasury. 

[See  notes  to 'the  Act  of  1894,  ante,  p.  752.] 
Appraisers.  —  Misconduct.  —  Compensation. 

19.  Any  appraiser  appointed  pursuant  to  the  provisions  of  this  act  who  shall 
take  any  fee  or  reward,  either  directly  or  indirectly,  from  any  executor  or  admin- 
istrator, or  any  other  person  liable  to  pay  any  tax  or  any  portion  thereof,  under 
the  provisions  of  this  act,  shall  be  guilty  of  a  misdemeanor,  and,  on  conviction, 
shall  be  punished  by  a  fine:  not  exceeding  one  thousand  dollars,  or  by  imprison- 
ment not  exceeding  one  year,  or  both,  at  the  discretion  of  the  court,  and,  in 
addition  thereto,  the  comptroller  of  the  treasury  of  this  state  shall  immediately 
dismiss  such  appraiser  from  his  employment.  The  compensation  of  said  ap- 
praisers shall  be  a  sum  not  exceeding  five  dollars  per  day,  to  be  fixed  and  deter- 
mined upon  by  the  said  comptroller  of  the  treasury,  and  to  be  paid  out  of  the 
treasury  of  this  state.  Such  appraisers  shall  also  be  reimbursed  for  all  actual 
expenses  incurred  in  the  discharge  of  their  duties. 

Jurisdiction. 

20.  The  ordinary  of  this  state  shall  have  jurisdiction  to  hear  and  determine 
all  questions  in  relation  to  any  tax  levied  under  the  provisions  of  this  act. 

Citation. 

21.  If  it  shall  appear  to  the  comptroller  of  the  treasury  of  this  state  that 
any  tax  which  has  accrued  under  this  act  has  not  been  paid  according  to  law 
said  comptroller  shall  report  such  fact,  in  writing,  to  the  register  of  the  preroga- 
tive court,  and  said  register  shall  issue  a  citation  citing  the  persons  or  corpora- 
tions interested  in  the  property  liable  to  said  tax  to  appear  before  the  ordinary 
on  a  certain  day,  not  more  than  three  months  from  the  date  of  such  citation,  and 
show  cause  why  such  tax  should  not  be  paid;  the  service  of  such  citation  and  the 
subsequent  proceedings  had  thereon  shall  conform  to  the  practice  prevailing  in 
the  prerogative  court.  Upon  the  making  of  any  decree  the  register  of  the  pre- 
rogative court  shall,  upon  the  request  of  the  comptroller  of  the  treasury  of  this 
state  furnish  one  or  more  copies  of  said  decree,  and  the  same  shall  be  docketed 
and  filed  by  the  clerk  of  the  supreme  court,  or  by  the  county  clerk  of  any  county 
in  this  state,  upon  the  request  of  the  comptroller  of  the  treasury  of  this  state, 
and  the  same  shall  have  the  same  effect  as  a  lien  by  judgment,  and  execution  shall 
issue  thereon  according  to  the  rules  and  practice  appertaining  to  other  judg- 
ments docketed  and  filed  with  said  respective  clerks. 


770  STATUTES  ANNOTATED.  [N.  J.  St. 

Attorney  General  to  Prosecute  Unpaid  Taxes. 

22.  Whenever  the  comptroller  of  the  treasury  of  this  state  shall  have  reason 
to  believe  that  any  tax  is  due  and  unpaid  under  this  act,  after  the  neglect  and 
refusal  of  the  persons  or  corporations  interested  in  the  property  and  liable  to  said 
tax  to  pay  the  same,  he  shall  notify  the  attorney  general  of  this  state,  in  writing, 
of  such  failure  to  pay  such  tax,  and  the  said  attorney  general,  when  so  notified, 
if  he  have  probable  cause  to  believe  that  a  tax  is  due  and  unpaid,  shall  prosecute 
the  proceeding  before  the  ordinary  of  this  state,  as  provided  for  in  section  twenty- 
one  of  this  act,  and  the  state  treasurer  shall,  on  the  warrant  of  the  comptroller, 
pay  all  the  expenses  of  said  proceeding. 

Records  Kept  by  Comptroller. 

23.  The  comptroller  of  the  treasury  of  this  state  shall  keep  a  record  in  his 
department  of  all  returns  made  by  appraisers,  the  cash  value  of  annuities,  life 
estates  and  term  of  years,  and  the  amount  of  all  taxes  assessed  by  him;  in  addi- 
tion to  the  foregoing  the  said  comptroller  may  enter  in  said  books  all  other 
information  and  data  which  he  may  deem  desirable  or  proper. 

Information  as  to  Property  Liable  to  Tax. 

24.  Whenever  a  resident  of  this  state  has  died,  or  shall  hereafter  die,  testate  or 
intestate,  seized  or  possessed  of  any  property  liable  to  the  payment  of  a  tax  under 
the  provisions  of  this  act,  and  no  letters  testamentary  or  of  administration  have 
or  shall  have  been  taken  out  on  such  estate  within  one  year  from  the  date  of  the 
death  of  such  person,  or  whenever  there  is  property,  real  or  personal,  within 
this  state  owned  by  a  non-resident  decedent  which  is  liable  to  the  payment  of 
a  tax^under  this  act,  and  such  non-resident  decedent  has  been  deceased  for  a 
period  of  three  months  without  the  tax  due  this  state  having  been  paid,  it  shall 
be  lawful  for  the  comptroller  of  the  treasury  of  this  state  to  enter  -nto  an  agree- 
ment, in  writing,  with  any  person  giving  him  information  of  the  existence  of 
property  so  liable  to  a  tax,  to  pay  to  such  person  or  persons  out  of  any  sum  which 
may  be  collected  from  any  such  estate  an  amount  not  exceeding  ten  per  centum 
thereof. 

Penalty  for  False  Statements  or  Reports. 

25.  Every  executor,  administrator,  trustee,  grantee,  donee  or  vendee  who 
wilfully  and  knowingly  subscribes  or  makes  any  false  statement  of  facts,  or 
knowingly  subscribes  or  exhibits  any  false  paper  or  false  report  with  intent  to 
deceive  any  appraiser  appointed  pursuant  to  the  provisions  of  this  act,  shall  be 
guilty  of  a  misdemeanor  and  punished  accordingly. 

Definitions. 

26.  The  words  "estate"  and  "property,"  wherever  used  in  this  act,  except 
where  the  subject  or  context  is  repugnant  to  such  construction  shall  be  construed 
to  mean  the  interest  of  the  testator,  intestate,  grantor,  bargainor  or  vendor 
passing  or  transferred  to  the  individual  or  specific  legatee,  devisee,  heir,  next  of 
kin,  grantee,  donee  or  vendee,  not  exempt  under  the  provisions  of  this  act,  whether 
such  property  be  situated  within  or  without  this  state.  The  word  "transfer," 
as  used  in  this  act,  shall  be  taken  to  include  the  passing  of  property,  or  any 


1910,  c.  28.]  NEW  JERSEY.  771 

interest  therein,  in  possession  or  enjoyment,  present  or  future,  by  distribution 
by  statute,  descent,  devise,  bequest,  grant,  deed,  bargain,  sale  or  gift- 
Invalidity  of  Part  not  to  Affect  Other  Sections. 

27.  In  case  for  any  reason  any  section  or  any  provision  of  this  act  shall  be 
questioned  in  any  court,  and  shall  be  held  to  be  unconstitutional  or  invalid,  the 
same  shall  not  be  held  to  affect  any  other  section  or  provision  of  this  act. 

Repealer.  —  Action  heretofore  not  Impaired. 

28.  All  acts  and  parts  of  acts  inconsistent  with  the  provisions  of  this  act  are 
hereby  repealed,  but  nothing  in  this  repealer  shall  affect  or  impair  the  lien  of 
any  taxes  heretofore  assessed,  or  any  tax  due  and  payable,  or  any  remedies  for 
the  collection  of  the  same,  or  to  surrender  any  remedies,  powers,  rights  or  privi- 
leges acquired  by  the  state  under  any  act  heretofore  passed,  or  to  relieve  any 
person  or  corporation  from  any  penalty  imposed  by  said  acts. 

Approved  April  20,  1909. 

[See  notes  to  the  Act  of  1894,  ante,  p.  754.] 

Public  ]VIonuments  or  Memorials  Exempted. 

N.  J.  St.  1910,  c.  28.     Approved  March  17,  1910. 

A  FURTHER  SUPPLEMENT  TO  AN  ACT  entitled  "An  Act  to  tax  the  transfer  of 
property  of  resident  and  non-resident  decedents  by  devise,  bequest,  descent, 
distribution  by  statute,  gift,  deed,  grant,  bargain  and  sale  in  certain  cases," 
approved  May  fifteenth,  one  thousand  eight  hundred  and  ninety-four. 

1.  All  property  passing  to  any  executor,  trustee  or  public  corporation  for, 
or  to  be  expended  in,  the  erection  of  a  public  monument  or  public  memorial 
in  this  state,  shall  be  exempt  from  the  payment  of  taxes  under  the  act  to  which 
this  is  a  supplement. 

2.  The  exemption  from  the  payment  of  such  taxes,  hereby  provided  for,  shall 
extend  to  all  property  that  may  have  heretofore  passed  for  such  purpose  as  well 
as  to  all  property  that  may  hereafter  pass  for  such  purpose. 

3.  This  act  shall  take  effect  immediately. 
[As  to  exemptions  see  ante,  p.  759.] 


772  STATUTES  ANNOTATED.  [N.  Y.  St. 


NEW  YORK. 


In  General. 

New  York  has  had  a  collateral  inheritance  tax  since  1885,  a 
direct  inheritance  tax  on  personal  property  since  1891,  and  on 
real  estate  since  1903.  Until  1910  the  rate  was  1  per  cent  on 
direct  inheritances,  and  5  per  cent  on  collateral  inheritances.  The 
much-criticised  law  of  1910  took  effect  July  11,  1910,  and  intro- 
duced graduated  rates  running  up  to  25  per  cent. 

It  would  be  hard  to  find  an  important  law  of  any  sort  which  so 
quickly  defeated  its  own  purpose  as  this  law.  Its  exorbitant 
rates,  its  inequalities  and  the  intolerable  burdens  that  it  placed 
upon  the  property  of  non-residents  quickly  aroused  most  em- 
phatic protests  from  all  classes  in  the  community,  and  resulted 
in  the  repeal  of  all  its  more  offensive  features  at  the  next  legis- 
lature. 

The  act  of  1911  substantially  reduces  the  rates  of  tax  although 
leaving  them  higher  than  they  were  before  1910  and  retaining 
the  progressive  feature.  Perhaps  its  most  commendable  feature  is 
that  it  does  away  with  the  double  taxation  of  property  of  non- 
residents by  providing  that  the  inheritance  tax  in  the  case  of  non- 
residents shall  be  collected  only  on  their  tangible  property  within 
the  state.  Tangible  property  is  so  defined  that  it  does  not  include 
money,  bank  deposits,  shares  of  stock  or  bonds. 

In  one  respect  non-residents  gain  more  than  residents  of  New 
York  who  must  pay  an  inheritance  tax  on  tangible  property  within 
the  state  and  their  intangible  property  wherever  situated.  If 
some  other  state  taxes  shares  in  a  local  corporation  owned  by  a 
resident  of  New  York,  it  does  not  relieve  the  estate  from  paying 
a  tax  to  New  York  as  well. 

As  has  been  seen,  in  some  states  credit  is  allowed  for  taxes  so 
paid  to  another  state,  and  other  states  have  a  reciprocal  or  retali- 
ative  provision  designed  to  prevent  other  states  from  taxing  in- 
tangible property  of  non-residents.  But  neither  of  these  features 
is  found  in  the  New  York  act. 


List.] 


NEW  YORK. 


773 


The  law  of  1911  is  more  liberal  as  to  bequests  to  charitable 
institutions  in  making  such  bequests  exempt  from  inheritance  tax 
wherever  the  institution  is  located.  Formerly  such  bequests  were 
taxable  unless  the  charitable  institution  was  located  in  the  state 
of  New  York. 

The  exemptions  apply  to  each  inheritance  rather  than  to  the 
estate  as  a  whole.  In  the  case  of  a  non-resident,  apparently,  if 
the  New  York  portion  of  the  inheritance  is  less  than  the  exempted 
amount,  the  inheritance  is  not  taxable. 

It  is  the  usual  practice  to  require  an  inventory  of  the  entire 
property  of  a  non-resident.  The  comptroller's  office  states  that 
this  is  ''only  for  the  purpose  of  seeing  that  the  stocks  of  New  York 
corporations  are  fully  set  forth,  and  for  the  purpose  of  prorating 
the  property  in  this  state  in  the  payment  of  legacies  under  the 
decedent's  will  or  the  interstate  law  of  decedent's  domicile." 
That  is  to  say,  for  the  purpose  of  preventing  non-resident  execu- 
tors from  satisfying  only  tax-exempt  inheritances  out  of  the  New 
York  portion  of  the  property.  This  purpose  becomes  less  im- 
portant under  the  act  of  1911. 

List  of  Statutes. 


1885. 

Statutes  of  New  York 

:,  c.  483. 

1887. 

c.  713. 

1889. 

c.  307. 

1889. 

c.  479. 

1890. 

c.  553. 

1891. 

c.  34. 

1891. 

c.  215. 

1892. 

c.  167. 

1892. 

c.  168. 

1892. 

c.  169. 

1892. 

c.  399. 

1892. 

c.  443. 

1893. 

c.  199. 

1893. 

c.  704. 

1894. 

c.  767. 

1895. 

c.  191. 

1895. 

c.  378. 

1895. 

c.  515. 

1895. 

c.  556. 

1895. 

c.  861. 

1896. 

c.  160. 

1896. 

c.  908. 

1896. 

c.  952. 

1896. 

c.  953. 

1897. 

c.  284. 

774 


STATUTES  ANNOTATED. 


[N.  Y.  St. 


1897.    Statutes  of  New  York,-c.  375. 


1898. 

' 

c.    88. 

1898. 

c.  289. 

1899. 

c.    76. 

1899. 

c.  269. 

1899. 

c.  270. 

1899. 

c.  389. 

1899. 

c.  406. 

1899. 

c.  672. 

1899. 

c.  737. 

1900. 

c.  379. 

1900. 

c.  382. 

1900. 

c.  658. 

1900. 

< 

c.  723. 

1901. 

11 

c.  173. 

1901. 

c.  288. 

1901. 

c.  458. 

1901. 

( 

c.  493. 

1901. 

c.  609. 

1901. 

Revised  Statutes  and  Gen.  Laws  (Birdseye),  pp.  3591-3604. 

1902. 

Statutes  3f  New  York,  c.  101. 

1902. 

c.  283. 

1902. 

c.  496. 

1903. 

c.    41. 

1904. 

c.  758. 

1904. 

Consolidated  Laws,  vol.  5,  c.  62,  ss.  220-245. 

1905. 

Statutes  of  New  York,  c.  368. 

1905. 

Revised  Stats.,  Codes  and  Gen.  Laws  (Birdseye),  v.  3  a.  10.  ss.  220-243 

1905. 

Gilbert's  Annotated  Code,  s.  447. 

1905. 

Code  of  Procedure,  s.  118. 

1906. 

Statutes  of  New  York,    c.  111. 

1906. 

c.  567. 

1906. 

c.  699. 

1907. 

c.  204. 

1907. 

c.  323. 

1907. 

c.  709. 

1908. 

€.310. 

1908. 

c.  312. 

1908. 

•'         "             "           c.  321. 

1909. 

c.    62. 

1909. 

c.  596. 

1909. 

Birdseye,  Cummings  &  Gilbert,  Consolidated  Laws,  vol.  5,  p.  5977, 

Bs.  220-245. 

1910. 

Statutes  of  New  York,  c.     70. 

1910. 

c.  600. 

1910. 

c.  706. 

1911. 

c.  732. 

1910. 

Annotated  Consolidated  Laws  (Birdseye,  Cummings  &  Gilbert),   Sup- 

plement, 

ss.  220-302,  pp.  1171-1189. 

Penal  Code 

,  s.  48c  added  L.  1903,  c.  692. 

1885,  c.  483.]  NEW  YORK.  775 

Constitutional  Limitations. 
New  York  Constitution,  1894,  a.  3,  s.  20. 

Every  law  which  imposes,  continues  or  revises  a  tax  shall  distinctly  state  the 
tax  and  the  object  to  which  it  is  to  be  applied,  and  it  shall  not  be  sufficient  to  re- 
fer to  any  other  law  to  fix  such  tax  or  object, 

[New  York  Constitution,  1894,  seems  to  contain  no  provision  requiring  uni- 
formity in  taxation.    See  Thorpe,  vol.  5,  p.  2694,  et  seq.] 

THE  ACT  OF  1885. 

[N.  Y.  St.  1885,  c.  483.    Approved  June  10,  1885;  in  effect  June  30, 1885.] 

An  Act  to  tax  gifts,  legacies  and  collateral  inheritances  in 
certain  cases. 

[Title  amended  by  St.  1891,  c.  215.    See  Matter  of  Howe,  112  N.  Y.  100.1 

S.  1.  Transfers  Taxable.  —  Rate.  —  Exemptions.  After  the  passage  of 
this  act,  all  property  which  shall  pass  by  will  or  by  the  intestate  laws  of  this  state 
from  any  person  who  may  die  seized  or  possessed  of  the  same  while  being  a  resi- 
dent of  the  state,  or  which  property  shall  be  within  this  state,  or  any  part  of  such 
property,  or  any  interest  therein,  or  income  therefrom,  transferred  by  deed,  grant, 
sale  or  gift  made  or  intended  to  take  effect  in  possession  or  enjoyment  after  the 
death  of  the  grantor  or  bargainor,  to  any  person  or  persons,  or  to  a  body  politic 
or  corporate,  in  trust  or  otherwise,  or  by  reason  whereof  any  person,  or  body  poli- 
tic or  corporate  shall  become  beneficially  entitled,  in  possession  or  expectancy,  to 
any  property,  or  to  the  income  thereof,  other  than  to  or  for  the  use  of  father, 
mother,  husband,  wife,  children,  brother  and  sister  and  lineal  descendants  born 
in  lawful  wedlock,  and  the  wife  or  widow  of  a  son  and  the  husband  of  a  daughter, 
and  the  societies,  corporations  and  institutions  now  exempted  by  law  from  taxa- 
tion, shall  be  and  is  subject  to  a  tax  of  five  dollars  on  every  hundred  dollars  of  the 
clear  market  value  of  such  property,  and  at  and  after  the  same  rate  for  any  less 
amount,  to  be  paid  to  the  treasurer  of  the  proper  county,  and  in  the  city  and  county 
of  New  York  to  the  comptroller  thereof,  for  the  use  of  the  state,  and  all  admin- 
istrators, executors  and  trustees  shall  be  liable  for  any  and  all  such  taxes  until 
the  same  shall  have  been  paid,  as  hereinafter  directed;  provided  that  an  estate 
which  may  be  valued  at  a  less  sum  than  five  hundred  dollars  shall  not  be  subject 
to  said  duty  or  tax. 

[Amended  by  St.  1887,  c.  713,   1891,  c.  215,  and  1892,  c.  169.] 

Nature.  —  A  Tax  on  Successions. 

This  act  imposes  a  tax  on  the  right  of  succession  and  not  on 
property.  In  re  Swift,  137  N.  Y.  77,  88,  32  N.  E.  1096,  18  L.  R.  A. 
709,  64  Hun  639;  16  N.  Y.  Suppl.  193;  19  N.  Y.  Suppl.  292.  In 
Matter  of  McPherson,  104  N.  Y.  306,  10  N.  E.  685,  58  Am.  Rep.  502, 
this  question  was  not  determined.  The.  court  remarks  that  in 
either  case  it  is  a  special  tax.  In  the  one  case  it  is  a  tax  upon  the 
particular  class  of  property,  and  in  the  other  case  a  tax  upon 


776  STATUTES  ANNOTATED.  [N.  Y.  St. 

succession  or  devolution  of  property,  or  the  right  to  receive  prop- 
erty.    In  either  case  it  is  free  from  constitutional  objection. 

Constitutionality. 

The  court  entertains  no  doubt  that  the  act  is  constitutional,  that 
the  power  of  the  state  extends  to  an  inheritance  tax.  In  re  Mc- 
Pherson,  104  N.  Y.  306,  316,  10  N.  E.  685,  58  Am.  Rep.  502.  This 
act  does  not  conflict  with  the  fourteenth  amendment  to  the  federal 
constitution.     Wallace  v.  Myers,  38  Fed.  184,  4  L.  R.  A.  171. 

Imperfections.  —  Contingent  Estates. 

It  was  pointed  out  that  the  statute  contains  many  imperfections 
and  that  there  would  be  great  embarrassment  and  difficulty  in 
executing  the  act  in  the  cases  of  contingent  remainders  and  expec- 
tant estates.  But  the  court  holds  that  this  is  no  reason  for  con- 
demning the  entire  act.  In  re  McPherson,  104  N.  Y.  306,  324, 
10  N.  E.  685,  58  Am.  Rep.  502. 

Not  Retroactive  on  Contingent  Interests. 

Where  the  testator  died  in  1881  and  left  a  legacy  to  his  nephew 
to  be  paid  when  he  should  reach  twenty-one,  which  occurred  in 
October,  1885,  this  legacy  is  not  subject  to  the  inheritance  tax  of 
1885,  as  the  interest  passed  from  the  testator  before  the  taking 
effect  of  the  statute.     In  re  Cogswell,  4  Dem.  Surr.  (N.  Y.)  248. 

Law  of  Date  of  Original  Will  Governs  Power  of  Appointment. 

One  who  takes  on  the  execution  of  a  power  of  appointment  con- 
tained in  a  will  takes  under  the  will  and  is  subject  to  taxation 
unless  excepted  by  the  act  of  1885.  Where  the  testator  died  in 
1886  the  power  was  exercised  in  1890.  In  re  Stewart,  131  N. 
Y.  274,  30  N.  E.  184,  14  L.  R.  A.  836,  affirming 

On  Property  of  a  Non-resident. 

This  act  imposed  a  tax  upon  two  classes  of  property:  (1)  upon  all 
property  which  shall  pass  from  any  person  who  may  die  seized  or 
possessed  of  the  same  while  being  a  resident  of  the  state ;  (2)  upon 
property  that  shall  be  within  this  state  transferred  inter  vivos  to 
take  effect  at  the  death  of  the  grantor.  And  the  court  finds  that 
there  was  no  intention  by  this  section  to  impose  a  succession  ta: 
upon  property  passing  by  will  or  intestacy  from  a  non-resident  o. 
the  state  to  his  collateral  relatives. 


1885,  c.  483.]  NEW  YORK.  777 

The  fact  that  the  New  York  statute  of  1887,  c.  713,  amended 
the  statute  of  1885,  s.  1,  so  as  to  subject  to  its  operation  the  prop- 
erty within  the  state  of  a  non-resident  decedent,  furnishes  some  evi- 
dence that  prior  thereto  the  proper  construction  of  the  section  did 
not  include  such  property  within  its  operation. 

"The  corporate  stocks  of  the  decedent  were  not,  under  the 
general  laws  of  this  state,  taxable  here,  although  the  share  certi- 
ficates may  have  been  held  here  by  her  agents.  The  certificates 
are  in  no  general  sense  property.  They  simply  represent  inter- 
ests in  the  corporations,  and  the  situs  of  the  property  owned  by  a 
shareholder  in  a  corporation  is  either  where  the  corporation  exists 
or  at  the  domicile  of  the  shareholder;  it  can  in  no  proper  sense  be 
said  to  be  where  the  certificates  happen  to  be  in  the  hands  of  an 
agent  in  a  state  where  the  corporation  has  no  existence  and  the 
owner  no  domicile.  So,  too,  the  bonds  of  foreign  corporations  in 
the  hands  of  the  agents  of  the  decedent  here  were  not,  in  a  legal 
sense,  property  within  this  state,  and  they  were  not,  under  the  gen- 
eral laws  or  the  policy  of  the  state,  taxable  here.  On  the  contrary, 
they  were,  by  the  general  policy  of  the  state,  exempted  from  taxa- 
tion here.  There  is  nothing  in  the  act  of  1885  from  which  it  can 
be  inferred  that  the  legislature  meant  so  far  to  depart  from  its  gen- 
eral system  and  policy  of  taxation  as  to  impose  here  a  succession 
tax  property  thus  situated.  It  was  dealing  with  taxation  upon  the 
property  of  persons  domiciled  here,  and  used  language  sufficient 
to  impose  taxation  upon  such  property,  but  not  upon  property  of 
non-residents  which  had  no  situs  in  this  state.  It  cannot  be  pre- 
sumed that  it  was  the  intention  of  the  legislature  to  impose  taxa- 
tion upon  all  the  property  of  any  decedent  found  within  this  state. 
Suppose  a  foreigner  should  come  here  with  negotiable  securities  in 
his  possession  for  the  purpose  of  buying  property  here,  and  soon 
after  should  die  here.  Or  suppose  a  merchant  should  come  here 
from  some  other  state  with  negotiable  drafts  or  securities  in  his 
possession  and  should  die  here  shortly  after  reaching  this  state; 
can  it  be  supposed  in  either  of  such  cases  that  it  was  the  legis- 
lative intent  that  before  the  property  of  the  decedent  could  be 
taken  out  of  this  state  to  the  jurisdiction  of  his  domicile  it  should 
be  subjected  to  a  tax  to  enhance  the  revenues  of  the  state?  Then, 
again,  if  this  act  is  to  be  so  construed  as  to  reach  personal  estate 
of  non-resident  decedents,  how  is  it  to  be  administered?  There 
are  no  means  of  ascertaining  here  how  much  of  the  estate  will  pass 
to  collateral  relatives  under  a  will  or  by  intestacy.     That  can  only 


778  STATUTES  ANNOTATED.  [N.  Y.  St. 

be  known  after  the  entire  expenses  of  administration  and  the 
debts  and  liabilities  of  the  deceased  have  been  ascertained  and 
deducted  at  the  place  of  his  domicile.  Suppose  a  non-resident 
dies,  leaving  $1,000,000  in  this  state,  and  is  largely  indebted  at 
the  place  of  his  domicile,  what  his  net  estate  will  be  after  deducting 
debts  and  expenses  of  administration  can  only  be  ascertained  at 
his  domicile,  where  his  estate  must  be  finally  administered  and 
adjusted*,  and  there  can  be  no  way  of  adjusting  the  estate  here, 
as  there  is  no  machinery  in  the  law  here  appropriate  to  such  a 
purpose ;  and  thus  it  would  be  impractical  to  administer  this  statute. 

"Still  further,  if  a  succession  tax  is  demanded  and  paid  here  upon 
the  property  of  a  non-resident  decedent,  that  does  not  answer  a 
claim  for  a  further  tax  at  the  place  of  the  decedent's  domicile; 
and  thus  his  estate  might,  and  many  times  would  be,  subjected  to 
a  double  succession  tax.  There  is  in  the  state  of  Pennsylvania  a 
law  for  the  taxation  of  collateral  inheritances  like  that  which 
exists  here,  and  if  this  estate  be  subjected  to  this  tax  in  this  state, 
it  may  again  be  subjected  to  a  like  tax  in  that  state.  All  these 
considerations  should  lead  us  to  hesitate  to  put  upon  section  1 
such  a  construction  as  would  bring  within  its  purview  the  prop- 
erty of  a  non-resident  decedent  left  in  this  state  at  his  death." 
Per  Andrews,  J.,  in  In  re  Enston,  113  N.  Y.  174,  181,  21  N.  E.  87, 
3  L.  R.  A.  464;  22  N.  Y.  St.  569,  reversing  46  Hun  506,  19  Abb. 
N.  Cas.  227;  10  N.  Y.  St.  380,  5  Dem.  Surr.  93;  8  N.  Y.  St.  781, 
overruling  In  re  Leavitt,  4  N.  Y.  Suppl.  179. 

In  re  Enston  was  followed  in  In  re  Hall,  55  Hun  608,  8  N.  Y. 
Suppl.  556. 

United  States  Bonds. 

A  bequest  of  United  States  government  bonds  is  subject  to  the 
inheritance  tax.  In  re  Carver,  4  Misc.  Rep.  592,  25  N.  Y.  Suppl. 
991.     Wallace  v.  Myers,  38  Fed.  Rep.  184. 

Property  Exempt  under  General  Law. 

Life  insurance  policies  and  other  property  not  taxable  under 
general  law  can  still  be  included  for  taxation  under  the  inheritance 
tax  law.  In  re  Knoedler.  140  N.  Y.  377,  380,  35  N.  E.  601,  affirm- 
ing 68  Hun  150. 

Real  Estate  out  of  the  State. 

A  tax  on  real  estate  situated  out  of  the  state  though  owned  by  a 
resident  of  New  York  was  not  imposed  by  this  act.     In  re  Swift, 


1885,  c.  483.1  NEW  YORK.  779 

137  N.  Y.  77,  88,  32  N.  E.  1096,  18  L.  R.  A.  709;   64  Hun  639, 
16  N.  Y.  Suppl.  193,  19  N.  Y.  Suppl.  292. 

In  Foreign  Corporations. 

Certificates  of  stock  belonging  to  a  testator  in  New  York  of 
corporations  created  under  the  laws  of  other  states  are  not  subject 
to  the  New  York  inheritance  tax  of  1885,  where  the  testatrix  died 
February  18,  1887.  In  re  Thomas,  3  Misc.  Rep.  388,  24  N.  Y. 
Suppl.  713. 

Adopted  Children. 

The  words  "lineal  descendants  born  in  lawful  wedlock"  might 
under  some  circumstances  be  given  wide  meaning  so  as  to  bring 
in  natural  or  illegitimate  children,  but  can  be  carried  no  farther. 
The  word  "children"  is  not  broad  enough  on  its  face  to  cover  the 
case  of  an  adopted  child.  In  re  Miller,  110  N.  Y.  216.  222,  18  N.  E. 
139,  affirming  47  Hun  394.  [Adopted  children  were  exempted  by 
the  act  of  1887,  c.  713.] 

Descendants  of  Brothers  and  Sisters. 

Under  the  statute  of  1885  descendants  of  brothers  and  sisters  are 
not  intended  to  be  exempt  from  the  tax.  In  re  Miller,  5  Dem. 
Surr.  (N.  Y.)  132,  45  Hun  244. 

The  Husband  of  a  Daughter. 

The  New  York  statute  of  1885  exempts  from  taxation  the  hus- 
band of  a  daughter,  and  the  court  holds  that  the  daughter's  death 
before  the  testator  does  not  subject  the  legacy  to  the  husband  to 
the  inheritance  tax.  In  re  McGarvey,  6  Dem.  Surr.  145,  20  St.. 
Rep.  135. 

Bequest  to  the  United  States. 

A  state  inheritance  tax  levied  upon  a  bequest  to  the  United 
States  is  not  void  as  an  attempt  to  tax  the  property  of  the  United 
States,  since  the  tax  is  imposed  upon  the  legacy  before  it  reaches 
the  hands  of  the  government.  The  legacy  becomes  the  property 
of  the  United  States  only  after  it  has  suffered  a  diminution  to  the 
amount  of  the  tax,  and  it  is  only  upon  this  condition  that  the  legis- 
lature assents  to  a  bequest  of  it.  United  States  v.  Perkins, 
163  U.  S.  625,  630,  affirming  In  re  Merriam,  141  N.  Y.  479, 
36  N.  E.  505. 


780  STATUTES  ANNOTATED.  [N.  Y.  St 

**Societies,  Corporations  and  Institutions  now  Exempted 
by  Law." 

What  is  a  General  Exemption  from  Taxation? 

Exemption  of  any  building  used  by  a  church  for  public  worship 
did  not  constitute  a  general  exemption  of  the  church  from  taxa- 
tion within  the  meaning  of  the  collateral  inheritance  act,  and 
therefore  the  church  is  not  exempt  from  taxation  upon  a  legacy  of 
"ten  thousand  dollars  towards  the  building  of  a  new  church." 
Sherrill  v.  Christ  Church,  121  N.  Y.  701,  702,  25  N.  E.  50, 
reversing  In  re  Van  Kleeck,  55  Hun  472. 

It  is  enough  to  exempt  societies  that  they  are  included  in  the 
list  of  societies  exempted  from  tax  by  a  general  law,  and  the  exemp- 
tion need  not  arise  from  a  special  provision  of  a  statute.  In  re 
Miller,  5  Dem.  Surr.  (N.  Y.)  132,  45  Hun  244. 

The  exemption  under  the  New  York  statute  of  1885  of  charitable 
corporations  which  are  exempt  by  law  is  not  confined  to  corpora- 
tions the  property  of  which  is  completely  exempt,  but  may  apply 
to  a  corporation  which  is  exempt  from  taxation  up  to  a  certain 
valuation  in  its  property,  as  it  is  assumed  that  the  corporation 
will  not  exceed  its  corporate  powers  and  take  more  property  than 
is  authorized.  In  re  Vassar,  127  N.  Y.  1,  12,  27  N.  E.  394, 
reversing  58  Hun  378,  12  N.  Y.  Suppl.  203. 

Particular  Societies. 

The  following  societies  have  been  held  subject  to  tax  under  this 
act:  American  Museum  of  Natural  History.  [In  re  Vanderbilt, 
10  N.  Y.  Suppl.  239,  2  Con.  Surr.  319.]  The  Board  of  Home 
Missions  of  the  Presbyterian  Church.  [In  re  Board  of  Home 
Missions,  11  N.  Y.  Suppl.  311.]  The  Metropolitan  Museum  of 
Art.  [In  re  Vanderbilt,  10  N.  Y.  Suppl.  239,  2  Con.  Surr.  319.] 
The  Young  Men's  Christian  Association.  [In  re  Vanderbilt,  10 
N.  Y.  Suppl.  239,  2  Con.  Surr.  319.] 

The  Metropolitan  Museum  of  Art  is  not  exempt  from  taxation 
as  a  free  public  charity,  as  it  derives  its  income  from  membership 
and  sales  of  books.  Its  privileges  and  advantages  are  not  free  to 
the  general  public.  In  re  Wolfe,  15  N.  Y.  Suppl.  539,  2  Con. 
Surr.  600. 

The  Church  Foundation  is  exempt  from  the  statute  of  1885,  as 
it  IS  based  on  personal  property  which  is  specifically  exempted  by 
law  from  taxation.  Church  Charity  Foundation  v.  People,  6  Dem. 
Surr.  (N.  Y.)  154. 


1885,  c.  483.1  NEW  YORK.  781 

Where  only  the  Real  Estate  of  a  Corporation  is  Exempt. 

Where  a  statute  giving  a  corporation  additional  privileges  ex- 
pressly provides  that  its  real  estate  shall  be  exempt  from  taxation, 
this  shows  by  inference  that  its  personal  property  was  not  exempt, 
and  therefore  it  is  subject  to  the  inheritance  tax,  although  it 
would  not  have  been  exempt  as  an  almshouse  under  general  law 
if  there  had  been  no  special  provision  in  its  special  statute  con- 
ferring upon  it  additional  privileges.  In  re  Forrester,  58  Hun 
611,  12  N.  Y.  Suppl,  774. 

'*For  the  Use  of  the  State." 

It  was  objected  that  the  requirement  that  the  inheritance  tax 
should  be  paid  for  the  use  of  the  state  did  not  comply  with  the 
New  York  constitution,  article  3,  section  20,  which  provides  that 
all  tax  laws  "shall  distinctly  state  the  tax  and  the  object  to  which 
it  is  to  be  applied.'*  But  the  court  holds  that  this  provision  of  the 
constitution  did  not  apply  to  the  inheritance  tax,  as  it  has  no 
reference  to  special  taxes  which  may  be  collected  in  a  variety  of 
ways  under  general  laws.  In  re  McPherson,  104  N.  Y.  306,  319, 
10  N.  E.  685,  58  Am.  Rep.  502. 

"Provided  that  an  Estate  .  .  .  less  .  .  .  than  Five  Hundred 
Dollars  shall  not  be  Subject  to  .  .  .  Tax." 

The  statute  imposes  the  tax  upon  the  individual  and  it  can  be 
imposed  only  when  the  particular  interest  devised  exceeds  in 
value  th^  amount  of  limitation  provided  by  the  statute.  In  re 
Cager,  111  N.  Y.  343,  347,  19  N.  Y.  St.  497,  18  N.  E.  866,  affirm- 
ing 46  Hun  657;  In  re  Hopkins,  6  Dem.  Surr.  1;  In  re  McCready, 
6.  Dem.  Surr.  292;  In  re  Smith,  5  Dem.  Surr.  (N.  Y.)  90.  Contra, 
In  re  Miller,  5  Dem.  Surr.  (N.  Y.)  132,  45  Hun  244. 

A  life  estate  of  a  value  of  less  than  five  hundred  dollars  is  not 
subject  to  taxation.  In  re  Cager,  111  N.  Y.  343,  347,  19  N.  Y.  St. 
497,  18  N.  E.  866,  affirming  46  Hun  657. 

S.  2.  When  any  person  shall  bequeath  or  devise  any  property,  or  interest 
therein,  or  income  therefrom,  to  a  father,  mother,  husband,  wife,  children,  brother 
and  sister,  the  widow  of  a  son,  or  a  lineal  descendant,  during  life  or  for  a  term 
of  years,  and  the  remainder  to  a  collateral  heir  of  the  decedent,  or  to  a  stranger  in 
blood,  or  to  a  body  politic  or  corporate  at  their  decease,  or  on  the  expiration  of 
such  term,  the  property  so  passing  shall  be  appraised  immediately  after  the  death 
of  the  decedent,  at  what  was  the  fair  market  value  thereof,  at  the  time  of  the 
death  of  the  decedent,  in  the  manner  hereinafter  provided,  and  after  deducting 
therefrom  the  value  of  said  life  estate,  or  term  of  years,  the  tax  prescribed  by  this 


782  STATUTES  ANNOTATED.  [N.  Y.  St. 

act  on  the  remainder  shall  be  immediately  due  and  payable  to  the  treasurer  of  the 
proper  county,  and  in  the  city  and  county  of  New  York  to  the  comptroller  thereof, 
and  together  with  the  interest  thereon,  shall  be  and  remain  a  lien  on  said  property 
until  the  same  is  paid;  provided  that  the  person  or  persons,  or  body  politic  or  cor- 
porate beneficially  interested  in  the  property  chargeable  with  said  tax  may  elect 
not  to  pay  the  same  until  they  shall  come  into  the  actual  possession  or  enjoyment 
of  such  property,  or,  and  in  that  case,  such  person  or  persons,  or  body  politic  or 
corporate,  shall  give  a  bond  to  the  people  of  the  state  of  New  York  in  a  penalty 
three  times  the  amount  of  the  tax  arising  upon  personal  estate,  with  such  sureties 
as  the  said  surrogate  may  approve,  conditioned  for  the  payment  of  said  tax  and 
interest  thereon,  at  such  time  or  period  as  they  or  their  representatives  may  come 
into  the  actual  possession  or  enjoyment  of  such  property,  which  bond  shall  be 
filed  in  the  office  of  the  surrogate  of  the  proper  county;  provided,  further,  that 
such  person  shall  make  a  full  verified  return  of  such  property  to  said  surrogate, 
and  file  the  same  in  his  office  within  one  year  from  the  death  of  the  decedent  and 
within  that  period  enter  into  such  security  and  renew  the  same  every  five  years. 

**  Remainder." 

A  "remainder"  under  section  2  of  this  statute  must  apply  only  to 
vested  remainders,  and  a  contingent  remainder  cannot  be  included ; 
when  the  property  bequethed  or  devised  actually  vests,  and  it 
passes  to  the  collateral  heir,  then  the  tax  becomes  due  and  pay- 
able. In  the  case  of  a  vested  remainder  the  vesting  takes  place 
at  the  death  of  the  decedent;  in  the  case  of  a  contingent  re- 
mainder the  vesting  takes  place  when  the  defeating  contingency 
has  been  rendered  impossible.  In  re  Lefever,  5  Dem.  Surr. 
(N.  Y.)  184. 

Contingent  Interests. 

Contingent  future  interests  in  an  annuity  cannot  be  taxed,  but 
they  should  be  reserved  for  future  action  until  the  contingency  has 
been  determined.  In  re  Clark,  1  Con.  Surr.  431,  22  N.  Y.  St.  354, 
5  N.  Y.  Suppl.  199.  To  the  same  effect  see  In  re  Wallace,  4  N.  Y. 
Suppl.  465. 

Where  a  remainder  in  a  trust  estate  was  given  to  such  persons 
named  as  might  be  living  at  the  successive  termination  of  each 
trust  these  remainders  are  not  liable  to  taxation  until  the  termina- 
tion of  each  trust,  as  it  cannot  until  then  be  determined  whether 
the  trust  fund  would  pass  to  persons  exempt  from  taxation  or  to  per- 
sons taxable. 

The  court  distinguishes  the  Matter  of  Stewart,  131  N.  Y.  277,  as 
that  case  does  decide  that  contingent  interests,  although  Vesting 
in  possession  at  a  future  day,  may  be  at  once  valued  and  assessed. 
And  the  court  says  that  it  may  possibly  be  that  where  the  only 


1885,  c.  483.]  NEW  YORK.  783 

contingency  of  the  future  is  upon  which  of  the  several  named  per- 
sons or  classes  of  persons,  all  of  whom  are  liable  to  taxation,  the 
beneficial  interest  will  ultimately  devolve,  the  appraisal  and  assess- 
ment need  not  be  postponed.  Yet  where  the  contingency  touches 
the  taxable  character  of  .he  succession,  where  it  is  only  in  the  chance 
of  uncertain  events  that  the  beneficial  interests  will  finally  alight 
where  they  will  be  taxable  at  all,  a  delay  until  the  contingency  is 
solved  is  both  just  and  necessary.  In  re  Curtis,  142  N.  Y.  219, 
223,  36  N.  E.  887,  affirming  73  Hun  185;  56  N.  Y.  St.  113,  25  N.  Y. 
Suppl.  909. 

When  the  estate  transferred  has  a  fixed  or  ascertainable  value 
at  the  tim^  of  the  death  of  the  testator,  the  value  at  that  time 
must  be  the  basis  of  the  appraisal  whenever  made.  But  if  the 
person  to  whom  the  property  passed  cannot  be  known  till  the  death 
of  the  life  tenant,  the  tax  cannot  be  imposed  until  after  that  event. 
So  interest  in  a  vested  remainder  taking  effect  after  the  death 
of  the  life  tenant  must  be  appraised  as  of  the  death  of  the  testator 
and  not  as  of  the  death  of  the  life  tenant.  In  re  Davis,  149  N.  Y. 
539,  547,  44  N.  E.  185,  affirming  91  Hun  53. 

Valuation  of  Life  Estate. 

Valuation  of  a  life  estate  under  the  New  York  statute  of  1885 
should  be  made  according  to  the  rules  of  the  supreme  court  where  no 
tables  are  specified  in  the  statute.  In  re  Robertson,  5  Dem.  Surr. 
(N.  Y.)  92. 

Life  Estate  Determinable  in  Marriage. 

Where  the  widow  is  given  the  use  of  the  whole  of  an  estate  for 
life,  but  in  case  of  her  remarriage  then  the  use  of  one-half  only, 
the  value  of  her  estate  or  of  the  remainder  cannot  now  be  ascer- 
tained for  the  purpose  of  the  assessment  of  the  tax.  That  cannot 
be  done  until  her  death  or  remarriage,  /w  re  Millward,  6  Misc. 
Rep.  425,  27  N.  Y.  Suppl.  286. 

Value  at  Date  of  Change  of  Title. 

As  the  inheritance  tax  is  a  tax  upon  succession  and  not  upon 
property,  the  true  test  of  value  is  the  value  of  the  estate  at  the  time 
of  the  transfer  of  title,  and  not  its  value  dt  the  time  of  the  transfer 
of  possession.  In  re  Davis,  149  N.  Y.  539,  547,  44  N.  E.  185, 
affirming  91  Hun  53. 


784  STATUTES  ANNOTATED.  [N.  Y.  St. 

From  Principal  or  Income. 

The  tax  on  the  life  estate  ought  to  be  taken  out  of  the  income  and 
the  tax  on  the  remainder  out  of  the  capital.  In  re  Johnson,  6  Dem, 
Surr.  146. 

Direction  in  Will. 

The  fact  that  a  will  directs  that  the  amount  of  the  tax  upon 
legacies  and  devises  should  be  paid  as  an  expense  of  administration 
does  not  affect  the  imposition  of  the  tax.  The  amount  of  the  tax 
to  be  assessed  on  prior  legacies  should  not  be  deducted  from  the 
residuary  estate  in  ascertaining  its  value  for  the  purpose  of  taxa- 
tion. That  which  is  to  be  reported  by  the  appraiser  for  the  pur- 
pose of  the  tax  is  the  value  of  the  interest  passing  to  the  legatee 
under  the  will  without  any  deduction  for  any  purpose,  nor  under 
any  testamentary  direction.  In  re  Swift,  137  N.  Y.  77,  87,  32 
N.  E.  1096,  18  L.  R.  A.  709,  64  Hun  639,  16  N.  Y.  Suppl.   193, 

19  N.  Y.  Suppl.  292. 

S.  3  provides  a  tax  on  the  excess  over  commissions  or  reasonable  compensation. 

A  bequest  in  addition  to  commissions  to  an  executor  is  not 
within  the  intention  of  this  section,  which  provides  for  a  case 
where ^a  bequest  is  made  in  lieu  of  commissions.     In  re  Underbill, 

20  N.  Y.  Suppl.  134,  2  Con.  Surr.  262. 

S.  4  provides  that  all  taxes  are  due  at  the  death  of  the  decedent  with  interest 
at  six  per  cent  from  that  time  if  paid  within  one  year,  and  if  not  so  paid  with  inter- 
est at  ten  per  cent,  provided  that  if  the  tax  is  paid  within  six  months  no  interest 
shall  be  charged  and  a  discount  of  five  per  cent  shall  be  allowed. 

Interest.  —  Penalty. 

S.  5.  The  penalty  of  ten  per  cent  per  annum,  imposed  by  section  four  hereof 
for  the  non-paynient  of  said  tax,  shall  not  be  charged  where  in  cases  by  reason  of 
claims  made  upon  the  estate,  necessary  litigation  or  other  unavoidable  cause  of 
delay,  the  estate  of  any  decedent,  or  a  part  thereof,  cannot  be  settled  at  the  end 
of  a  year  from  the  death  of  the  decedent,  and  in  such  cases  only  six  per  cent  per 
annum  shall  be  charged  upon  the  said  tax  from  the  expiration  of  such  year  until 
the  cause  of  such  delay  is  removed. 

Penalty. 

Where  the  estate  cannot  be  settled  at  the  end  of  a  year  from  death, 
the  intention  is  merely  to  relieve  the  estate  from  the  penalty  and 
not  from  the  interest.  In  re  Prout,  22  N.  Y.  St.  Rep.  334,  3  N.  Y. 
Suppl.  834. 


1885,  c.  483.1  NEW  YORK.  785 

Interest.  —  To  what  Estates  Applicable. 

These  provisions  apply  to  the  will  of  one  who  died  in  1890 
although  proceedings  for  collection  were  pending  after  the  passage 
of  the  act  of  1892.  In  re  Fayerweather,  143  N.  Y.  114,  38  N.  E. 
278. 

Interest.  —  Unavoidable  Cause  of  Delay. 

Section  4  intends  to  provide  that  the  interest  at  ten  per  cent 
shall  be  remitted  and  no  interest  whatever  charged  during  the  first 
year,  provided  that  a  cause  for  remitting  the  interest  on  account 
of  an  unavoidable  cause  of  delay  under  section  5  exists.  The 
burden  of  showing  that  such  unavoidable  cause  of  delay  in  settling 
any  estate  exists  is  on  the  estate.  People  v.  Prout,  53  Hun  541, 
6  N.  Y.  Suppl.  457. 

The  legatee  should  be  relieved  from  the  payment  of  interest  at 
ten  per  cent  for  the  period  covered  by  the  contest  of  the  wills  of 
two  heirs  at  law  of  the  decedent,  pending  which  contest  the  estates 
of  these  heirs  had  no  legal  representative.  In  re  Prout,  3  N.  Y. 
Suppl.  831.  The  lower  rate  of  interest  should  be  charged  under 
this  section  where  litigation  prevented  the  executors  from  taking 
any  action.  In  re  Stewart,  131  N.  Y.  274,  285,  30  N.  E.  184,  14 
L.  R.  A.  836. 

S.  6.    The  administrator  or  executor  is  to  deduct  the  tax. 

S.  7.  The  executor,  administrator  or  trustee  shall  have  power  to  sell  the  prop- 
erty to  enable  him  to  pay  the  tax. 

S.  8.  Payment  of  the  tax  is  to  be  made  to  the  county  treasurer  of  the  "proper 
county." 

"Proper  County." 

This  section  provides  that  every  tax  shall  be  paid  to  the  treasurer 
of  the  proper  county,  and  it  was  contended  that  this  means  the 
county  where  the  property  liable  to  tax  is  situated.  The  court 
finds  that  the  words  "proper  county"  evidently  refer  to  the  county 
of  the  surrogate  first  properly  acquiring  jurisdiction,  and  the  surro- 
gate of  a  county  retains  such  jurisdiction  throughout  all  proceed- 
ings even  should  there  be  real  estate  in  every  county  in  the  state. 
In  re  Keenan,  5  N.  Y.  Suppl.  200,  1  Con.  Surr.  226. 

S.  9.    Executors  are  to  give  notice  to  the  treasurer  or  comptroller  of  the  county. 
S.  10  provides  for  a  refund  of  the  tax  where  the  legatee  is  forced  to  refund  to 
pay  debts. 


786  STATUTES  ANNOTATED.  [N.  Y.  St. 

S.  11  provides  that  the  tax  is  to  be  paid  on  the  transfer  of  stocks  by  a  foreign 
executor  or  administrator. 

S.  12.    A  tax  paid  erroneously  is  to  be  refunded. 

S.  13.  Appraisal.  In  order  to  fix  the  value  of  property  of  persons  whose 
estates  shall  be  subject  to  the  payment  of  said  tax,  the  surrogate,  on  the  appli- 
cation of  any  interested  party,  or  upon  his  own  motion  shall  appoint  some  compe- 
tent person  as  appraiser  as  often  as,  and  whenever  occasion  may  require,  whose 
duty  it  shall  be  forthwith  to  give  such  notice  by  mail,  and  to  such  persons  as  the 
surrogate  may  by  order  direct,  of  the  time  and  place  he  will  appraise  such  property; 
and  at  such  time  and  place  to  appraise  the  same  at  its  fair  market  value,  and 
make  a  report  thereof  in  writing  to  said  surrogate,  together  with  such  other  facts 
in  relation  thereto  as  said  surrogate  may  by  order  require,  to  be  filed  in  the  office 
of  such  surrogate;  and  from  this  report  the  said  surrogate  shall  forthwith  assess 
and  fix  the  then  cash  value  of  all  estates,  annuities  and  life  estates,  or  term  of 
years  growing  out  of  said  estate,  and  the  tax  to  which  the  same  is  liable,  and  shall 
immediately  give  notice  thereof  by  mail  to  all  parties  known  to  be  interested 
therein.  Any  person  or  persons  dissatisfied  with  said  appraisement  or  assessment 
may  appeal  therefrom  to  the  surrogate  of  the  proper  county  within  sixty  days 
after  the  making  and  filing  of  such  assessment,  on  paying,  or  giving  security  ap- 
proved by  the  surrogate  to  pay  all  costs,  together  with  whatever  tax  shall  be  fixed 
by  said  court.  The  said  appraiser  shall  be  paid  by  the  county  treasurer  or  comp- 
troller out  of  any  funds  he  may  have  in  his  hands  on  account  of  said  tax,  on  the 
certificate  of  the  surrogate,  at  the  rate  of  three  dollars  per  day  for  every  day  actu- 
ally and  necessarily  employed  in  said  appraisement,  together  with  his  actual  and 
necessary  traveling  expenses. 

Duties  to  Surrogate.  —  Notice  to  Comptroller. 

As  the  surrogate  is  invested  with  the  duty  and  authority  to 
assess  and  fix  the  tax  to  which  the  property  is  liable  under  this 
section,  which  carries  the  power  to  determine  the  question  of  lia- 
bility, a  prior  determination  of  that  question  is  conclusive  upon 
the  comptroller  and  district  attorney,  and  leaves  no  scope  for  the 
operation  of  sections  16  and  17,  except  in  the  case  of  a  refusal  or 
a  neglect  to  pay  the  tax  which  is  due.  Therefore  the  tax  was  legally 
assessed,  although  neither  the  treasurer  nor  the  comptroller  was 
given  any  notice  of  the  proceedings. 

"When  we  read  all  of  the  provisions  of  this  act,  it  is  perfectly 
apparent  that  a  special  system  of  taxation  was  created  for  the 
benefit  of  the  state,  with  all  the  necessary  machinery  for  its  work- 
ing; the  control  with  respect  to  which  was  vested  in  the  surro- 
gate's court,  with  a  jurisdiction  exclusive  in  its  nature.  In  the 
assessment  of  a  tax  upon  property  passing  by  will,  or  by  the  in- 
testate law,  the  responsibility  is  imposed  by  the  law  upon  the 
surrogate.  He  acts  for  the  state  and  he  is  commanded  to  assess 
and  fix  the  tax  to  which  the  property  is  liable.  To  comply  with 
the  command  in  section  13  of  the  act,  in  that  respect,  he  must, 


1885,  c.  483.1  NEW  YORK.  787 

necessarily,  determine  the  question  of  liability  to -taxation,  inas- 
much as  if  no  such  liability  exists  he  is  without  jurisdiction  in  the 
matter.  When  the  machinery  of  this  system  of  taxation  is  set 
in  motion,  under  section  13  of  the  act,  whether  upon  the  applica- 
tion of  interested  parties,  or  upon  his  own  motion,  the  surrogate,  by 
force  of  its  provisions,  is  at  once  invested  with  the  office  and  the 
functions  of  an  assessor  for  the  state,  whose  duty  it  is  to  assess 
for  its  use  a  tax,  and  in  whom,  not  only  by  virtue  of  the  office, 
but  by  the  further  provisions  of  section  15,  inheres  the  authority, 
and  upon  whom  rests  the  obligation,  to  determine  the  question 
of  whether  the  property  of  the  decedent,  which  passes  to  others, 
is  subject  or  liable  to  taxation  by  the  state.  He  must  decide 
whether  the  property  is  taxable,  for  that  fact  lies  at  the  founda- 
tion of  his  jurisdiction  and  is  of  the  essence  of  his  right  to  pro- 
ceed with  the  assessment.  Not  all  the  property  of  decedents  may 
be  subject  to  the  tax  imposed  by  the  first  section,  and  what  property 
shall  be  assessed  for  taxation  is  left,  by  the  thirteenth  section, 
for  the  surrogate  to  determine.  To  quote  again  the  language, 
he  'shall  assess  and  fix  the  cash  values  of  all  the  estates,  etc.,  and 
the  tax  to  which  the  same  is  liable,'  and  this  direction  to  assess 
involves  the  necessity,  as  well  as  the  power,  to  determine  the 
question  of  liability;  as  much  as  it  does  in  the  case  of  assessors  of 
taxes  in  the  general  scheme  of  taxation." 

"I  can  see  no  difference  between  the  principle  upon  which  the 
surrogate  acts,  in  proceeding  to  assess  property  for  taxation  under 
the  act,  and  that  upon  which,  in  the  general  system  of  taxation 
in  the  state,  tax  assessors  act  in  the  assessment  of  persons  or 
property  for  purposes  of  taxation.  It  is  well  settled,  as  to  them, 
that  in  their  proceedings  they  must  determine  the  question  of 
liability  to  taxation  as  a  fact,  which  gives  them  jurisdiction  to 
assess.  It  is  not  only  an  important,  but  it  is  a  conditional  step  in 
the  proceeding  for  the  assessment.  That  the  doctrine  of  notice  has 
any  application  in  such  proceedings  to  the  case  of  the  comptroller, 
is  a  proposition  which  has  neither  support  in  some  requirement 
of  the  act,  nor  is  justified  by  his  relation  to  the  subject-matter. 
He  is  not  a  person  who  has  any  interest  in  the  property.  He 
is  an  utter  stranger  to  it.  Contingently  upon  the  refusal  or 
neglect  to  pay  a  tax  due  under  the  act,  it  may  become  his  duty 
to  notify  the  district  attorney  to  proceed  to  enforce  collection. 
The  performance  of  that  duty,  however,  involves  the  idea  of  a 
failure  of  the  surrogate  to  act  at  all,  or  of  a  neglect  or  refusal  to 


788  STATUTES  ANNOTATED.  [N.  Y.  St- 

obey  the  decree  of  the  Surrogate's  Court.  It,  doubtless,  is  very 
proper  that  the  surrogate  should  cause  the  comptroller  to  be 
notified  of  the  proceedings  for  appraisement  and  assessment,  in 
order  that  a  question  which  concerns  the  interests  of  the  state 
may  be  tried  out  in  the  fullest  possible  manner;  but  nothing  in 
the  law,  or  in  the  relations  of  the  comptroller,  makes  notice  to 
him  a  prerequisite  to  a  complete  determination  by  the  surrogate 
of  the  questions  presented  in  the  proceedings..  The  doctrine  of 
notice  is  one  which  finds  application  when  it  is  sought  to  tax  the 
property  of  the  citizen.  When  he  is  to  be  assessed  it  is  essential 
that  he  shall  be  given  an  opportunity  to  be  heard,  to  establish  a 
demand  against  him.  As  matter  of  fact,  in  this  proceeding,  it 
appears  that  the  comptroller  was  caused  to  be  notified  by  the 
surrogate  before  he  passed  upon  the  question  of  the  liability  of 
these  legacies  to  taxation;  so  that  he  had  his  opportunity  to 
appear  and  be  heard,  if  he  had  chosen  to  avail  himself  of  it.  I 
can  see  no  more  force  in  the  argument  as  to  an  implied  require- 
ment of  notice  to  him,  than  if  the  argument  was  made,  in  the 
case  of  the  assessment  and  taxation  of  property  under  the  general 
system  of  taxation  in  the  state,  that  some  state  official  should 
have  notice  and  the  opportunity  to  be  heard."  Per  Gray,  J.,  in 
In  re  Wolfe,  137  N.  Y.  205,  211,  33  N.  E.  156,  affirming  66  Hun 
389,  29  Abb.  N.  Cas.  340,  21  N.  Y.  Suppl.  515 ;  reversing  2  Connoly 
600,  15  N.  Y.  Suppl.  539. 

Contingent  Interests. 

The  court  holds  that  contingent  interests  are  subject  to  the 
power  given  under  the  provisions  of  section  13,  and  that  the  con- 
tingent interests  given  by  a  will  which  after  the  death  of  a  testator 
are  converted  by  the  happening  of  the  event  upon  which  they  are 
limited  into  actual  vested  estates  may  then  be  appraised  and  taxed 
under  the  provisions  of  section  13.  The  intention  of  the  legis- 
lature under  this  act  was  to  impose  a  tax  on  every  interest 
immediate  or  future,  derived  under  a  testator  or  intestate  not  em- 
braced in  the  exception.  No  collateral  inheritance  was  excepted 
in  terms.  In  re  Stewart,  131  N.  Y.  274,  281,  30  N.  E.  184,  U 
L.  R.  A.  836. 

Notice  to  Parties. 

^  The  act  was  attacked  on  the  ground  that  no  proper  notice  was 
given  to  the  taxpayer.  The  court  construes  section  13  of  the  act 
liberally  as  requiring  the  surrogate  to  give  notice  to  all  persons 


1885,  c.  483.]  NEW  YORK.  789 

interested,  and  it  is  further  provided  that  immediately  after  he  has 
assessed  a  tax  the  surrogate  shall  "give  notice  by  mail  to  all  parties." 

The  section  further  provides  a  right  of  appeal  and  upon  such 
appeal  there  is  another  opportunity  to  be  heard.  There  is  still 
further  opportunity  to  be  heard  under  section  16  of  the  act,  which 
provides  for  the  service  of  a  citation  on  an  order  to  show  cause 
why  the  tax  should  not  be  paid. 

It  is  clear  that  the  person  thus  cited  may  allege  any  reason 
whatever  which  shows  that  he  ought  not  to  pay  it.  He  may 
answer  that  he  has  not  had  an  opportunity  to  be  heard  at  the 
appraisal,  and  that  therefore  the  tax  as  to  him  is  void.  He  may 
show  any  error  affecting  the  validity  of  the  tax,  or  that  he  has  never 
received  and  never  will  receive  the  inheritance  or  legacy,  and  it 
would  undoubtedly  be  a  justification  for  refusing  to  pay  that  he 
absolutely  renounced  and  refused  to  accept  or  receive  the  inheri- 
tance or  legacy.  If  the  surrogate  should  err  in  his  decision  th^re 
would  be  the  right  of  appeal  to  the  supreme  court. 

The  court  concludes  that  in  all  these  ways  there  is  sufficient 
provision  for  notice  and  hearing  for  all  parties  interested.  In  re 
McPherson,  104  N.  Y.  306,  323,  10  N.  E.  685,  58  Am.  Rep.  502. 

S.  14  makes  it  a  misdemeanor  for  the  appraiser  to  take  any  reward  from  the 
person  liable  to  pay  the  tax. 

S.  15.  Jurisdiction.  The  surrogate's  court  in  the  county  in  which  the  real 
property  is  situate  of  a  decedent  who  was  not  a  resident  of  the  state,  or  in  the 
county  of  which  the  decedent  was  a  resident  at  the  time  of  his  death,  shall  have 
jurisdiction  to  hear  and  determine  all  questions  in  relation  to  the  tax  arising  under 
the  provisions  of  this  act,  and  the  surrogate  first  acquiring  jurisdiction  hereunder 
shall  retain  the  same  to  the  exclusion  of  every  other. 

Jurisdiction  of  Surrogate's  Courts. 

The  imposition  and  collection  of  this  tax  are  simply  incidents  in 
the  final  settlement  and  adjustment  of  estates,  and  therefore 
properly  within  the  jurisdiction  of  surrogate's  courts.  In  re  Mc- 
Pherson, 104  N.  Y.  306,  324,  10  N.  E.  685,  58  Am.  Rep.  502. 

Power  to  Declare  Will  Void. 

This  section  creates  a  special  grant  of  power  aside  from  the  ordi- 
nary jurisdiction  of  the  surrogate.  This  includes  the  power  to 
hold  void  any  provision  in  the  will  and  thus  to  decide  that  nothing 
passed  under  it  to  the  beneficiary  named.  In  re  Ullman,  137  N.  Y. 
403,  33  N.  E.  480. 

S.  16  provides  for  citation  to  issue  on  proceedings  to  enforce  payment  of  the  tax. 


790  STATUTES  ANNOTATED.  [N.  Y.  St. 

The  surrogate  has  no  authority  to  decide  the  liability  of  the  execu- 
tor for  the  inheritance  tax  upon  motion  by  the  executor.  The  only 
way  to  obtain  a  decision  in  this  question  is  by  proceedings  insti- 
tuted by  the  district  attorney  under  section  16.  In  re  Farley, 
15  N.  Y.  St.  Rep.  727. 

Omitted  Property. 

Under  this  statute  the  state  has  a  right  after  an  appraisal  has 
been  had  and  property  has  been  withheld  from  the  notice  of  the  ap- 
praiser, to  proceed  under  sections  16  and  17  of  the  statute  to  levy 
the  tax  on  the  omitted  property.  In  re  Smith,  23  N.  Y. 
Suppl.  762. 

S.  17  provides  for  referring  cases  of  refusal  to  pay  to  the  district  attorney. 

Under  this  section  the  comptroller  is  required  whenever  he  has 
reason  to  believe  a  tax  is  due  and  unpaid  to  notify  the  district 
attorney.  In  re  Vanderbilt,  10  N.  Y.  Suppl.  239,  2  Con. 
Surr.  319. 

S.  18  requires  the  surrogate  and  county  clerk  to  make  a  statement  of  parties 
liable  to  the  tax  to  the  county  treasurer  or  comptroller. 

S.  19  provides  for  the  payment  of  expenses. 

S.  20  designates  the  book  to  be  furnished  to  the  surrogate. 

S.  21  provides  for  the  payment  and  collection  of  taxes. 

S.  22  allows  the  county  officers  to  retain  five  per  cent  as  compensation  for 
collection. 

S.  23  covers  the  receipt  for  and  recording  of  the  payment.  [  This  section  was 
amended  by  St.  1891,  c.  215.] 


THE  ACT   OF   1887. 

N.  Y.  St.  1887,  c.  713.    Approved  June  25.  1887. 

Chapter  four  hundred  and  eighty-three  of  the  laws  of  eighteen  hundred  and 
eighty-five,  entitled  "An  act  to  tax  gifts,  legacies  and  collateral  inheritances  in 
certain  cases,"  is  hereby  amended  so  as  to  read  as  follows: 

S.  1.  Transfers  Taxable.  —  Rate.  —  Exemptions.  After  the  passage  of 
the  act  all  property  which  shall  pass  by  will  or  by  the  intestate  laws  of  this  state, 
from  any  person  who  may  die  seized  or  possessed  of  the  same  while  a  resident  of 
this  state,  or  if  such  decedent  was  not  a  resident  of  this  state  at  the  time  of  death, 
which  property,  or  any  part  thereof,  shall  be  within  this  state,  or  any  interest 
therein,  or  income  therefrom  which  shall  be  transferred  by  deed,  grant,  sale  or 


1887,  c.  713.]  NEW  YORK.  791 

gift,  made  or  intended  to  take  effect  in  possession  or  enjoyment  after  the  death 
of  the  grantor  or  bargainor,  to  any  person  or  persons,  or  to  any  body  politic  or 
corporate,  in  trust  or  otherwise,  or  by  reason  whereof  any  person  or  body  politic 
or  corporate  shall  become  beneficially  entitled,  in  possession  or  expectancy,  to  any 
property  or  to  the  income  thereof,  other  than  to  or  for  the  use  of  his  or  her  father, 
mother,  husband,  wife,  child,  brother,  sister,  the  wife  or  widow  of  a  son,  or  the 
husband  of  a  daughter,  or  any  child  or  children  adopted  as  such  in  conformity 
with  the  laws  of  the  State  of  New  York,  or  any  person  to  whom  the  deceased  for 
not  less  than  ten  years  prior  to  his  or  her  death  stood  in  the  mutually  acknow- 
ledged relation  of  a  parent,  and  any  lineal  descendant  of  such  decedent  born  in 
lawful  wedlock,  or  the  societies,  corporations  and  institutions  now  exempted  by 
law  from  taxation  by  reason  whereof  any  such  person  or  corporation  shall  become 
beneficially  entitled,  in  possession  or  expectancy,  to  any  such  property  or  to  the 
income  thereof,  shall  be  and  is  subject  to  a  tax  of  five  dollars  on  every  hundred 
dollars  of  the  clear  market  value  of  such  property,  and  at  and  after  the  same  rate 
for  any  less  amount,  to  be  paid  to  the  treasurer  of  the  proper  county,  and  in  the 
city  and  county  of  New  York  to  the  comptroller  thereof,  for  the  use  of  the  State, 
and  all  administrators,  executors  and  trustees  shall  be  liable  for  any  and  all  such 
taxes  until  the  same  shall  have  been  paid  as  hereinafter  directed,  provided  that 
an  estate  which  may  be  valued  at  a  less  sum  than  five  hundred  dollars  shall  not 
be  subject  to  such  duty  or  tax. 

[See  notes  to  the  Act  of  1885,  s.  1,  ante,  p.  775  et  seq.\ 

Act  Poorly  Drawn. 

Surrogate  Ransom  has  used  the  following  language  concerning 
the  statute  of  1885  as  amended  by  the  statute  of  1887:  — 

"This  legislation  in  form  and  substance  is  justly  entitled  to 
severe  condemnation  for  great  looseness  and  incoherence  of  expres- 
sion. There  is  no  symmetry  in  its  provisions,  and  it  is  impossible 
to  be  certain  of  the  intention  of  the  lawmakers  in  respect  of  the 
various  steps  which  it  may  be  necessary  to  take  to  effectuate  its 
purpose.  And  if  much  is  required  by  me  to  be  done  to  put  in  motion 
the  cumbersome  and  awkward  machinery  set  up  for  the  collection 
of  taxes  upon  collateral  inheritances,  etc.,  which  may  seem  to  be 
unnecessary,  the  cause  therefor  must  be  looked  for  within  the  halls 
of  legislation,  where  this  anomalous  statute  was  invented  and  sent 
forth  to  confuse  and  therefore  exasperate  the  personal  representa- 
tives of  deceased  persons  and  the  courts,  by  its  glaring  inconsis- 
tencies and  absurdities.  After  much  patient  reading  and  rereading 
of  this  act,  I  have  concluded  upon  a  course  of  procedure  which 
I  hope  and  believe  will  bear  the  test  of  superior  judicial  investi- 
gation. Fortunately,  the  constitutionality  of  the  law  cannot  now 
be  mooted.  The  court  of  appeals  has  settled  that  {Re  McPher- 
son,  104  N.  Y.  306)."  In  re  Astor,  20  Abb.  N.  Gas.  405,  6  Dem. 
Surr.  402. 


792  STATUTES  ANNOTATED.  [N.  Y.  St. 

Nature.  —  Treaty  not  Applicable. 

The  act  of  1887  is  not  a  "detraction  tax,"  but  a  succession  tax, 
and  is  therefore  not  included  within  the  terms  of  the  treaty  of  1844 
between  the  kingdom  of  Wurtemberg  and  the  United  States. 
In  re  Stroebel,  5  N.  Y.  App.  Div.  621,  39  N.  Y.  Suppl.  169. 

A  Continuation  of  the  Act  of  1885. 

The  act  of  1887  does  not  repeal  the  statute  of  1885  except  so 
far  as  inconsistent  with  it;  therefore  a  tax  due  under  the  statute  of 
1885  may  be  collected  under  the  statute  of  1887.  In  re  Arnett, 
49  Hun  599,  18  N.  Y.  St.  576,  2  N.  Y.  Suppl.  428.  Warrimer  v. 
People,  6  Dem.  Surr.  (N.  Y.)  211.  See  In  re  Cager,  111  N.  Y.  343, 
347,  19  N.  Y.  St.  497, 18  N.  E.  866,  affirming  46  Hun  657. 

Purpose  of  Amendment  to  Tax  Property  of  Non-residents. 

The  change  in  the  existing  law  effected  by  N.  Y.  St.  1887,  c.  713, 
was  to  impose  a  succession  tax  with  respect  to  the  property  of 
non-residents  which  should  be  within  the  state.  As  the  law  stood 
under  the  act  of  1885,  it  could  not  be  gathered  from  its  language 
that  the  legislature  intended  to  impose  a  tax  upon  property  in  this 
state;  and  the  act  of  1887  was  undoubtedly  passed  in  order  to 
comprehend  such  cases  as  In  re  Enston,  113  N.  Y.  174.  Under  its 
provisions  the  question  of  the  residence  of  the  owner  and  of  the 
legatee  is  of  no  materiality.  It  is  the  property  of  the  decedent 
which  is  sought  to  be  subjected  to  the  tax.  The  right  of  the  state 
to  impose  the  tax  is  based  upon  its  dominion  over  property  situated 
within  its  territory.  If  the  property  consisted  in  personalty  its 
legal  situs  would  follow  the  domicile  of  its  owner,  and  thus  if  he 
were  a  resident  of  the  state  become  subject  to  taxation  there.  In  re 
James,  144  N.  Y.  6,  10,  38  N.  E.  961,  affirming  77  Hun  211,  27 
N.  Y.  Suppl.  288,  6  Misc.  206. 

The  purpose  and  effect  of  the  amendment  Was  to  subject  to 
taxation  property  within  the  state  of  New  York  of  a  non-resident 
decedent,  whether  he  died  testate  or  intestate,  it  having  been 
declared  in  In  re  Enston,  113  N.  Y.  174,  that  such  property  was 
not  taxable  under  the  original  act.  In  re  Gibbes,  176  N.  Y.  565, 
68  N.  E.  1117,  affirming  84  N.  Y.  App.  Div.  510,  83  N.  Y.  Suppl. 
53,  reversing  83  N.  Y.  Suppl.  56. 

A  Property  Tax  on  Non-Residents. 

As  to  personal  property  within  the  state  of  New  York  belong- 
ing to  non-resident  decedents  succession  is  under  the  law  of  a  for- 


1887,  c.  713.]  NEW  YORK.  793 

eign  state  and  that  succession  cannot  be  taxed  by  New  York. 
In  such  case  the  right  of  the  state  to  impose  a  tax  is  based  on  its 
dominion  over  the  property  situated  within  its  territory.  This  is 
a  property  tax  on  such  property.  In  re  Embury,  154  N.  Y.  746, 
49  N.  E.  1096,  affirming  19  N.  Y.  App.  Div.  214,  45  N.  Y.Suppl.  881. 

Real  Estate  of  Non- Residents. 

N.  Y.  St.  1887,  c.  713,  conferred  on  the  surrogate  jurisdiction 
in  the  case  of  non-resident  decedents  of  those  only  who  died  seized 
of  real  estate  within  the  surrogate's  county;  and  the  act  of  1885 
amended  by  the  act  of  1887  declared  this  property  taxable  but 
omitted  to  give  the  surrogate's  court  jurisdiction  to  impose  the 
tax  where  the  non-resident  had  no  real  estate  in  the  state  and  the 
personal  property  was  moved  out  of  the  state  before  the  imposition 
of  any  tax.  In  re  Embury,  154  N.  Y.  746,  49  N.  E.  1096,  affirm- 
ing 19  N.  Y.  App.  Div.  214,  45  N.  Y.  Suppl.  881. 

Covers  both  Testate  and  Intestate  Non-Residents. 

The  legislature  did  not  intend  to  discriminate  between  the 
property  of  a  non-resident  who  made  a  will  and  one  who  did  not. 
The  court  says  that  the  legislature  intended  by  the  first  part  of  the 
sentence  to  provide  for  succession  to  the  estates  of  residents  to 
which  the  intestate  laws  of  this  state  apply;  that  after  providing 
for  that  class  a  change  is  made  to  another  subject  covering  non- 
residents. In  re  Romaine,  127  N.  Y.  80,  85,27  N.  E.  759,  12  L.  R. 
A.  401,  affirming  58  Hun  109. 

Not  Retroactive. 

The  New  York  statute  of  1887  is  not  retroactive  so  as  to  govern 
the  assessment  and  collection  of  a  tax  on  interests  passing  under 
the  will  of  one  who  died  before  the  passage  of  the  act.  In  re 
Brooks,  6  Dem.  Surr.  (N.  Y.)  165,  20  N.  Y.  St.  149. 

The  question  of  validity  of  a  tax  is  not  affected  by  the  amend- 
ment made  to  the  law  of  1885  by  the  statute  of  1887,  c.  713,  as  the 
tax  was  adjudicated  and  imposed  by  the  surrogate  before  the  amend- 
ment took  effect.  In  re  Cager,  111  N.  Y.  343,  347,  19  N.  Y.  St. 
497,  18  N.  E.  866,  affirming  46  Hun  657. 

Not  Retroactive  as  to  Interests  under  Deed. 

The  act  of  1887  does  not  apply  to  remainder  interests  created  by 
a  deed  executed  in  1882  which  took  effect  in  possession  on  the 


794  STATUTES  ANNOTATED.  [N.  Y.  St. 

death  of  the  grantor  in  1888.     In  re  Hendricks,  3  N.  Y.  Suppl. 
281,  1  Con.  Surr.  301. 

Gifts  Causa  Mortis. 

This  act  subjects  gifts  causa  mortis  to  tax.  In  re  Edwards, 
146  N.  Y.  380,  41  N.  E.  89,  affirming  85  Hun  436,  66  N.  Y.  St. 
Rep.  231,  32  N.  Y.  Suppl.  901. 

Exemptions. 

A  gift  to  the  American  Bible  Society  is  subject  to  the  inheritance 
tax.     In  re  Lenox,  9  N.  Y.  Suppl.  895. 

The  Bank  Clerks'  Mutual  Benefit  Association  not  being  exempt 
from  taxation  by  its  charter  is  not  exempt  from  taxation  on  a 
legacy  to  it.  In  re  Jones,  50  Hun  603,  2  N.  Y.  Suppl.  671,  22 
Abb.  N.  Cas.  50,  1  Con.  Surr.  125. 

Under  this  act  charitable  or  religious  corporations  are  exempt 
from  the  inheritance  tax  only  by  special  exemption  either  by 
charter  or  by  some  special  act.  So  the  Missionary  Congregation 
of  St.  Paul  the  Apostle  is  subject  to  the  inheritance  tax.  In  re 
Kavanagh,  6  N.  Y.  Suppl.  669. 

Grace  Church  is  not  exempt  from  taxation  as  a  charity,  as  its 
benefits  and  privileges  are  not  free  to  all,  and  hence  it  is  not  a 
free  public  charity.  In  re  Wolfe,  15  N.  Y.  Suppl.  539,  2  Con. 
Surr.  600,  following  Catlin  v.  Trustees,  113  N.  Y.  133,  20  N.  E.  864. 

The  Wartburg  Orphan  Farm  School  is  exempt  from   taxation 
under  general  law  in  New  York  as  a  "house  of  industry,"  and  is, 
therefore  exempt  from  the  collateral  inheritance  tax  of  1887.     In 
re  Herr,  55  Hun  167,  7  N.  Y.  Suppl.  852,  affirmed  in  57  Hun  591, 
10  N.  Y.  Suppl.  680. 

Foreign  Corporations  not  Exempt. 

The  language  excepting  certain  charities  "now  exempted  by 
law"  refers  to  exemptions  under  the  New  York  statute.  An 
exemption  of  a  foreign  corporation  under  the  law  of  its  origin 
from  taxation  does  not  render  it  exempt  from  a  collateral  inherit- 
ance tax  in  New  York.  Catlin  v.  Trinity  College  Trustees,  113 
N.  Y.  133,  142,  22  N.  Y.  St.  189,  20  N.  E.  864,  3  L.  R.  A.  206, 
affirming  49  Hun  278,  17  N.  Y.  St.  707,  1  N.  Y.  Suppl.  808. 

Under  this  act  a  legacy  to  a  college  located  and  incorporated 
in  another  state  is  subject  to  the  tax.  In  re  McCoskey,  1  N.  Y. 
Suppl.  782,  22  Abb.  N.  Cas.  20,  6  Dem.  Surr.  438. 


1887,  c.  713.]  NEW  YORK.  795 

Municipal  Corporations. 

Under  this  statute  the  exemption  of  "societies,  corporations  and 
institutions  now  exempted  by  law  from  taxation"  was  not  intended 
to  apply  to  bequests  to  municipal  corporations.  The  property  of 
municipal  corporations  is  never  included  in  the  terms  of  'any  law 
providing  for  the  imposition  of  a  tax,  not  because  it  is  exempt, 
but  for  the  reason  that  in  the  nature  of  things  it  never  was  and 
never  can  be  taxable,  as  this  would  be  a  tax  by  the  government 
upon  itself  and  utterly  useless.  Exemption  implies  that  the  person 
or  corporation  to  which  it  applies  is  or  would  otherwise  be  taxable. 
To  include  public  property  which  is  not  and  in  the  nature  of  things 
cannot  be  taxable  at  all  within  the  terms  of  an  exemption  act 
would  be  to  do  a  vain  and  useless  thing  which  cannot  be  imputed 
to  the  legislature.  There  is  no  sound  distinction  between  this 
case  and  that  of  a  bequest  to  the  United  States  which  was  held 
subject  to  the  tax.  In  re  Hamilton,  148  N.  Y.  310,  314,  42  N.  E. 
717,  affirming  90  Hun  608. 

* 'Estate  which  may  be  Valued  at  a  Less  Sum  than  Five 
Hundred  Dollars.'* 

This  language  refers  to  the  estate  given  to  the  beneficiaries 
under  the  will  or  that  descends  under  the  intestate  laws  to  the 
heirs.  It  is  property  or  estate  taken  by  any  person  or  persons 
that  is  taxed  and  not  the  estate  of  the  deceased.  McVean  v. 
Sheldon,  48  Hun  163. 

The  court  holds  that  this  language  does  not  mean  that  five 
hundred  dollars  in  value  of  every  legacy  is  exempt,  but  it  means 
simply  that  if  the  legacy  is  less  than  five  hundred  dollars  it  is 
exempt,  if  more  than  five  hundred  dollars  all  of  it  is  subject  to 
tax.  In  re  Sherwell,  125  N.  Y.  376,  26  N.  E.  464,  affirming  12 
N.  Y.  Suppl.  200,  reversing  11  N.  Y.  Suppl.  897. 

S.  2.  Particular  Estates  and  Remainders.  When  any  grant,  gift,  legacy 
or  succession  upon  which  a  tax  is  imposed  by  section  first  of  this  act,  shall  be  an 
estate,  income  or  interest  for  a  term  of  years  or  for  life,  or  determinable  upon  any 
future  or  contingent  event,  or  shall  be  a  remainder,  reversion  or  other  expectancy, 
real  or  personal,  the  entire  property  or  fund  by  which  such  estate,  income  or  inter- 
est is  supported,  or  of  which  it  is  a  part,  shall  be  appraised  immediately  after  the 
death  of  the  decedent,  at  what  was  the  fair  and  clear  market  value  thereof  at  the 
time  of  the  death  of  the  decedent,  in  the  manner  hereinafter  provided,  and  the 
surrogate  shall  thereupon  assess  and  determine  the  value  of  the  estate,  income  or 
interest  subject  to  said  tax,  in  the  manner  recorded  in  section  thirteen  of  this 
act,  and  the  tax  prescribed  by  this  act  shall  be  immediately  due  and  payable  to 


796  STATUTES  ANNOTATED.  [N.  Y.  St. 

the  treasurer  of  the  proper  county,  and  in  the  city  or  county  of  New  York  to  the 
comptroller  thereof,  and,  together  with  the  interest  thereon,  shall  be  and  remain 
a  lien  on  said  property  until  the  same  is  paid;  provided  that  the  person  or  persons, 
or  body  politic  or  corporate  beneficially  interested  in  the  property  chargeable  with 
said  tax,  may  elect  not  to  pay  the  same  until  they  shall  come  i  nto  the  actual  pos- 
session or  enjoyment  of  such  property,  and  in  that  case  such  person  or  persons  or 
body  politic  or  corporate,  shall  give  a  bond  to  the  people  of  the  state  of  New 
York  in  a  penalty  of  three  times  the  amount  of  the  tax  arising  upon  personal  es- 
tate, with  such  sureties  as  the  surrogate  of  the  proper  county  may  approve  con- 
ditioned for  the  payment  of  said  tax  and  interest  thereon  at  such  time  or  period 
as  they  or  their  representatives  may  come  into  the  actual  possession  or  enjoyment 
of  such  property,  which  bond  shall  be  filed  in  the  office  of  the  surrogate  of  the 
proper  county;  provided  further,  that  such  person  shall  make  a  full  verified  re- 
turn of  such  property  to  said  surrogate,  and  file  the  same  in  his  office  within  one 
year  from  the  death  of  the  decedent,  and  within  that  period  enter  into  such  secur- 
ity and  renew  the  same  every  five  years. 

Vested  Remainder. 

A  vested  remainder  after  a  life  estate  is  subject  to  the  inheritance 
tax  of  1887.     In  re  Vinot,  7  N.  Y.  Suppl.  517. 

Remainders  not  Ascertained. 

Where  the  property  is  bequeathed  in  trust  to  pay  the  income  to 
the  wife  for  life  and  on  her  death  to  give  annuities  to  various 
persons  with  cross  remainders  contingent  on  survivorship  inter  se, 
the  remainders  and  annuities  are  not  subject  to  the  inheritance 
tax  under  the  New  York  statute  of  1887,  until  the  death  of  the  life 
tenant,  as  it  could  not  be  known  until  then  who  would  benefit  by 
the  will.  In  re  Roosevelt,  143  N.  Y.  120,  38  N.  E.  281,  25  L.  R.  A. 
695,  affirming  27  N.  Y.  Suppl.  741,  76  Hun  257. 

Valuation  of  Remainder  Based  on  Actual  Duration  of  the 
Life  Estate. 

The  testator  gave  property  in  trust  to  pay  the  income  to  his  wife 
for  life.  If  the  income  was  insufficient  to  realize  $5,500  a  year  they 
are  directed  to  use  the  principal  to  make  up  that  amount.  The 
testator  died  in  1889  and  the  appraiser  reported  that  the  rights 
of  the  remaindermen  were  uncertain  and  therefore  not  ascertainable. 
The  widow  died  in  1900  and  the  appraiser  on  her  death  appraised 
her  interest  according  to  the  annuity  tables  as  of  the  death  of  the 
testator.  The  widow  also  actually  survived  longer  than  the 
annuity  tables  reckoned  and  the  court  holds  that  the  valuation  of 
the  estate  in  remainder  should  be  made  as  of  the  death  of  the  life 
tenant.     In  re  Hall,  36  Misc.  Rep.  618,  73  N.  Y.  Suppl.  1124. 


1887,  c.  713.]  NEW  YORK.  797 

This  case  is  decided  in  New  York  county  and  the  surrogate 
notes  that  in  other  counties  it  has  been  held  that  the  appraiser 
cannot  hear  such  evidence,  but  that  deductions  must  be  made  by 
the  surrogate  himself,  and  quotes  In  re  Millward,  6  Misc.  425, 
27  N.  Y.  Suppl.  286,  In  re  Ludlow,  4  Misc.  594,  25  N.  Y.  Suppl. 
989. 

N.  Y.  St.  1887,  c.  713,  ss.  3,  6-8,  10,  11,  14-18,  20,21,23,  are  the  same  as  sec- 
tions of  these  numbers  i  n  the  act  of  1885. 

Interest.  —  Penalty. 

S.  4  amends  N.  Y.  St.  1885,  c.  483,  s.  4,  by  providing  that  if  the  taxes  are  paid 
within  eighteen  months,  no  interest  shall  be  charged  and  collected  thereon;  but 
if  not  so  paid,  interest  at  the  rate  of  ten  per  cent  per  annum  shall  be  charged  and 
collected  from  the  time  said  tax  accrued,  provided  that  if  said  tax  is  paid  within 
six  months  from  the  accruing  thereof  a  discount  of  five  per  cent  shall  be  allowed 
and  deducted  from  said  tax. 

S.  5  amends  N.  Y.  St.  1885,  c.  483,  s.  5,  by  providing  that  the  penalty  of  ten 
per  cent  shall  not  be  charged  where  the  estate  by  reason  of  litigation  cannot  be 
settled  at  the  end  of  eighteen  months  from  the  death  of  the  decedent. 

Litigation  among  distributees  of  an  estate  to  determine  their 
respective  shares  is  "an  unavoidable  cause  of  delay  in  settling 
the  estate"  within  the  terms  of  section  5,  and  therefore  in  such  case 
interest  should  be  charged  only  from  the  expiration  of  eighteen 
months  from  the  death  of  the  decedent.  In  re  Moore,  90  Hun  162, 
35  N.  Y.  Suppl.  782. 

Adopted  Children.  —  Relation  of  Parent. 

S.  9  adds  to  the  exception  the  brother,  sister,  "child  or  children  adopted  by 
such  decedent  according  to  law,  or  any  person  to  whom  the  deceased  for  not 
less  than  ten  years  prior  to  his  or  her  death,  stood  in  the  mutually  acknowledged 
relation  of  a  parent." 

The  Exemption  to  Adopted  Children. 

The  testatrix  died  in  1886  and  the  court  holds  that  the  statute 
of  1887  is  not  retroactive  and  does  not  apply  to  the  case.  The 
fact  that  the  language  in  the  statute  of  1887  declares  that  the 
statute  of  1885  "is  amended  so  as  to  read  as  follows,"  is  immate- 
rial, as  is  also  the  fact  that  the  statute  of  1887  closes  with  the 
words  "all  acts  and  parts  of  acts  inconsistent  with  the  provisions 
of  this  act  are  hereby  repealed."  In  re  Miller,  110  N.  Y.  216,  223, 
18  N.  E.  139,  affirming  47  Hun  394. 


798  STATUTES  ANNOTATED.  [N.  Y.  St. 

The  same  result  was  reached  in  In  re  Thompson,  14  N.  Y.  St. 
Rep.  487,  In  re  Ryan,  3  N.  Y.  Suppl.  136.  See  also,  Kissam  v. 
People,  3  N.  Y.  Suppl.  135,  6  Dem.  Surr.  171. 

S.  12  extends  the  time  for  making  application  for  refund  to  five  years  from  the 
date  of  payment. 

Appraisal. 

S.  13  adds  to  N.  Y.  St.  1885,  c.  483,  s.  13,  "and  the  value  of  every  future  or 
contingent  or  limited  estate,  income  or  interest  shall,  for  the  purposes  of  this  act, 
be  determined  by  the  rule,  method  and  standards  of  mortality  and  of  value,  which 
are  employed  by  the  superintendent  of  the  insurance  department  in  ascertaining 
the  value  of  policies  of  life  insurance  and  annuities,  for  the  determination  of  the 
liabilities  of  life  insurance  companies,  save  that  the  rate  of  interest  to  be  assessed 
in  computing  the  present  value  of  all  future  interests  and  contingencies  shall  be 
five  per  cent  per  annum;  and  the  superintendent  of  the  insurance  department 
shall,  on  the  application  of  any  surrogate,  determine  the  value  of  such  future  or 
contigent  or  limited  estate,  income  or  interest,  upon  the  facts  contained  in  such 
report,  and  certify  the  same  to  the  surrogate,  and  his  certificate  shall  be  conclu- 
sive evidence  that  the  method  of  computations  adopted  therein  is  correct." 

[This  section  was  amended  by  St.  1889,  c.  307,  1891,  c.  34,  and  1892,  c.  165.] 

,  There  is  an  elaborate  opinion  as  to  the  practice  on  appraisal 
under  the  New  York  statute  of  1887  in  In  re  Astor,  20  Abb.  N.  Cas. 
405,  6  Dem.  Surr.  402,  14  N.  Y.  St.  478,  2  N.  Y.  Suppl.  630. 

S.  17  was  amended  by  St.  1892,  c.  168. 

S.  19  refers  to  section  17  instead  of  section  16. 

S.  22.  Fees.  The  treasurer  of  each  county  and  the  comptroller  of  the  city  and 
county  of  New  York,  shall  be  allowed  to  retain,  on  all  taxes  paid  and  accounted 
for  by  him  each  year,  under  this  act,  in  addition  to  his  salary  or  fees  now 
allowed  by  law,  five  per  cent  on  the  first  fifty  thousand  dollars  so  paid  and  ac- 
counted for  by  him,  three  per  cent  on  the  next  fifty  thousand  dollars  so  paid  and 
accounted  for  by  him,  and  one  per  cent  on  all  additional  sums  so  paid  and  ac- 
counted for  by  him. 

S.  24.  Use  of  Receipts.  All  taxes  levied  and  collected  under  this  act  shall 
be  paid  into  the  treasury  of  the  state,  for  the  uses  of  the  state,  and  shall  be  appli- 
cable to  the  payment  of  the  general  expenses  of  the  state  government,  and  to  such 
other  purposes  as  the  legislature  may  by  law  direct. 

S.  25.  Repeal.  All  acts  or  parts  of  acts  inconsistent  with  the  provisions  of 
this  act  are  hereby  repealed. 

[See  amendment  by  St.  1890,  c.  479.] 


1891,  c.  34.]  NEW  YORK.  799 

Amendments  to  the  Acts  of  1885  and  1887. 

N.  Y.  St.  1889,  c.  307,  approved  May  27,  1889,  amends  N.  Y.  St.  1887,  c.  713, 
s.  13,  by  adding  thereto  provisions  for  the  appointment  by  the  surrogate  of  the 
city  and  county  of  New  York,  of  a  clerk  for  assessing  the  inheritance  taxes. 

N.  Y.  St.  1889,  c.  479,  approved  June  14,  1889,  amended  N.  Y.  St.  1887,  c.  713, 
s.  25,  to  read  as  follows:  "All  acts  and  parts  of  acts  inconsistent  with  the  provi- 
sions of  this  act  are  hereby  repealed,  but  this  act  shall  apply  to  all  estates  of 
deceased  persons  where  no  assessment  of  the  tax  has  been  made  to  which  such 
estate  or  estates  are  liable  under  the  provisions  of  the  foregoing  act." 

The  assessment  having  been  made  in  a  case  at  the  time  of  the 
passage  of  the  act  of  1889,  the  exemption  to  adopted  children  pro- 
vided by  the  statute  of  1887  became  operative  and  two  legatees 
who  stood  in  the  mutually  acknowledged  relation  of  a  child  to  the 
testator  stood  in  the  same  situation  as  if  the  claus*e  exempting 
them  had  been  contained  in  the  original  act.  Under  the  saving 
clause  in  the  statute  of  1892  these  rights  to  exemption  were  not 
modified.     In  re  Thomas,  3  Misc.  Rep.  388,  24  N.  Y.  Suppl.  713. 

St.  1890,  c.  553,  provides  that  the  collateral  inheritance  tax  shall  not  apply 
to  certain  corporations. 

This  statute  giving  certain  exemptions  is  prospective  in  opera- 
tion and  does  not  apply  to  a  tax  which  became  due  and  payable 
before  its  passage.  Sherrill  v.  Christ  Church,  121  N.  Y.  701,  703, 
25  N.  E.  50,  reversing  In  re  Van  Kleeck,  55  Hun.  472. 

Foreign  Corporations  not  Exempt. 

This  "act  exempts  from  taxation  only  domestic  corporations. 
The  fact  that  a  foreign  charitable  corporation  was  given  a  limited 
privilege  of  taking  and  holding  real  and  personal  property  in  New 
York  did  not  relieve  that  corporation  from  a  legacy  due  it;  that 
was  an  enabling  statute  merely.  The  corporation  remained  a  for- 
eign corporation  as  before,  but  possessing  in  this  state  a  privilege 
granted  by  that  statute.  In  re  Prime,  136  N.  Y.  347,  363,  32  N.  E. 
1091,  18  L.  R.  A.  713,  affirming  64  Hun.  50. 

N.  Y.  St.  1891,  c.  34,  approved  February  25,  1891,  provides  that  appraisers 
shall  "value  the  real  estate  at  its  full  and  true  value,  taking  into  consideration 
actual  sales  of  neighboring  real  estate  similarly  situated,  during  the  year  immedi- 
ately preceding  the  date  of  such  appraisal,  if  any;  and  they  shall  value  all  such 
property,  stocks,  bonds'  or  securities  as  are  customarily  bought  or  sold  in  open 
markets  in  the  city  of  New  York  or  elsewhere,  forthe  day  on  which  such  appraisal 
or  report  may  be  required,  by  ascertaining  the  range  of  the  market  and  the  aver- 
age of  prices  as  thus  found,  running  through  a  reasonable  period  of  time." 


800  STATUTES  ANNOTATED.  [N.  Y.  St. 

N.  Y.  St.  1891,  c.  215,  s.  1,  approved  April  20,  1891,  amends  N.  Y.  St.  1885, 
c.  483,  by  including  in  the  transfers  subject  to  tax  a  "deed,  grant,  sale  or  gift 
made  in  contemplation  of  the  death  of  the  grantor  or  bargainor;"  and  providing 
for  a  tax  of  one  per  cent  on  direct  descendants,  brothers  and  sisters,  with  an  exemp- 
tion of  estates  which  may  be  valued  at  a  less  sum  than  ten  thousand  dollars* 

Continuity  of  Law. 

N.  Y.  St.  1891,  c.  215,  which  amends  N.  Y.  St.  1885,  c.  483,  s.  1, 
"so  as  to  read  as  follows,"  operates  as  a  repeal  of  inconsistent 
provisions  in  the  former  law,  and  where  the  amended  act  re- 
enacts  provisions  in  the  former  law  the  law  will  be  regarded  as 
having  been  continuous,  and  the  new  enactment  as  to  such  part 
will  not  operate  as  a  repeal  so  as  to  affect  a  duty  accrued  under 
the  prior  law,  although  as  to  all  new  transactions  the  later  law  will 
be  referred  to  as  the  ground  of  obligation.  In  re  Prime,  136  N. 
Y.  347,  355,  32  N.  E.  1091,  18  L.  R.  A.  713,  affirming  64  Hun.  50. 

Foreign  Property  of  Resident. 

Promissory  notes,  bonds  and  mortgages  belonging  to  a  resident 
of  New  York,  which  at  the  time  of  the  testator's  death  were  in  the 
hands  of  his  agent  in  Michigan,  are  taxable  under  the  statute  of 
1885,  as  amended  by  the  statute  of  1891,  chapter  215.  In  re  Corn- 
ing, 3  Misc.  Rep.  160,  51  N.  Y.  St.  265,  23  N.  Y.  Suppl.  285. 

The  United  States  not  Exempt. 

N.  Y.  St.  1885,  c.  483,  as  amended  by  St.  1891,  c.  215,  exempted 
from  the  inheritance  tax  societies,  corporations  and  institutions 
now  exempted  by  law  from  taxation  and  the  court  holds  that  the 
United  States  is  not  a  corporation  exempt  by  law  from  taxation. 
It  is  a  settled  doctrine  of  New  York  that  exemption  from  taxation 
is  granted  only  to  domestic  corporations  and  this  doctrine  is  applied 
to  their  inheritance  tax  law  in  the  Matter  of  Prime,,  136  N.  Y.  347. 
The  legislature  intended  to  allow  an  exemption  only  in  favor  of 
such  corporations  as  it  had  itself  created  and  which  might  reason- 
ably be  supposed  to  be  the  special  objects  of  its  solicitude  and 
bounty.  We  think  it  was  not  intended  to  apply  the  exemption  to  a 
purely  political  or  governmental  corporation  like  the  United 
States.  United  States  v.  Perkins,  163  U.  S.  625,  affirming  In  re 
Merriam,  141  N.  Y.  479,  36  N.  E.  505. 

N.  Y.  St.  1891,  c.  215,  s.  2,  approved  April  20,  1891,  provides  that  the  record 
book  in  which  receipts  are  to  be  kept  as  provided  in  section  23  of  N.  Y.  St.  1885, 
c.  483,  shall  be  labeled  "legacy  and  inheritance  tax." 


1892,  c.  399.]  NEW  YORK.  801 

N.  Y.  St.  1891,  c.  215,  s.  3,  amends  the  title  of  N.  Y.  St.  1885,  c.  483,  to  read 
as  follows:   "An  act  to  tax  gifts,  legacies  and  inheritances." 

N.  Y.  St.  1892,  c.  167,  approved  March  19, 1892,  amended  N.  Y.  St.  1887,  c.  713, 
s.  13,  by  providing  that  the  appraiser  is  authorized  to  summon  witnesses  and  take 
testimony  and  make  a  report  thereof  in  writing  to  the  surrogate. 

N.  Y.  St.  1892,  c.  168,  approved  March  19, 1892,  amends  N.  Y.  St.  1887,  c.  713, 
s.  17,  by  adding  that  costs  may  be  fixed  by  the  surrogate  but  shall  not  exceed  in 
any  case  one  hundred  dollars  where  there  has  been  no  contest  and  two  hundred 
and  fifty  dollars  where  there  has  been  a  contest. 

N.  Y.  St.  1892,  c.  169,  approved  March  19, 1892,  amends  N.  Y.  St.  1885,  c.  483, 
s.  1,  by  adding  an  exemption  of  gifts  to  bishops  or  religious  corporations. 

N.  Y.  St.  1892,  c.  443,  approved  May  3,  1892,  amended  N.  Y.  St.  1885,  c.  483, 
s.  13,  by  providing  an  inheritance  tax  clerk  for  the  surrogate  of  Kings  County. 


THE  ACT  OF   1892. 

N.  Y.  St.  1892,  c.  399.    Passed  March  19,  1892,  in  effect  May  1,  1892. 

S.  1.  Taxable  transfers.  A  tax  shall  be  and  is  hereby  imposed  upon  the 
transfer  of  ?ny  property,  real  or  personal,  of  the  value  of  five  hundred  dollars  or 
over,  or  of  any  interest  or  income  therefrom,  in  trust  or  otherwise,  to  persons  or 
corporations  not  exempt  by  law  from  taxation  on  real  or  personal  property  in  the 
following  cases: 

(1)  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  from  any 
person  dying  seized  or  possessed  of  the  property  while  a  resident  of  the  state. 

(2)  When  the  transfer  is  by  will  or  intestate  law,  of  property  within  the  state, 
and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

(3)  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  non-resident, 
when  such  non-resident's  property  is  within  this  state,  by  deed,  grant,  bargain, 
sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  donor, 
or  intended  to  take  effect,  in  possession  or  enjoyment,  at  or  after  such  death. 
Such  tax  shall  also  be  imposed  when  any  such  person  or  corporation  becomes  bene- 
ficially entitled,  in  possession  or  expectancy,  to  any  property  or  the  income  thereof 
by  any  such  transfer,  whether  made  before  or  after  the  passage  of  this  act.  Such 
tax  shall  be  at  the  rate  of  five  per  cent  upon  the  clear  market  value  of  such  prop- 
erty, except  as  otherwise  prescribed  in  the  next  section. 

"Five  Hundred  Dollars  or  Over." 

Where  the  estate  passing  to  the  hands  of  a  public  administrator 
amounts  to  eleven  hundred  ($1100)  dollars  nieces  are  taxable, 
although  the  share  which  each  takes  is  less  than  five  hundred 
($500)  dollars.  The  court  follows  In  re  Corbett,  171  N.  Y.  516, 
holding  that  it  is  the  aggregate  amount  of  the  personal  property 
left  by  the  decedent  and  not  the  amount  of  the  particular  estate 
transferred  to  any  beneficiary  which  determines  whether  the  tax 
shall  be  imposed  or  not.  The  statute  of  1892  changed  the  law  in 
this  respect. 


802  STATUTES  ANNOTATED.  [N.  Y.  St. 

"Prior  to  the  amendment  of  the  Inheritance  Tax  Law  by  chapter 
399  of  the  laws  of  1892  it  was  held  that  the  law  imposed  a  tax  upon 
the  right  of  succession  to  the  property  of  the  testator  or  intestate 
which  vested  in  the  successors  severally.  The  act  of  1892  worked 
a  complete  change  in  the  manner  of  assessing  the  tax."  In  re 
Costello,  189  N.  Y.  288,  292,  82  N.  E.  139,  modifying  117  N.  Y. 
App.  Div.  807,  103  N.  Y.  Suppl.  6. 

To  the  same  effect  see  In  re  Flynn,  30  N.  Y.  Suppl.  388;  In  re 
Hall,  88  Hun  68,  68  N.  Y.  St.  Rep.  538,  34  N.  Y.  Suppl.  616. 

Under  the  statute  of  1892,  chapter  399,  the  share  of  one  who 
stood  in  the  relation  of  a  child  to  the  testator  should  be  added  to 
the  shares  of  nephews  and  their  wives  in  order  to  make  the  aggre- 
gate estate  transferred  exceed  five  hundred  ($500)  dollars.  While 
the  share  of  this  adopted  child  is  not  taxable,  yet  under  the  authori- 
ties she  is  not  a  person  "specifically  exempt  from  taxation,"  as  is 
a  bishop  or  a  religious  corporation,  for  the  reason  that  if  the  estate 
had  been  sufficiently  large  to  bring  her  share  within  the  provisions 
of  the  law  she  would  then  have  been  a  taxable  person  under  it. 
In  re  McMurray,  96  N.  Y.  App.  Div.  128,  89  N.  Y.  Suppl.  71, 
ciring  In  re  Corbett,  171  N.  Y.  516,  64  N.  E.  209,  affirming  55 
N.  Y.  App.  Div.  124,  67  N.  Y.  Suppl.  46;  In  re  Hoffman,  143  N.  Y. 
327,  -38  N.  E.  311;  In  re  Garland,  88  N.  Y.  App.  Div.  380,  84, 
N.  Y.  Suppl.  630.  See  contra,  In  re  Bliss,  6  N.  Y.  App.  Div.  192, 
39  N.  Y.  Suppl.  875. 

•'Property  within  the  State." 

The  court  notes  the  language  of  the  N.  Y.  St.  1892,  c.  399, 
as  confining  the  tax  on  non-residents  to  "property  within  the 
state,"  and  refers  to  section  22  of  the  act,  which  defines  the  word 
"property"  as  meaning  all  property  or  interest  therein  "over 
which  this  state  had  any  jurisdiction  for  the  purposes  of  taxation." 
In  re  Bronson,  150  N.  Y.  1,  4,  44  N.  E.  707,  34  L.  R.  A.  238,  55 
Am.  St.  Rep.  632,  modifying  1  N.  Y.  App.  Div.  546,  37  N.  Y. 
Suppl.  476. 

Where  no  Property  in  State  when  Statute  was  Passed. 

While  the  New  York,  statute  of  1887  was  in  effect,  the  testator, 
a  non-resident,  died  leaving  deposits  and  stocks  on  deposit  in 
New  York.  The  executors  promptly  withdrew  them  and  the 
court  holds  that  the  tax  cannot  subsequently  be  collected  under  the 
laws  of  1892,  as  there  was  then  no  property  of  the  estate  in   New 


1892,  c.  399.]  NEW  YORK.  803 

York,  and  the  tax  cannot  be  legally  imposed  unless  the  statute, 
in  addition  to  creating  a  tax,  provided  for  an  officer  or  tribunal 
who  shall  impose  and  assess  the  property  on  notice  to  the  owner. 
In  re  Embury,  154  N.  Y.  746,  49  N.  E.  1096,  affirming  19  N.  Y. 
App.  Div.  214,  45  N.  Y.  Suppl.  881. 

"Intended  to  Take  Effect  ...  at  or  after  such  Death.*' 

Where  a  grantor  by  a  trust  deed  conveys  property  to  trustees 
in  trust  to  pay  an  annuity  to  his  daughter  for  life  and  the  balance 
of  the  income  to  the  grantor,  and  on  his  death  to  pay  over  the 
principal  as  provided  in  the  trust  deed,  this  transfer  to  the  remain- 
dermen on  his  death  is  intended  to  "take  effect  in  possession  or 
enjoyment  at  or  after  the  death"  of  the  donor,  and  was  therefore 
subject  to  the  inheritance  tax  under  N.  Y.  St.  1892,  c.  399,  s.  1, 
the  trust  deed  being  dated  in  September,  1892,  and  the  testator 
dying  in  1898.  In  re  Cruger,  166  N.  Y.  602,  59  N.  E.  1121,  affirm- 
ing 54  N.  Y.  App.  Div.  405,  66  N.  Y.  Suppl.  636. 

"When  any  .  .  .  Person  .  .  .  Becomes  Beneficially  Entitled." 

The  testator  died  in  1884,  and  the  life  tenant  died  in  1889,  and 
the  court  holds  that  the  provisions  of  the  statute  of  1892  did  not 
relate  back  to  the  possession  taken  in  December,  1889,  under  the 
statute  of  1892,  chapter  399,  section  1,  taxing  transfers  as  of  the 
time  when  the  transferee  "becomes  beneficially  entitled."  In  re 
Travis,  19  Misc.  Rep.  393,  44  N.  Y.  Suppl.  349,  2  Gibbons  91. 

"Whether  made  before  or  after  the  Passage  of  this  Act.'* 

This  language  refers  solely  to  gifts  causa  mortis  and  does  not 
apply  to  the  case  of  a  decedent  dying  before  the  passage  of  the 
statute.  It  is  of  no  consequence  that  the  will  was  executed  before 
the  statute  if  the  death  occurs  after,  and  the  same  rule  is  intended 
to  be  explicitly  applied  to  grants  causa  mortis.  The  transfer  in 
both  instances  is  to  date  from  death,  the  one  event  which  makes  it 
operative  and  effective.  In  re  Seaman,  147  N.  Y.  69,  77,  41  N.  E. 
401,  reversing  87  Hun  619. 

In  re  Seaman  was  approved  and  applied  to  a  statute  containing 
no  express  provision  making  the  statute  applicable  whether  the 
transfer  was  made  before  or  after  the  passage  of  the  act,  in  Crocker 
V.  Shaw,  174  Mass.  266,  267,  268. 

This  statute  does  not  apply  to  gifts  inter  vivos  made  before  the 
passage  of  the  act.  In  re  Birdsall,  22  Misc.  Rep.  180,  49  N.  Y. 
Suppl.  450,  2  Gibbons  293. 


804  STATUTES  ANNOTATED.  [N.  Y.  St 

Where  the  testator  died  in  1873  and  the  remaindermen  became 
entitled  in  1893  on  the  death  of  the  Hfe  tenant,  no  tax  can  be 
levied.  In  re  Forsyth,  10  Misc.  Rep.  477,  32  N.  Y.  Suppl.  175. 
Where  the  testator  died  in  1884  and  the  life  tenant  died  in  1893, 
but  where  the  interests  of  the  remaindermen  became  vested  at  the 
testator's  death,  therefore  they  are  not  subject  to  any  tax  under 
the  provisions  of  the  statute.  In  re  Travis,  19  Misc.  Rep.  393, 
44  N.  Y.  Suppl.  349,  2  Gibbons,  91. 

Bank  Deposit  of  Non-resident. 

Where  a  non-resident  deposited  money  in  a  New  York  bank  it 
is  subject  to  taxation  in  New  York  under  the  act  of  1892,  although 
the  money  of  the  decedent  was  mingled  with  those  of  an  estate  he 
represented  as  trustee.  All  the  justices  did  not  agree  with  the 
reasoning  given  by  Vann,  J.,  who  wrote  the  opinion,  but  they  are  of 
the  opinion  that  a  deposit  of  money  in  a  bank,  although  techni- 
cally a  debt,  is  still  money  for  all  practical  purposes  and  as  such 
is  taxable  under  the  transfer  tax  act.  In  re  Houdayer,  150  N.  Y. 
37,  41,  44  N.  E.  718,  34  L.  R.  A.  235,  55  Am.  St.  Rep.  642,  revers- 
ing 3  N.  Y.  App.  Div.  474,  38  N.  Y.  Suppl.  323. 

Bonds  of  Non-residents  Issued  by  Domestic  Corporation. 

The  bonds  of  a  domestic  corporation  held  outside  the  state  by 
non-residents  do  not  represent  "property  within  the  state"  in  any 
conceivable  sense.  The  property  they  represented  consisted  in 
the  debt  of  their  maker,  and  that  species  of  property  is  a  chose 
in  action  belonging  to  the  owner  and  inseparable  from  his  per- 
sonalty. In  re  Bronson,  150  N.  Y.  1,  8,  44  N.  E.  707,  34  L.  R.  A. 
238,  55  Am.  St.  Rep.  632,  modifying  1  N.  Y.  App.  Div.  546;  37 
N.  Y.  Suppl.  476. 

Stock  of  Non-resident. 

Corporate  shares  must  be  regarded  as  property  within  the  broad 
meaning  of  that  term,  hence  it  cannot  be  said,  if  the  property  repre- 
sented by  a  share  of  stock  has  its  legal  situs  either  where  the  cor- 
poration exists,  or  at  the  holder's  domicile,  that  the  state  is  with- 
out jurisdiction  over  it  for  taxation  purposes.  Therefore  stock 
held  by  a  non-resident  in  a  New  York  corporation  is  subject  to 
tax  under  N.  Y.  St.  1892. 

•     "The  attitude  of  a  holder  of  shares  of  capital  stock  is  quite 
other  than  that  of  a  holder  of  bonds,  towards  the  corporation  which 


1892,  c.  399.1  NEW  YORK.  805 

issued  them.  While  the  bondholders  are  simply  creditors,  whose 
concern  with  the  corporation  is  limited  to  the  fulfilment  of  its 
particular  obligation,  the  shareholders  are  persons  who  are  inter- 
ested in  the  operation  of  the  corporate  property  and  franchises  and 
their  shares  actually  represent  undivided  interests  in  the  corporate 
enterprise.  The  corporation  has  the  legal  title  to  all  the  proper- 
ties acquired  and  appurtenant;  but  it  holds  them  for  the  pecuniary 
benefit  of  those  persons  who  hold  the  capital  stock.  They  appoint 
the  persons  to  manage  its  affairs ;  they  have  the  right  to  share  in 
surplus  earnings,  and  after  dissolution  they  have  the  right  to  have 
the  assets  reduced  to  money  and  to  have  them  ratably  distributed. 
Each  share  represents  a  distinct  interest  in  the  whole  of  the  cor- 
porate property."  Per  Gray,  J.,  in  In  re  Bronson,  150  N.  Y. 
1,  8,  44  N.  E.  707,  34  L.  R.  A.  238,  55  Am.  St.  Rep.  632.  modify- 
ing 1  N.  Y.  App.  Div.  546,  37  N.  Y.  Suppl.  476. 

Legacy  to  Lineals  of  Proceeds  of  Real  Estate. 

Under  the  New  York  statute  of  1892,  chapter  399,  legacies  to 
lineal  descendants  out  of  the  proceeds  of  testator's  real  estate  are 
exempt.  In  re  Cobb,  14  Misc.  Rep.  409  71  N.  Y.  St.  506,  36  N.  Y. 
Suppl.  448. 

Gifts  Inter  Vivos. 

It  was  claimed  that  the  statute  did  not  impose  a  tax  upon  the 
transfer  of  property  by  gifts  inter  vivos,  but  was  confined  to  gifts 
causa  mortis.  The  court  holds  that  the  words  "made  in  contempla- 
tion of  death"  show  that  the  statute  covered  gifts  inter  vivos. 
In  re  Birdsall,  22  Misc.  Rep.  180,  49  N.  Y.  Suppl.  450,  462,  2  Gib- 
bons 293. 

Exercise  of  Power  Created  before  the  Passage  of  the  Statute. 

Where  the  testator  died  in  1877  leaving  the  power  of  appoint- 
ment which  was  exercised  by  will  in  1896,  there  can  be  no  inherit- 
ance tax  on  the  property  passing  by  the  power,  as  the  source  of 
title  is  the  original  will  of  1877,  and  into  that  instrument  must  be 
read  the  names  of  the  appointees,  although  designated  by  a  later 
instrument.  In  re  Harbeck,  161  N.  Y.  211,  55  N.  E.  850,  reversing 
43  N.  Y.  App.  Div.  188,  59  N.  Y.  Suppl.  362.  See,  however.  In  re 
Brooks,  65  N.  Y.  St.'  Rep.  255,  32  N.  Y.  Suppl.  176,  1  Gibbons  188. 

Constitutionality. 

N.Y.St.  1892,  c.  399,  is  constitutional.    InreGoxiXd,  156  N.  Y.  423. 


g06  STATUTES  ANNOTATED.  [N.  Y.  St. 

When  Took  Effect. 

N.  Y.  St.  1892,  c.  399,  took  effect  May  1,  1892.  Matter  of  Payer- 
weather,  143  N.  Y.  114,  38  N.  E.  278. 

Purpose  and  Construction  of  Statute. 

This  act  was  enacted  as  a  general  act  in  relation  to  the  taxation 
of  transfers  of  property  from  a  decedent.  It  was  intended  las  a  gen- 
eral law  of  the  state  upon  the  subject,  and  its  exemption  of  any 
religious  corporation  should  receive  the  same  construction  which  a 
similar  provision  in  a  prior  act  had  received.  In  re  Balleis,  144 
N.  Y.  132,  134,  38  N.  E.  1007,  affirming  78  Hun  275. 

Continuous  with  Prior  Legislation. 

The  statute  of  1892,  chapter  399,  repealed  the  act  of  1885,  with- 
out any  saving  clause ;  still  the  tax  law  has  been  continuously  in 
force  to  the  present  time  since  1885,  because  of  the  statutory  con- 
struction law  statute  of  1892,  chapter  677.  Therefore  the  surro- 
gate had  jurisdiction  to  make  an  order  assessing  the  inheritance 
tax  in  1901  on  the  estate  of  one  who  died  in  1888.  In  re  Jones, 
54  Misc.  202,  105  N.  Y.  Suppl.  932. 

Not  Retroactive. 

The  testator,  a  resident  of  New  Jersey,  died  there  March  19, 
1782,  leaving  personal  property  in  New  York  state,  and  some  of  the 
assets  were  not  removed  to  New  Jersey  until  after  May  1,  1892, 
when  the  New  York  statute  of  1892,  chapter  399,  became 
operative.  The  court  holds  that  the  fact  that  the  property  was  in 
New  York  when  the  statute  of  1892  went  into  effect  does  not  make 
it  subject  to  tax,  as  this  would  render  the  statute  retroactive.  "If 
the  right  of  taxation  because  of  decease  does  not  exist  at  the  time 
of  death  it  never  can  be  thereafter  imposed  upon  the  ground  of 
such  death."  In  re  Pettit,  171  N.  Y.  654,  63  N.  E.  1121,  affirming 
65  N.  Y.  App.  Div.  30,  72  N.  Y.  Suppl.  469.  To  the  same  effect 
see  In  re  Fayerweather,  143  N.  Y.  114,  38  N.  E.  278. 

The  testator  died  in  1887  and  the  appraisal  was  made  in  that 
year  and  appeal  was  taken  from  the  appraisal  and  decided  in  1890. 
The  statute  of  March  19,  1892,  was  passed,  providing  that  "any 
property  heretofore  devised  or  bequeathed  or  which  may  hereafter 
be  devised  or  bequeathed  to  any  person  who  is  a  bishop  or  to  any 
religious  corporation,  shall  be  exempt"  from  taxation.  As  the  assess- 
ment had  been  entirely  completed  so  far  as  the  surrogate  was  con- 


1892,  c.  399.]  NEW  YORK.  807 

cerned,  prior  to  the  enactment  of  the  exemption  clauses,  the  legatees 
can  derive  no  benefit  therefrom.  In  re  Wolfe,  66  Hun  389,  29 
Abb.  N.  Cas.  340,  21  N.  Y.  Suppl.  515,  affirming  15  N.  Y.  Suppl. 
539  (s.  c.  137  N.  Y.  205,  33  N.  E.  156). 

S.  2.  Exceptions  and  limitations.  When  the  property  or  any  beneficial 
interest  therein  passes  by  any  such  transfer  to  or  for  the  use  of  any  father,  mother, 
husband,  wife,  child,  brother,  sister,  wife  or  widow  of  a  son  or  the  husband  of  a 
daughter,  or  any  child  or  children  adopted  as  such  in  conformity  with  the  laws 
of  this  state,  of  the  decedent,  grantor,  donor  or  vendor,  or  to  any  person  to  whom 
any  such  decedent,  grantor,  donor  or  vendor  for  not  less  than  ten  years  prior  to 
such  transfer  stood  in  the  mutually  acknowledged  relation  of  a  parent  or  to  any 
lineal  descendant  of  such  decedent,  grantor,  donor  or  vendor  born  in  lawful  wed- 
lock, such  transfer  of  property  shall  not  be  taxable  under  this  act,  unless  it  is  per- 
sonal property  of  the  value  of  ten  thousand  dollars  or  more,  in  which  case  it  shall 
be  taxable  under  this  act  at  the  rate  of  one  per  centum  upon  the  clear  market 
value  of  such  property.  But  any  property  heretofore  or  hereafter  devised  or 
bequeathed  to  any  person  who  is  a  bishop  or  to  any  religious  corporation  shall 
be  exempted  from  and  not  subject  to  the  provisions  of  this  act. 

Adopted  Children. 

Rights  to  "exemption  of  adopted  children  under  the  act  of  1887 
are  not  modified  by  the  act  of  1892.  In  re  Thomas,  3  Misc.  388, 
24  N.  Y.  Suppl.  713. 

"Unless  it  is  Personal  Property  of  the  Value  of  Ten  Thousand 
Dollars  or  More.'* 

Under  N.  Y.  St.  1892,  c.  399,  s.  22,  the  purpose  of  the  entirely 
new  provision  there  is  to  compel  a  change  of  the  previous  construc- 
tion of  the  court  which  applied  the  ten  thousand  dollar  exemption 
to  the  share  of  each  beneficiary  and  required  the  court  to  attach  the 
limitation  to  the  estate  of  the  decedent  and  not  to  the  several  and 
particular  estates  passing  to  the  successor.  Therefore,  a  devise 
to  the  mother  of  the  decedent  is  taxable  at  one  per  cent  although 
itself  of  the  value  of  l^ss  than  ten  thousand  dollars,  because  the 
aggregate  transfers  by  will  to  taxable  persons  exceeded  that  amount. 
In  re  HofTman,  143  N.  Y.  327,  38  N.  E.  311,  modifying  76  Hun 
399,  5  Misc.  439.  In  re  Taylor,  6  Misc.  Rep.  277,  27  N.  Y.  Suppl. 
232.  See,  however.  In  re  SkiUman,  66  N.  Y.  St.  Rep.  140,  10 
Misc.  Rep.  642,  32^  N.  Y.  Suppl.  780. 

The  interest  of  an  infant  in  the  proceeds  of  the  sale  of  real  estate 
in  partition  is  not  exempt  as  real  property  under  the  statute.  The 
transfer  tax  act  taxes,  not  the  property,  but  the  individual  who 


808  STATUTES  ANNOTATED.  [N.  Y.  St. 

receives  the  property,  and  in  this  case  what  the  individual  receives 
is  money  and  not  real  estate.  In  re  Stiger,  7  Misc.  Rep.  268,  28 
N.  Y.  Suppl.  163. 

•*To  any  Person  who  is  a  Bishop." 

The  testator  died  in  1896  leaving  a  legacy  "to  Bishop  William 
Taylor,  or  his  living  successor,  to  be  used  in  his  African  mission 
work."  Bishop  Taylor  died  before  the  testator,  and  his  living 
successor  was  a  resident  of  New  Jersey  and  not  of  New  York. 
It  was  argued  that  the  bishop  took  this  in  his  official  capacity 
and  that  it  was  therefore  subject  to  taxation  as  a  charitable  gift 
to  a  foreign  corporation.  But  the  court  holds  that  the  office  of 
bishop  is  not  a  state  office  and  that  the  bishop  is  not  a  corporation 
sole.  The  state  does  not  recognize  the  existence  of  any  ecclesi- 
astical office,  the  result  of  which  is  to  give  to  the  holders  of  it  the 
right  of  perpetual  succession,  or  any  other  rights  similar  to  those 
which  are  enjoyed  by  corporations.  The  designation  of  a  person 
as  a  bishop  is  a  mere  descriptio  personcB.  Therefore,  this  legacy 
is  exempt  from  taxation  under  the  statute  of  1892  exempting  from 
the  tax  legacies  "to  any  person  who  is  a  bishop,  or  to  any  religious 
corporation."  In  re  Palmer,  158  N.  Y.  669,  52  N.  E.  1125,  affirm- 
ing 33  N.  Y.  App.  Div.  307,  53  N.  Y.  Suppl.  847. 

•*To  any  Religious  Corporation."  —  Foreign  Religious  Cor- 
porations not  Exempted. 

The  exemption  in  this  act  of  certain  religious  corporations 
applies  only  to  domestic  corporations.  In  re  Balleis,  144  N.  Y. 
132,  38  N.  E.  1007,  affirming  78  Hun  275.  In  re  Smith,  77  Hun 
134,  28  N.  Y.  Suppl.  476.  In  re  Fayerweather,  30  N.  Y.  Suppl. 
273,  31  Abb.  N.  Cas.  287.  In  re  Taylor,  80  Hun  589,  30  N.  Y. 
Suppl.  582. 

The  American  Baptist  Publication  Society  was  empowered  by 
the  New  York  statute  to  take  and  hold  property  in  New  York 
state,  but  the  court  holds  that  this  right  alone  does  not  relieve  tlie 
respondent  from  taxation.  In  re  Wolfe,  23  Misc.  Rep.  439,  52 
N.  Y.  Suppl.  415,  2  Gibbons  446. 

S.  3.  Lien  of  tax  and  payment  thereof.  Every  such  tax  shall  be  and  re- 
main a  hen  upon  the  property  transferred  until  paid  and  the  person  to  whom  the 
property  is  so  transferred,  and  the  administrators,  executors  and  trustees  of  every 
estate  so  transferred  shall  be  personally  liable  for  such  tax  until  its  payment.  The 
tax  shall  be  paid  to  the  treasurer  or  comptroller  of  the  county  of  the  surrogate 
having  jurisdiction  as  herein  provided;   and  said  treasurer  or  comptroller  shall 


1892,  c.  399.]  NEW  YORK.  809 

give,  and  every  executor,  administrator  or  trustee  shall  take,  duplicate  receipts 
from  him  of  such  payment,  one  of  which  he  shall  immediately  send  to  the  comp- 
troller of  the  state,  whose  duty  it  shall  be  to  charge  the  treasurer  or  comptroller 
so  receiving  the  tax  with  the  amount  thereof  and  to  seal  said  receipt  with  the  seal 
of  his  office  and  countersign  the  same  and  return  it  to  the  executor,  administrator 
or  trustee,  whereupon  it  shall  be  a  proper  voucher  in  the  settlement  of  his  accounts; 
but  no  executor,  administrator  or  trustee  shall  be  entitled  to  a  final  accounting 
of  an  estate  in  settlement  of  which  a  tax  is  due  under  the  provisions  of  this  act 
unless  he  shall  produce  a  receipt  so  sealed  and  countersigned  by  the  comptroller 
or  a  copy  thereof  certified  by  him,  or  unless  a  bond  shall  have  been  filed  as  pre- 
scribed by  section  seven  of  this  act.  All  taxes  imposed  by  this  act  shall  be  due 
and  payable  at  the  time  of  the  transfer,  provided,  however,  that  taxes  upon  the 
transfer  of  any  estate,  property  or  interest  therein  limited,  conditioned,  depend- 
ent or  determinable  upon  the  happening  of  any  contingency  or  future  event  by 
reason  of  which  the  fair  market  value  thereof  can  not  be  ascertained  at  the  time 
of  the  transfer  as  herein  provided  shall  accrue  and  become  due  and  payable  when 
the  persons  or  corporations  beneficially  entitled  thereto  shall  come  into  actual 
possession  or  enjoyment  thereof. 

When  Tax  Accrues  on  Interests  Unascertained. 

The  court  remarks  that  the  legislature  under  the  statute  of 
1892  has  given  a  practical  construction  to  its  previous  legislation 
on  the  subject  when  it  provides  that  where  the  fair  market  value 
of  the  property  or  interest  cannot  be  ascertained  at  the  time  of 
the  transfer,  the  tax  shall  become  due  and  payable  when  the 
beneficiary  shall  come  into  actual  possession  or  enjoyment.  In  re 
Roosevelt,  143  N.  Y.  120,  38  N.  E.  281,  25  L.  R.  A.  695,  affirming 
27  N.  Y.  Suppl.  741,  76  Hun  257. 

Where  the  testator  left  a  fund  to  pay  the  income  to  her  mother 
for  life  and  on  her  death  to  the  daughter,  and  on  the  death  of  the 
daughter  the  principal  to  go  to  her  issue,  if  any,  and  in  default  of 
issue  to  certain  other  persons,  and  where  the  will  also  provided  that 
if  the  daughter  were  not  living  at  the  mother's  death  the  prin- 
cipal sum  should  then  be  paid  over  to  the  issue  of  the  daughter, 
if  any,  or  to  certain  other  persons,  the  estates  of  the  daughter  and 
her  child  were  not  taxable  until  the  death  of  the  mother.  She 
ought  not  to  be  taxed  until  events  make  it  certain  that  there  is 
an  actual  and  beneficial  transfer  of  the  property  to  her.  The  tax 
should  be  confined  to  a  present  enjoyment  or  a  fixed  and  absolute 
right  of  future  enjoyment.  In  re  Hoffman,  143  N.  Y.  327,  38 
N.  E.  311,  modifying  76  Hun  399,  5  Misc.  439. 

To  Survivors,  on  t)eath  of  Life  Tenant. 

A  gift  to  survivors  on  the  death  of  the  life  tenant  tax  accrues 
then,    /wre  Davis,  149  N.Y.  539,  44  N.E.  185, affirming 91  Hun  53. 


810  STATUTES  ANNOTATED.  IN.  Y.  St. 

Where  a  devise  is  given  to  a  sister  for  life  and  on  her  death  to 
certain  survivors  or  their  issue  as  set  forth  in  the  will,  the  court 
finds  that  no  tax  can  be  assessed  on  the  remainder  until  it  is 
known  to  whom  the  property  would  pass.  In  re  Plum,  37  Misc. 
Rep.  466,  75  N.  Y.  Suppl.  940. 

The  will  of  a  testator  provided  for  two  life  estates  and  on  the 
death  of  the  survivor  he  gave  the  remainder  to  one  E.,  if  he  be 
then  living,  but  if  he  is  not  living  at  that  time  then  the  remainder 
is  given  to  other  persons.  Under  the  statute  of  1887,  chapter  713, 
the  devise  to  E.  is  not  presently  taxable.  In  re  Westcott,  11 
Misc.  Rep.  589,  33  N.  Y.  Suppl.  426,  following  In  re  Hoffman, 
143  N.  Y.  327,  38  N.  E.  311. 

Life  Estate  in  Remainder. 

Where  a  testator  gives  to  his  wife  for  life  and  on  her  death  a 
life  estate  to  G.,  the  estate  to  G.  comes  within  the  statutory  defi- 
nition of  a  vested  remainder,  but  it  is  very  different  from  a  case 
where  the  will  gives  a  life  estate  to  A.  and  the  remainder  to  B. 
and  his  heirs.  At  the  present  time  G.  has  no  estate  that  she 
could  sell  to  any  one  at  any  price,  and  therefore  the  inheritance 
tax  must  be  postponed  until  the  death  of  the  life  tenant.  In  re 
Westcott,  11  Misc.  Rep.  589,  33  N.  Y.  Suppl.  426. 

S.  4  combines  the  provisions  of  N.  Y.  St.  1887,  c.  713,  ss.  4  and  5. 

This  section  does  njt  apply  where  the  decedent  died  in  1890. 
In  re  Fayerweather,  143  N.  Y.  114,  38  N.  E.  278. 

Interest  on  Remainder  from  the  Death  of  the  Life  Tenant. 

Where  a  will  left  property  to  a  life  tenant,  and  on  her  death 
to  her  children  who  might  be  living  at  the  time  of  her  death,  it  was 
not  certain  until  that  time  whether  the  property  would  be  subject 
to  an  inheritance  or  transfer  tax,  or  whether  the  remainderman 
would  ever  be  entitled  to  the  possession  of  the  property  and  thus 
become  liable  to  be  taxed.  Until  that  time  no  tax  accrued.  There- 
fore interest  at  six  per  cent  should  be  charged  only  from  the  death 
of  the  life  tenant.  In  re  Davis,  149  N.  Y.  539,  548,  44  N.  E.  185, 
affirming  91  Hun.  53.  (This  result  would  now  be  different  as  a 
result  of  the  act  of  1899.) . 

Awaiting  Disposition  of  Will  Contest. 

Where  litigation  over  the  probate  of  a  will  is  pending  it  cannot 
be  known  whether  the  property  will  pass  under  the  will  or  as  in 


1892,  c.  399.]  NEW  YORK.  811 

case  of  intestacy,  and  until  this  fact  is  ascertained  it  is  impracti- 
cable to  proceed  to  fix  a  transfer  tax  under  the  act  of  1892,  since 
the  ascertainment  of  the  persons  entitled  to  the  property  of  a 
decedent  must  precede  the  imposition  of  any  tax.  In  re  Westurn, 
152  N.  Y.  93,  99,  46  N.  E.  315,  reversing  8  N.  Y.  App.  Div.  59. 

S.  5  combines  N.  Y.  St.  1887,  c.  713,  ss.  6  and  7. 

S.  6  amends  N.  Y.  St.  1887,  c.  713,  s.  10,  by  adding  to  it  provisions  authorizing 
the  state  comptroller  to  refund  or  require  the  refunding  of  taxes  erroneously 
paid. 

The  debts  of  a  testator,  it  plainly  appears  from  the  sixth  section 
of  N.  Y.  St.  1892,  are  to  be  deducted  in  arriving  at  the  valuation 
of  the  property  and  in  fixing  the  tax.  In  re  Westurn,  152  N.  Y. 
93,  100,  46  N.  E.  315,  reversing  8  N.  Y.  App.  Div.  59.  See,  how- 
ever. In  re  Ludlow,  4  Misc.  Rep.  594,  25  N.  Y.  Suppl.  989. 

S.  7  allows  parties  interested  to  defer  payment  on  proper  security  until  they 
come  into  actual  possession  of  the  property  transferred. 

S.  8  practically  continues  the  provisions  of  N.  Y.  St.  1887,  c.  713,  s.  3. 

S.  9  provides  for  the  payment  of  the  tax  on  transfer  of  stock,  and  that  no  safe 
deposit  company  or  other  institution  or  person  holding  securities  or  assets  of  a 
decedent  shall  deliver  or  transfer  the  same  except  on  five  days'  notice  to  the  county 
I  treasurer  or  comptroller.    Failure  to  observe  these  provisions  renders  the  corpo- 

ration or  person  liable  to  the  tax.    [Compare  N.  Y.  St.  1887,  c.  713,  s.  11.] 

S,  10  gives  the  surrogate's  court  jurisdiction  to  appoint  trustees  or  to  give  ancil- 
lary letters  to  hear  and  determine  all  questions  arising  under  the  provisions  of 
the  act,  and  to  do  any  act  in  relation  thereto  authorized  by  law  to  be  done  by  a 
surrogate,  and  other  matters  or  proceedings  coming  within  his  jurisdiction.  [See 
N.  Y.  St.  1887,  c.  713,  s.  15.] 

Exclusive. 

The  jurisdiction  given  to  the  surrogate  to  determine  and  assess 
the  inheritance  tax  is  exclusive  and  cannot  be  exercised  by  the 
supreme  court  on  a  petition  to  construe  a  will.  Weston  v.  Goodrich^ 
86  Hun.  194,  33  N.  Y.  Suppl.  382. 

Property  in  Two  Counties. 

The  jurisdiction  to  assess  a  tax  on  a  non-resident  depends  on 
the  appointment  of  an  ancillary  administrator.  Where  the  prop- 
erty of  a  non-resident  is  situated  in  two  counties  and  an  ancillary 
administrator  has  been  appointed  in  one  county,  there  can  be  no 


812  STATUTES  ANNOTATED.  [N.  Y.  St. 

appointment  in  another  county  and  the  surrogate  of  the  county 
which  first  obtained  jurisdiction  is  the  only  surrogate  who  can 
assess  the  tax.  In  re  Hathaway,  27  Misc.  Rep.  474,  59  N.  Y. 
Suppl.  166. 

Power  to  Order  Refund. 

Under  this  section  the  surrogate  has  power  to  order  the  county 
treasurer  to  refund  taxes  in  his  hands,  the  amount  of  the  tax  not 
having  been  paid  into  the  state  treasury.  In  re  Park,  8  Misc. 
Rep.  550,  29  N.  Y.  Suppl.  1081. 

S.  11.  *  •Appointment  of  appraisers.**  The  surrogate,  upon  the  application 
of  any  interested  party,  including  county  treasurers,  or  the  comptroller  of  New 
York  city,  or  upon  his  own  motion,  shall,  as  often  as  and  whenever  occasion  may 
require,  appoint  a  competent  person  as  appraiser,  to  fix  the  fair  market  value,  at 
the  time  of  the  transfer  thereof,  of  property  of  persons  whose  estates  shall  be  sub- 
ject to  the  payment  of  any  tax  imposed  by  this  act.  If  the  property  upon  the 
transfer  of  which  a  tax  is  imposed  shall  be  an  estate,  income  or  interest  for  a  term 
of  years,  or  for  life,  or  determinable  upon  any  future  or  contingent  estate,  or  shall 
be  a  remainder  or  reversion  or  other  expectancy,  real  or  personal,  the  entire  prop- 
erty or  fund  by  which  such  estate,  income  or  interest  is  supported,  or  of  which  it 
is  a  part,  shall  be  appraised  immediately  after  such  transfer,  or  as  soon  thereafter 
as  may  be  practicable,  at  the  fair  and  clear  market  value  thereof  at  that  time,  pro- 
vided, however,  that  when  such  estate,  income  or  interest  shall  be  of  such  a  nature 
that  its  fair  and  clear  niarket  value  can  not  be  ascertained  at  such  time,  it  shall 
be  appraised  in  like  manner  at  the  time  when  such  value  first  became  ascertain- 
able. The  value  of  every  future  or  contingent  or  limited  estate,  income,  interest 
or  annuity  dependent  upon  any  life  or  lives  in  being  shall  be  determined  by  the 
rule,  method  and  standards  of  mortality  and  value  employed  by  the  superintend- 
ent of  insurance  in  ascertaining  the  value  of  policies  of  life  insurance  and  annu- 
ities for  the  deterifiination  of  liabilities  of  life  insurance  companies;  except  that 
the  rate  of  interest  for  computing  the  present  value  of  all  future  and  contingent 
interests  or  estates  shall  be  five  per  centum  per  annum. 

Deduction  of  debts  and  expenses  on  appraisal,  see  notes  to  sec- 
tion 6,  ante. 

Appraisal  of  Uncertain  Interests. 

Where  a  life  estate  is  created  subject  to  determination  on  the 
remarriage  of  the  life  tenant,  it  is  impossible  on  the  death  of  the 
testator  to  ascertain  the  value  of  the  interest  ultimately  going  to 
'  the  remainderman.  Therefore  the  value  should  be  appraised  under 
the  N.  Y.  St.  1892,  "as  soon  as  may  be  practicable,"  which  isonthe 
death  of  the  life  tenant.  Still,  whenever  the  appraisal  is  made, 
the  value  of  the  property  is  to  be  appraised  according  to  the  fair 


1892,  c.  399.]  NEW  YORK.  813 

and  clear  market  value  of  the  interest  at  the  time  of  the  death  of 
the  testator.  In  re  Sloane,  154  N.  Y.  109,  47  N.  E.  978,  19  N.  Y. 
App.  Div.  411,  46  N.  Y.  Suppl.  264. 

When  May  Appoint.  —  Expenses  of  Litigation. 

It  was  claimed  that  the  surrogate  under  this  section  had  no  power 
to  appoint  an  appraiser  or  to  fix  the  tax  until  the  fact  whether 
there  were  claims  against  the  estate  had  been  ascertained  in  due 
course.  But  the  statute  provides  that  the  surrogate  may  appoint 
an  appraiser  "as  often  as  and  whenever  occasion  may  require." 
It  seems  to  be  left  to  his  sound  discretion  when  the  power  shall 
be  exercised. 

The  sums  expended  by  the  heirs  in  successfully  testing  the  pro- 
bate of  a  will  are  properly  disallowed,  as  they  are  not  claims  exist- 
ing against  the  decedent  or  his  properl  y,  although  the  court  charged 
certain  costs  and  allowances  in  their  favor  upon  the  estate,  as  this 
was  practically  a  charge  upon  their  own  property  for  the  benefit 
of  their  attorneys.  In  re  Westurn,  152  N.  Y.  93,  102,  46  N.  E. 
315,  reversing  8  N.  Y.  App.  Div.  59. 

Special  Guardian. 

Where  the  will  left  all  the  property  to  the  wife  for  life  and  the 
remainder  to  an  infant,  and  where  it  appeared  that  the  infant's 
estate  could  not  be  appraised  at  the  present  time,  it  is  improper 
to  appoint  a  special  guardian  for  the  infant.  In  re  Post,  5  N.  Y. 
App.  Div.  113,  38  N.  Y.  Suppl.  977. 

Reappraisal. 

The  authority  to  a  surrogate  to  appoint  an  appraiser  "as  often 
as  occasion  may  require"  has  for  its  object  to  collect  the  tax  on  the 
whole  taxable  estate ;  and  where  all  the  assets  have  been  appraised 
and  the  tax  fixed  to  cover  any  omission  by  additional  or  supple- 
mental appraisals  and  when  such  omissions  are  discovered  upon  the 
new  appraisal,  property  of  the  decedent  which  had  not  been  ap- 
praised at  the  previous  proceeding  was  properly  included.  But 
the  appraiser  has  no  authority  to  increase  the  appraisal  on  prop- 
erty which  was  included  in  the  former  appraisal,  even  although 
the  executor  had  since  the  former  appraisal  actually  received  for 
such  property  respective  sums  for  which  they  were  valued  in  the 
new  appraisal.  The  court  treats  this  difference  as  an  increase  in 
value  subsequent  to  the  date  of  the  death  of  the  decedent.     In  re 


814  STATUTES  ANNOTATED.  IN.  Y.  St. 

Rice,  56  N.  Y.  App.  Div.  253,  68  N.  Y.  Suppl.  1147,  affirming  61 
N.  Y.  Suppl.  911. 

On  the  reappraisal  the  appraiser  should  not  increase  the  valua- 
tions on  property  already  appraised,  as  reappraisals  are  intended 
only  to  reach  property  omitted  in  former  appraisals  and  the  val- 
uation is  to  be  measured  by  the  value  at  the  death  of  testate. 
Matter  of  Rice,  56  N.  Y.  App.  Div.  253,  68  N.  Y.  Suppl.  1147, 
affirming  61  N.  Y.  Suppl.  911. 

S.  12  practically  continues  the  provisions  of  N.  Y.  St.  1887,  c.  713,  s.  13. 

S.  13.  Determination  by  surrogate.  The  report  of  the  appraiser  shall  be 
filed  in  the  office  of  the  surrogate,  and  from  such  report  and  other  proof  relating 
to  any  such  estate  before  the  surrogate,  the  surrogate  shall  forthwith  as  of  course 
determine  the  cash  value  of  all  estates  and  the  amount  of  tax  to  which  the  same 
are  liable;  or,  the  surrogate  may  so  determine  the  cash  value  of  all  such  estates 
and  the  amount  of  tax  to  which  the  same  are  liable  without  appointing  an 
appraiser.  The  superintendent  of  insurance  shall,  on  the  application  of  any 
surrogate,  determine  the  value  of  any  such  future  or  contingent  estates,  income  or 
interest  limited,  contingent,  dependent  or  determinable  upon  the  life  or  lives  of 
persons  in  being,  upon  the  facts  contained  in  any  such  appraiser's  report,  and 
certify  the  same  to  the  surrogate,  and  his  certificate  shall  be  conclusive  evidence 
that  the  method  of  computation  adopted  therein  is  correct.  Any  person  dissatis- 
fied with  the  appraisement  or  assessment  and  determination  of  tax  may  appeal 
therefrom  to  the  surrogate  within  sixty  days  from  the  fixing,  assessing  and 
determination  of  tax  by*  the  surrogate  as  herein  provided,  upon  filing  in  the  office 
of  the  surrogate  a  written  notice  of  appeal,  which  shall  state  the  grounds  upon 
which  the  appeal  is  taken.  The  surrogate  shall  immediately  give  notice,  upon 
the  determination  by  him  as  to  the  value  of  any  estate  which  is  taxable  under  this 
act,  and  of  the  tax  to  which  it  is  liable,  to  all  parties  known  to  be  interested 
therein. 

Notice  of  appeal  must  be  filed  and  the  hearing  must  be  limited 
to  the  errors  noted  in  the  appeal.  In  re  Davis,  149  N.  Y.  539,  548, 
44  N.  E.  185,  affirming  91  Hun.  53. 

S.  14  covers  the  salaries  of  surrogate's  assistants  in  New  York  city. 

S.  15  practically  continues  the  provisions  of  N.  Y.  St.  1887,  c.  713,  s.  16,  and 
adds  thereto  further  provisions  as  to  costs  and  expenses. 

The  affidavit  to  commence  the  proceedings  to  enforce  the  trans- 
fer tax  under  section  15  must  contain  a  statement  that  there  was 
'probable  cause  for  the  proceeding,  and  an  affidavit  which  simply 
says  that  the  comptroller  notified  the  district  attorney  and  that  the 
proceedings  were  commenced  in  good  faith  furnishes  no  evidence 
as  to  the  facts  and  circumstances  from  which  the  court  may  form 


1892,  c.  399.]  NEW  YORK.  815 

an  opinion  as  to  the  existence  of  probable  cause.     In  re  McCarthy, 
5  Misc.  Rep.  276,  25  N.  Y.  Suppl.  987. 

S.  16  covers  the  form  of  receipt  on  payment  of  tax. 
S.  17  covers  the  fees  of  the  county  treasurer  and  comptroller. 
S.  18  provides  for  the  books  and  forms  to  be  furnished  by  the  state  comp- 
troller. 

S.  19  provides  for  the  reports  of  the  surrogate  and  county  clerk. 
S.  20  provides  for  the  reports  of  the  county  treasurer  and  comptroller  of  the  city 
of  New  York. 

S.  21  covers  application  of  taxes. 

S.  22.  Definitions.  The  words  "estate"  and  "property"  as  used  in  this  act 
shall  be  taken  to  mean  the  property  or  interest  therein  of  the  testator,  intestate, 
grantor,  bargainor  or  vendor,  passing  or  transferred  to  those  not  herein  specifi- 
cally exempted  from  the  provisions  of  this  act  and  not  as  the  property  or  interest 
therein  passing  or  transferred  to  individual  legatees,  devisees,  heirs,  next-of  kin, 
grantees,  donees  or  vendees,  and  shall  include  all  property  or  interest  therein, 
whether  situated  within  or  without  this  state,  over  which  this  state  has  any  juris- 
diction for  the  purposes  of  taxation.  The  word  "transfer"  as  used  in  this  act 
shall  be  taken  to  include  the  passing  of  property  or  any  interest  therein  in  posses- 
sion or  enjoyment,  present  or  future,  by  inheritance,  descent,  devise,  bequest, 
grant,  deed,  bargain,  sale  or  gift  in  the  manner  herein  prescribed.  The  words 
"county  treasurer,"  "comptroller"  and  "district  attorney"  as  used  in  this  act 
shall  be  taken  to  mean  the  treasurer,  comptroller  or  district  attorney  of  the  county 
of  the  surrogate  having  jurisdiction  as  provided  in  section  ten  of  this  act. 

**Over  which  this  State  has  Any  Jurisdiction  for  the  Pur- 
poses of  Taxation."  —  United  States  Bonds. 

The  court  holds  that  N.  Y.  St.  1892  did  not  tax  United  States 
bonds  physically  present  in  the  state  belonging  to  a  non-resident. 
Although  the  state  may  have  the  power  to  impose  a  succession 
tax  upon  United  States  bonds,  it  has  not  yet  done  so ;  the  phrase 
"property  over  which  this  state  has  any  jurisdiction  for  the  pur- 
poses of  taxation"  refers  to  the  jurisdiction  actually  exercisfed 
through  contemporary  statutes  rather  than  to  the  entire  juris- 
diction actually  possessed  by  the  state.  In  re  Whiting,  150  N.  Y. 
27,  31,  44  N.  E.  715,  34  L.  R.  A.  232,  55  Am.  St.  Rep.  640,  modify- 
ing 2  N.  Y.  App.  Div.  590,  38  N.  Y.  Suppl.  131.  To  the  same  effect 
is  In  re  Coogan,  27  Misc.  Rep.  563,  59  N.  Y.  Suppl.  111. 

The  court  follows  In  re  Whiting,  150  N.  Y.  27,  and  refers  to 
Wallace  v.  Myers,  38  Fed.  184,  which  was  governed  by  the  act  of 
1887,  c.  713.  The  court  remarks,  however,  that  the  statute  of  1892 
contains  a  new  provision,  section  22,  not  found  in  the  prior  acts, 


816  STATUTES  ANNOTATED.  [N.  Y.  St. 

which  is  a  limitation  on  the  taxing  power,  and  that  therefore  United 
States  bonds  are  not  subject  to  tax. 

The  court  affirms  the  power  of  the  state  under  the  inheritance 
tax  laws  to  ascertain  the  value  of  the  property  for  the  purpose 
of  fixing  a  tax  to  include  the  value  of  federal  securities  owned  by 
the  decedent.  In  re  Sherman,  153  N.  Y.  1,  4,  46  N.  E.  1032,  affirm- 
ing 15  N.  Y.  App.  Div.  628. 

S.  23  names  laws  repealed,  as  follows:  — 

Laws  of  1885,  c.  483.  Laws  of    1889,  c.  479. 

"     "  1887,  c.  713.  "     "     1891,  c.  215. 

"     "  1889,  c.  307. 

S.  24.  Saving  clause.  The  repeal  of  a  law  or  any  part  of  it  specified  in  the 
annexed  schedule  shall  not  affect  or  impair  any  act  done,  or  right  accruing,  accrued 
or  acquired,  or  liability,  penalty,  forfeiture  or  punishment  incurred  prior  to  May 
first,  eighteen  hundred  and  ninety-two,  under  or  by  virtue  of  any  law  so  repealed, 
but  the  same  may  be  asserted,  enforced,  prosecuted  or  inflicted  as  fully  and  to 
the  same  extent  as  if  such  law  had  not  been  repealed ;  and  all  actions  and  proceed- 
ings, civil  or  criminal,  commenced  under  or  by  virtue  of  the  law  so  repealed  and 
pending  on  April  thirtieth,  eighteen  hundred  and  ninety-two,  may  be  prosecuted 
and  defended  to  final  effect  in  the  same  manner  as  they  might  under  the  laws 
then  existing,  unless  it  shall  be  otherwise  specially  provided  by  law. 

The  decedent  died  in  November,  1890,  and  contest  arose  over 
the  probate  of  the  will,  which  was  decided  in  March,  1891.  The 
question  arose  whether  interest  on  the  amount  of  the  tax  due 
should  be  charged  from  the  date  of  the  death  of  the  decedent  or 
from  a  date  eighteen  months  subsequent  thereto.  N.  Y.  St.  1892, 
c.  399,  s.  4,  does  not  apply  to  this  case,  as  when  the  decedent  died 
the  law  of  1887  applied,  and  under  its  provisions  the  executors 
would  have  a  right  to  ask  that  the  interest  charged  against  them 
for  delayed  payment  of  the  tax  should  be  six  per  cent  from  eighteen 
months  after  the  death  of  the  decedent. 

The  repealing  act  of  1892  altered  this  provision,  but  at  the  same 
time  saved  the  right  which  in  the  meaning  of  the  statute 
had  either  accrued  or  was  accruing  at  the  time  of  its  passage. 
This  provision  of  the  fifth  section  of  the  act  of  1887  may  well  be 
called  a  "right"  within  the  meaning  of  the  act  of  1892.  It  was 
something  which  gave  to.  the  parties  the  absolute  right  to  have 
^  the  interest  charged  at  a  certain  percentage  and  from  a  certain 
date,  upon  the  fact  appearing  which  the  statute  provided  for;  and 
the  saving  feature  of  the  repealing  act  of  the  statute  of  1892  applies 
to  it.     In  re  Fayerweather,  143  N.  Y.  114,  38  N.  E.  278. 


1896,  c.  908.]  NEW  YORK.  817 

S.  25.  Construction.  The  provisions  of  this  act,  so  far  as  they  are  substan- 
tially the  same  as  those  of  laws  existing  on  April  thirtieth,  eighteen  hundred  and 
ninety-two,  shall  be  construed  as  a  continuation  of  such  laws,  modified  or  amended 
according  to  the  language  employed  in  this  act,  and  not  as  new  enactments.  Ref- 
erences in  laws  not  repealed  to  provisions  of  laws  incorporated  into  this  act  and 
repealed,  shall  be  construed  as  applying  to  the  provisions  so  incorporated.  Noth- 
ing in  this  act  shall  be  construed  to  amend  or  repeal  any  provision  of  the  Criminal 
or  Penal  Code. 

AMENDMENTS   TO  THE  ACT  OF  1892. 

N.  Y.  St.  1893,  c.  199,  approved  March  24,  1893,  provides  for  an  assistant  for 
the  collection  of  inheritance  taxes  in  the  county  of  Kings,  and  repeals  N.  Y.  St. 
1892,  c.  443.   ' 

N.  Y.  St.  1893,  c.  704,  approved  May  13,  1893,  amends  N.  Y.  St.  1892,  c.  399, 
s.  17,  as  to  the  fees  of  the  county  treasurer  and  comptroller. 

N.  Y.  St.  1894,  c.  767,  approved  May  24,  1894,  amends  N.  Y.  St.  1892,  c.  399, 
s.  14,  as  to  surrogate's  and  district  attorney's  assistant  in  New  York  city. 

N.  Y.  St.  1895,  c.  191,  approved  March  30,  1895,  amends  N.  Y.  St.  1892,  c.  399, 
8.  14,  by  providing  an  assistant  to  the  district  attorney  in  Erie  county  for  the 
collection  of  the  tax. 

N.  Y.  St.  1895,  c.  378,  approved  April  23,  1895,  amends  N.  Y.  St.  1892,  c.  399, 
s.  15,  by  adding  a  provision  authorizing  the  state  comptroller  and  a  justice  of  the 
supreme  court  to  compromise  and  settle  the  amount  of  the  tax  in  any  case  where 
controversies  have  arisen  or  may  arise  as  to  the  relationship  of  the  beneficiaries 
to  the  former  owner. 

N.  Y.  St.  1895,  c.  515,  approved  May  2,  1895,  amends  N.  Y.  St.  1892,  c.  399, 
s.  14,  as  to  surrogate's  and  district  attorney's  assistants  in  New  York  city  and 
the  county  of  Erie. 

N.  Y.  St.  1895,  c.  556,  approved  May  8,  1895,  amends  N.  Y.  St.  1892,  c.  399, 
s.  13. 

N.  Y.  St.  1895,  c.  861,  approved  June  1,  1895,  provides  for  a  surrogate's  assis- 
tant for  the  collection  of  inheritance  taxes  in  Westchester  county. 

N.  Y.  St.  1896,  c.  160,  makes  an  appropriation  for  salaries  and  expenses  in  the 
collection  of  corporation  and  inheritance  taxes. 

N.  Y.  St.  1896,  c.  952,  became  law  May  28, 1896,  amended  N.  Y.  St.  1892,  c.  399, 
s.  14. 

THE  ACT  OF   1896. 

N.  Y.  St.  1896,  c.  908.     In  effect  May  27,  1896. 

Sections  220  to  242  of  this  act  provide  a  complete  system  of 
inheritance  taxation. 

Validity. 

This  act  is  constitutional.  In  re  Kimberly,  27  N.  Y.  App.  Div. 
470,  50  N.  Y.  Suppl.  586. 

S.  220.  Transfers  taxable.  A  tax  shall  be  and  is  hereby  imposed  upon  the 
transfer  of  any  property,  real  or  personal,  of  the  value  of  five  hundred  dollars  or 


818  STATUTES  ANNOTATED.  [N.  Y.  St. 

over,  or  of  any  interest  therein  or  income  therefrom,  in  trust  or  otherwise,  to  per- 
sons or  corporations  not  exempt  by  law  from  taxation  on  real  or  personal  prop- 
erty, in  the  following  cases: 

(1)  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  from  any 
preson  dying  seized  or  possessed  of  the  property  while  a  resident  of  the  state. 

(2)  When  the  transfer  is  by  will  or  intestate  law,  of  property  within  the  state, 
and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

(3)  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  non-resident, 
when  such  non-resident's  property  is  within  this  state,  by  deed,  grant,  bargain, 
sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  donor, 
or  intended  to  take  effect,  in  possession  or  enjoyment,  at  or  after  such  death.  Such 
tax  shall  also  be  imposed  when  any  such  person  or  corporation  becomes  benefi- 
cially entitled,  in  possession  or  expectancy  to  any  property  or  the  income  thereof 
by  any  such  transfer,  whether  made  before  or  after  the  passage  of  this  act.  Such 
tax  shall  be  at  the  rate  of  five  per  centum  upon  the  clear  market  value  of  such  prop- 
erty except  as  otherwise  prescribed  in  the  next  section. 

S.  221.  Exemptions.  When  the  property  or  any  beneficial  interest  therein 
passes  by  any  such  transfer  to  or  for  the  use  of  any  father,  mother,  husband,  wife, 
child,  brother,  sister,  wife  or  widow  of  a  son  or  the  husband  of  a  daughter,  or  any 
child  or  children  adopted  as  such  in  conformity  with  the  laws  of  this  state,  of  the 
decedent,  grantor,  donor  or  vendor  or  to  any  person  to  whom  any  such  decedent, 
grantor,  donor  or  vendor  for  not  less  than  ten  years  prior  to  such  transfer  stood 
in  the  mutually  acknowledged  relation  of  a  parent,  or  to  any  lineal  descendant  of 
such  decedent,  grantor,  donor  or  vendor  born  in  lawful  wedlock,  such  transfer  of 
property  shall  not  be  taxable  under  this  act,  unless  it  is  personal  property  of  the 
value  of  ten  thousand^dollars  or  more,  in  which  case  it  shall  be  taxable  under  this 
act  at  the  rate  of  one  per  centum  upon  the  clear  market  value  of  such  property. 
But  any  property  heretofore  or  hereafter  devised  or  bequeathed  to  any  person 
who  is  a  bishop  or  to  any  religious  corporation  shall  be  exempted  from  and  not 
subject  to  the  provisions  of  this  act. 

S.  222.  Lien  of  tax  and  payment  thereof.  Every  such  tax  shall  be  and  re- 
main a  lien  upon  the  property  transferred  until  paid  and  the  person  to  whom  the 
property  is  so  transferred,  and  the  administrators,  executors  and  trustees  of  every 
estate  so  transferred  shall  be  personally  liable  for  such  tax  until  its  payment.  The 
tax  shall  be  paid  to  the  treasurer  or  comptroller  of  the  county  of  the  surrogate  hav- 
ing jurisdiction  as  herein  provided;  and  said  treasurer  or  comptroller  shall  give, 
and  every  executor,  administrator  or  trustee  shall  take,  duplicate  receipts  from 
him  of  such  payment,  one  of  which  he  shall  immediately  send  to  the  comptroller 
of  the  state,  whose  duty  it  shall  be  to  charge  the  treasurer  or  comptroller  so  receiv- 
ing the  tax  with  the  amount  thereof  and  to  seal  said  receipt  with  the  seal  of  his 
office  and  countersign  the  same  and  return  it  to  the  executor,  administrator  or 
trustee,  whereupon  it  shall  be  a  proper  voucher  in  the  settlement  of  his  accounts; 
but  no  executor,  administrator  or  trustee  shall  be  entitled  to  a  final  accounting 
of  an  estate  in  settlement  of  which  a  tax  is  due  under  the  provisions  of  this  act 
unless  he  shall  produce  a  receipt  so  sealed  and  countersigned  by  the  comptroller 
or  a  copy  thereof  certified  by  him,  or  unless  a  bond  shall  have  been  filed  as  pre- 
scribed by  section  two  hundred  and  twenty-six  of  this  chapter.  All  taxes  imposed 
by  this  article  shall  be  due  and  payable  at  the  time  of  the  transfer ;  provided,  how- 


1896,  c.  908.]  NEW  YORK.  819 

ever,  that  taxes  upon  the  transfer  of  any  estate,  property  or  interest  therein  limited, 
conditioned,  dependent  or  determinable  upon  the  happening  of  any  contingency 
or  future  event  by  reason  of  which  the  fair  market  value  thereof  can  not  be  ascer- 
tained at  the  time  of  the  transfer  as  herein  provided  shall  accrue  and  become  due 
and  payable  when  the  persons  or  corporations  beneficially  entitled  thereto  shall 
come  into  actual  possession  or  enjoyment  thereof. 

S.  223.  Discount,  interest  and  penalty.  If  such  tax  is  paid  within  six 
months  from  the  accruing  thereof,  a  discount  of  five  per  centum  shall  be  allowed 
and  deducted  therefrom.  If  such  tax  is  not  paid  within  eighteen  months  from  the 
accruing  thereof,  interest  shall  be  charged  and  collected  thereon  at  the  rate 
of  ten  per  centum  per  annum  from  the  time  the  tax  accrued;  unless  by  reasons  of 
claims  made  upon  the  estate,  necessary  litigation  or  other  unavoidable  cause  of 
delay,  such  tax  can  not  be  determined  and  paid  as  herein  provided,  in  which  case 
interest  at  the  rate  of  six  per  centum  per  annum  shall  be  charged  upon  such  tax 
from  the  accrual  thereof  until  the  cause  of  such  delay  is  removed,  after  which  ten 
per  centum  shall  be  charged.  In  all  cases  when  a  bond  shall  be  given  under  the 
provisions  of  section  two  hundred  and  twenty-six  of  this  chapter,  interest  shall 
be  charged  at  the  rate  of  six  per  centum  from  the  accrual  of  the  tax  until  the  date 
of  payment  thereof. 

Ss.  224-242  cover  the  assessment  and  collection  of  the  tax. 

S.  230.  Appointment  of  appraisers.  The  surrogate,  upon  the  applica- 
tion of  any  interested  party,  including  county  treasurers,  or  the  comptroller  of 
New  York  city,  or  upon  his  own  motion,  shall,  as  often  as  and  whenever  occasion 
may  require,  appoint  a  competent  person  as  appraiser,  to  fix  the  fair  market 
value,  at  the  time  of  the  transfer  thereof  of  property  of  persons  whose  estates 
shall  be  subject  to  the  payment  of  any  tax  imposed  by  this  article.  If  the  prop- 
erty upon  the  transfer  of  which  a  tax  is  imposed  shall  be  an  estate,  income  or  inter- 
est for  a  term  of  years,  or  for  life,  or  determinable  upon  any  future  or  contingent 
estate,  or  shall  be  a  remainder  or  reversion  or  other  expectancy,  real  or  perspnal, 
the  entire  property  or  fund  by  which  such  estate,  income  or  interest  is  supported, 
or  of  which  it  is  a  part,  shall  be  appraised  immediately  after  such  transfer,  or  as 
soon  thereafter  as  may  be  practicable,  at  the  fair  and  clear  market  value  thereof 
at  that  time;  provided,  however,  that  when  such  estate,  income  or  interest  shall 
be  of  such  a  nature  that  its  fair  and  clear  market  value  can  not  be  ascertained  at 
such  time,  it  shall  be  appraised  in  like  manner  at  the  time  when  such  value  first 
became  ascertainable.  The  value  of  every  future  or  contingent  or  limited  estate, 
income,  interest  or  annuity  dependent  upon  any  life  or  lives  in  being  shall  be  deter- 
mined by  the  rule,  method  and  standard  of  mortality  and  value  employed  by  the 
superintendent  of  insurance  in  ascertaining  the  value  of  policies  of  life  insurance 
and  annuities  for  the  determination  of  liabilities  of  life  insurance  companies; 
except  that  the  rate  of  interest  for  computing  the  present  value  of  all  future  and 
contingent  interests  or  estates  shall  be  five  per  centum  per  annum.  Whenever 
an  estate  for  life  or  for  years  can  be  divested  by  the  act  or  omission  of  the  legatee 
or  devisee,  it  shall  be  taxed  as  if  there  were  no  possibility  of  such  limitation. 

Contingent  Interests. 

Under  the  statute  of  1896,  contingent  or  defeasible  interests 
should  not  be  appraised  until  the  death  of  the  life  tenant  and  then 


820  STATUTES  ANNOTATED.  [N.  Y.  St. 

should  be  appraised  at  their  full  value  when  the  persons  entitle 
come  into  the  beneficial  enjoyment  thereof.  In  re  Connoly,  38 
Misc.  Rep.  533,  77  N.  Y.  Suppl.  1113. 

Where  the  testator  died  in  1897,  the  law  in  existence  at  his 
death  governs  the  valuation  of  a  contingent  interest;  and  there- 
fore the  value  of  the  contingent  estate  on  coming  into  possession 
must  be  assessed  without  deduction  of  the  value  of  the  life  estate. 
In  re  Goelet,  78  N.  Y.  Suppl.  47. 

THE  ACT  OF   1897. 

N.  Y.  St.  1897,  c.  284,  s.  220,  added  to  N.  Y.  St.  1896,  c.  908,  s.  220,  by  insert- 
ing the  following  provisions:  — 

(4)  (Such  tax  shall  be  imposed)  When  any  such  person  or  corporation  becomes 
beneficially  entitled,  in  possession  or  expectancy,  to  any  property  or  the  income 
thereof  by  any  such  transfer,  whether  made  before  or  after  the  passage  of  this  act. 

(5)  Whenever  any  person  or  corporation  shall  exercise  a  power  of  appoint- 
ment derived  from  any  disposition  of  property  made  either  before  or  after  the  pas- 
sage of  this  act,  such  appointment  when  made  shall  be  deemed  a  transfer  taxable 
under  the  provisions  of  this  act  in  the  same  manner  as  though  the  property  to 
which  such  appointment  relates  belonged  absolutely  to  the  donee  of  such  power 
and  had  been  bequeathed  or  devised  by  such  donee  by  will ;  and  whenever  any 
person  or  corporation  possessing  such  a  power  of  appointment  so  derived  shall 
omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole  or 
in  part,  a  transfer  taxable  under  the  provisions  of  this  act  shall  be  deemed  to  take 
place  to  the  extent  of  such  omissions  or  failure,  in  the  same  manner  as  though  the 
persons  or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoyment 
of  the  property  to  which  such  power  related  had  succeeded  thereto  by  a  will  of 
the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at  the  time 
of  such  omission  or  failure. 

(6)  The  tax  imposed  thereby  shall  be  at  the  rate  of  five  per  centum  upon  the 
clear  market  value  of  such  property,  except  as  otherwise  prescribed  in  the  next 
section. 

Appraisal  of  Remainder  Interests  at  Death  not  Binding  on 
State. 

Where  in  1898  the  life  estate  and  the  remainders  were  appraised, 
although  no  tax  was  laid  on  the  remainder  interests  as  it  could  not 
then  be  definitely  ascertained  to  whom  such  remainders  would 
ultimately  descend,  the  court  holds  that  the  determination  of  the 
value  of  remainder  interests  was  not  binding  upon  the  remainder- 
^  men,  neither  was  it  binding  on  the  state.  Therefore,  when  the 
'  question  came  on  the  death  of  the  life  tenant  on  the  tax  to  be  paid 
by  the  remaindermen,  the  state  was  not  bound  by  the  appraisal 
formerly  made.  In  re  Naylor,  189  N.  Y.  556,  82  N.  E.  1129, 
affirming  120  N.  Y.  App.  Div.  738,  105  N.  Y.  Suppl.  667. 


1896,  Amend.]  NEW  YORK.  821 

Powers  of  Appointment. 

The  New  York  statute  of  1885  did  not  create  any  contract  right 
that  a  person  dying  while  that  statute  was  in  force  might  dispose 
of  his  estate  without  any  further  tax  except  as  then  in  existence. 
Therefore  the  statute  of  1897  could  tax  powers  of  appointment 
which  were  not  taxable  under  the  statute  of  1885.  In  re  Vander- 
bilt,  163  N.  Y.  597,  57  N.  E.  1127,  50  N.  Y.  App.  Div.  246,  63 
N.  Y.  Suppl.  1079. 

The  tax  imposed  by  the  New  York  statute  of  1897  upon  trans- 
fers made  under  a  power  of  appointment  is  a  tax  on  the  right  of 
succession  and  not  on  property;  and  therefore  no  exemption 
can  arise  from  the  fact  that  the  funds  are  invested  in  state  and 
municipal  bonds.  In  re  Dows,  167  N.  Y.  227,  60  N.  E.  439,  52 
L.  R.  A.  433,  88  Am.  St.  Rep.  508,  affirming  60  N.  Y.  App.  Div. 
630  (affirmed  suh  nomine,  Orr  v.  Gilman,  183  U.  S.  278,  22  S.  Ct. 
213,  46  L.  Ed.  196). 

It  was  claimed  that  the  New  York  statute  of  1897  imposing  a 
tax  upon  transfers  made  under  the  power  of  appointment  was  a 
tax  on  property  and  not  on  the  right  of  succession;  and  as  a  por- 
tion of  the  fund  was  invested  in  state  and  city  bonds  exempt  from 
taxation,  such  exemption  formed  part  of  the  contract  under  which 
these  securities  were  purchased,  and  the  tax  imposed  was  in  viola- 
tion of  the  federal  constitution  forbidding  the  states  to  pass  laws 
impairing  the  obligation  of  contracts. 

The  court  holds  that  this  tax  does  not  impair  the  obligation  of 
the  contract  within  the  meaning  of  the  federal  constitution.  Orr 
v  Gilman  183  U.  S.  278,  22  S.  Ct.  213,  46  L.  Ed.  196,  affirming 
In  re  Dow,  167  N.  Y.  227,  60  N.  E.  439,  52  L.  R.  A.  433,  88  Am. 
St.  Rep.  508.     [See,  further,  notes  to  the  present  act,  post,  p.  884.] 

N.  Y.  St.  1897,  c.  284,  amended  section  222  of  N.  Y.  St.  1896  by  providing  that 
taxes  limited  or  determinable  upon  a  contingency  or  future  event  shall  accrue 
and  become  due  and  payable  when  the  persons  beneficially  entitled  shall  come 
into  actual  possession  or  enjoyment  thereof. 

N.  Y.  St.  1897,  c.  284,  s.  4,  amends  N.  Y.  St.  1896,  s.  225. 

N.  Y.  St.  1897,  c.  284,  s.  5,  amends  N.  Y.  St.  1896,  s.  226. 

N.  Y.  St.  1897,  c.  284,  s.  6,  amends  N.  Y.  St.  1896,  s.  230. 

N.  Y.  St.  1897,  c.  284,  s.  7,  amends  N.  Y.  St.  1896,  s.  232. 

AMENDMENTS  TO   THE  ACT  OF   1896. 

N.  Y.  St.  1896,  c.  953,  provided  for  a  transfer  tax  clerk  in  the  county  of  Onondaga- 
N.  Y.  St.  1897,  c.  375,  approved  April  29, 1897,  provided  for  an  additional  trans- 
fer tax  clerk  in  the  county  of  Oneida. 


822  STATUTES  ANNOTATED.  [N.  Y.  Sf 

N.  Y.  St.  1898,  c.  88,  approved  March  21,1898,  amended  N.  Y.  St.  1896,  c.  908, 
a.  X,s.221,by  limiting  exception  as  to  any  person  to  whom  the  decedent  or  gran- 
tor stood  in  the  relation  of  a  parent  "to  any  child"  .  .  .  "provided,  however, 
such  relationship  began  at  or  before  the  child's  fifteenth  lairthday  and  was  contin- 
uous for  ten  years  thereafter." 

N.  Y.  St.  1898,  c.  88,  amended  N.  Y.  St.  1896,  c.  908,  a.  X,  s.  242, 
by  adding  to  the  definition  of  the  word  "estate"  and  by  striking  out  the 
words  "over  which  this  state  has  any  jurisdiction  for  the  purposes  of 
taxation." 

N.  Y.  St.  1898,  c.  289,  approved  April  19,  1898,  amended  N.  Y.  St.  1896,  c.  908, 
s.  233,  by  raising  the  salary  of  the  assistant  in  the  county  of  Erie. 

N.  Y.  St.  1898,  c.  289,  amended  N.  Y.  St.  1896,  c.  908,  s.  237,  as  to 
the  payment  of  the  percentage  of  the  money  collected  to  the  county  where 
collected. 

N.  Y.  St.  1899,  c.  76,  approved  March  14,  1899,  amends  N.  Y.  St.  1896, 
c.  908,  s.  230,  by  giving  the  state  comptroller  the  power  jointly  with  the 
county  treasurers  or  the  comptroller  of  New  York  city  to  appoint  an  appraiser. 
The  section  further  provides  that  whenever  a  transfer  of  property  is  made  upon 
which  there  is  or  may  be  a  tax  imposed,  such  property  shall  be  appraised 
immediately. 

No  deduction  shall  be  made  in  favor  of  persons  or  corporations  presently 
entitled  to  the  beneficial  enjoyment  of  property  on  account  of  any  contingent 
encumbrance  or  any  contingency  which  may  defeat  or  diminish  the  estate.  But 
in  case  of  a  happening  of  such  contingency  a  proper  refund  of  the  tax  paid  shall 
be  made.  When  property  is  transferred  subject  to  any  charge  determinable  on 
the  death  of  any  person,  the  increase  of  benefit  accruing  on  the  determination  of 
such  charge  is  a  transfer-of  property  taxable  under  the  statute,  as  though  the  per- 
son beneficially  entitled  had  then  acquired  such  increase  of  benefit.  When  prop- 
erty is  transferred  in  trust  or  otherwise  and  the  rights  of  transferees  are  dependent 
upon  contingencies  or  conditions  whereby  they  may  be  wholly  or  in  part  created, 
defeated,  extended  or  abridged,  a  tax  shall  be  imposed  upon  said  transfer  at  the 
highest  rate  which  on  the  happening  of  any  of  the  contingencies  or  conditions 
could  be  possible,  and  such  tax  shall  be  due  and  payable  forthwith  out  of  the  prop- 
erty transferred.  But  in  case  of  a  subsequent  diminution  the  taxpayer  shall  be 
entitled  to  a  refund.  All  estates  upon  remainder  or  reversion  which  vested  prior 
to  June  30,  1885,  but  which  will  not  come  in  actual  possession  or  enjoyment  until 
after  the  passage  of  this  act  shall  be  appraised  and  taxed  as  soon  as  the  person  or 
corporation  beneficially  interested  shall  be  entitled  to  the  actual  possession  or 
enjoyment  thereof. 

Purpose  of  Amendment. 

The  amendments  of  1899,  c.  76,  and  1900,  c.  658,  were  passed  to 
supply  what  were  deemed  omissions  in  the  transfer  tax  law  as  it  then 
stood,  as  some  of  the  courts  had  decided  that  the  transfer  tax  on 
Hfe  estates  was  payable  out  of  income  and  no  tax  could  be  imposed 
on  contingent  remainders.  [In  re  Johnson,  6  Dem.  146,  In  re  Roose- 
velt, 143  N.  Y.  120.]  In  re  Tracy,  179  N.  Y.  501,  508,  72  N.  E. 
519,  reversing  g7  N.  Y.  App.  Div.  215. 


1896,  Amend.]  NEW  YORK.  823 

Nature  and  Validity  of  Tax. 

The  transfer  tax  under  this  act  of  1899  still  remains  a  tax  upon 
succession.  Each  trust  estate  created  is  to  be  separately  appraised 
and  the  tax  determined  according  to  the  percentage  fixed  by  the 
statute  for  those  who  are  contingently  entitled  to  the  estate,  and 
when  fixed  the  tax  is  forthwith  payable  out  of  the  trust  property. 
In  re  Vanderbilt,  172  N.  Y.  69,  73,  64  N.  E.  782,  modifying  68 
N.  Y.  App.  Div.  27,  74  N.  Y.  Suppl.  450.  In  re  Brez,  172  N.  Y. 
609,  64  N.  E.  958. 

This  is  a  tax  on  the  succession  of  property  and  not  a  direct  tax. 
If  this  act  were  a  direct  tax  upon  property  it  is  clearly  unconsti- 
tutional, aa'it  does  not  apportion  the  burden  equally  among  the 
owners  of  estates  sought  to  be  taxed.  This  is  evidence  that  the 
intention  of  the  legislature  was  not  to  exercise  its  power  of  direct 
taxation.  In  re  Pell,  171  N.  Y.  48,  60,  63  N.  E.  789,  57  L.  R.  A. 
540,  89  Am.  St.  Rep.  791,  reversing  60  N.  Y.  App.  Div.  28b,  70 
N.  Y.  Suppl.  196. 

Unconstitutional  in  so  far  as  Retroactive. 

The  testator  died  in  1863,  leaving  property  to  a  life  tenant  who 
died  December  20,  1899,  at  which  time  all  the  estates  in  remainder 
came  into  actual  possession  and  enjoyment,  although  they  vested 
in  1863  on  the  death  of  the  testator.  N.  Y.  St.  1899,  c.  76,  pro- 
vided for  a  tax  upon  all  estates  in  remainder  or  reversion  which 
vested  prior  to  June  30,  1885,  but  which  will  not  come  into  actual 
possession  or  enjoyment  until  after  the  passage  of  the  act.  The 
court  remarks  that  legislation  which  impairs  the  value  of  a  vested 
estate  is  unconstitutional. 

"In  the  case  before  us  it  is  an  undisputed  fact  that  these  re- 
mainders had  vested  in  1863,  and  the  only  contingency  leading  to 
their  divesting  was  the  death  of  a  remainderman  in  the  lifetime 
of  the  life  tenant,  in  which  event  the  children  of  the  one  so  dying 
would  be  substituted.  If  these  estates  in  remainder  were  vested 
prior  to  the  enactment  of  the  Transfer  Tax  Act  there  could  be  in 
no  legal  sense  a  transfer  of  the  property  at  the  time  of  possession 
and  enjoyment.  This  being  so,  to  impose  a  tax  based  on  the 
succession  would  be  to  diminish  the  value  of  these  vested  estates, 
to  impair  the  obligation  of  a  contract,  and  take  private  property 
for  public  use  without  compensation."  Fer  Bartlett,  J.,  in  In  re 
Pell,  171  N.  Y.  48,  55,  63  N.  E.  789,  57  L.  R.  A.  540,  89 
Am.  St.  Rep.  791,  reversing  60  N.  Y.  App.  Div.  286,  70  N.  Y. 
Suppl.  196. 


824  STATUTES  ANNOTATED.  [N.  Y.  St. 

Effect  of  Amendment. 

Under  the  statute  of  1899  the  transfer  is  the  passing  of  the  title 
of  a  valuable  interest  out  of  or  from  the  estate  of  the  decedent, 
though  the  transferee  is  not  now  ascertainable,  and  every  such 
transfer  is  presently  taxable,  however  obscure,  contingent  or  nebu- 
lous the  ultimate  vesting  of  the  transferred  interest  may  be. 
Therefore  remainders  for  certain  survivors  not  now  ascertainable 
are  now  taxable.  In  re  Le  Brun,  39  Misc.  Rep.  516,  80  N.  Y.  Suppl. 
486. 

N.  Y.  St.  1899,  c.  269,  approved  April  7,  1899,  authorizes  the  appointment  of  a 
transfer  tax  clerk  in  the  county  of  Ulster. 

N.  Y.  St.  1899,  c.  270,  approved  April  7,  1899,  provides  for  the  appointment  of 
a  transfer  tax  clerk  in  the  county  of  Erie. 

N.  Y.  St.  1899,  c.  389,  amends  N.  Y.  St.  1896,  c.  908,  s.  234,  by  providing  for  a 
surrogate's  transfer  clerk  in  the  county  of  Suffolk. 

N.  Y.  St.  1899,  c.  406,  approved  April  24,  1899,  provides  for  the  collection  in 
the  county  of  Queens  of  the  transfer  tax  through  an  inheritance  tax  clerk. 

N.  Y.  St.  1899,  c.  672,  approved  May  25,  1899,  amended  N.  Y.  St.  1896,  c.  908, 
s.  232,  by  inserting  in  that  section  a  provision  for  the  appointment  of  a  special 
guardian  to  protect  the  rights  of  infants  or  incompetents  interested  in  the  matter 
of  the  inheritance  tax. 

N.  Y.  St.  1899,  c.  737,  approved  May  26, 1899,  amended  N.  Y.  St.  1896,  c.  908, 
s;  282. 

"Article  13,  s.  282.  Limitation  of  time.  The  provisions  of  the  code  of  civil 
procedure,  relative  to  the  limitation  of  time  of  enforcing  a  civil  remedy,  shall  not 
apply  to  any  proceeding  or  action  taken  to  levy,  appraise,  assess,  determine  or 
enforce  the  collection  of  any  tax  or  penalty  prescribed  by  articles  nine  or  ten  of 
said  chapter,  and  this  act  shall  be  construed  as  having  been  in  effect  as  of  date  of 
the  original  enactment  of  the  corporation  and  inheritance  tax  law,  provided,  how- 
ever, that  as  to  real  estate  in  the  hands  of  bona  fide  purchasers,  the  transfer  tax 
shall  be  presumed  to  be  paid  and  cease  to  be  a  lien  as  against  such  purchasers 
after  the  expiration  of  six  years  from  the  date  of  accrual.  This  act  shall  not  affect 
any  action  or  proceeding  now  pending." 

N.  Y.  St.  1900,  c.  379,  approved  April  11,  1900,  authorized  agreements  of  com- 
promise of  taxes  not  presently  payable. 

N.  Y.  St.  1900,  c.  382,  in  effect  April  11, 1900,  amends  article  10,  c.  908  by  add- 
ing a  section,  243,  to  read  as  follows: 

Exemptions  in  article  one  not  applicable.  The  exemptions  enumerated 
in  section  four  of  the  tax  law,  of  which  this  article  is  a  part,  shall  not  be  construed 
as  being  applicable  in  any  manner  to  the  provisions  of  article  ten  hereof. 

Cooper  Union. 

A  legacy  given  to  the  Cooper  Union  by  a  testator  who  died  in 
1901  is  subject  to  the  transfer  tax,  although  the  Cooper  Union 
was  free  of  tax  under  the  law.  The  court  relies  upon  In  re  Hunt- 
ington, 168  N.  Y.  399,  61  N.  E.  643;   Cooper   Union  v.  Gass,  190 


1896,  Amend.]  NEW  YORK.  825 

N.  Y.  323,  83  N.  E.  64,  123  Am.  St.  Rep.  549.     In  re  Kucielski, 
128  N.  Y.  Suppl.  768. 

Educational. 

The  statute  of  1900,  chapter  382,  made  a  change  in  the  law  and 
under  it  a  corporation  organized  exclusively  for  educational  pur- 
poses is  no  longer  exempt  from  the  inheritance  tax.  In  re  Grouse, 
34  Misc.  670,  70  N.  Y.  Suppl.  731, 

Religious. 

The  Episcopal  Church  Missionary  Society  for  Seamen  is  a 
religious  corporation  although  it  has  power  to  conduct  a  seamen's 
boarding  house,  where  its  main  object  is  to  provide  floating  or 
other  churches  for  seamen  at  different  points  in  New  York  City. 
In  re  Prall,  78  N.  Y.  App.  Div.  301,  79  N.  Y.  Suppl.  971. 

N.  Y.  St.  1900,  c.  382,  in  effect  April  11,  1900,  amends  N.  Y.  St.  1896,  c.  908, 
s.  225,  as  to  the  refund  of  taxes  erroneously  paid. 

N.  Y.  St.  1900,  c.  658,  approved  April  25,  1900,  amends  N.  Y.  St.  1896,  c.  908, 
s.  230,  by  placing  the  appointment  of  appraisers  within  the  control  of  the  state 
comptroller.    The  amendment  further  provides  for  the  salaries  of  the  appraisers. 

N.  Y.  St.  1900,  c.  658,  s.  2,  amends  N.  Y.  St.  1896,  c.  908,  s.  231,  by  increasing 
the  rate  of  compensation  of  the  appraisers. 

[See  notes  to  the  Act  of  1899,  c.  76,  ante,  p.  822.] 

N.  Y.  St.  1900,  c.  723,  exempts  the  New  York  Society  for  the  Suppression  of 
Vice  from  the  operation  of  the  inheritance  tax  law. 

N.  Y.  St.  1901,  c.  173,  added  to  N.  Y.  St.  1896,  s.  222,  the  following  language: 
"All  taxes,  which,  at  the  time  the  amendment  of  this  section  takes  effect,  have 
been  assessed  by  an  order  of  the  surrogate,  or  which  have  accrued,  in  a  county  in 
which  the  office  of  appraiser  is  salaried,  shall  be  paid  to  the  state  comptroller,  as 
provided  by  this  article." 

N.  Y.  St.  1901,  c.  173,  s.  2,  amended  s.  224  of  N.  Y.  St.  1896. 

N.  Y.  St.  1901,  c.  173,  s.  3,  amended  s.  225  of  N.  Y.  St.  1896. 

N.  Y.  St.  1901,  c.  173,  s.  4,  amended  ss.  228  and  229  of  N.  Y.  St.  1896. 

N.  Y.  St.  1901,  c.  173,  s.  5,  amended  s.  230  of  N.  Y.  St.  1896. 

Effect  on  Contingent  Interests. 

Under  the  amendment  of  1899,  statute  of  1899,  chapter  76,  the 
intention  of  the  legislature  was  m.ade  clear  and  certain  to  change 
from  a  future  to  a  present  taxation  in  all  cases  of  future  estates. 
By  the  amendment  of  1901,  c.  173,  the  language  of  the  amendment  of 
1899  was  retained,  showing  the  general  legislative  intent  remained 
the  same.  Certain  language  was  inserted  providing  that  in  speci- 
fied cases  a  future  taxation  was  intended,  as  under  the  amendment 


826  STATUTES  ANNOTATED.  [N.  Y.  St. 

of  1897  this  provision  that  "estates  in  expectancy  .  .  .  shall  be 
appraised  at  their  full  undiminished  value,  etc.,"  was  intended  to 
apply  only  to  those  cases  unprovided  for  by  the  statute  of  1899  where 
the  transfers  had  occurred  prior  to  1899  and  there  had,  under  the 
amendment  of  1897,  been  no  proceedings  taken  to  impose  the  tax. 
As  the  amendment  of  1899  omitted  the  provision  as  to  future 
assessment  contained  in  the  amendment  of  1897  these  cases  were 
covered  by  no  provision  of  the  statute  and  hence  this  one  was 
inserted  in  the  amendment  of  1901  to  provide  therefor.  The 
legislature  did  not  intend  to  change  the  general  policy  of  px"esent 
instead  of  future  assessments  of  the  estates  of  this  nature  as  clearly 
indicated  in  the  amendment  of  1899.  Miller  v.  Tracy,  93  N.  Y. 
App.  Div.  27,  86  N.  Y.  Suppl.  1024. 

Retrospective  as  to  Appraisal. 

The  testatrix  died  in  1891,  and  the  appraisal  was  had  then  under 
the  existing  law  of  the  interests  of  the  beneficiaries,  but  the  tax 
on  the  interests  of  certain  contingent  remainders  was  postponed, 
as  it  was  not  then  known  and  could  not  then  be  ascertained  to 
whom  the  shares  would  ultimately  pass.  In  1902  the  legatee  to 
whom  the  property  was  given  when  she  became  thirty  years  of 
age  reached  that  age  and  application  was  made  to  fix  the  tax  on 
her  share. 

The  court  holds  that  the  language  in  the  statute  of  1901,  chapter 
173,  section  5,  "where  the  taxation  thereof  has  been  held  in 
abeyance,"  clearly  makes  the  section  apply  retroactively  and  that 
therefore  the  appraisal  must  take  place  not  in  accordance  with  the 
valuation  of  1891,  but  that  a  new  appraisal  was  necessary.  In  re 
Hosack,  39  Misc.  Rep.  130,  78  N.  Y.  Suppl.  983. 

N.  Y.  St.  1901,  c.  173,  "shall  take  effect  April  1st,  1901." 

N.  Y.  St.  1901,  c.  173,  s.  6,  amended  N.  Y.  St.  1896,  by  adding  s.  230a,  giving 
the  tax  officials  authority  to  compromise  the  taxes  on  certain  remainder  or  future 
interests. 

N.  Y.  St.  1901,  c.  173,  s.  7,  amends  N.  Y.  St.  1896,  s.  231,  as  to  appraisal. 
N.  Y.  St.  1901,  c.  173,  s.  8,  amends  N.  Y.  St.  1896,  s.  232. 
N.  Y.  St.  1901,  c.  173,  s.  9,  amends  N.  Y.  St.  1896,  s.  233. 
N.  Y.  St.  1901,  c.  173,  s.  10,  amends  N.  Y.  St.  1896,  s.  234. 
N.  Y.  St.  1901,  c.  173,  s.  11,  amends  N.  Y.  St.  1896,  ss.  235  and  236. 
*      N.  Y.  St.  1901,  c.  173,  s.  12,  amends  N.  Y.  St.  1896,  s.  237. 

N.  Y.  St.  1901,  c.  173,  s.  13,  amends  N.  Y.  St.  1896,  ss.  239  and  240. 
N.  Y.  St.  1901,  c.  173,  s.  14,  amended  N.  Y.  St.  1896,  by  inserting  a  new  section, 
^4Ufl,  as  to  the  report  of  the  state  comptroller  and  the  payment  of  taxes. 
N.  Y.  St.  1901,  c.  173,  s.  15,  amends  N.  Y.  St.  1896,  s.  241. 


1896,  Amend.]  NEW  YORK.  827 

N.  Y.  St.  1901,  c.  173,  s.  16,  amends  N.  Y.  St.  1896,  s.  242,  as  amended  by  N.  Y. 
St.  1898,  c.  88. 

N,  Y.  St.  1901,  c.  288,  approved  April  5,  1901,  applied  to  the  appointment  of 
salaried  appraisers  in  various  counties. 

N.  Y.  St.  1901,  c.  458,  approved  April  22,  1901,  amends  N.  Y.  St.  1896,  c.  908, 
s.  221,  by  adding  to  the  exempted  classes  the  following:  Corporations  organized 
exclusively  for  bible  or  tract  purposes,  corporations  or  associations  organized 
exclusively  for  the  moral  and  mental  improvement  of  men  and  women,  or  for 
charitable,  benevolent,  missionary,  hospital,  infirmary,  educational,  scientific, 
literary,  library,  patriotic,  cemetery  or  historical  purposes,  or  for  the  enforcement 
of  laws  relating  to  children  or  animals;  unless  any  officer,  member  or  employee 
of  such  corporations  shall  receive  any  pecuniary  profit  from  the  operations  thereof 
other  than  reasonable  compensation,  or  unless  the  corporation  be  a  guise  or  pre- 
tence for  makin'g  pecuniary  profit  or  if  it  not  be  in  good  faith  organized  or  con- 
ducted for  such  purposes. 

N.  Y.  St.  1901,  c.  493,  approved  April  23,  1901,  further  amended  N.  Y.  St.  1896, 
c.  908,  s.  230,  by  giving  the  comptroller  of  the  state  of  New  York  the  right  to  move 
for  an  appraisal. 

N.  Y.  St.  1901,  c.  609,  in  effect  September  1,  1901,  provides  that  the  state  of 
New  York  may  be  made  a  party  defendant  in  any  action  brought  affecting  real 
estate  upon  which  the  state  has  a  lien  under  the  transfer  tax  act. 

N.  Y.  St.  1902,  c.  101,  approved  March  6,  1902,  amends  N.  Y.  St.  1896,  c.  908, 
s.  228,  by  putting  the  collection  of  the  tax  and  the  right  of  inquiry  in  the  hands 
of  the  state  comptroller,  and  by  making  other  changes  in  that  section. 

N.  Y.  St.  1902,  c.  283,  approved  March  29, 1902,  amends  N.  Y.  St.  1896,  c.  908, 
s.  234,  as  to  surrogate's  assistants  and  their  salaries. 

N.  Y.  St.  1902,  c.  496,  approved  April  10,  1902,  further  amends  N.  Y.  St.  1896, 
c.  908,  s.  230,  as  to  the  appointment,  salaries  and  duties  of  appraisers. 

The  statute  of  1902,  chapter  496,  does  not  in  express  terms 
apply  to  a  remainder  which  has  vested  prior  to  the  passage  of  the 
act.  In  re  Meyer,  83  N.  Y.  App.  Div.  381,  82  N.  Y.  Suppl.  329, 
reversing  82  App.  Div.  636;  81  S.  1135. 

N.  Y.  St.  1903,  c.  41,  approved  March  16,  1903,  amended  N.  Y.  St.  1896,  c.  908, 
s.  221,  by  providing  that  real  or  personal  property  to  lineals,  husband  and  wife 
and  brother  and  sister,  shall  be  exempt  from  taxation  up  to  ten  thousand  dollars 
whether  real  or  personal  property.  If  the  property  so  transferred  is  of  the  value 
of  ten  thousand  dollars  or  more  it  shall  be  taxable  at  the  rate  of  one  per  cent  upon 
the  clear  market  value  of  such  property. 

Constitutionality. 

This  act  is  constitutional.  It  was  attacked  for  insufficiency  of 
the  certificate  of  the  secretary  of  state  which  omitted  to  state  that 
three-fifths  of  all  the  members  of  the  legislature  were  present  as 
required  by  law  at  its  passage.     In  re  Weeks,  185  N.  Y.  541,  77 


828  STATUTES  ANNOTATED.  [N.  Y.  St. 

N.  E.  1197,  affirming  109  App.  Div.  859,  96  N.  Y.  Suppl.  876. 
Matter  of  Stickney,  185  N.  Y.  107,  77  N.  E.  77,  993;  affirming  110 
N.  Y.  App.  Div.  294,  97  N.  Y.  Suppl.  336;  affirmed  in  Stickney  v. 
Kelsey,  209  U.  S.  419,  52  L.  Ed.  863. 

See  In  re  Fisher,  96  N.  Y.  App.  Div.  133,  89  N.  Y.  Suppl.  102, 
to  the  effect  that  the  only  effect  of  this  amendment  is  that  in  esti- 
mating the  value  of  the  property  passing,  real  estate  as  well  as 
personal  property  is  to  be  now  included. 

N.  Y.  St.  1904,  c.  758,  approved  May  14,  1904,  further  amended  N.  Y.  St.  1896, 
c.  908,  s.  230,  by  raising  the  salary  of  the  appraiser  in  the  county  of  Albany. 

N.  Y.  St.  1905,  c.  368,  approved  May  4,  1905,  amends  all  sections  of  N.  Y.  St. 
1896. 

(St.  1896,  c.  908,  s.  226,  providing  machinery  for  deferring  payments  until  pos- 
sesion is  actually  taken  was  repealed  by  being  omitted  from  St.  1905,  c.  368.  Cf. 
St.  1899,  c.  76.) 

N.  Y.  St.  1906,  c.  Ill,  approved  March  28, 1906,  amends  N.  Y.  St.  1896,  c.  908 
as  amended  by  N.  Y.  St.  1905,  c.  368,  s.  240a. 

N.  Y.  St.  1906,  c.  567,  approved  May  23.  1906,  amends  N.  Y.  St.  1896,  c.  908, 
6.  229. 

N.  Y.  St.  1906,  c.  699,  approved  June  2,  1906,  amends  N.  Y.  St.  1896,  c.  908, 
8.  234,  as  to  the  salary  of  a  transfer  tax  assistant  in  Westchester  county. 

N.  Y.  St.  1907,  c.  204,  approved  April  25, 1907,  amends  N.  Y.  St.  1896,  c.  908, 
s.  221. 

N.  Y.  St.  1907,  c.  323,  approved  May  8,  1907,  amends  N.  Y.  St.  1896,  c.  908, 
8.  225,  as  to  the  interest  on  refunds  or  taxes  erroneously  paid. 

N.  Y.  St.  1907,  c.  709,  approved  July  23,  1907,  amends  N.  Y.  St.  1896,  c.  908, 
8.  229,  as  to  expenses  of  appraisal  in  New  York  county. 

N.  Y.  St.  1908,  c.  310,  approved  May  18,  1908,  amends  N.  Y.  St.  1896,  c.  908, 
ss.  220,  221,  227,  229,  232,  235  and  237. 

N.  Y.  St.  1908,  c.  312,  approved  May  18,  1908,  amends  N.  Y.  St.  1896,  c.  908, 
8.  234. 

N.  Y.  St.  1908,  c.  321,  approved  May  19,  1908,  amends  N.  Y.  St.  1896,  c.  908, 
8.  229. 

N.  Y.  St.  1909,  c.  62,  is  an  act  in  relation  to  taxation  constituting  c.  60  of  the 
consolidated  laws. 

N.  Y.  St.  1909,  c.  595,  approved  May  29,  1909,  provides  that  in  construing  the 
consolidated  laws  these  laws  shall  be  considered  as  having  been  enacted  as  of  the 
various  times  when  such  provisions  and  sections  first  became  laws  by  the  earlier 
statutes,  the  purpose  being  to  prescribe  that  the  statutory  laws  shall  be  of 
the  same  force  and  effect  as  they  were  before  the  enactment  of  the  consolidated 
laws. 


1910,  c.  706.J  NEW  YORK.  829 

N.  Y.  St.  1910,  c.  70,  approved  April  5, 1910,  amends  N.  Y.  St.  1909,  c.  62,  s.  234, 
as  to  the  salary  of  the  transfer  tax  clerk  in  the  county  of  Albany. 

N.  Y.  St.  1910,  c.  600,  approved  June  23,  1910,  amends  N.  Y.  St.  1909,  c.  62, 
s.  221.  The  words  "for  religious  ceremonies,  observances  or  commemorative  ser- 
vices of  or  for  the  deceased  donor  or,"  are  new  in  the  section.  [See  Matter  of 
Epping,  63  Misc.  613,  118  N.  Y.  Suppl.  683.] 

N.  Y.  St.  1910,  c.  706,  approved  July  11,  1910,  amended  N.  Y.  St.  1909,  c.  62. 
s.  220,  by  providing  that  a  tax  shall  be  imposed  upon  the  transfer  of  any  property 
of  the  value  of  more  than  one  hundred  dollars.  The  provision  formerly  was  of 
"five  hundred  dollars  or  over." 

N.  Y.  St.  1910,  c.  706,  approved  July  11,  1910,  amends  N.  Y.  St.  1909,  c.  62, 
s.  221,  by  cutting  down  the  exemptions  to  lineals  and  to  collaterals  from  ten  thou- 
sand dollars  to  five  hundred  dollars.    A  graduated  tax  is  also  provided. 

N.  Y.  St.  1910,  c.  706,  approved  July  11,  1910,  amends  N.  Y.  St.  1909,  c.  62, 
s.  229,  by  adding  an  additional  appropriation  for  extra  work  in  the  comptroller's 
office  at  Albany. 

N.  Y.  St.  1910,  c.  706,  approved  July  11,  1910,  amends  N.  Y.  St.  1909,  c.  62, 
s.  243. 


THE  GRADUATED  TAX  ACT  OF  1910. 

This  statute,  the  most  drastic  ever  passed  by  any  eastern  state, 
raised  such  a  storm  of  protest  from  bankers  and  other  interests 
affected  that  it  was  promptly  repealed  by  St.  1911,  c.  732. 

N.  Y.  St.  1910,  c.  706.     In  effect  July  11,  1910. 

S.  220.  Taxable  transfers.  A  tax  shall  be  and  is  hereby  imposed  upon  the 
transfer  of  any  property,  real  or  personal,  of  the  value  of  more  than  one  hundred 
dollars  or  of  any  interest  therein  or  income  therefrom,  in  trust  or  otherwise,  to 
persons  or  corporations  not  exempt  by  law  from  taxation  on  real  or  personal  prop- 
erty, in  the  following  cases: 

(1)  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  from  any 
person  dying  seized  or  possessed  of  the  property  while  a  resident  of  the  state. 

(2)  When  the  transfer  is  by  will  or  intestate  law,  of  property  within  the  state, 
and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

(3)  Whenever  the  property  of  a  resident  decedent  or  the  property  of  a  non- 
resident decedent  within  this  state,  transferred  by  will,  is  not  specifically  be- 
queathed or  devised,  such  property  shall,  for  the  purposes  of  this  article,  be 
deemed  to  be  transferred  proportionately  to,  and  divided  pro  rata  among  all 
the  general  legatees  and  devisees  named  in  said  decedent's  will,  including  all 
transfers  under  a  residuary  clause  of  such  will. 

(4)  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  non-resident 
when  such  non-resident's  property  is  within  this  state,  by  deed,  grant,  bargain, 
sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  donor,  or 
intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such  death. 

(5)  When  any  such  person  or  corporation  becomes  beneficially  entitled,  in 
possession  or  expectancy,  to  any  property  or  the  income  thereof  by  any  such  trans- 
fer, whether  made  before  or  after  the  passage  of  this  chapter. 


830  STATUTES  ANNOTATED.  [N.  Y.  St. 

(6)  Whenever  any  person  or  corporation  shall  exercise  a  power  of  appointment 
derived  from  any  disposition  of  property  made  either  before  or  after  the  passage 
of  this  chapter,  such  appointment  when  made  shall  be  deemed  a  transfer  taxable 
under  the  provisions  of  this  chapter  in  the  same  manner  as  though  the  property 
to  which  such  appointment  relates  belonged  absolutely  to  the  donee  of  such  power 
and  had  been  bequeathed  or  devised  by  such  donee  by  will;  and  whenever  any 
person  or  corporation  possessing  such  a  power  of  appointment  so  derived  shall 
omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole  or  in 
part,  a  transfer  taxable  under  the  provisions  of  this  chapter  shall  be  deemed  to 
take  place  to  the  extent  of  such  omission  or  failure,  in  the  same  manner  as  though 
the  persons  or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoy- 
ment of  the  property  to  which  such  power  related  had  succeeded  thereto  by  a  will 
of  the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at  the  time 
of  such  omission  or  failure. 

(7)  The  tax  imposed  hereby  shall  be  at  the  rate  of  five  per  centum  upon  the 
clear  market  value  of  such  property,  except  as  otherwise  prescribed  in  the  next 
section.    (As  amended  by  L.  1910,  c.  706.) 

S.  221.  Exceptions  and  limitations.  When  property,  real  or  personal,  or 
any  beneficial  interest  therein,  of  the  value  of  not  more  than  five  hundred  dollars 
passes  by  any  such  transfer  to  or  for  the  use  of  any  father,  mother,  husband,  wife, 
child,  brother,  sister,  wife  or  widow  of  a  son  or  the  husband  of  a  daughter,  or  any 
child  or  children  adopted  as  such  in  conformity  with  the  laws  of  this  state,  of  the 
decedent,  grantor,  donor,  or  vendor,  or  to  any  child  to  whom  any  such  decedent, 
grantor,  donor  or  vendor  for  not  less  than  ten  years  prior  to  such  transfer  stood  in 
the  mutually  acknowledged  relation  of  a  parent,  provided,  however,  i«:uch  rela- 
tionship began  at  or  before  the  child's  fifteenth  birthday  and  was  continuous  for 
said  ten  years  thereafter,-and  provided  also  that,  except  in  the  case  of  a  stepchild, 
the  parents  of  such  child  shall  have  been  deceased  when  such  relationship  com- 
menced, or  to  any  lineal  descendant  of  such  decedent,  grantor,  donor  or  vendor 
born  in  lawful  wedlock,  such  transfer  of  property  shall  not  be  taxable  under  this 
article;  if  real  or  personal  property,  or  any  beneficial  interest  therein,  so  trans- 
ferred is  of  the  value  of  more  than  five  hundred  dollars,  it  shall  be  taxable  under 
this  article  at  the  rate  of  one  per  centum  upon  the  clear  market  value  of  such  prop- 
erty except  as  herein  provided  No  such  tax  shall  be  assessed  upon  property, 
real  or  personal,  or  any  beneficial  interest  therein  so  transferred  to  a  father, 
mother,  widow  or  minor  child  of  the  decedent,  grantor,  donor  or  vendor,  if  the 
amount  so  transferred  to  such  father,  mother,  widow  or  minor  child  is  the  sum 
of  five  thousand  dollars  or  less;  but  if  the  amount  so  transferred  to  a  father, 
mother,  widow  or  a  minor  child  is  over  five  thousand  dollars  the  excess  shall  be 
taxable  at  the  rate  of  one  per  centum  upon  the  clear  market  value  of  such  prop- 
erty as  hereinbefore  provided.  The  rates  of  taxation  hereinbefore  prescribed  in 
this  and  the  preceding  section  are  hereby  designated  as  "primary  rates." 
Whenever  any  property,  real  or  personal,  or  any  beneficial  interest  therein  which 
passes  by  any  such  transfer  to  or  for  the  use  of  any  person  or  corporation,  shall 
exceed  the  amount  of  twenty-five  thousand  dollars  over  and  above  the  exemp- 
tions hereinbefore  provided  the  rate  of  taxation  shall  be  as  follows: 

Upon  all  amounts  in  excess  of  the  said  twenty-five  thousand  dollars  and 
up  to  and  including  the  sum  of  one  hundred  thousand  dollars,  twice  the  primary 
rates: 


1910,  c.  706.1  NEW  YORK.  831 

Upon  all  amounts  in  excess  of  the  said  one  hundred  thousand  dollars  and  up  to 
and  including  the  sum  of  five  hundred  thousand  dollars,  three  times  the  primary 
rates; 

Upon  all  amounts  in  excess  of  the  said  five  hundred  thousand  dollars  and  up 
to  and  including  the  sum  of  one  million  dollars,  four  times  the  primary  rates; 

Upon  all  amounts  in  excess  of  the  said  one  million  dollars,  five  times  the  pri- 
mary rates.  But  any  property  devised  or  bequeathed  for  religious  ceremonies, 
observances  or  commemorative  services  of  or  for  the  deceased  donor,  or  to  any 
person  who  is  a  bishop  or  to  any  religious,  educational,  charitable,  missionary, 
benevolent,  hospital  or  infirmary  corporation,  including  corporations  organized 
exclusively  for  Bible  or  tract  purposes,  shall  be  exempted  from  and  not  subject 
to  the  provisions  of  this  article.  There  shall  also  be  exempted  from  and  not  sub- 
ject to  the  provisions  of  this  article  personal  property  other  than  money  or  secur- 
ities bequeathed  to  a  corporation  or  association  organized  exclusively  for  the 
moral  or  mental  improvement  of  men  or  women  or  for  scientific,  literary, 
library,  patriotic,  cemetery  or  historical  purposes  or  for  the  enforcement  of  laws 
relating  to  children  or  animals  or  for  two  or  more  of  such  purposes  and  used 
exclusively  for  carrying  out  one  or  more  of  such  purposes.  But  no  such  corpora- 
tion or  association  shall  be  entitled  to  such  exemption  if  any  officer,  member  or 
employee  thereof  shall  receive  or  may  be  lawfully  entitled  to  receive  any  pecun- 
iary profit  from  the  operations  thereof  except  reasonable  compensation  for  ser- 
vices in  effecting  one  or  more  of  such  purposes  or  as  proper  beneficiaries  of  its 
strictly  charitable  purposes;  or  if  the  organization  thereof  for  any  such  avowed 
purpose  be  a  guise  or  pretense  for  directly  or  indirectly  making  any  other  pecun- 
iary profit  for  such  corporation  or  association  or  for  any  of  its  members  or 
employees  or  if  it  be  not  in  good  faith  organized  or  conducted  exclusively  for  one 
or  more  of  such  purposes.    [As  amended  by  L.  1910,  chaps.  600  and  706.] 

N.  Y.  St.  1896,  s.  221,  as  amended  by  the  statute  of  1910,  c.  706, 
provides  for  a  graduated  tax,  and  it  was  claimed  that  the  secondary 
rates  are  to  be  calculated  upon  so  much  of  the  transfer  as  exceed 
the  amounts  taxable  at  a  lower  rate.  The  court  considered  that 
the  words  "property"  and  "interest"  are  by  their  context  confined 
to  the  interest  which  passed  to  the  individuals.  On  a  grammatical 
construction  of  the  statute  in  consideration  of  its  language  the 
court  holds  that  the  words  "up  to  and  including  the  sum  of"  relate 
to  the  excess  over  the  amount  subject  to  the  previous  rate  of  taxa- 
tion, and  should  be  read  as  if  the  words  in  question  were  "upon  all 
amounts  of  legacy  which  shall  be  in  excess  of  said  $25,000."  The 
amounts  of  each  class  are  reckoned  beginning  with  the  amount  of 
the  next  lower  class  and  not  by  considering  the  amount  of  the  whole 
estate  in  question.     In  re  Jourdan,  128  N.  Y.  Suppl.  728. 

S.  243.  Definitions.  The  words  "estate"  and  "property,"  as  used  in  this 
article,  shall  be  taken  to  mean  the  property  or  interest  therein  passing  or  trans- 
ferred to  individual  or  corporate  legatees,  devisees,  heirs,  next-of-kin,  grantees, 
donees  or  vendees  and  not  the  property  or  interest  therein  of  the  decedent,  grantor. 


832  STATUTES  ANNOTATED.  [N.  Y.  St. 

donor  or  vendor  passing  or  transferred  and  shall  include  all  property  or  interest 
therein,  whether  situated  within  orwithout  this  state.  The  word  "transfer,"  as 
used  in  this  article,  shall  be  taken  to  include  the  passing  of  property  or  any  inter- 
est therein  in  possession  or  enjoyment,  present  or  future,  by  inheritance,  descent, 
devise,  bequest,  grant,  deed,  bargain,  sale  or  gift,  in  the  manner  herein  prescribed. 
The  words  "county  treasurer"  and  "district  attorney,"  as  used  in  this  article, 
shall  be  taken  to  mean  the  treasurer  or  the  district  attorney  of  the  county  of  the 
surrogate  having  jurisdiction  as  provided  in  section  two  hundred  and  twenty- 
eight  of  this  article.    (Former  s.  242,  as  amended  by  L.  1910,  c.  706.) 

THE  PRESENT  ACT. 

IN.  Y/St.  1909,  c.  62,  as  amended.] 

In  General. 
History.  —  Nature. 

"While  the  laws  of  all  civilized  states  recognize  in  every  citizen 
the  absolute  right  to  his  own  earnings,  and  to  the  enjoyment  of 
his  own  property  and  the  increase  thereof,  during  his  life,  except 
so  far  as  the  state  may  require  him  to  contribute  his  share  for  pub- 
lic expenses,  the  right  to  dispose  of  his  property  by  will  has  always 
been  considered  purely  a  creature  of  statute  and  within  legislative 
control.  *By  the  common  law,  as  it  stood  in  the  reign  of  Henry  II, 
a  man's  goods  were  to  be  divided  into  three  equal  parts;  of  which 
one  went  to  his  heirs  or  lineal  descendants,  another  to  his  wife,  and 
a  third  was  at  his  own  disposal;  or  if  he  died  without  a  wife,  he 
might  then  dispose  of  one  moiety,  and  the  other  went  to  his  chil- 
dren; and  so,  e  converso,  if  he  had  no  children,  the  wife  was  entitled 
to  one  moiety,  and  he  might  bequeath  the  other;  but  if  he  died 
without  either  wife  or  issue,  the  whole  was  at  his  own  disposal.' 
II  Bl.  Com.  492.  Prior  to  the  Statute  of  Wills,  enacted  in  the 
reign  of  Henry  VIII,  the  right  to  a  testamentary  disposition  of 
property  did  not  extend  to  real  estate  at  all,  and  as  to  personal  estate 
was  limited  as  above  stated.  Although  these  restrictions  have 
long  since  been  abolished  in  England,  and  never  existed  in  this 
country,  except  in  Louisiana,  the  right  of  a  widow  to  her  dower 
and  to  a  share  in  the  personal  estate  is  ordinarily  secured  to  her 
by  statute. 

"By  the  Code  Napoleon,  gifts  of  property,  whether  by  acts  inter 
vivos  or  by  will,  must  not  exceed  one  half  the  estate  if  the  testator 
leave  but  one  child ;  one  third,  if  he  leaves  two  children ;  one  fourth, 
if  he  leaves  three  or  more.  If  he  have  no  children,  but  leaves 
ancestors,  both  in  the  paternal  and  maternal  line,  he  may  give  away 
but  one  half  of  his  property,  and  but  three  fourths  if  he   have 


1909,  c.  62.]  NEW  YORK. 

ancestors  in  but  one  line.  By  the  law  of  Italy,  one  half  a  testa- 
tor's property  must  be  distributed  equally  among  all  his  children ; 
the  other  half  he  may  leave  to  his  eldest  son  or  to  whomso- 
ever he  pleases.  Similar  restrictions  upon  the  power  of  disposition 
by  will  are  found  in  the  codes  of  other  continental  countries,  as  well 
as  in  the  state  of  Louisiana.  Though  the  general  consent  of  the 
most  enlightened  nations  has  from  the  earliest  historical  period 
recognized  a  natural  right  in  children  to  inherit  the  property  of 
their  parents,  we  know  of  no  legal  principle  to  prevent  the  legis- 
lature from  taking  away  or  limiting  the  right  of  testamentary  dis- 
position or  imposing  such  conditions  upon  its  exercise  as  it  may  deem 
conducive  to 'public  good." 

The  New  York  inheritance  tax  is  not  a  tax  upon  the  property 
itself  but  upon  its  transmission  by  will  or  descent.  Per  Brown,  J., 
in  United  States  v.  Perkins,  163  U.  S.  625,  627,  affirming  In  re 
Merriam,  141  N.  Y.  479,  36  N.  E.  505,  in  which  the  court  cites  the 
following  cases:  Matter  of  Swift,  137  N.  Y.  77;  Matter  of  Hoffman, 
143  N.  Y.  327;  Schoolfeld  v.  Lynchburg,  78  Va.  366;  Strode  v.  Com- 
monwealth, 52  Pa.  St.  181;  State  v.  Dalrymple,  70  Md.  294,  299. 

As  to  the  history  and  purpose  of  the  legislation,  see  discussion 
by  CuUen,  J.,  in  In  re  Hellman,  174  N.  Y.  254,  66  N.  E.  809,  95 
Am.  St.  Rep.  582,  reported  post,  pp.  851,  852. 

The  New  York  transfer  tax  is  one  on  the  right  of  succession  and 
not  on  property.  In  re  Vanderbilt,  172  N.  Y.  69,  73,  64  N.  E. 
782,  modifying  68  N.  Y.  App.  Div.  27,  74  N.  Y.  Suppl.  450. 

In  discussing  the  effect  of  the  general  tax  law  on  the  collateral 
inheritance  act  the  court  says:  "Nearly  sixty  years  intervened 
between  the  passage  of  the  earlier  and  the  later  statute,  and  the 
latter  was  enacted  under  different  conditions  from  the  former. 
It  proceeds  upon  a  new  theory  of  the  right  of  the  government  to 
tax  and  establishes  a  new  system  of  taxation.  It  taxes  the  right 
of  succession  to  property,  and  measures  the  tax  in  the  method 
specifically  prescribed.  All  property  having  an  appraisable  value 
must  be  considered,  whether  it  is  such  as  might  be  taxed  under 
the  general  law  or  not.  Many  kinds  of  property  might  be  enu- 
merated which  are  not  assessable  under  the  general  law,  but  which 
are  appraisable  under  the  collateral  inheritance  act.  The  defi- 
nition of  the  different  kinds  of  property  which  the  legislature  has 
incorporated  in  the  general  tax  law,  for  the  purposes  of  that  law, 
cannot  be  imported  into  the  collateral  inheritance  tax  law  upon 
any  sound  principle  of  statutory  construction.  It  is  therefore 
immaterial   whether   life  insurance   policies   can   be   valued    and 


834  STATUTES  ANNOTATED.  [N.  Y.  St. 

assessed  for  taxation  under  the  general  law."  Per  Maynard,  J., 
in  In  re  Knoedler,  140  N.  Y.  377,  380,  35  N.  E.  601,  affirming 
68  Hun.  150. 

What  Law  Governs. 

Time. 

As  to  the  statute  governing  powers,  see  notes  to  the  act  of 
1897,  ante,  p.  821. 

The  law  in  force  at  the  testator's  death  governs  substantive 
rights  and  liabilities  under  the  inheritance  tax.  In  re  Sterling, 
9  Misc.  Rep.  224,  30  N.  Y.  Suppl.  385.  In  re  Milne,  76  Hun.  328, 
27  N.  Y.  Suppl.  727  (penalties  and  interest).  In  re  Moore,  90 
Hun.  162,  35  N.  Y.  Suppl.  782. 

The  method  of  procedure  in  a  proceeding  for  the  ascer- 
tainment and  the  determination  of  an  inheritance  tax  is  controlled 
by  the  statute  on  the  subject  in  force  at  the  time  of  the  institution 
of  the  proceeding  although  the  tax  itself  and  the  rights  of  the 
parties  are  controlled  by  an  earlier  statute.  In  re  Sloane,  154 
N.  Y.  109,  47  N.  E.  978,  19  N.  Y.  App.  Div.  411,  46  N.  Y.  Suppl. 
264.  In  re  Davis,  149  N.  Y.  539,  545,  44  N.  E.  185,  affirming 
91  Hun.  53. 

A  law  passed  after  vested  though  future  interests  had  fully  ac- 
crued, attempting  to  tax  such  interests  would  be  unconstitutional 
though  these  interests  had  not  come  into  possession.  In  re  Craig, 
181  N.  Y.  551,  74  N.  E.  1116,  affirming  97  N.  Y.  App.  Div.  289, 
89  N.  Y.  Suppl.  971.  In  re  Hitchins,  43  Misc.  485,  89  N.  Y. 
Suppl.  472. 

A  vested  remainder  of  one  dying  before  the  transfer  tax  act 
went  into  effect  is  not  subject  to  the  tax,  although  the  life  tenant 
dies  after  the  tax  statute  has  been  passed.  In  re  Backhouse,  185 
N.  Y.  544,  77  N.  E.  1181,  affirming  110  N.  Y.  App.  Div.  737,  96 
N.  Y.  Suppl.  466. 

Where  the  children  of  the  testator  took  vested  interests  sub- 
ject to  open  and  let  in  after  born  children  on  the  one  hand,  and 
on  the  other  hand  subject  to  be  defeated  by  death  without  issue, 
it  is. obvious  that  a  right  of  succession  to  the  estates  in  remainder 
passed  at  once  on  the  death  of  the  testator;  and  where  the  testator 
died  in  1876  these  remainder  interests  were  not  subject  to  the 
inheritance  tax. 

The  court  distinguishes  In  re  Curtis,  142  N.  Y.  219,  on  the 
ground  that  that  case  did  not  decide,  as  claimed,  that  such  remainder 


1909,  c.  62.]  NEWYOPK.  835 

interests  were  taxable  when  they  became  beneficial  interests.  It 
was  claimed  that  the  beneficial  interests  did  not  pass  until  the 
termination  of  the  life  estates.  The  court  says  that  in  one  sense 
that  is  true,  but  says  that  a  necessary  delay  in  appraisal  as  pro- 
vided for  by  the  statute  of  1892  is  a  very  different  matter  from 
the  provision  that  no  beneficial  right  of  succession  passed  at  all 
until  after  the  death  of  the  life  tenants.  To  include  such  cases 
would  give  the  statute  a  retrospective  operation  and  subject  to 
taxation  rights  of  succession  which  accrued  before  the  statute  came 
into  existence.  To  say  that  no  beneficial  interest  passed  into 
hands  where  it  was  taxable  is  very  different  from  saying  that  no 
beneficial  interest  passed  at  all.  In  re  Seaman,  147  N.  Y.  69, 
41  N.  E.  401,  reversing  87  Hun.  619. 

Law  at  Date  of  Deed. 

The  deceased  executed  a  trust  deed  in  1875  transferring  all  his 
property  to  trustees  in  contemplation  of  his  then  pending  marriage, 
by  the  terms  of  which  the  net  income  of  all  the  property  was 
made  payable  to  the  deceased  for  his  life  and  at  his  death  the 
principal  was  to  be  paid  to  his  widow  and  the  issue  of  the  marriage. 
The  deceased  died  in  1901.  The  marriage  took  place  before  1885. 
The  right  as  a  property  right  to  take  the  gifts  when  the  time  for 
possesssion  and  enjoyment  of  it  arrived  at  the  death  had  fully 
accrued  on  the  marriage  and  the  birth  of  the  children  free  from  any 
existing  tax,  hence  subsequent  legislation  imposing  such  a  tax 
must  be  considered  unconstitutional.  No  reservation  being  made 
of  the  power  of  revocation  it  became  operative  and  effective  as  a 
grant  upon  execution  and  delivery  wholly  irrespective  of  the  time 
when  possession  was  to  be  given  and  the  estate  conveyed.  In  re 
Craig,  181  N.  Y.  551,  74  N.  E.  1116,  affirming  97  N.  Y.  App.  Div. 
289,  89  N.  Y.  Suppl.  971. 

N.  Y.  St.  1887,  c.  713,  does  not  apply  to  render  taxable  property 
under  an  irrevocable  deed  executed  by  the  decedent  in  1882  trans- 
ferring property  to  trustees  to  pay  the  income  to  the  grantor  for 
life  and  on  her  death  then  over  to  nephews  and  nieces.  The  grantor 
died  in  1888  and  the  court  holds  that  the  transfer  took  place  to 
the  nephews  and  nieces  on  the  execution  of  the  deed  and  not  at  the 
death  of  the  testator.  At  the  decedent's  death  she  owned  none 
of  the  property  in  question  as  her  title  had  been  conveyed  to 
others  long  before.  In  re  Hendricks,  3  N.  Y.  Suppl.  281,  1  Con. 
Surr.  301. 


836  STATUTES  ANNOTATED.  [N.  Y.  St. 

Domicile, 

The  exercise  by  a  non-resident  of  a  power  of  appointment  under 
the  will  of  a  resident  is  not  subject  to  tax  in  New  York.  In  re 
Fearing,  200  N.  Y.  340,  93  N.  E.  956,  affirming  123  N.  Y.  Suppl. 
396. 

The  rights  of  the  parties  are  governed  by  the  law  of  the  place 
which  formed  testator's  domicile  at  his  death.  So  where  the  testa- 
tor while  a  citizen  of  France  married,  and  under  French  law  his 
wife  was  entitled  to  one  half  of  his  property  on  his  death,  the  court 
holds  that  where  he  afterwards  becomes  a  citizen  of  New  York 
and  owns  property  there,  one  half  his  property  is  not  exempt 
from  taxation  on  the  ground  that  it  belongs  to  his  wife  under 
French  law.  In  re  Majot,  135  N.  Y.  App.  Div.  400,  119  N. 
Y.  Suppl.  888. 

Construction  of  Statute. 

Executors  have  a  right  to  claim  that  they  shall  be  clearly  brought 
within  the  terms  of  the  inheritance  law  before  they  shall  be  sub- 
jected to  its  burdens.  It  is  a  well  established  rule  that  a  citizen 
cannot  be  subjected  to  special  burdens  without  the  clear  warrant 
of  the  law.  In  re  Enston,  113  N.  Y.  174, 178,  21  N.  E.  87, 3  L.  R.  A. 
464,  22  N.  Y.  St.  569,  reversing  46  Hun.  506,  19  Abb.  N.  Cas.  227, 
10  N.  Y.  St.  380,  5  Dem.  Surr.  93,  8  N.  Y.  St.  781. 

Taxes  imposed  by  the  collateral  inheritance  tax  are  special  and 
not  general,  and  the  rule  is  that  special  tax  laws  are  to  be  con- 
strued strictly  against  the  government  and  favorable  to  the  tax 
payer;  that  a  citizen  cannot  be  subjected  to  special  burdens  with- 
out clear  warrant  of  law.  In  re  Vassar,  127  N.  Y.  1,  12,  27  N.  E. 
394,  reversing  58  Hun  378,  12  N.  Y.  Suppl.  203. 

The  statute  should  be  strictly  construed  in  favor  of  the  citizen, 
since  it  assumes  to  impose  a  special  burden  upon  particular  prop- 
erty and  persons  and  is  not  in  any  proper  sense  a  general  tax. 
But  where  a  particular  subject  is  within  the  scope  of  the  first  sec- 
tion and  an  exemption  from  taxation  is  claimed  on  the  ground  that 
the  legislature  has  not  provided  proper  machinery  for  accomplish- 
ing the  legislative  purpose  in  a  particular  instance,  a  liberal  rather 
than  a  strict  construction  should  be  applied,  and  if  by  fair  and 
reasonable  construction  of  its  provisions  the  purpose  of  the  statute 
can  be  carried  out,  that  interpretation  ought  to  be  given  to  effectu- 
ate the  legislative  intent.  In  re  Stewart,  131  N.  Y.  274,  282,  30 
N.  E.  184,  14  L.  R.  A.  836. 


1909,  c.  62.]  NEW  YORK.  837 

Validity. 

See  notes  to  the  Acts  of  1885,  1887  and  1892,  ante,  pp.  776,  792, 
801. 

Classification  by  Relationship. 

The  suggestion  that  the  New  York  statute  is  unconstitutional 
as  providing  a  different  rate  of  taxation  for  different  classes  of  rela- 
tives, even  if  tenable,  could  not  render  the  statute  void  in  entirety. 
In  re  Keeney,  194  N.  Y.  281,  286,  87  N.  E.  428,  affirming  128  N.  Y. 
App.  Div.  893. 

Discrimination  Among  Life  Estates. 

The  objection  was  made  thac  the  New  York  statute  was  void 
as  singling  out  for  taxation  transfers  where  a  life  estate  is  reserved 
to  the  grantor  leaving  all  other  transfers  or  conveyances  exempt. 

''We  think  that  there  are  sufficient  reasons  to  support  the  classifi- 
cation made  by  the  statute;  at  least  that  the  classification  can- 
not be  said  to  be  devoid  of  reasonable  ground  on  which  to  rest. 
Inheritance  tax  laws  have  been  very  generally  adopted  throughout 
the  states  of  the  Union.  A  substantial  part  of  the  revenue 
necessary  to  support  their  governments  is  now  derived  from 
that  source.  A  not  wholly  unnatural  desire  exists  among  owners 
of  property  to  avoid  the  imposition  of  inheritance  taxes  upon  the 
estates  they  may  leave,  so  that  such  estates  may  pass  to  the  objects 
of  their  bounty  unimpaired.  It  is  a  matter  of  common  knowledge 
that  for  this  purpose  trusts  or  other  conveyances  are  made  whereby 
the  grantor  reserves  to  himself  the  beneficial  enjoyment  of  his 
estate  during  life.  Were  it  not  for  the  provision  of  the  statute 
which  is  challenged,  it  is  clear  that  in  many  cases  the  estate  on  the 
death  of  the  grantor  would  pass  free  from  tax  to  the  same  persons 
who  would  take  it  had  the  grantor  made  a  will  or  died  intestate. 
It  is  true  that  an  ingenious  mind  may  devise  other  means  of  avoid- 
ing an  inheritance  tax,  but  the  one  commonly  used  is  a  transfer 
with  reservation  of  a  life  estate.  We  think  this  fact  justified  the 
legislature  in  singling  out  this  class  of  transfers  as  subject  to  a 
special  tax."  Per  Cullen,  C.  J.,  in  In  re  Keeney,  194  N.  Y.  281, 
286,  87  N.  E.  428,  affirming  128  N.  Y.  App.  Div.  893. 

Who  May  Object  to  Discrimination  in  Rate. 

Grantees  in  a  deed  subject  to  the  lowest  rate  of  taxation  have  no 
valid  cause  of  complaint  as  to  the  constitutionality  of  the  transfer 
tax  because  other  grantees  are  subjected  to  a  higher  rate.  That 
objection  if  tenable  could  be  taken  only  by  the  grantees  taxed  at 


838  STATUTES  ANNOTATED.  [N.  Y.  St. 

the  higher  rate.     In  re  Keeney,  194  N.  Y.  281,  286,  87  N.  E.  428, 
affirming  128  N.  Y.  App.  Div.  893. 

Not  Impair  Contract. 

Where  the  law  imposing  a  tax  was  in  force  before  the  deposit 
was  made  by  a  non-resident  in  the  state  of  New  York  it  did  not 
impair  the  obligation  of  the  contract,  if  a  tax  otherwise  lawful 
ever  can  be  said  to  have  that  effect.  Blackstonev.  Miller,  188  U.  S. 
189,  23  S.  Ct.  277,  47  L.  Ed.  439,  affirming  171  N.  Y.  682,  69  N.  Y. 
App.  Div.  127,  quoting  Pinney  v.  Nelson,  183  U.  S.  144,  147. 

Evasion  of  Tax. 

Evasion  of  tax  by  marshaling  assets,  see  p.  936. 

Evasion  of  tax  by  joint  ownership,  see  ante,  p.  846. 

Good  faith  the  test  in  transfers,  see  p.  877. 

Assignment  of  interests,  see  p.  840. 

Exercise  of  power  following  direction  in  will,  see  p.  889. 

Deed  in  trust  for  the  use  of  the  testator  for  life  and  on  his  death 
subject  to  appointment  by  his  will,  see  p.  882. 

Election  to  take  under  original  will  instead  of  under  the  exercise 
of  a  power  of  appointment,  see  p.  891. 

Rate  on  assignment  of  legacy,  see  p.  905. 

Where  no  next  of  kin  appear,  see  p.  904. 

Effect  of  leaving  legal  title  to  property  in  a  non-resident  trustee, 
see  p.  856. 

Leaving  Stock  with  Brokers. 

The  decedent,  a  resident  of  Louisiana,  had  ordered  the  pur- 
chase through  her  stock  brokers  in  New  York  of  certain  stock 
and  the  certificates  were  taken  in  the  name  of  the  brokers,  but 
paid  for  by  her,  and  the  stock  was  transferred  on  the  books  of  the 
corporation,  which  was  a  New  York  corporation,  to  the  brokers, 
who  thereupon  endorsed  their  names  upon  the  blank  transfer 
printed  upon  the  certificates  so  that  the  same  could  be  transferred 
to  the  testatrix,  and  the  certificates  so  endorsed  were  then  delivered 
by  the  brokers  to  the  testatrix.  The  court  holds  that  although 
she  did  not  have  the  legal  title  to  the  stock  at  the  time  of  her 
death,  she  did  have  an  equitable  title  which  at  any  time  she  could 
have  transferred  into  a  legal  title  by  simply  presenting  the  cer- 
tificates to  the  officers  of  the  corporations,  and  that  this  was  an 
interest  in  the  property  which  passed  by  her  will  and  which  was 


1909,  c.  62.]  NEW  YORK.  839 

taxable.  She  was  entitled  at  any  time  to  become  vested  with  the 
legal  title  and  certainly  this  equitable  title  was  something  more 
than  a  mere  chose  in  action.  It  was  in  effect  a  property  interest 
in  these  domestic  corporations.  In  re  Newcomb,  172  N.  Y.  608, 
64  N.  E.  1123,  affirming  71  N.  Y.  App.  Div.  606,  76  N.  Y.  Suppl. 
222. 

Renunciation  by  Legatee. 

In  one  case  the  legatees  renounced  the  legacy  and  the  property 
bequeathed  therefore  went  to  the  residuary  legatees.  The  court 
therefore  holds  that  the  tax  should  be  laid  at  the  rate  as  if  the 
legacy  had  been  originally  given  to  the  residuary  legatees.  The 
tax  is  laid  solely  upon  the  transfer  and  not  upon  the  property 
transferred,  nor  upon  the  estate  of  the  legatee.  If  the  legatee 
renounced  a  gift,  refused  to  receive  it,  no  tax  can  be  collected 
with  respect  to  him  because  there  has  been  no  transfer  to  him. 
His  right  to  renounce  the  privilege  of  accepting  the  donation  is 
not  denied  or  forbidden  by  the  statute,  and  on  his  effective  renun- 
ciation the  title  or  ownership  of  the  property  remains  in  the  estate, 
to  be  disposed  of  under  the  terms  of  the  will,  and  the  succession  is 
taxable  in  accordance  with  the  nature  of  the  ultimate  devolution. 
In  re  Wolfe,  179  N.  Y.  599,  72  N.  E.  1152,  affirming  89  N.  Y. 
App.  Div.  349. 

The  court  affirms  and  distinguishes  In  re  Wolfe,  89  N.  Y.  App. 
Div.  349,  179  N.  Y.  599,  as  there  was  no  transfer  by  will  to.  the 
executors,  and  therefore  no  transfer  tax  could  be  imposed. 
In  re  Cook,  187  N.  Y.  253,  79  N.  E.  991,  reversing  114  N.  Y.  App. 
Div.  718,  99  N.  Y.  Suppl.  1049. 

Property  Disclaimed  by  Executor. 

A  disclaimer  by  the  executor  of  property  claimed  to  be  included 
in  a  gift  inter  vivos  by  the  decedent  does  not  deprive  the  surrogate 
of  jurisdiction  to  appraise  it.  In  re  Lansing,  31  Misc.  148,  64  N.  Y. 
Suppl.  1125. 

The  investment  of  a  trust  fund  in  tax-exempt  securities  does  not 
avoid  the  tax  which  is  on  successions  and  not  on  property.  In  re 
Dow,  167  N.  Y.  227,  230,  60  N.  E.  439,  52  L.  R.  A.  433,  88  Am. 
St.  Rep.  508,  affirming  60  N.  Y.  App.  Div.  630. 

Account  Placed  in  Wife's   Name. 

Where  a  partner  in  a  firm  invested  the  profits  witn  the  firm 
and  transferred  this  account  to  his  wife  to  protect  his  wife  from 


840  STATUTES  ANNOTATED.  [N.  Y.  St. 

his  creditors,  on  the  death  of  the  wife  a  transfer  tax  should  be 
levied  on  the  property,  as  his  intention  to  protect  his  wife  could  be 
effectuated  only  in  case  it  was  her  money.  In  re  Anthony,  40 
Misc.  Rep.  497,  82  N.  Y.  Suppl.  789. 

Bequest  Void. 

Where  it  appeared  that  the  beneficiaries  under  a  residuary 
clause  conceded  its  invalidity  as  a  perpetuity  and  abandoned  all 
claim  to  the  property  to  the  heirs,  who  sold  it  and  received  the 
consideration  therefor,  and  that  it  did  not  pass  under  the  will, 
the  surrogate  had  jurisdiction  to  find  that  the  proper cy  did  not 
pass  under  the  will,  and  that  no  tax  was  assessable  against  the 
residuary  beneficiaries  named.  In  re  Ullman,  137  N.  Y.  403, 
33  N.  E.  480. 

Assignment  by  Legatee.  —  Payment  by  Executor  out  of  his  own 
Funds. 
Where  one  of  the  executors  previous  to  the  death  of  the  testator 
had  so  invested  the  testator's  property  that  it  was  worthless  and 
then  on  his  death  destroyed  his  will,  one  of  the  legatees  by  threats 
of  criminal  prosecution  obtained  payment  of  her  legacy  from  the 
executor,  at  the  same  time  assigning  the  legacy  and  all  her  interest 
in  the  same  to  the  executor.  The  legacy  was  paid  with  the  indi- 
vidual property  of  the  executor.  The  legacy  was  two  thousand 
dollars  and  the  total  assets  of  the  estate  of  the  testator  amounted 
to  less  than  eight  hundred  dollars.  The  court  holds  that  no 
transfer  tax  can  be  levied  on  this  legacy,  as  the  legatee  never 
received  any  property  from  the  estate,  and  has  in  fact  assigned 
all  her  rights  against  the  estate.  In  re  Weed,  10  Misc.  Rep.  628, 
32,  N.  Y.  Suppl.  777. 

S.  220.  [As  amended  by  St.  1911,  c.  732,  in  effect  July  21,  1911.]  Taxable 
transfers.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  tang- 
ible property  within  the  state  and  of  intangible  property,  or  of  any  interest  therein 
or  income  therefrom,  in  trust  or  otherwise,  to  persons  or  corporations  in  the 
following  cases,  subject  to  the  exemptions  and  limitations  hereinafter  prescribed : 

(1)  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  of  any 
intangible  property,  or  of  tangible  property  within  the  state,  from  any  person 
dying  seized  or  possessed  thereof  while  a  resident  of  the  state. 

(2)  When  the  transfer  is  by  will  or  intestate  law,  of  tangible  property  within 
the  state,  and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

(3)  Whenever  the  property  of  a  resident  decedent,  or  the  property  of  a  non- 
resident decedent  within  this  state,  transferred  by  will  is  not  specifically  be- 
queathed or  devised,  such  property  shall  for  the  purposes  of  this  article,   be 


I 


1911,  c.  732.]  NEW  YORK.  841 

deemed  to  be  transferred  proportionately  to  and  divided  pro  rata  among  all  the 
general  legatees  and  devisees  named  in  said  decedent's  will,  including  all  trans- 
fers under  a  residuary  clause  of  such  will. 

(4)  When  the  transfer  is  of  intangible  property,  or  of  tangible  property  within 
the  state,  made  by  a  resident,  or  of  tangible  property  within  the  state  made  by  a 
non-resident,  by  deed,  grant,  bargain,  sale  or  gift  made  in  contemplation  of  the 
death  of  the  grantor,  vendor  or  donor  or  intended  to  take  effect  in  possession  or 
enjoyment  at  or  after  such  death. 

(5)  When  any  such  person  or  corporation  becomes  beneficially  entitled,  in 
possession  or  expectancy,  to  any  property  or  the  income  thereof  by  any  such  trans- 
fer whether  made  before  or  after  the  passage  of  this  chapter. 

(6)  Whenever  any  person  or  corporation  shall  exercise  a  power  of  appoint- 
ment derived  from  any  disposition  of  property  made  either  before  or  after  the 
passage  of  this'  chapter,  such  appointment  when  made  shall  be  deemed  a  transfer 
taxable  under  the  provisions  of  this  chapter  in  the  same  manner  as  though  the 
property  to  which  such  appointment  relates  belonged  absolutely  to  the  donee  of 
such  power  and  had  been  bequeathed  or  devised  by  such  donee  by  will. 

(7)  The  tax  imposed  hereby  shall  be  upon  the  clear  market  value  of  such  prop- 
erty, at  the  rates  hereinafter  prescribed. 

[See  notes  to  the  Act  of  1885,  c.  483,  s.  1;  1887,  c.  713;  1891.  c.  215;  1892, 
c.  169;  1892,  c.  399,  s.  1;  1896,  c.  908,  s.  220;  1897,  c.  284,  s.  2;  1905,  c.  368; 
1908,  c.  310;   1909,  c.  62,  s.  220;   1910,  c.  706;   1911,  c.  732. 

Definitions. 

The  words  "estate,"  "property,"  "tangible  property,"  "intang- 
ible property,"  "transfer,"  "intestate  laws  of  this  state,"  are 
defined  in  section  243,  post,  p.  969. 

**Transfer.'* — Direction  to  Pay  Debt  or  Other  Obligation. 

The  testator  by  his  will  gave  to  H.  all  money  which  might 
become  due  and  payable  at  his  decease  on  account  of  his  membership 
in  a  certain  Masonic  Aid  Association.  The  testator  had  taken 
out  this  membership  to  secure  an  indebtedness  to  H.  The  court 
holds  that  while  H.  may  be  entitled  to  receive  money  by  virtue 
of  the  will  he  does  not  get  it  as  a  gift,  but  as  payment  of  a  debt, 
and  the  words  used  accomplish  no  more  than  the  usual  general 
direction  in  wills  to  pay  debts  and  funeral  expenses.  In  re  Rogers, 
10  N.  Y.  Suppl.  22,  2  Con.  Surr.  198. 

A  husband  signed  an  agreement  to  pay  an  annuity  through  a 
trustee  to  the  wife,  and  by  his  will  he  created  a  trust  in  his  executors 
to  continue  the  annuity  in  case  she  refused  a  gross  sum  allowed 
her  in  the  will.  The  court  holds  that  this  direction  as  to  the  trust 
in  the  will  is  nbt  taxable,  as  it  is  no  transfer  and  confers  no  benefit 
upon  the  widow.     It  is  simply  a  direction  of  the  testator  as  to 


842  STATUTES  ANNOTATED.  [N.  Y.  St. 

the  manner  in  which  his  estate  shall  be  administered.  In  re 
Daniell,  40  Misc.  Rep.  329,  81  N.  Y.  Suppl.  1033. 

The  testator  gave  a  legacy  to  a  doctor  in  view  of  his  care  and 
services  during  the  testator's  years  of  sickness  "without  asking 
any  reward  for  services  rendered,  as  he  knew  my  means  were 
somewhat  limited."  The  court  holds  that  the  question  is  not 
whether  there  is  a  claim  which  the  testator  may  honorably,  but  not 
legally  appoint  to  pay,  but  whether  the  creditor  has  a  claim  to 
which  there  is  no  legal  defence  which  he  can  enforce  by  legal  pro- 
ceedings. The  court  says  that  the  physician  by  neglecting  to  make 
a  claim  as  a  creditor  has  waived  any  rights  and  must  come  in  as 
a  legatee  only. 

"By  neglecting  to  present  any  account  to  the  executor,  or  prove 
any  claim  against  the  estate,  and  having  accepted  the  gratuity 
which  the  deceased  provided  for  him  in  her  will,  it  was  the  duty 
of  the  executor,  on  its  payment  to  him,  to  deduct  therefrom  the 
tax  which  had  been  assessed  by  the  surrogate.  If  he  desired  to 
escape  the  payment  of  the  tax,  or  was  dissatisfied  with  the  amount 
of  the  legacy,  he  should  have  established  his  debt,  if  he  had  any, 
against  the  estate,  and  had  it  paid  by  the  executor  in  the  usual 
manner,  and  let  the  legacy  to  him  go  into  the  residuary  assets. 

"The  times  have  been 
That,  when  the  brains  were  out,  the  man  would  die, 
And  there  an  end;  but  now  they  rise  again, 
With  twenty  mortal  murders  on  their  crowns. 
And  push  us  from  our  stools. 

"So,  in  the  settlement  of  estates,  the  legal  skeletons  of  stale 
claims  and  outlawed  demands  stalk  forth  from  their  charnel  houses 
and  their  graves,  and  seek  to  push  from  their  stools  the  guests  whom 
the  testator  has  invited  to  the  feast."  Per  Kennedy,  S.,  in  In  re 
Doty,  7  Misc.  Rep.  193,  56  N.  Y.  St.  626,  27  N.  Y.  Suppl.  653,  656. 

Contract  to  Leave  by  Will. 

The  testator  died  in  1901  leaving  a  will,  and  the  inheritance  tax 
was  compromised  by  the  executor.  An  action  was  brought  rely- 
ing on  an  ante-nuptial  contract  with  the  testator  to  leave  by  will 
.certain  property,  which  agreenient  the  testator  had  failed  to  ful- 
fill. The  action  ended  by  a  judgment  for  the  plaintiff,  and  the 
court  ordered  the  executors  to  turn  over  to  the  plaintiff  the  prop- 
erty covered  by  the  contract. 


1911,  c.  732.1  NEW  YORK.  843 

The  court  holds  that  this  transfer  is  subject  to  the  inheritance 
tax,  as  it  was  not  a  contract  to  convey,  but  a  contract  to  make  a 
will.  Had  the  deceased  performed  his  agreement  and  bequeathed 
the  property  the  estate  would  have  been  subject  to  the  tax.  It 
does  not  affect  the  question  of  the  liability  of  the  estate  to  taxation 
that  in  consequence  of  the  failure  of  the  testator  to  carry  out  his 
promise  the  beneficiary  was  obliged  to  resort  to  a  court  for  relief. 
The  judgment  of  the  court  converts  the  devisees  or  heirs  at  law, 
as  the  case  may  require,  into  trustees  for  the  beneficiary  under  the 
original  agreement.  Therefore  the  devolution  of  the  property  has 
in  fact  taken  place  under  the  will,  and  such  devolution  is  subject 
to  the  transfer  tax.  In  re  Kidd,  188  N.  Y.  274,  279,  80  N.  E.  924, 
reversing  115  N.  Y.  App.  Div.  205,  100  N.  Y.  Suppl.  917. 

Where  in  1899  the  intestate  entered  into  an  ante-nuptial  contract 
in  writing,  by  the  terms  of  which,  in  consideration  of  his  marriage, 
he  agreed  to  provide  for  his  wife  by  his  last  will  and  testament  in  case 
she  survived  him,  the  court  holds  that  her  rights  are  in  the  nature 
of  a  debt,  and  therefore  not  subject  to  taxation  under  the  transfer 
tax  law.  She  takes  under  the  contract  and  not  by  will.  In  re 
Baker,  178  N.  Y.  575,  70  N.  E.  1094,  affirming  83  N.  Y.  App.  Div. 
530,  82  N.  Y.  Suppl.  390,  38  Misc.  151,  77  N.  Y.  Suppl.  170. 

Bequest  for  Consideration. 

The  will  of  Jay  Gould  recited  that,  his  son  having  conducted  his 
business  for  many  years  with  great  ability,  he  had  fixed  the 
value  of  the  son's  services  at  five  million  dollars;  and  evi- 
dence was  introduced  that  this  legacy  was  by  agreement  in  view 
of  the  son's  services  and  was  for  compensation  and  no  other 
purpose.  The  court  holds,  however,  that  the  New  York  statute 
does  not  limit  the  tax  to  property  "gratuitously  given  by  will," 
but  that  the  word  "transfer"  covers  the  gift  by  will,  whatever  the 
method  may  be,  whether  to  pay  a  debt  or  to  discharge  a  moral 
obligation,  or  to  benefit  a  relative  for  whom  the  testator  entertained 
a  strong  affection.  In  re  Gould,  156  N.  Y.  423,  428,  51  N.  E.  287, 
modifying  19  N.  Y.  App.  Div.  352. 

On  the  other  hand,  where  a  bequest  is  made  to  the  foreman  of 
the  testator  of  four  thousand  dollars  on  condition  he  should  accept 
it  in  full  of  all  claims,  and  it  appeared  that  the  amount  of  the 
legatee's  claim  for  services  was  in  excess  of  the  sum  bequeathed, 
the  legacy  is  not  a  gift  and  is  not  subject  to  the  inheritance  tax. 
In  re  Underhill,  20  N.  Y.  Suppl.  134,  2  Con.  Surr.  262. 


g44  STATUTES  ANNOTATED.  [N.  Y.  St. 

Ante- Nuptial  Contract. 

An  ante-nuptial  contract  entered  into  by  which  the  testator 
agrees  to  leave  certain  property  by  will  to  his  wife  is  not  one  "in- 
tended to  take  effect  in  possession  or  enjoyment"  until  after  the 
death  of  the  obligor.  It  is  not  subject  to  taxation  under  the 
transfer  tax  act  unless  it  can  be  shown  that  the  agreement  was 
entered  into  in  bad  faith  where  the  husband  in  fact  died  intestate. 
In  re  Baker,  178  N.  Y.  575,  70  N.  E.  1094,  affirming  83  N.  Y. 
App.  Div.  530,  82  N.  Y.  Suppl.  390,  38  Misc.  151,  77  N.  Y.  Suppl. 
170. 

An  ante-nuptial  agreement  by  which  the  husband  transferred 
certain  stock  to  the  wife,  and  the  next  day  she  transferred  the 
same  stock  back  to  him  as  trustee  to  apply  to  the  mutual  use  of 
the  parties  during  their  joint  lives,  is  not  a  gift  to  the  wife  in  con- 
templation of  death. 

The  court  holds  that  the  two  agreements  are  not  contempo- 
raneous. In  re  Miller,  77  N.  Y.  App.  Div.  473,  78  N.  Y.  Suppl. 
930,  overruling  75  N.  Y.  Suppl.  929.  See,  however.  In  re  Kidd, 
188  N.  Y.  274,  80  N.  E.  924,  reversing  115  N.  Y.  App.  Div.  205, 
100  N.  Y.  Suppl.  917,  noted  fully  ante,  p.  842. 

Money  Advanced  to  Legatee. 

The  testator  left  the  remainder  of  his  property  to  his  wife  for 
life  and  on  her  death  among  his  six  children,  deducting  from  the 
share  of  two  of  his  sons  money  advanced  to  them,  and  charging 
their  shares  with  these  sums. 

The  court  holds  that  these  sums  lent  in  advance  to  the  sons  are 
not  regarded  as  advancements,  but  that  they  are  claims  belonging 
to  the  estate,  and  hence  they  are  subject  to  the  inheritance  tax. 
In  re  Bartlett,  4  Misc.  Rep.  380,  25  N.  Y.  Suppl.  990. 

"Of  ANY  Tangible  Property  within  the  State  and  of 
Intangible  Property." 

This  language  is  entirely  new  and  was  inserted  by  the  act  of 
1911. 

Insurance  Policies  which  Testator  had  Assigned. 

Where  two  policies  upon  their  face  were  payable  to  the  estate 
of  the  decedent  and  at  his  death  were  found  in  his  safe  deposit 
vault,  and  attached  to  each  policy  was  an  assignment  of  it  in  con- 
sideration of  love  and  affection  to  his  wife,  the  comptroller  contends 


1911,  c.  732.]  NEW  YORK.  845 

that  under  section  220  the  tax  is  payable  upon  the  transfer  of  those 
poHcies  upon  the  theory  that  the  transfer  was  first  by  death  and 
second  by  an  assignment  to  take  effect  in  possession  or  enjoyment 
at  the  death  of  the  decedent. 

The  court  holds  that  as  against  the  state  the  deceased  was  not 
possessed  of  the  policies  at  the  time  of  his  death  and  that  the 
widow  did  not  obtain  title  to  them  through  his  will  or  by  the  laws 
of  the  state  of  New  York.  This  is  an  absolute  present  assignment 
of  the  interests  of  the  assignor  in  the  policy;  therefore,  no  transfer 
tax  is  assessable.  In  re  Parsons,  117  N.  Y.  App.  Div.  321,  102  N.  Y. 
Suppl.  168,  affirming  51  Misc.  370,  101  N.  Y.  Suppl.  430. 

Stock  Held  as  Collateral. 

Where  stock  is  purchased  by  stock  brokers  for  a  customer  with 
their  own  money  and  they  hold  the  stock  as  collateral  with  other 
stock  deposited  with  them,  the  customer  is  merely  the  pledgee  of 
the  stock,  the  brokers  being  the  owners  of  the  property  subject 
to  a  right  to  redeem  upon  paying  the  entire  amount  of  the  debt, 
and  therefore  the  stock  should  not  be  included  in  the  transfer  of  the 
estate  of  the  customer.  A  subsequent  sale  of  the  stock  by  the 
brokers  for  the  satisfaction  of  their  lien  extinguishes  whatever  right 
or  title  the  decedent  had  and  demonstrates  that  instead  of  being 
the  owner  of  the  property  the  estate  was  indebted  in  a  large  sum 
to  the  brokers.  In  re  Havemeyer,  32  Misc.  Rep.  416,  66  N.  Y. 
Suppl.  722. 

The  testator  was  a  non-resident  of  New  York  and  had  a  specula- 
tive stock  account  with  brokers  in  the  city  of  New  York,  and  on  the 
day  of  his  death  owed  them  large  sums  of  money  on  stocks  and  bonds 
purchased  by  them  for  him  with  their  own  money. 

The  court  holds  that  the  deceased  was  under  contract  with  the 
brokers  to  apply  certain  pledged  securities  to  the  payment  of  the 
debt  and  the  executrix  performed  that  contract.  The  executrix 
argued  that  having  paid  a  portion  of  the  debt  with  pledged  non- 
taxable securities,  which  are  not  under  the  transfer  tax  law  con- 
sidered as  "property"  in  this  state,  she  has  a  right  to  treat  such  por- 
tion of  the  debt  as  still  existing  for  the  purpose  of  offsetting  against 
it  property  otherwise  taxable.  But  the  court  holds  that  the  execu- 
trix cannot  claim  that  the  balance  of  the  debt  after  applying 
taxable  property  pledged  which  has  actually  been  paid  with  non- 
taxable securities  pledged  for  that  purpose  should  be  carried  as  a 
debt  to  credit  and  offset  against  clearly  taxable  property.     And 


g46  STATUTES  ANNOTATED.  [N.  Y.  St. 

while  for  the  purposes  of  taxation  non-taxable  property  is  not  to 
be  treated  as  taxable  property,  yet  it  was  part  of  the  estate  of  the 
deceased  which  passed  to  the  executrix  and  she  chose  to  cause  its 
sale  and  application  to  the  debt  of  the  deceased;  and  therefore 
the  balance  of  the  taxable  property  in  the  state  of  New  York  con- 
sisting of  real  estate  and  personal  property  is  subject  to  the  tax. 
In  re  Burden,  47  Misc.  329,  95  N.  Y.  Suppl.  972. 

Equitable  Interests. 

A  gift  in  contemplation  of  death  was  made  by  a  father  to  a 
daughter  and  she  died  within  a  few  days  of  his  death  before  the 
certificates  of  stock  had  been  actually  transferred  to  her,  before 
she  had  received  any  dividends.  The  stock  passed  under  her  will 
as  her  property,  and  so  passing  is  a  transfer  under  the  transfer  tax 
law  of  the  state  which  must  suffer  a  tax.  In  re  Borup,  28  Misc. 
Rep.  474,  59  N.  Y.  Suppl.  1097. 

Joint  Deposit. 

The  courts  have  sought  so  far  as  possible  to  ascertain  the  real 
ownership  in  a  joint  deposit  and  measure  the  tax  accordingly. 
Hence  a  joint  deposit  in  a  savings  bank  made  up  of  sums  which  were 
given  by  the  decedent  to  his  wife  was  not  taxable.  In  re  Rosen- 
berg, 114  N.  Y.  Suppl.  726.  A  deposit  made  in  a  national  bank 
in  the  joint  names  of  the  husband  and  wife  was  originally  owned  by 
the  decedent.  Where  the  amount  of  the  deposit  at  the  time  the 
account  was  made  joint  was  made  up  entirely  of  money  belonging 
to  the  decedent  and  where  the  checks  were  drawn  out  for  house- 
hold expenses  and  made  up  by  money  of  the  wife,  the  court  says 
that  if  the  money  belonged  to  the  wife  then  it  is  not  taxable  and 
if  it  was  a  joint  account  with  right  of  survivorship  then  the  case 
is  governed  by  the  Stebbins  case,  103  N.  Y.  Suppl.  563,  and  the 
money  is  not  taxable  in  either  event.  In  re  Graves,  52  Misc.  433, 
103  N.  Y.  Suppl.  571. 

Where  the  husband  and  wife  deposited  money  in  a  savings 
bank  in  their  joint  names,  with  account  payable  to  either  or  sur- 
vivor, the  wife  has  an  interest  in  the  deposit  to  give  her  an  equal 
right  with  him  to  withdraw  it  during  their  joint  lives  and  vests  her 
with  the  absolute  title  in  case  she  survives  him.  The  court  holds 
'that  in  this  case  it  was  not  the  intention  of  either  party  to  divest 
himself  of  the  control  and  use  of  this  money  so  long  as  both  lived, 
and  that  the  accounts  were  entered  so  that  either  could  draw 
money  during  their  joint  lives  as  a  matter  of   convenience,  and 


1911,  c.  732.]  NEW  YORK.  847 

upon  the  death  of  either  the  deposits  would  become  the  absolute 
property  of  the  survivor. 

The  court  holds  that  the  husband  did  not  surrender  the  absolute 
possession  and  dominion  of  the  money  in  question  during  his  life- 
time, and  that  although  there  was  intention  on  the  part  of  the 
parties  to  evade  the  transfer  tax  law,  yet  as  the  transfer  had  not 
become  absolute  until  the  death  of  the  depositor  such  parts  of 
the  different  deposits  as  were  not  the  money  of  the  wife  when 
deposited  are  taxable.  In  re  Kline,  65  Misc.  446,  121  N.  Y. 
Suppl.  1090. 

An  account  was  opened  in  a  trust  company  in  the  following 
form  in  1899:  "H.  H.  Stebbins,  Julia  A.  Stebbins,  either  or  the 
survivor  may  draw."  The  money  contributed  originally  belonged 
to  the  wife,  Julia  A.  Stebbins,  and  her  husband  contributed  his 
salary  to  the  household  expenses,  while  the  wife  contributed  various 
sums  for  the  same  purpose.  The  court  notes  section  225  and 
holds  that  sections  220  and  242  do  not  provide  for  the  taxation 
of  joint  deposits.  The  act  of  depositing  money  in  the  joint  names 
of  the  husband  and  wife  indicates  an  intent  to  invest  the  title  of 
the  money  in  the  survivor,  and  the  deposit  being  joint  is  in 
the  nature  of  an  agreement  or  contract  between  the  husband  and 
wife.  It  is  not  testamentary  nor  does  it  depend  upon  the  intestacy 
or  testacy  of  the  decedent.  In  this  case  there  is  no  suggestion 
that  the  joint  deposit  was  made  with  intent  to  evade  the  transfer 
tax.  The  survivorship  is  a  mere  incident.  In  re  Stebbins,.  52 
Misc.  438,  103  N.  Y.  Suppl.  563. 

Not  Limited  to  Property  Subject  to  General  Taxation. 

Property  subject  to  the  transfer  tax  is  not  confined  to  property 
subject  to  general  taxation.  In  re  Knoedler,  140  N.  Y.  377,  35  N.  E. 
601,  affirming  68  Hun  150  (insurance  policy).  In  re  Hellman, 
174  N.  Y.  254,  66  N.  E.  809,  95  Am.  St.  Rep.  582,  reversing  77 
N.  Y.  App.  Div.  355,  79  N.  Y.  Suppl.  201  (seat  in  stock  exchange) . 

Real  Estate. 

Taxes  on  real  estate,  see  post,  p.  954. 

Lien  on  real  estate  for  whole  tax  to  life  tenant  and  remainderman, 
see  post,  p.  918. 

Mortgaged  Real  Estate, 

Where  real  estate  is  devised  subject  to  mortgage  the  interest  or 
equity  of  the  testator  in  the  real  estate  only  is  to  be  considered 


848  STATUTES  ANNOTATED.  [N.  Y.  St. 

as  devised  and  the  executors  have  no  right  to  deduct  the  amount 
of  the  mortgages  from  the  value  of  the  personal  estate  in  settling 
the  inheritance  tax.  In  re  Sutton,  3  N.  Y.  App.  Div.  208,  38  N.  Y. 
Suppl.  277,  affirming  15  Misc.  659,  38  N.  Y.  Suppl.  102.  In  re 
Kene,  8  Misc.  Rep.  102,  29  N.  Y.  Suppl.  1078. 

Direction  to  Pay  Mortgages  out  of  Personalty. 

Where  the  will  leaves  real  and  personal  property  and  empowers 
the  executor  to  pay  certain  mortgages  on  the  real  estate  out  of  the 
personal  property  the  fact  that  the  executors  do  so  does  not  reduce 
the  amount  of  personal  property  liable  to  the  tax.  The  court  dis- 
tinguishes In  re  James,  144  N.  Y.  6,  and  says  that  the  subsequent 
act  of  the  executor  had  no  greater  effect  to  reduce  the  tax  on  the 
personalty  than  would  the  taking  of  the  money  by  the  beneficiary 
out  of  one  pocket  and  putting  it  into  the  other.  In  re  Livingston, 
1  N.  Y.  App.  Div.  568,  37  N.  Y.  Suppl.  463. 

The  testator  at  the  date  of  his  death  owned  equities  in  real  estate 
subject  to  mortgages  and  directed  by  his  will  that  these  mortgages 
be  paid  out  of  his  personal  estate.  The  personalty  should  be  ap- 
praised, as  it  was  at  the  testator's  death,  less  debts  and  mortgages 
payable.  The  court  holds  that  the  estate  must  be  appraised  in  the 
condition  in  which  it  was  at  the  death  of  the  testator.  In  re 
Offerman,  25  N.  Y.  App.  Div.  94,  48  N.  Y.  Suppl.  993,  following 
In  re  Sutton,  3  N.  Y.  App.  Div.  208,  38  N.  Y.  Suppl.  277,  and  In 
re  Livingston,  1  N.  Y.  App.  Div.  568,  37  N.  Y.  Suppl.  463. 

Where  the  testator  devised  real  estate  and  directed  that  the  mort- 
gage upon  it  should  be  paid  by  his  executor,  the  amount  so  used 
should  be  treated  as  personalty  subject  to  the  transfer  tax.  In  re 
De  Graaf,  24  Misc.  Rep.  147,  53  N.  Y.  Suppl.  591,  2  Gibbons 
516,  following  In  re  Offerman,  25  N.  Y.  App.  Div.  94,  48 
N.  Y.  Suppl.  993. 

Co-Tenancy.  — Allowance  for  Improvements. 

Where  the  decedent  was  a  co-tenant  of  land  on  which  other 
co-tenants  had  made  improvements  and  where  each  co-tenant 
presumed  and  knew  what  the  others  were  doing,  and  the  improve- 
ments were  made  under  such  conditions  that  on  partition  the  co- 
'tenants  would  be  entitled  to  allowance  for  the  improvements,  only 
the  balance  of  the  interest  of  the  decedent  should  be  taxed,  notwith- 
standing the  fact  that  no  proceeding  for  contribution  had  been  com- 
menced, and  notwithstanding  the  fact  that  it  might  be  claimed  that 


1911,  c.  732.]  NEW  YORK.  849 

no  contribution  would  ever  be  asked.  This  does  not  justify  the 
taxation  of  property  that  the  decedent  did  not  own  which  does  not 
pass  to  the  heirs-at-law  as  her  property.  In  re  Wood,  123  N.  Y. 
Suppl.  574. 

Real  Estate  Outside  the  State. 

Under  the  statute  of  1885  real  estate  situated  in  Rhode  Island 
belonging  to  a  resident  of  New  York  is  not  subject  to  taxation  in 
New  York.    Lorillard  v.  People,  6  Dem.  Surr.  (N.  Y.)  268. 

Perpetual  Leases. 

Perpetual  leases  on  real  estate  in  Japan  are  real  estate.  In  re 
Vivanti,  122  N.  Y.  Suppl.  954,  reversing  63  Misc.  618,  118  N.  Y. 
Suppl.  680. 

Joint  Stock  Association  Owning  Real  Estate, 

The  testator  died  in  1891  bequeathing  shares  in  a  joint  stock 
association  called  "The  New  York  Times"  which  owned  personal 
property.  The  executors  contended  that  as  the  association  owned 
real  estate  the  interest  therein  of  the  shareholder  was  realty  also, 
and  as  it  passed  under  his  will  in  the  direct  line,  was  exempt,  the 
statute  taxing  transfers  of  realty  only  when  passing  to  collaterals' 
or  strangers.     See  N.  Y.  St.  1891,  c.  215. 

The  court  discusses  the  difference  between  joint  stock  associa- 
tions and  corporations  and  concludes  that  "the  fact  that  a  joint 
stock  association  is  not  in  legal  contemplation  a  corporation,  and 
not  liable  to  taxation  under  acts  seeking  to  reach  corporations, 
in  no  way  militates  against  the  position  assumed  by  the  comptroller 
in  this  case.  It  is  competent  for  private  individuals  to  create  a 
joint  stock  association,  issue  shares  of  stock,  and  in  that  form  dis- 
pose of  property  by  last  will  and  testament.  The  associates  by 
contract  have  created  the  same  situation  as  to  shares  of  stock  that 
a  corporation  secures  by  charter."  Per  Bartlett,  ]. /in  In  re  Jones, 
172  N.  Y.  575,  65  N.  E.  570,  60  L.  R.  A.  476,  reversing  69  N.  Y. 
App.  Div.  237.  74  N.  Y.  Suppl.  702. 

On  Annulment  of  Fraudulent  Conveyance. 

The  executor  claimed  that  certain  property  had  been  given  to 
one  of  the  heirs  under  the  will,  and  the  heir  also  claimed  the  gift, 
and  the  surrogate  in  a  proceeding  to  assess  the  tax  failed  to  assess 
this  property,  on  the  theory  that  it  had  been  given  to  the  heir. 


850  STATUTES  ANNOTATED.  [N.  Y.  St. 

Subsequently,  in  a  contest  between  the  heirs,  it  was  determined 
that  this  gift  was  fraudulent  and  void,  and  the  court  then  decided 
that  as  it  now  appeared  that  the  property  was  transferred  by  the 
will  of  the  testator  and  not  by  gift,  it  became  taxable  under  the 
statute.    In  re  Lansing,  31  Misc.  Rep.  148,  64  N.  Y.  Suppl.  1125. 

Personalty.  • 

Debt. 

A  bequest  of  a  debt  to  the  debtor  is  property  and  subject  to  the 
inheritance  tax.    In  re  Wood,  40  Misc.  Rep.  155,  81  N.  Y.  Suppl.  511. 

Value  of  note  signed  by  legatee  and  bequeathed  to  him  by  holder, 
see  p.  932. 

Good  Will. 

As  to  the  appraisal  of  the  good  will,  see  post,  p.  933. 

The  good  will  of  a  firm  is  taxable  under  the  transfer  tax.  In  re 
Dun,  40  Misc.  Rep.  509,  82  N.  Y.  Suppl.  802.  (See,  however,  In  re 
Dun.  30  Misc.  616,  80  N.  Y.  Suppl.  657.)  In  re  Hellman,  77  N.  Y. 
App.  Div.  255,  79  N.  Y.  Suppl.  201,  which  was,  however,  reversed 
in  174  N.  Y.  254,  66  N.  E.  809,  95  Am.  St.  Rep.  355,  79  N.  Y. 
Suppl.  201. 

Where  a  business  was  conducted  by  and  carried  on  by  an  adminis- 
tratrix in  the  name  oF  the  decedent,  the  good  will  of  the  business 
is  an  assest  in  her  hands  and  as  such  it  is  taxable.  In  re  Keahon, 
60  Misc.  508,  113  N.  Y.  Suppl.  926. 

Leasehold  Interest, 

The  interest  of  a  lessee  of  real  estate  is  personal  property,  subject 
to  taxation  under  N.  Y.  St.  1896,  c.  908,  s.  221,  although  buildings 
erected  by  the  tenant  may  be  assessed  to  him  as  land  under  the 
tax  law.  In  re  Althause,  168  N.  Y.  670,  61  N.  E.  1127,  affirming 
63  N.  Y.  App.  Div.  252,  71  N.  Y.  Suppl.  445. 

Partnership  Profits, 

Profits  permitted  to  remain  on  deposit  with  the  partnership 
should  be  included  among  the  taxable  assets.  In  re  Probst,  40 
Misc.  Rep.  431,  82  N.  Y.  Suppl.  396. 

Partner's  Claim  against  Partnership. 

Where  a  partner  makes  a  loan  to  a  partnership  this  money,  as 
regards  the  rest  of  the  world,  is  capital  and  not  a  loan,  and   is 


1911,  c.  732.]  NEW  YORK.  851 

therefore  subject  to  the  transfer  tax.      In  re  Probst,  40  Misc.  Rep. 
431,  82  N.  Y.  Suppl.  396. 

Insurance. 

A  life  insurance  poHcy  on  the  life  of  the  decedent  held  by  him 
at  the  time  of  his  death  is  property  owned  by  him  at  his  death, 
and  so  subject  to  appraisal  for  the  purposes  of  taxation  under 
the  inheritance  tax  law.  The  argument  was  made  that  it  was 
only  property  liable  to  taxation  under  the  general  tax  law  of  the 
state  which  could  be  taxed  under  the  act  relating  to  taxable  trans- 
fers, and  that  inasmuch  as  life  insurance  policies  cannot  be  included 
in  the  valuation  of  the  taxpayer's  property  under  the  general  law 
they  cannot  be  considered  in  assessing  the  tax  under  the  collateral 
inheritance  law.  But  the  taxable  transfer  law  has  no  reference 
or  relation  to  the  general  law.  While  the  object  of  both  is  to  raise 
revenue  for  the  support  of  the  government  they  have  nothing  else 
in  common.  In  re  Knoedler,  140  N.  Y.  377,  35  N.  E.  601,  affirm- 
ing 68  Hun  150. 

The  testator  was  a  member  of  the  New  York  Produce  Exchange, 
and  was  a  subscriber  of  the  gratuity  fund  of  that  body,  which  under 
its  by-laws  belonged  to  beneficiaries  provided  for  on  his  death, 
and  was  not  liable  to  the  payment  of  debts  or  legacies.  This 
money  passed,  not  by  virtue  of  will  or  of  any  administration,  but 
by  the  contract  of  the  testator  with  the  Produce  Exchange. 

The  distinction  between  the  two  classes  of  policies— the  first 
class  where  the  contract  is  made  for  the  benefit  of  the  insured  and 
the  proceeds  pass  to  his  personal  representatives  as  part  of  his 
estate;  and  the  second  class  where  the  contract  is  made  for  the 
benefit  of  others  and  the  proceeds  are  transferred  to  them  by  the 
terms  of  the  contract — was  clearly  laid  down  by  the  court.  In 
re  Fay,  25  Misc.  Rep.  468,  55  N.  Y.  Suppl.  749. 

Seat  in  Stock  Exchange. 

The  court  holds  that  a  seat  in  the  stock  exchange  is  property 
and  subject  to  tax  within  the  meaning  of  the  N.  Y.  St.  1896,  c. 
908,  s.  242. 

"In  determining  the  construction  to  be  given  to  the  broad  and 
comprehensive  language  of  section  242,  we  must  consider  that  the 
statute  has  a  history  plainly  indicating  the  trend  of  legislative 
action,  and  that  as  to  the  transfer  tax  it  is  a  literal  reproduction 
of  the  then  existing  law.  First  enacted  in  1885  (Chap.  483)  the 
Inheritance  Tax  Law  was  limited  to  property  passing  to  collateral 


852  STATUTES  ANNOTATED.  [N.  Y.  St. 

relatives.  It  was  subjected  to  repeated  amendments,  the  effect  of 
which  in  nearly  every  instance  was  either  to  enlarge  the  class  of 
persons  subject  to  the  tax  or  to  extend  its  application  to  some  spe- 
cies of  property  which  the  courts  had  held  not  to  fall  within  its 
terms.  The  distinction  between  property  justly  subject  to  ordi- 
nary taxation  and  that  liable  to  the  imposition  of  the  transfer  tax 
was  early  appreciated.  In  Matter  of  Knoedler  (140  N.  Y.  377)  a 
policy  of  life  insurance  payable  to  the  estate  of  the  deceased  was 
held  subject  to  the  tax.  In  the  opinion  there  rendered  Judge 
Maynard  said:  'The  argument  is  made  that  it  is  only  property 
which  is  liable  to  taxation  under  the  General  Tax  Law  of  the  state 
which  can  be  taxed  under  the  act  relating  to  taxable  transfers,  and 
that,  inasmuch  as  life  insurance  policies  cannot  be  included  in  the 
valuation  of  a  taxpayer's  property  under  the  general  law,  they  can- 
not be  considered  in  assessing  a  tax  upon  the  collateral  inheritance. 
The  main  premise  upon  which  this  proposition  rests  is  mani- 
festly inadmissible.  The  Taxable  Transfer  Law  has  no  reference 
or  relation  to  the  general  law  ...  it  proceeds  upon  a  new  theory 
of  the  right  of  the  government  to  tax  and  establishes  a  new  system 
of  taxation.  It  takes  the  right  of  succession  to  property  and 
measures  the  tax  in  the  method  specifically  prescribed.  All 
property  having  an  appraisal  value  must  be  considered,  whether 
it  is  such  as  might  be  taxed  under  the  general  law  or  not.  Many 
kinds  of  property  might  be  enumerated  which  are  not  assessable 
under  the  general  law,  but  which  are  appraisable  under  the  col- 
lateral inheritance  tax.'  Such  was  the  settled  construction  of  the 
inheritance  tax  laws  when  the  act  of  1896  was  passed.  That  act, 
as  already  said,  was  a  revision  of  the  existing  law,  and  an  attempt 
to  bring  into  a  single  statute  all  existing  legislation  relative  to 
taxation  by  the  state.  In  Henavie  v.  N.  Y.  C.  &  H.  R.  R.  Co. 
(154  N.  Y.  278,  281)  Judge  Vann  said :  'The  rule  in  the  case  of  a  re- 
vision of  statutes  is  that  where  the  law,  as  it  previously  stood,  was 
settled  either  by  adjudication  or  by  frequent  application  of  the 
statute  without  question,  a  mere  change  in  the  phraseology  is  not  to 
be  construed  as  a  change  in  the  law,  unless  the  purpose  of  the  legis- 
lature to  work  a  change  is  clear  and  obvious'  Therefore,  because 
section  242  prescribes  that  'all  property'  shall  be  subject  to  the 
transfer  tax  and  because  the  revision  of  the  statute  should  not  be 
held  to  work  a  change  in  the  settled  law  unless  the  legislative 
in  cent  to  that  effect  is  clearly  manifest,  we  are  of  opinion  that  the 
seat  held  by  the  testator  was  subject  to  the  tax  imposed  upon  it." 


1911,  c.  732.]  NEW  YORK.  853 

Per  Cullen,  J.,  in  In  re  Hellman,  174  N.  Y.  254,  257,  66  N.  E.  809, 
95  Am.  St.  Rep.  582,  reversing  77  N.  Y.  App.  Div.  355,  79  N.  Y. 
Suppl.  201. 

A  seat  in  the  stock  exchange  is  a  privilege  of  value  subject  to 
the  inheritance  tax.  In  re  Curtis,  31  Misc.  Rep.  83,  64  N.  Y.  Suppl. 
574. 

Conversion. 

Conversion  by  Direction  to  Pay  Mortgages  out  of  Personalty. 

The  New  York  courts  have  consistently  refused  to  follow  the 
Pennsylvania  rule  but  have  maintained  that  the  test  of  taxability 
is  the  actual  condition  of  property  at  the  testator's  death  unaffected 
by  any  direction  in  the  will  for  sale  or  investment.  In  re  Mills, 
reported  post,  p.  854,  is  not  a  modification  but  is  an  example  of  this 
rule. 

Direction  to  Sell  Real  Estate. 

The  power  of  sale  conferred  on  executors  does  not  operate  to 
transfer  real  estate  into  personal  property  for  purposes  of  taxation 
as  the  doctrine  of  equitable  conversion  is  not  applicable  to  subject 
real  estate  to  taxation.  In  re  Swift,  137  N.  Y.  77,  88,  32  N.  E. 
1096,  18  L.  R.  A.  709,  64  Hun.  639,  16  N.  Y.  Suppl.  193,  19  N.  Y. 
Suppl.  292. 

Where  land  is  devised  and  the  executor  is  directed  absolutely 
to  sell  it  the  better  rule  is  to  assess  the  tax  on  the  property  trans- 
ferred as  the  testator  leaves  it  without  regard  to  the  operation  or 
effect  of  equitable  rules  that  apply  only  to  the  administration  of 
the  estate.  In  re  Sutton,  3  N.  Y.  App.  Div.  208,  38  N.  Y.  Suppl. 
277,  affirming  15  Misc.  659,  38  N.  Y.  Suppl.  102. 

A  decedent  transferred  real  estate  in  trust  giving  a  power  of  sale 
to  the  trustees.  After  the  death  of  the  grantor  the  trust  property 
was  condemned  for  park  purposes  and  the  proceeds  invested  in 
bonds  and  mortgages.  Upon  the  death  of  the  daughter  without 
exercising  the  power  given  her  by  the  trustee,  the  court  holds  that 
the  trust  estate  descending  to  her  issue  is  to  be  treated  as  personal 
property. 

The  courts  have  held  that  the  doctrine  of  equitable  conversion 
cannot  be  invoked  for  the  purpose  of  subjecting  property  to  taxa- 
tion under  the  act.  The  converse  of  that  proposition  must  be  true 
and  the  doctrine  should  not  be  invoked  for  the  purpose  of  exempt- 
ing the  property  from  taxation.     It  is  only  by  applying  this  fiction 


854  STATUTES  ANNOTATED.  [N.  Y.  St. 

that  the  securities  now  constituting  the  trust  fund  can  be  regarded 
as  realty.  The  better  rule  is  to  assess  the  tax  on  the  property  trans- 
ferred as  the  decedent  left  it.  It  is  unreasonable  that  an  equitable 
rule  should  attach  to  such  absolute  property,  giving  to  it  a  fictitious 
character  different  from  the  real  nature,  so  as  to  affect  the  right  of 
the  estate  to  subject  the  same  to  taxation.  In  re  Bartow,  30  Misc. 
Rep.  27,  62  N.  Y.  Suppl.  1000.  A  contrary  result  was  reached  in 
In  re  Wheeler,  1  Misc.  Rep.  450,  22  N.  Y.  Suppl.  1075. 

Direction  to  Invest  in  Real  Estate. 

Where  the  will  directed  a  remainder  to  be  paid  to  a  certain  New 
York  church  "ten  thousand  dollars  towards  the  building  of  a  new 
church"  this  bequest  cannot  be  treated  as  real  estate,  but  is  personal 
property,  and  by  no  rule  of  equitable  conversion  can  it  become 
real  estate  until  it  has  been  invested  in  real  estate  as  directed. 
It  must  therefore  be  treated  as  a  legacy  of  money.  Sherrill  v. 
Christ  Church,  121  N.  Y.  701,  702,  25  N.  E.  50,  reversing  In  re  Van 
Kleeck,  55  Hun.  472. 

Tax  on  Power  of  Appointment. 

Where  a  will  directs  a  conversion  of  real  estate  into  personal 
property  the  court  holds  that  the  actual  form  in  which  the  property 
existed  at  the  death  "^of  the  testator  determines  its  liability  to  a 
transfer  tax.  And  this  same  rule  applies  to  a  tax  on  the  execution 
of  the  power  of  appointment.  As  it  is  the  execution  of  a  power 
which  subjects  grantees  under  it  to  a  transfer  tax,  it  follows  that 
the  condition  or  form  of  the  property  at  the  time  of  such  execution 
must  control.  In  re  Dows,  167  N.  Y.  227,  232,  60  N.  E.  439, 
52  L.  R.  A.  433,  88  Am.  St.  Rep.  508,  affirming  60  N.  Y.  App.  Div. 
630,  affirmed  suh  nomine,  Orr  v.  Cilman,  183  U.  S.  278,  22  S.  Ct. 
213,  46  L.  Ed.  176. 

Interest  of  Testator  in  Estate,  the  Property  of  which  was  Directed 
to  he  Sold. 
The  testator  direcced  a  sale  of  his  real  property  and  his  daughter 
took  his  share  in  the  proceeds  of  the  real  estate.  She  died  before 
any  actual  sale  and  conversion  had  taken  place,  leaving  a  will  by 
which  her  interest  in  her  father's  estate  passed  to  her  husband. 
The  court  holds  that  by  the  direction  under  the  will  of  the  father 
the  land  became  personal  property  and  therefore  there  was  no  tax 
on  the  interest  passing  from  the  daughter  to  her  husband.     In  re 


1911,  c.  732.1  NEW  YORK.  865 

Mills,  177  N.  Y.  562,  69  N.  E.  1127,  affirming  86  N.  Y.  App.  Div. 
555,  84  N.  Y.  Suppl.  1135. 

Domicile  or  Situs  of  Property. 

Adjudication  of  Domicile  in  Different  States. 

The  fact  that  the  California  courts  decided  that  a  certain  dece- 
dent was  a  resident  of  California  and  administered  his  estate  and 
assessed  a  tax  on  that  basis  does  not  bar  the  New  York  courts. 
It  is  not  res  judicata  as  to  them.  In  re  Cummings,  142  N.  Y.  App. 
Div.  377,  127  N.  Y.  Suppl.  109,  reversing  63  Misc.  621,  118  N.  Y. 
Suppl.  684,  citing  Tilt  v.  Kelsey,  207  U.  S.  43,  28  S.  Ct.  1,  52 
L.  Ed.  95.  '  The  court  distinguishes  the  case  of  Tilt  v.  Kelsey 
on  the  ground  that  the  California  probate  was  only  binding  on 
heirs  or  beneficiaries  and  not  on  claimants. 

Constitutionality  of  Double  Taxation, 

Where  a  law  imposing  a  tax  was  in  force  before  the  deposit  was 
made  by  a  non-resident  in  New  York,  although  this  fact  does  not 
seem  to  be  relied  upon  by  the  court,  the  tax  may  be  levied  by  the 
state  of  New  York,  although  the  tax  has  already  been  paid  on  the 
same  deposit  by  the  state  of  Illinois  where  the  testator  was  domi- 
ciled. The  court  holds  that  this  does  not  violate  the  fourteenth 
amendment. 

"The  fact  that  two  states,  dealing  each  with  its  own  law  of  suc- 
cession, both  of  which  the  plaintiff  in  error  has  to  invoke  for  her 
rights,  have  taxed  the  right  which  they  respectively  confer,  gives 
no  cause' for  complaint  on  constitutional  grounds.  The  universal 
succession  is  taxed  in  one  state,  the  singular  succession  is  taxed  in 
another.  The  plaintiff  has  to  make  out  her  right  under  both  in 
order  to  get  the  money."  Per  Holmes,  J.,  in  Blackstone  v.  Miller^ 
188  U.  S.  189,  207,  23  S.  Ct.  277,  47  L.  Ed.  439,  affirming  171  N.  Y. 
682,  69  N.  Y.  App.  Div.  127. 

"Faith  and  Credit"  to  Judgment  of  Another  State. 

Where  Illinois  had  already  laid  a  tax  upon  the  interest  of  a 
citizen  of  Illinois  in  a  deposit  in  a  trust  company  in  New  York, 
it  was  claimed  that  for  New  York  to  attempt  to  assess  the  interest 
as  within  the  jurisdiction  of  New  York  was  not  giving  due  faith 
and  credit  to  the  judgment  in  Illinois.  The  court  replies  that  the 
tax  does  not  deprive  the  plaintiff  in  error  of  any  of  the  privileges 
and  immunities  of  the  citizens  of  New  York.     It  is  no  such  depri- 


856  STATUTES  ANNOTATED.  [N.  Y.  St. 

vation  that  if  she  had  lived  in  New  York  the  tax  on  the  transfer 
of  the  deposit  would  have  been  part  of  the  tax  on  the  inheritance 
as  a  whole.  Blackstone  v.  Miller,  188  U.  S.  189,  23  S.  Ct.  277, 
47  L.  Ed.  439,  affirming  171  N.  Y.  682,  69  N.  Y.  App.  Div.  127. 

Legal  Title  in  Trustee  in  Another  State. 

The  fact  that  certain  trust  property  passing  under  a  deed  of 
trust  was  at  the  intestate's  death  in  another  state  with  the  legal 
title  in  the  trustee  does  not  affect  the  liability  of  the  transfer  to 
taxation.  The  liability  in  this  case  accrued  at  the  time  of  the 
transfer,  no  matter  when  imposed. 

The  deceased  was  a  resident  of  this  state  at  the  time  of  the 
transfer  and  the  property  was  in  this  state  and  the  transfer  was 
here  made.  The  deed  in  question  was  the  deed  in  trust  reserving 
a  life  estate  to  the  grantor.  In  re  Keeney,  194  N.  Y.  281,  287, 
87  N.  E.  428,  affirming  128  N.  Y.  App.  Div.  893. 

Personal  Property  of  Resident. 

The  personal  property  of  a  resident  decedent  situated  whether 
within  or  without  the  state  is  subject  to  the  tax  imposed  by  the 
act.  In  re  Swift,  137  N.  Y.  77,  88,  32  N.  E.  1096,  18  L.  R.  A. 
709,  64  Hun.  639,  16  N.  Y.  Suppl.  193,  19  N.  Y.  Suppl.  292. 

The  intestate,  a  resident  of  New  York,  died  in  1894,  leaving  per- 
sonal property  in  Iowa.  An  administrator  appointed  by  the  Iowa 
court  paid  a  brother  of  the  intestate  who  lived  in  Iowa  out  of  the 
Iowa  property.  The  court  holds  that  the  property  in  question 
although  in  a  foreign  state  was  subject  to  the  New  York  tax. 
The  court  remarks  that  whether  or  not  the  tax  when  so  assessed 
can  be  collected  is  a  question  in  no  manner  presented  to  the  court. 
In  re  Dingman,  66  N.  Y.  App.  Div.  228,  72  N.  Y.  Suppl.  694. 

Claim  Against  Estate  of  Non-resident. 

Where  the  personal  estate  of  a  resident  of  New  York  consisted 
entirely  of  her  distributive  share  in  the  estate  of  a  deceased  sister 
who  resided  in  Ohio,  but  no  part  of  this  estate  had  come  into  the 
possession  of  the  testatrix  prior  to  her  death,  but  consisted  of 
4noney  sent  directly  from  the  trustee  of  the  estate  of  the  deceased 
sister  to  the  executor  of  the  New  York  testator  for  the  purposes 
of  distribution,  that  portion  of  the  personal  estate  is  not  liable 
to  taxation.     In  re  Thomas,  3  Misc.  Rep.  388,  24  N.  Y.  Suppl.  713. 


1911,  c.  732.]  NEW  YORK.  857 

Property  of  Non-residents. 

Debts  of  non-resident  exhausting  his  New  York  assets,  see 
p.  938. 

The  statute  of  1911  has  upset  the  policy  of  the  state  as  to  the 
taxation  of  property  of  non-residents.  The  act  was  passed  in 
response  to  the  demands  of  bankers  and  business  men  who  claimed 
that  the  act  of  1910  was  driving  capital  out  of  the  state.  In 
particular  it  appeared  that  over  four  hundred  millions  of  dollars 
deposited  in  banks  and  trust  companies  had  been  withdrawn  from 
the  state  and  that  the  high  rates  had  resulted  in  no  increase  in 
revenue. 

The  act  of  1911  limits  the  tax  to  tangible  property  within  the 
state  and  to  intangible  property  of  residents  of  the  state.  Tan- 
gible property  is  confined  by  the  act  to  corporeal  property  such  as 
real  estate  and  goods,  wares  and  merchandise,  and  does  not  include 
money,  bank  deposits,  stock,  bonds,  notes,  credits  or  evidences  of 
an  interest  in  property  and  evidences  of  debt. 

These  provisions  closely  follow  the  uniform  inheritance  law  sug- 
gested by  the  International  Tax  Conference  of  1910. 

Personal  Estate  in  New  York  of  Non-residents. 

The  state  has  a  right  to  tax  personal  estate  of  non-residents 
which  exists  in  the  state  of  New  York.  In  re  Romaine,  127  N.  Y. 
80,  86,  27  N.  E.  759,  12  L.  R.  A.  401,  affirming  58  Hun.  109;  In  re 
Vinot,  7  N.  Y.  Suppl.  517.  This  is  now  limited  by  St.  1911,  c. 
732,  to  tangible  property  of  non-residents. 

New   York  Real  Estate  of  a   Non-resident, 

Real  property  in  New  York  of  a  non-resident  is  subject  to  the 
inheritance  tax.     In  re  Vinot,  7  N.  Y.  Suppl.  517. 

Bonds. 

The  cases  cited  below  are  not  applicable  to  estates  where  the 
transfer  occurred  after  July  21,  1911  under  N.  Y.  St.  1911,  c.  702, 
as  bonds  of  non-residents  are  not  under  that  act  taxable  in  New 
York. 

Where  the  testator,  a  resident  of  South  Carolina,  died  in  1888, 
leaving  an  estate,  part  of  which  was  invested  in  bonds  of  corpora- 
tions outside  of  the  state  of  New  York,  which  were  on  deposit  at 
the  time  of  hrs  death  with  a  New  York  bank,  neither  under  the  act 
of  1887  any  more  than  the  original  act  of  1885  are  such  bonds 


858  STATUTES  ANNOTATED.  [N.  Y.  St. 

property  left  within  this  state  subject  to  the  payment  of  the  tax. 
In  re  Gibbes,  176  N.  Y.  565,  68  N.  E.  1117,  affirming  84  N.  Y. 
App.  Div.  510;  83  N.  Y.  Suppl.  53,  reversing  83  N.  Y.  Suppl.  56. 

The  decedent  died  in  1905,  a  resident  of  Alabama.  He  was  a 
stockholder  in  a  certain  foreign  consolidated  coal  company.  The 
decedent  was  the  president  of  the  consolidated  company  which 
executed  a  deed  of  trust  to  a  New  York  trust  company,  conveying 
their  property  to  secure  a  bond  issue.  The  decedent  as  president 
of  the  consolidated  company  commenced  to  sign  these  bonds  in 
Alabama,  but  they  were  never  all  signed  by  him  before  his  death. 
The  decedent  was  entitled  to  some  of  these  bonds,  but  he  never 
received  any  certificates  from  the  New  York  trust  company,  or 
anyone  else  that  he  was  entitled  to  them,  although  such  a  certifi- 
cate was  delivered  to  his  executrix  after  his  death.  The  direction 
of  the  vice-president  of  the  consolidated  company  to  the  New  York 
trust  company  to  deliver  to  the  decedent  five  hundred  thousand 
of  the  bonds  of  the  consolidated  company,  directing  that  such 
bonds  be  deposited  with  the  trust  company  for  safe  keeping  in  his 
name,  and  the  receipt  therefor  sent  to  the  consolidated  company 
at  Alabama,  cannot  be  considered  as  a  legal  disposition  of  the 
bonds  which  belonged  to  the  coal  company,  so  that  they  thereby 
became  the  property  of  the  decedent.  If  the  decedent  received 
these  bonds  it  would  be  as  president  of  the  coal  company.  This 
right  to  receive  these  bonds  of  the  foreign  corporation  which  were 
never  executed  and  which  the  decedent,  a  non-resident,  was  entitled 
to  receive  because  he  was  a  stockholder  of  another  foreign  corpora- 
tion, was  not  property  within  this  state  and  was  not  subject  to 
taxation.  In  re  Hillman,  116  N.  Y.  App.  Div.  186,  101  N.  Y. 
Suppl.  640. 

While  deposits  are  taxable  at  the  place  of  deposit  (In  re  Houd- 
ayer,  150  N.  Y.  37),  irrespective  of  the  place  where  the  certificates 
of  deposit  may  be  kept  (In  re  Hewitt,  181  N.  Y.  547),  bonds  are 
considered  by  the  New  York  courts  at  least,  as  following  the  owner's 
domicile.  In  re  Bronson,  150  N.  Y.  1;  In  re  Whiting,  150  N.  Y. 
27;  In  re  Morgan,  150  N.  Y.  35.  See  In  re  Schermerhorn,  50 
Misc.  233,  100  N.  Y.  Suppl.  480. 

,  Non-resident's  Claim  against  Estate  of  Another. 

Under  N.  Y.  St.  1911,  c.  732,"  only  tangible  assets  in  New  York 
of  a  non-resident  are  taxable  in  New  York. 

The  testator  died  in  1891  leaving  the  residue  to  a  non-resident. 
The  residuary  legatee  died  in  1892.     The  New  York  transfer  tax 


1911,  c.  732.]  NEW  YORK.  859 

authorities  fixed  the  amount  of  her  estate  subject  to  tax  including 
the  residuary  legacy  to  the  non-resident,  and  the  tax  was  paid. 
The  legacy  to  the  non-resident  was  never  paid  to  him  nor  was  it  in 
a  condition  to  be  paid,  as  he  died  while  the  testator's  estate  was 
unsettled.     By  his  will  he  gave  his  estate  to  his  widow. 

This  proceeding  was  brought  under  the  statute  of  1887  as  amended 
by  the  statute  of  1891,  chapter  215. 

The  court  notices  the  doctrine  as  to  the  situs  of  tangible  personal 
property,  but  says  that  a  mere  chose  in  action  has  never  yet  been 
given  the  attribute  of  tangibility  and  this  was  all  that  the  residuary 
legatee  had  at  the  time  of  his  death.  He  had  a  right  to  claim  the 
amount  of  money  which  his  share  of  the  residuary  estate  would 
result  in  and  nothing  more.  He  had  no  right  in  any  particular 
piece  of  property  or  any  particular  sum  of  money.  Until  this 
residuary  estate  was  ascertained  he  might  not  be  even  able  to 
maintain  an  action  for  its  recovery.  The  court  holds,  therefore,  that 
no  tax  should  have  been  laid  upon  this  legacy  as  the  statute  was 
intended  to  cover  only  tangible  property  kept  within  this  state  by 
the  decedent  and  that  property  which  is  transiently  here,  as  upon 
the  person  or  in  the  baggage  of  a  man  suddenly  dying  within  this 
state,  was  never  intended  to  be  covered  by  the  provisions  of  the 
act.  In  re  Phipps,  143  N.  Y.  641,  37  N.  E.  823,  affirming  77  Hun. 
325,  28  N.  Y.  Suppl.  330. 

The  testator  was  a  citizen  of  France  and  died  before  the  payment 
to  him  of  his  share  in  his  father's  estate,  the  father  being  a  resident 
of  New  York  and  his  will  being  admitted  to  probate  in  this  state. 
Subsequently  distribution  was  had  and  the  executor  of  the  son  ap- 
pointed in  New  York  received  certain  securities  in  satisfaction  of 
his  share  of  the  father's  estate.  It  was  contended  that  at  the  time 
of  the  death  of  the  son  his  interest  in  his  father's  estate  was  a  mere 
chose  in  action,  the  situs  of  which  was  not  this  state  but  at  the  son's 
domicile  in  France,  that  hence  that  was  not  property  within  the 
state  and  subject  to  our  inheritance  laws. 

The  court  holds  that  it  cannot  concede  that  a  claim  due  a  non- 
resident from  a  resident  of  this  state  is  not  property  within  this 
state  subject  to  the  imposition  of  the  transfer  tax.  The  court  refuses 
to  follow  In  re  Phipps,  143  N.  Y.  641,  77  Hun.  325,  and  says  that 
that  case  has  been  overruled  in  effect  by  In  re  Blackstone,  171 
N.  Y.  682,  affirmed  inBlackstone  v.  Miller,  188  U.  S.  189.  Under  the 
doctrine  of  the  Blackstone  case  the  interest  of  the  son  in  his  father's 
estate  was  subject  to  the  inheritance  tax  imposed  by  the  laws  of 


860  STATUTES  ANNOTATED.  [N.  Y.  St 

this  state  as  it  was  a  claim  due  a  non-resident  from  a  resident  of 
this  state.  In  re  Clinch,  180  N.  Y.  300,  73  N.  E.  35,  affirming 
99  N.  Y.  App.  Div.  298;  90  N.  Y.  Suppl.  923,  44  Misc.  190,  89 
N.  Y.  Suppl.  802. 

Where  the  husband  and  wife  are  both  residents  of  New  Jersey 
and  the  husband  dies  leaving  in  a  safe  deposit  box  in  New  York 
certain  securities,  and  cash  on  deposit  in  a  New  York  bank,  and 
bequeathing  by  will  all  of  his  property  to  his  wife,  before  the  will 
was  admitted  to  probate  the  wife  died,  leaving  a  last  will  and  testa- 
ment by  which  she  left  certain  legacies.  After  the  death  of  the 
wife  the  will  of  her  husband  was  admitted  to  probate  by  a  New 
Jersey  court  and  later  her  will  was  also  admitted  to  pro- 
bate by  this  court.  Subsequently  the  executor  of  the  husband 
removed  his  securities  to  New  Jersey  and  paid  to  the  executor  of 
the  wife  various  sums  of  money  in  payment  of  her  legacy.  The 
court  finds  that  although  the  property  of  the  husband  was  actually 
in  the  state  of  New  York  at  his  death  still  the  claim  of  the  wife 
against  this  estate  was  never  property  within  the  state  of  New 
York,  as  the  right  that  the  wife  had  in  her  husband's  estate  was 
not  a  right  to  the  particular  personal  property  which  he  owned, 
but  a  right  to  the  balance  of  the  proceeds  of  his  property  after 
the  payment  of  debts  and  expenses  of  administration.  And  that 
right  at  her  death  was  solely  a  claim  against  his  executor  and  was 
not,  therefore,  property  within  the  state  of  New  York  at  the  death 
of  the  wife.  In  re  Lord,  186  N.  Y.  549,  79  N.  E.  1110,  affirming 
111  N.  Y.  App.  Div.  152,  97  N.  Y.  Suppl.  553. 

The  testator,  a  resident  of  New  Jersey,  died  in  1892.  By  his 
will  he  gave  all  his  estate  to  his  wife.  He  also  exercised  a  power  of 
appointment  of  certain  property  held  by  trustees  in  favor  of  his 
wife  and  appointed  his  wife  and  nephew  executors.  Before  this 
will  was  admitted  to  probate  his  wife  died,  a  resident  of  New 
Jersey.  The  original  testator  owned  no  real  property  within  the 
state  of  New  York  and  as  the  statute  at  that  time  provided  no 
means  of  assessing  and  collecting  a  tax  upon  a  non-resident  not 
owning  real  estate  within  the  state  the  transfer  of  his  property  was 
not  taxable. 

After  the  will  of  the  testator  had  been  admitted  to  probate  in 
New  Jersey  the  surviving  executor  took  the  property  of  the  testator 
which  was  within  the  state  of  New  York  to  the  state  of  New  Jersey. 

There  are  three  funds  involved :  first,  a  trust  fund  created  by  a 
trust  deed  of  1873,  of  which  the  testator  was  life  tenant  with  the 


1911,  c.  732.]  NEW  YORK.  861 

power  of  disposal  by  will.  By  his  will  he  exercised  this  power  in 
favor  of  his  wife  and  by  this  exercise  of  the  power  the  title  vested 
in  her  and  passed  under  her  will.  Second,  a  trust  created  by  a  will 
of  a  relative  who  died  in  1880,  the  income  to  be  paid  to  the  testator 
for  life  with  the  power  of  appointment  of  the  remainder.  This  he 
also  exercised  in  favor  of  his  wife  and  that  property  vested  in  her 
and  passed  under  her  will.  Third,  property  bequeathed  by  the 
testator  to  his  wife,  which  was  subsequent  to  her  death  realized 
by  his  executor  and  the  proceeds  paid  by  him  to  the  executors  of 
the  wife. 

At  the  time  of  the  death  of  the  testator  the  property  created  under 
the  first  trust  was  held  by  the  trustees  who  were  residents  of  New 
York  and  the  property  was  in  New  York.  Upon  the  exercise  of 
the  power  of  appointment  the  title  to  that  property  vested  abso- 
lutely in  the  wife,  her  title  relating  back  to  the  deed  and  will  creat- 
ing the  trust.  The  property  constituting  these  trust  funds  that 
was  in  the  state  at  the  time  of  her  death  which  was  transferred  by 
her  last  will  was  clearly  taxable  under  the  New  York  statute  of 
1885  as  amended  by  the  statutes  of  1887  and  1891,  c.  215.  In  re 
Lord,  186  N.  Y.  549,  79  N.  E.  1110,  affirming  111  N.  Y.  App.  Div. 
152,  97  N.  Y.  Suppl.  553. 

Debt  to  Non-resident  by  Association  with  an  Office  in  New  York, 

The  decedent  resided  in  New  Jersey  and  was  president  of  a  joint 
stock  association  and  owned  a  majority  of  its  stock.  At  the  time  of 
his  death  the  association  was  indebted  to  the  decedent  on  an  open 
account;'  and  the  court  holds  that  this  account  is  not  subject  to 
tax  in  New  York,  although  the  association  had  an  office  in  the  city 
of  New  York.     In  re  Horn,  39  Misc.  Rep.  133,  78  N.  Y.  Suppl.  979. 

Deposit  in  Bank  by  Non-resident. 

The  cases  cited  below  are  not  applicable  to  transfers  which  took 
place  after  July  21,  1911,  under  N.  Y.  St.  1911,  c.  732,  which 
exempted  the  bank  accounts  of  non-residents  from  the  inheri- 
tance tax. 

Bank  account  of  non-resident  in  N.  Y.  is  taxable.  In  re  Clark, 
92  N.  Y.  St.  650,  9  N.  Y.  Suppl.  444,  2  Con.  Surr.  183. 

''If  the  transfer  of  the  deposit  necessarily  depends  upon  and 
involves  the  law  of  New  York  for  its  exercise,  or,  in  other  words, 
if  the  transfer  is  subject  to  the  power  of  the  state  of  New  York, 
then  New  York  may  subject  the  transfer  to  a  tax."    United  States  v. 


862  STATUTES  ANNOTATED.  [N.  Y.  St. 

Perkins,  163  U.  S.  625,  628,  629;  McCullough  v.  Maryland,  4  Wheat. 
316,  429.  But  it  is  plain  that  the  transfer  does  depend  upon  the 
law  of  New  York,  not  because  of  any  theoretical  speculation  concern-  • 
ing  the  whereabouts  of  the  debt,  but  because  of  the  practical  fact 
of  its  power  over  the  person  of  the  debtor.  The  principle  has  been 
recognized  by  this  court  with  regard  to  garnishments  of  a  domestic 
debtor  of  an  absent  defendant.  Chicago,  Rock  Island  &  PacificRy. 
Co.  V.  Sturmy  174  U.  S.  710.  See  Wyman  v.  Halstead,  109  U.  S. 
654.  What  gives  the  debt  validity?  Nothing  but  the  fact  that 
the  law  of  the  place  where  the  debtor  is  will  make  him  pay.  It 
does  not  matter  that  the  law  would  not  need  to  be  invoked  in  the 
particular  case.  Most  of  us  do  not  commit  crimes,  yet  we  never- 
theless are  subject  to  the  criminal  law,  and  it  affords  one  of  the 
motives  for  our  conduct.  So  again,  what  enables  any  other  than 
the  very  creditor  in  proper  person  to  collect  the  debt?  The  law  of 
the  same  place.  To  test  it,  suppose  that  New  York  should  turn 
back  the  current  of  legislation  and  extend  to  debts  the  rule  still 
applied  to  slander  that  actio  personalis  moritur  cum  persona^ 
and  should  provide  that  all  debts  hereafter  contracted  in  New 
York  and  payable  there  should  be  extinguished  by  the  death 
of  either  party.  Leaving  constitutional  considerations  on  one 
side,  it  is  plain  that  the  right  of  the  foreign  creditor  would 
be  gone. 

"Power  over  the  person  of  the  debtor  confers  jurisdiction,  we 
repeat.  And  this  being  so  we  perceive  no  better  reason  for  deny- 
ing the  right  of  New  York  to  impose  a  succession  tax  on  debts 
owed  by  its  citizens  than  upon  tangible  chattels  found  within  the 
state  at  the  time  of  the  death.  The  maxim  mohilia  sequuntur  per- 
sonam has  no  more  truth  in  the  one  case  than  in  the  other.  When 
logic  and  the  policy  of  a  state  conflict  with  a  fiction  due  to  historical 
tradition,  the  fiction  must  give  way. 

"There  is  no  conflict  between  our  views  and  the  point  decided 
in  the  case  reported  under  the  name  of  State  Tax  on  Foreign  Held 
Bonds,  15  Wall.  300.  The  taxation  in  that  case  was  on  the  inter- 
est on  bonds  held  out  of  the  state.  Bonds  and  negotiable  instru- 
ments are  more  than  merely  evidences  of  debt.  The  debt  is 
inseparable  from  the  paper  which  declares  and  constitutes  it,  by  a 
4;radition  which  comes  down  from  more  archaic  conditions.  Bacon 
v.  Hooker,  111  Mass.  335,  337. '  Therefore,  considering  only  the 
place  of  the  property,  it  was  held  that  bonds  held  out  of  the  state 
could  not  be  reached.     The  decision  has  been  cut  down  to  its  pre- 


1911,  c.  732.]  NEW  YORK.  863 

cise  point  by  later  cases.  Savings  &  Loan  Society  v.  Multnomah 
County,  169  U.  S.  421,  428;  New  Orleans  v.  Stempel,  175  U.  S.  309, 
319  320. 

"In  the  case  at  bar  the  law  imposing  the  tax  was  in  force  before 
the  deposit  was  made,  and  did  not  impair  the  obligation  of  the 
contract,  if  a  tax  otherwise  lawful  ever  can  be  said  to  have  that 
effect.  Pinney  v.  Nelson,  183  U.  S.  144,  147.  The  fact  that  two 
states,  dealing  each  with  its  own  law  of  succession,  both  of  which  the 
plaintiff  in  error  has  to  invoke  for  her  rights,  have  taxed  the  right 
which  they  respectively  confer,  gives  no  cause  for  complaint  on 
constitutional  grounds.  Coe  v.Errol,  116  U.  S.  517,  524;  Knowlton 
v.  Moore,  178  U.  S.  41,  53.  The  universal  succession  is  taxed  in 
one  state,  the  singular  succession  is  taxed  in  another.  The  plaintiff 
has  to  make  out  her  right  under  both  in  order  to  get  the  money. 
See  Adams  v.  Batchelder,  173  Mass.  258."  Per  Holmes,  J.,  in 
Blackstone  v.  Miller,  188  U.  S.  189,  affirming  In  re  Blackstone,  171 
N.Y.  682,64  N.E.  1118,  69  N.Y.  App.  Div.  127,  74  N.Y.  Suppl.  508. 

Special  Deposit. 

The  testator  was  a  resident  of  Montana  and  died  November  12, 
1900,  owning  a  debt  against  a  resident  of  New  York  city.  The  tes- 
tator had  previously  loaned  money  to  a  resident  of  New  York  who 
gave  a  check  during  the  last  illness  of  the  testator  to  the  testator's 
secretary  in  payment  of  the  loan.  The  secretary  deposited  this 
in  a  New  York  bank  in  a  special  account  to  the  credit  of  the 
testator. 

The  court  holds  that  this  account  is  subject  to  the  New  York 
transfer  tax  although  it  has  also  paid  a  tax  in  Montana.  The  court 
relies  on  the  case  Blackstone  v.  Miller,  188  U.  S.  189.  In  re  Daly, 
182  N.  Y.  524,  74  N.  E.  1116,  affirming  100  N.  Y.  App.  Div.  373, 
91  N.  Y.  Suppl.  858.  (The  opposite  result  would  now  be  reached 
under  N.  Y.  St.  1911,  c.  732.) 

Deposit  in  Savings  Bank. 

A  resident  of  Pennsylvania  died  holding  certain  deposits  in  sav- 
ings banks  in  New  York  state  and  also  in  the  hands  of  her  legal 
adviser  here  a  certain  sum  of  money,  and  also  a  bond  for  ten 
thousand  dollars  secured  by  a  mortgage  on  real  estate  in  the  city 
of  New  York. 

The  court  holds  that  as  the  money  in  the  savings  banks  was  under 
the  protection  of  the  laws  of  New  York  it  is  subject  to  tax  in  New 
York.  In  rg'Burr,  16  Misc.  Rep.  89,  74  N.  Y.  St.  490,  38  N.  Y. 
Suppl.  811. 


864  STATUTES  ANNOTATED.  [N.  Y.  St. 

Deposit  in  Trust  Company. 

The  cases  cited  below  are  not  applicable  to  transfers  which  took 
place  after  July  21,  1911,  under  N.  Y.  St.  1911,  c.  732,  which 
exempted  deposits  of  non-residents  from  the  inheritance  tax. 

Money,  the  proceeds  of  a  sale  of  stock  in  an  Illinois  corporation 
owned  by  an  Illinois  corporation,  deposited  with  a  New  York  trust 
company  in  New  York  where  the  funds  lay  at  the  death  of  the  tes- 
tator, is  subject  to  the  New  York  transfer  tax.  The  court  relies 
on  In  re  Houdayer,  150  N.  Y.  37.  In  re  Blackstone,  171  N.  Y.  682, 
affirming  69  N.  Y.  App.  Div.  127;  74  N.  Y.  Suppl.  508,  reversing 
72  N.  Y.  Suppl.  59,  affirmed  Blackstone  v.  Miller,  188  U.  S.  189, 
23  S.  Ct.  277. 

The  testator,  a  citizen  of  Illinois,  made  a  deposit  in  a  trust 
company  in  New  York  and  his  estate  paid  the  Illinois  transfer  tax. 
The  supreme  court,  however,  sustains  the  levy  of  a  tax  by  the 
state  of  New  York  also. 

"If  the  transfer  of  the  deposit  necessarily  depends  upon  and 
involves  the  law  of  New  York  for  its  exercise,  or  in  other  words, 
if  the  transfer  is  subject  to  the  power  of  the  state  of  New  York, 
then  New  York  may  subject  the  transfer  to  a  tax.  .  .  .  But  it  is 
plain  that  the  transfer  does  depend  upon  the  law  of  New  York,  not 
because  of  any  theoretical  speculation  concerning  the  whereabouts 
of  the  debt,  but  because  of  the  practical  fact  of  its  power  over  the 
person  of  the  debtor. 

"What  gives  the  debt  validity?  Nothing  but  the  fact  that  the 
law  of  the  place  where  the  debtor  is  will  make  him  pay.  It  does 
not  matter  that  the  law  would  not  need  to  be  invoked  in  the  par- 
ticular case.  Most  of  us  do  not  commit  crimes,  yet  we  neverthe- 
less are  subject  to  the  criminal  law,  and  it  affords  one  of  the  motives 
for  our  conduct.  So  again,  what  enables  any  other  than  the  very 
creditor  in  proper  person  to  collect  the  debt?  The  law  of  the  same 
place.  To  test  it,  suppose  that  New  York  should  turn  back  the 
current  of  legislation  and  extend  to  debts  the  rule  still  applied 
to  slander  that  actio  personalis  moritur  cum  persona,  and  should 
provide  that  all  debts  hereafter  contracted  in  New  York  and 
payable  there  should  be  extinguished  by  the  death  of  either 
party.  Leaving  constitutional  considerations  on  one  side,  it  is 
plain  that  the  right  of  the  foreign  creditor  would  be  gone. 

"Power  over  the  person  of  the  debtor  confers  jurisdiction,  we 
repeat.  And  this  being  so  we  perceive  no  better  reason  for  deny- 
ing the  right  of  New  York  to  impose  a  succession  tax  on  debts 


1911,  c.  732.]  NEW  YORK.  865 

owed  by  its  citizens  than  upon  tangible  chattels  found  within  the 
state  at  the  time  of  the  death.  The  maxim  mohilia  sequunter  per- 
sonam has  no  more  truth  in  the  one  case  than  in  the  other.  When 
logic  and  the  policy  of  a  state  conflict  with  a  fiction  due  to  his- 
torical tradition,  the  fiction  must  give  way."  Per  Holmes,  J.,  in 
Blackstone  v.  Miller,  188  U.  S.  189,  23  S.  Ct.  277,  47  L.  Ed.  439; 
affirming  171  N.  Y.  682,  69  N.  Y.  App.  Div.  127. 

The  court  remarks  that  "no  one  doubts  that  succession  to  a 
tangible  chattel  may  be  taxed  wherever  the  property  is  found  and 
none  the  less  that  the  law  of  the  situs  accepts  its  rules  of  succes- 
sion from  the  law  of  the  domicile,  or  that  by  the  law  of  the  domicile 
the  chattel  is'  part  of  a  universitas  and  is  taken  into  account  again 
in  the  succession  tax  there."  The  court  holds  that  there  is  no 
distinction  for  the  purposes  of  taxation  between  the  power  to  tax 
chattels  of  a  non-resident  within  the  state  and  his  rights  in  a  deposit 
in  a  trust  company  within  the  state.  Blackstone  v.  Miller,  188 
U.  S.  189,  204,  23  S.  Ct.  277,  47  L.  Ed.  439;  affirming  171  N.  Y. 
682,  69  N.  Y.  App.  Div.  127. 

Where  a  deposit  is  made  in  a  trust  company  where  it  remains 
fourteen  months  while  the  owner  is  seeking  new  investment,  a 
finding  is  justified  that  the  property  was  not  ''in  transitu  in  such  a 
sense  as  to  withdraw  it  from  the  power  of  the  state."  Blackstone 
V.  Miller,  188  U.  S.  189,  203,  23  S.  Ct.  277,  47  L.  Ed.  439;  affirming 
171  N.  Y.  682,  69  N.  Y.  App.  Div.  127. 

Money  deposited  by  a  non-resident  in  a  New  York  trust  company 
is  property  within  the  state  subject  to  the  inheritance  tax.  "If 
he  had  deposited  in  specie,  to  be  returned  in  specie,  there  can  be 
no  doubt  that  the  money  would  be  property  in  this  state  subject 
to  taxation.  But,  instead,  he  did  as  business  men  generally  do, 
deposited  his  money  in  the  usual  way,  knowing  that,  not  the  same, 
but  the  equivalent,  would  be  returned  to  him  upon  demand.  While 
the  relation  of  debtor  and  creditor  technically  existed,  practically 
he  had  his  money  in  the  bank  and  could  come  and  get  it  when  he 
wanted  it.  It  was  an  investment  in  this  state  subject  to  attach- 
ment by  creditors.  If  not  voluntarily  repaid,  he  could  compel 
payment  through  the  courts  of  this  state.  The  depositary  was  a 
resident  corporation,  and  the  receiving  and  retaining  of  the  money 
were  corporate  acts  in  this  state.  Its  repayment  would  be  a 
corporate  act  in  this  state.  Every  right  springing  from  the  deposit 
was  created  by  the  laws  of  this  state.  Every  act  out  of  which 
those  rights  arose  was  done  in  this  state.     In  order  to  enforce 


866  STATUTES  ANNOTATED.  [N.  Y.  St. 

those  rights,  it  was  necessary  for  him  to  come  into  this  state.  Con- 
ceding that  the  deposit  was  a  debt ;  conceding  that  it  was  intan- 
gible, still  it  was  property  in  this  state  for  all  practical  purposes, 
and  in  every  reasonable  sense  within  the  meaning  of  the  Trans- 
fer Tax  Act.     {In  re  Romaine,  127  N.  Y.  80,  89.) 

"While  distribution  of  the  fund  belongs  to  the  state  where  the 
decedent  was  domiciled,  as  such  distribution  cannot  be  made  until 
his  administrator  has  come  into  this  state  to  get  the  fund,  possibly, 
after  resorting  to  the  courts  for  aid  in  reducing  it  to  possession, 
the  fund  has  a  situs  here,  because  it  is  subject  to  our  laws.  A 
reasonable  test  in  all  cases,  as  it  seems  to  me,  is  this:  Where  the  * 
right,  whatever  it  may  be,  has  a  money  value  and  can  be  owned 
and  transferred,  but  cannot  be  enforced  or  converted  into  money 
against  the  will  of  the  person  owning  the  right  without  coming 
into  this  state,  it  is  property  within  this  state  for  the  purposes  of  a 
succession  tax.  Thus  the  right  in  question  is  property,  because 
it  is  capable  of  being  owned  and  transferred.  It  is  within  this 
state,  because  the  owner  must  come  here  to  get  it.  It  is  subject 
to  taxation,  because  it  is  under  the  control  of  our  laws.  It  has  a 
money  value,  because  it  is  virtually  money,  or  can  be  converted 
into  money  upon  demand.  It  is  subject  to  a  transfer  tax,  because 
the  passing,  by  gift  or  inheritance,  of  'all  property,  or  interest 
therein,  whether  within  or  without  this  state,  over  which  this 
state  has  any  jurisdiction  for  the  purposes  of  taxation,'  comes 
within  the  expressed  intention  of  the  legislature."  Per  Vann,  J., 
in  In  re  Houdayer,  150  N.  Y.  37,  40,  44  N.  E.  718,  34  L.  R.  A. 
235,55  Am.  St.  Rep.  642,  reversing  3  N.  Y.  App.  Div.  474,  38  N.  Y. 
Suppl.  323. 

A  deposit  in  a  trust  company  by  a  non-resident  in  this  state  for 
nearly  two  months  before  the  date  of  the  death  of  the  testator  is 
subject  to  tax  notwithstanding  the  contention  that  the  deposit 
was  here  temporarily  for  the  purpose  of  investment  only.  In  re 
Myer,  129  N.  Y.  Suppl.  194. 

Deposit  with  Broker, 

The  testator,  a  resident  of  Montana,  had  delivered  to  stock- 
brokers $250,000  to  margin  stock  transactions.  The  stock  pur- 
chased had  been  closed  out  and  this  sum  was  held  by  the  brokers 
subject  to  his  further  instructions  as  to  buying  stock  or  whatever 
else  he  saw  fit  to  do  with  it.  The  court  holds  that  this  relation 
created  an  indebtedness  the  same  as  obtains  between  a  bank  and  its 


1911,  c.  732.]  NEW  YORK.  867 

depositors.  In  the  technical  sense  it  undoubtedly  was  a  debt,  but 
within  the  authorities  for  purposes  of  taxation  it  is  regarded  as 
money  on  account  due  to  the  depositor  and  subject  to  his  order. 
It  was  transferred  as  such  to  his  estate,  and  is  therefore  taxable. 
In  re  Daly,  100  N.  Y.  App.  Div.  373,  91  N.  Y.  Suppl.  858. 

(The  opposite  result  would  now  be  reached  under  N.  Y.  St.  1911, 
c.  7S2.— Ed.) 

Securities  on  Deposit. 

The  following  cases  are  not  applicable  to  transfers  which  have 
taken  place  since  July  21,  1911,  under  N.  Y.  St.  1911,  c.  732. 

The  decedent,  a  resident  of  Connecticut,  died  owning  certain 
promissory  notes  which  were  in  a  safe  deposit  box  in  the  city  of 
New  York.  With  two  exceptions  the  notes  were  made  by  non- 
residents of  the  state  of  New  York  and  payment  of  all  of  them 
was  secured  by  property  outside  of  the  state.  The  court  holds 
that  they  are  subject  to  taxation  relying  upon  In  re  Wall,  105  N.  Y. 
App.  Div.  643,  94  N.  Y.  Suppl.  1166,  and  In  re  Whiting,  150  N.  Y. 
27,  44  N.  E.  715,  34  L.  R.  A.  232,  55  Am.  St.  Rep.  640. 

The  court  remarks  that  two  of  the  notes  are  made  by  residents 
of  New  York  and  says  that  it  is  possible  that  they  should  be  treated 
differently,  but  that  it  does  not  seem  to  the  court  that  the  resi- 
dence of  the  debtor  can  change  the  character  of  property  or  deter- 
mine whether  it  is  liable  to  an  inheritance  tax.  In  re  Tiffany, 
128  N.  Y.  Suppl.  106. 

The  intestate  died  in  March,  1887,  a  resident  of  New  Jersey, 
leaving  on  deposit  with  a  safe  deposit  company  in  New  York  for 
safe  keeping  certain  securities,  and  the  court  holds  that  this  prop- 
erty has  neither  passed  by  will  nor  been  transferred  by  deed, 
grant,  sale  or  gift,  nor  passed  by  the  intestate  law  of  the  state  of 
New  York,  and  therefore  it  is  not  subject  to  the  tax  imposed  by  the 
New  York  statute  of  1885,  chapter  483.  In  re  Tulane,  51  Hun 
213,  4  N.  Y.  Suppl.  36. 

Bonds  and  stock  held  by  a  non-resident  and  deposited  in  a 
trust  company  in  New  York  are  physically  within  the  state  of 
New  York  and  constitute  property  subject  to  taxation.  They 
were  regarded  as  tangible  assets  and  apparently  as  in  the  nature 
of  chattels.  In  re  Whiting,  150  N.  Y.  27,  29,  44  N.  E.  715,  34 
L.  R.  A.  232,  55  Am.  St.  Rep.  640,  modifying  2  N.  Y.  App.  Div. 
590,  38  N.  Y.  Suppl.  131. 


868  STATUTES  ANNOTATED.  IN.  Y.  St. 

Where  only  Ground  for  Taxation  that  Stock  Certificates  are  in  State, 
The  court  holds  that  stock  in  foreign  corporations  belonging  to 
a  non-resident  is  not  taxable  in  New  York  simply  because  the  certifi- 
cates were  in  the  state  of  New  York  at  the  date  of  the  death  of  the 
testator.  The  5tock  of  foreign  corporations  which  formed  part  of 
this  estate  were  not  property  in  the  legal  sense.  The  share  certifi- 
cates which  the  testator  held  represented  interests  which  he 
possessed  in  the  corporations  which  issued  them  and  the  legal 
situs  of  that  species  of  personal  property  is  where  the  corporation 
exists  or  where  the  shareholder  has  his  domicile.  In  re  James, 
144  N.  Y.  6,  12,  38  N.  E.  961,  affirming  77  Hun  211,  27  N.  Y. 
Suppl.  288,  6  Misc.  206;  In  re  Bishop,  82  N.  Y.  App.  Div.  112,  81 
N.  Y.  Suppl.  474,  reversing  40  Misc.  64,  81  N.  Y.  Suppl.  252. 
C/.,  however,  Blackstone  v.  Miller,  188  U.  S.  189,  23  Sup.  Ct. 
277,  affirming  In  re  Blackstone-  171  N.  Y.  682,  64  N.  E.  1118. 
See  also,  St.  1911,  c.  732. 

Funds  for  Investment. 

The  decedent,  a  non-resident,  three  days  before  his  death  sent 
one  hundred  thousand  ($100,000)  dollars  to  New  York  city  for 
the  purpose  of  purchasing  stock  in  a  foreign  corporation;  and  he 
died  before  the  transaction  was  completed.  The  court  holds  that 
this  money  is  not  subject  to  the  New  York  transfer  tax.  In  re 
Leopold,  35  Misc.  Rep.  369,  71  N.  Y.  Suppl.  1032. 

Insurance  Policies, 

The  following  cases  under  the  old  statute  are  still  law  under  St. 
1911,  c.  732. 

Where  an  insurance  policy  is  issued  by  a  New  York  corporation 
on  the  life  of  a  non-resident  and  the  corporation  has  property 
sufficient  to  pay  the  policy  in  the  estate  of  the  insured  and  has  there 
appointed  an  attorney  to  receive  service ;  where  the  policy  had  always 
been  kept  within  the  state  of  the  insured;  where  the  insured  died 
there;  and  executors  were  appointed  there  and  premiums  were 
paid  there,  the  court  holds  that  this  is  sufficient  to  distinguish  the 
case  from  Blackstone  v.  Miller,  188  U.  S.  189. 

The  court  says  that  in  all  cases  where  the  tax  has  been  imposed 
at  the  domicile  of  the  debtor,  the  creditor  has  been  forced  of  neces- 
*sity  to  go  to  that  domicile  for  the  collection  of  his  tax,  but  as  that 
fact  did  not  appear  in  this  case  it  would  be  unreasonable  to  tax 
the  proceeds  of  this  poUcy  in  New  York.  In  re  Gordon,  186  N.  Y. 
471,  474,  79  N.  E.  722,  10  L.  R.  A.  N.  S.  1089,  affirming  114  N.  Y. 
App.  Div.  202,  99  N.  Y.  Suppl.  630. 


1911,  c.  732.]  NEW  YORK.  869 

"In  conclusion  we  might  say  that  we  are  unable  to  contemplate 
with  a  confidence  born  of  great  optimism  the  results  which  would 
follow  from  the  adoption  and  enforcement  of  the  doctrine  urged 
by  appellant.  If  the  contract  in  this  case  is  subject  to  the  imposi- 
tion of  a  transfer  tax,  then  any  contract  of  insurance  issued  to  a 
non-resident,  passing  to  and  held  by  his  non-resident  represen- 
tatives or  assigns,  and  being  administered  and  enforceable  in  a  for- 
eign jurisdiction,  whether  in  the  state  of  Texas  or  California,  or 
in  some  foreign  country,  would  afford  the  basis  of  taxation  in  this 
state,  provided  only  the  policy  was  issued  by  a  New  York  corpora- 
tion and  access  could  be  obtained  by  the  tax  collector  to  its  pro- 
ceeds. No  distance  of  domicile  of  the  assured  and  his  transferees 
or  beneficiaries,  and  no  completeness  of  foreign  jurisdiction  over 
administration  and  enforcement,  and  no  lack  of  anticipation  of 
such  a  result  upon  the  part  of  the  assured,  would  be  a  bar  to  the  at- 
tempted application  of  the  taxing  power.  It  requires  no  great 
imaginative  processes  to  picture  the  limits  and  the  disapproval 
and  friction  to  which  this  theory  would  lead  if  logically  carried  to 
its  full  length. 

"It  was  undoubtedly  the  intent  of  the  legislature  that  the  statute 
under  consideration  should  be  liberally  construed  to  the  end  of 
taxing  the  transfer  of  all  property  which  fairly  and  reasonably 
could  be  regarded  as  subject  to  the  same,  and  this  court  has  un- 
equivocally placed  itself  upon  record  in  favor  of  construing  the 
statute  in  the  light  of  such  intent.  But  the  proposition  now  pro- 
pounded, if  adopted,  would  lead  far  beyond  any  point  which  has 
thus  far  been  reached,  and  we  do  not  believe  that  it  would  be  wise 
or  practicable  to  adopt  it.  We  can  scarcely  believe  that  the  various 
states  and  countries,  which  have  so  carefully  and  positively  protected 
their  citizens  holding  policies  of  insurance  issued  by  foreign  cor- 
porations from  the  burden  and  annoyance  of  being  compelled  to 
go  to  distant  forums  for  the  purpose  of  enforcing  their  contracts, 
would  permit  them  to  be  subjected  to  a  species  of  taxation  based 
upon  an  assumed  necessity  for  resort  to  foreign  courts  which  has 
thus  been  obviated.  We  believe  that  if  the  policy  being  urged  upon 
us  were  adopted,  the  great  business  of  insurance  now  being  con- 
ducted by  corporations  chartered  and  under  the  protection  of  the 
state  of  New  York  would  be  subjected  to  new  and  unexpected  em- 
barrassment." Per  Hiscock,  J.,  in  In  re  Gordon,  186  N.  Y.  471, 
483,  79  N.  E.  722,  10  L.  R.  A.,  N.  S.  1089,  affirming  114  N.  Y.  App. 
Div.  202,  99  N.  Y.  Suppl.  630. 


870  STATUTES  ANNOTATED.  [N.  Y.  St. 

The  same  result  was  reached  in  In  re  Abbett,  29  Misc.  Rep.  567, 
61  N.  Y.  Suppl.  1067;  In  re  Horn,  39  Misc.  Rep.  133,  78  N.  Y. 
Suppl.  979. 

The  mere  fact  that  policies  of  insurance  are  in  this  state  does 
not  make  them  subject  to  tax  where  they  are  on  the  life  of  a  non- 
resident and  issued  by  a  foreign  corporation.  In  re  Gibbs,  60  Misc. 
645,  113  N.  Y.  Suppl.  939.  The  court  follows  In  re  Gordon,  186 
N.  Y.  471,  79  N.  E.  722,  10  L.  R.  A.,  N.  S.  1089. 

Mortgages  Held  hy  Non-resident  on  New  York  Real  Estate. 

Bonds  owned  by  a  non-resident  secured  by  mortgages  on  land 
in  New  York  are  not  subject  to  tax  in  New  York,  In  re  Fearing, 
200  N.  Y.  340,  93  N.  E.  956,  affirming  123  N.  Y.  Suppl.  396,  relying 
upon  In  re  Bronson,  150  N.  Y.  1,  44  N.  E.  707,  34  L.  R.  A.  238,  55 
Am.  St.  Rep.  632. 

Under  N.  Y.  St.  1887,  personal  property  of  a  non-resident  of 
New  York  consisting  of  bonds  secured  by  a  mortgage  on  real 
estate  in  New  York  is  not  exempt  as  the  property  has  enjoyed  the 
protection  "afforded  by  the  laws  of  the  state"  and  must  pay, 
as  the  condition  upon  which  the  privilege  of  allowing  it  to  pass  is 
granted,  the  tax  by  law.  In  re  Clark,  29  N.  Y.  St.  650,  9  N.  Y. 
Suppl.  444,  2  Con.  Surr.  183. 

The  testator  was  a  resident  of  New  Jersey  possessed  of  certain 
bonds  and  mortgages,  the  latter  covering  real  estate  in  New  York. 
The  court  holds  that  there  is  no  tax  assessable  in  New  York,  fol- 
lowing In  re  Bronson,  150  N.  Y.  1,  44  N.  E.  707.  In  re  Preston, 
75  N.  Y.  App.  Div.  250,  78  N.  Y.  Suppl.  91,  affirming  37  Misc.  236, 
75  N.  Y.  Suppl.  251. 

(The  opposite  result  would  now  be  reached  under  N.  Y.  St.  1911, 
c.  n2.—Ed.) 

Railroad  in  Several  States. 

Under  N.  Y.  St.  1911,  c.  732,  stock  in  domestic  corporations 
owned  by  non-residents  is  not  taxable. 

Where  a  non-resident  held  stock  in  a  New  York  railroad  cor- 
poration it  was  claimed  that  the  tax  should  be  only  upon  that 
proportion  of  its  value  which  represents  the  proportion  of  the 
capital  and  assets  of  the  company  employed  within  the  state  of 
New  York.  That  where  it  appeared  that  only  sixty-four  per  cent 
of  the  capital  was  invested  in  the  state  of  New  York,  it  is  argued 
that  the  appraisal  of  the  value  of  the  stock  should  have  been  pro- 
portionately less.     The  court  holds,   however,   that  the  market 


1911,  c.  732.]  NEW  YORK.  871 

value  of  the  stock  may  or  may  not  represent  proportionately  the 
actual  value  of  the  corporate  properties.  "That  value,  whatever 
it  may  be  in  the  market,  is  the  worth  attached  to  an  interest  in 
the  corporate  assets  and  properties,  regarded  as  a  whole.  A  share 
of  capital  stock  represents  the  distinct  interest  which  its  holder 
has  in  the  corporation,  and  his  right  to  participate  in  the  distri- 
bution of  the  net  earnings  of  the  corporation.  They  evidence  the 
extent  of  his  proprietary  interest  and  their  assessment  for  taxa- 
tion purposes  must  be  upon  that  interest,  and  must  be  regarded 
as  an  entity,  and  is  unapportionable  with  reference  to  the  situs  of 
the  corporate  properties.  The  tax  imposed  by  the  state  upon  the 
transfer  of  such  property  upon  the  decease  of  its  owner  is  not  upon 
the  property  which  passes;  it  is  upon  the  right  of  succession  to  it." 
{In  re  Palmer,  183  N.  Y.  238,  76  N.  E.  16,  affirming  102  N.  Y. 
App.  616.) 

"The  assessment  of  the  stockholder,  however,  is  computed  upon 
the  value  of  his  interest  in  the  whole  of  the  corporate  property, 
as  evidenced  by  the  number  of  the  shares  of  stock  which  he 
holds.  Their  market  value  may,  or  may  not,  represent,  propor- 
tionately, the  actual  value  of  the  corporate  properties.  Very  often 
it  does  not  and  the  market  value  of  the  shares  of  capital  stock  may 
be  quite  disproportionately  influenced  by  considerations,  or  by 
circumstances,  having  little  reference  to  actual  conditions.  That 
value,  whatever  it  may  be  in  the  market,  is  the  worth  attached  to 
an  interest  in  the  corporate  assets  and  properties,  regarded  as 
a  whole.  A  share  of  capital  stock  represents  the  distinct  inter- 
est which  its  holder  has  in  the  corporation,  and  his  right  to  partici- 
pate in  the  distribution  of  the  net  earnings  of  the  corporation,  as 
a  going  concern,  or  in  that  of  its  assets,  upon  a  dissolution,  is  pro- 
portionate to  the  number  of  shares  which  he  holds.  They  evidence 
the  extent  of  his  proprietary  interest  and  their  assessment  for 
taxation  purposes  must  be  upon  that  interest,  regarded  as  an  entity, 
and  is  unapportionable  with  reference  to  the  situs  of  the  corporate 
properties.  The  tax,  imposed  by  the  state  upon  the  transfer  of 
such  property,  upon  the  decease  of  its  owner,  is  not  upon  the 
property  which  passes;  it  is  upon  the  right  of  succession  to  it. 
The  Transfer  Tax  Act  operates  upon  that  general  right  to  succeed 
to  the  interest  of  the  deceased  in  the  corporation,  and  it  is  incon- 
ceivable that  the  value  of  the  interest,  upon  which  the  tax  is  com- 
puted, is  determinable  by  the  location  of  the  corporate  properties." 
Per  Gray,  J.,  in  In  re  Palmer,  183  N.  Y.  238,  241,  76  N.  E.  16, 
affirming  102  N.  Y.  App.  Div.  616,  92  N.  Y.  Suppl.  1137. 


872  STATUTES  ANNOTATED.  [N.  Y.  St. 

In  deciding  that  the  stock  in  the  Boston  and  Albany  Railroad 
was  properly  taxable  in  New  York  only  for  the  amount  which 
represents  the  property  in  New  York  state,  the  court  distinguishes 
In  re  Palmer,  183  N.  Y.  238,  on  the  ground  that  it  did  not  appear 
in  that  case  that  the  corporation  had  any  other  corporate  existence 
outside  of  New  York. 

The  court  suggests  that  there  may  be  difficulties  in  appraising 
the  property  of  a  railroad  corporation  to  ascertain  just  what 
property  is  in  each  state  where  it  is  incorporated.  But  the  court 
suggests  that  an  apportionment  based  upon  trackage  or  figures 
drawn  from  the  books  or  balance  sheets  of  the  company  may 
doubtless  be  easily  reached  which  will  be  substantially  correct, 
and  any  inaccuracies  of  which  when  reflected  in  a  tax  of  one  per 
cent  will  be  inconsequential.  In  re  Cooley,  186  N.Y.  220,  232,  78 
N.  E.  939,  10  L.R.A.N.S.   1010,  reversing  113  N.Y.  App.  Div.  388. 

"I  see  nothing  in  the  statute  which  prevents  us  from  paying 
decent  regard  to  the  principles  of  interstate  comity  and  from 
adopting  a  policy  which  will  enable  each  state  fairly  to  enforce 
its  own  laws  without  oppression  to  the  subject.  This  result  will 
be  attained  by  regarding  the  New  York  corporation  as  owning  the 
property  situate  in  New  York  and  the  Massachusetts  corporation 
as  owning  that  situate  in  Massachusetts,  and  each  as  owning  a  share 
of  any  property  situate  outside  of  either  state  or  moving  to  and 
fro  between  the  two  states,  and  assessing  decedent's  stock  upon  that 
theory.  That  is  the  obvious  basis  for  a  valuation  if  we  are  to  leave 
any  room  for  the  Massachusetts  corporation  and  for  a  taxation 
by  that  state  similar  in  principle  to  our  own  without  double  taxa- 
tion." Per  Hiscock,  J.,  in  In  re  Cooley,  186  N.  Y.  220,  228,  78 
N.  E.  939,  10  L.  R.  A.  N.  S.  1010,  reversing  113  N.  Y.  App.  Div. 
388,  98  N.  Y.  Suppl.  1006. 

Where  a  corporation  has  but  a  single  corporate  existence  under 
the  laws  of  one  state  there  is  no  difficulty  in  determining  in  such 
a  case  that  a  shareholder  in  such  a  corporation  has  an  interest  in 
all  the  corporate  property  wherever  situated.  But  where  stock 
in  the  Boston  and  Albany  Railroad,  incorporated  in  several  states, 
is  held  by  a  non-resident,  the  sole  jurisdiction  of  New  York  to  assess 
it  is  based  upon  the  theory  that  it  is  held  in  the  company  as  a 
•^New  York  corporation.  . 

If  the  courts  of  New  York  hold  that  this  stock  is  assessable  at 
its  full  value  in  New  York,  then  the  courts  of  Massachusetts 
should  also  hold  that  it  is  assessable  for  its  full  value  in  Massa- 


1911,  c.  732.]  NEW  YORK.  873 

chusetts,  which  would  lead  to  great  injustice  as  double  taxation. 
Double  taxation  is  one  which  the  courts  should  avoid  whenever  it 
is  possible  within  reason  to  do  so.  {Matter  of  James,  144  N.  Y. 
6,  11.)  It  is  never  to  be  presumed.  Sometimes  tax  laws  have 
that  effect,  but  if  they  do  it  is  because  the  legislature  has  unmis- 
takably so  enacted.  All  presumptions  are  against  such  an  impo- 
sition. {Tennessee  v.  Whitworth,  117  U.  S.  129.)  In  re  Cooley, 
186  N.  Y.  220,  227,  78  N.  E.  939,  10  L.  R.  A.  N.  S.  1010,  reversing 
113  N.  Y.  App.  Div.  388,  98  N.  Y.  Suppl.  1006. 

"The  Boston  and  Albany  Railroad  Company  is  a  consolidation 
formed  by  the  merger  of  one  or  more  New  York  corporations  and 
one  Massachusetts  corporation.  The  merger  was  authorized  and 
the  said  consolidated  corporation  duly  and  separately  created 
and  organized  under  the  laws  of  each  state.  It  was,  so  to  speak, 
incorporated  in  duplicate.  There  is  but  a  single  issue  of  capital 
stock  representing  all  of  the  property  of  the  consolidated  and  dual 
organization.  Of  the  track  mileage  about  five-sixths  is  in  Massa- 
chusetts and  one-sixth  in  New  York.  The  principal  offices,  in- 
cluding the  stock  transfer  office,  are  situated  in  Boston  and  there 
also  are  regularly  held  the  meetings  of  its  stockholders  and  direc- 
tors. The  deceased  was  a  resident  of  the  state  of  Connecticut 
and  owned  four  hundred  and  twenty-six  shares  of  the  capital 
stock,  the  value  of  which  for  the  purposes  of  the  transfer  tax  was 
fixed  at  the  full  market  value  of  $252.50  per  share  of  the  par  value 
of  $100."  Per  Hiscock,  J.,  in  In  re  Cooley,  186  N.  Y.  220,  223? 
78  N.  E.  939,  10  L.  R.  A.  N.  S.  1010,  reversing  113  N.  Y.  App. 
Div.  388',  98  N.  Y.  Suppl.  1006. 

The  testator,  a  resident  of  Illinois,  died  in  1902,  and  the  court 
holds  that  his  interest  in  the  New  York  Central  Railroad  Com- 
pany, a  New  York  corporation,  is  taxable  under  the  New  York 
statute,  following  In  re  Bronson,  150  N.  Y.  1.  In  re  Palmer,  183 
N.  Y.  238,  240,  76  N.  E.  16,  aff'irming  102  N.  Y.  App.  Div.  616, 
92  N.  Y.  Suppl.  1137. 

The  court  holds  that  where  a  railroad  has  lines  indifferent 
states  the  appraisal  shall  be  apportioned  on  the  basis  of  the  total 
mileage  in  each  state  and  not  on  the  mileage  between  terminals. 
Branch  lines  are  then  taken  into  account  as  elements  of  value. 
In  re  Thayer,  58  Misc.  117,  110  N.  Y.  Suppl.  751. 

Stock  in  Domestic  Corporations  Owned  by  Non-residents. 

Under  St.  1911,  c.  732,  stock  in  domestic  corporations  owned  by 
non-residents  is  not  taxable  in  New  York. 


874  STATUTES  ANNOTATED.  [N.  Y.  St. 

Stock  in  a  national  bank  doing  business  in  New  York  owned  by 
a  non-resident  stockholder  is  subject  to  the  transfer  tax  although 
the  certificate  was  out  of  the  state  at  the  death  of  the  testator. 
In  re  Gushing,  40  Misc.  Rep.  505,  82  N.  Y.  Suppl.  795. 

Where  the  testatrix,  a  resident  of  Connecticut,  died  leaving  use 
of  certain  stock  in  a  New  York  corporation  to  her  mother  for  life 
and  on  her  death  to  her  niece,  both  the  life  tenant  and  the  remainder- 
man took  their  interest  in  the  property  as  a  matter  of  sovereign 
favor.  The  life  tenant  cannot  complain  that  the  principal  of  which 
she  is  entitled  to  the  use  is  diminished  by  the  tax,  nor  can  the 
remainderman  resist  the  imposition  of  the  tax  upon  the  ground 
that  she  may  never  come  into  possession  of  the  property  as  she  took 
a  vested  indefeasible  interest  in  the  property.  In  re  Bushnell, 
172  N.  Y.  649,  65  N.  E.  1115,  affirming  73  N.  Y.  App.  Div.  325, 
77  N.  Y.  Suppl.  4. 

The  testator,  a  non-resident,  died  in  1894  and  distribution  was 
made  under  the  direction  of  the  probate  court  in  Connecticut 
where  the  testatrix  Hved  in  1895.  In  April,  1897,  the  comptroller 
of  the  city  of  New  York  instituted  a  proceeding  in  the  surrogate's 
court  for  the  determination  of  the  tax  on  certain  shares  in  a  New 
York  corporation. 

The  court  remarks  that  in  the  matter  of  Bronson,  counsel  did 
not  challenge  the  jurisdiction  of  the  surrogate's  court  which  im- 
posed the  tax  and  therefore  the  question  was  not  considered  by  the 
court.  The  surrogate's  jurisdiction  was  given  under  N.  Y.  St.  1892, 
c.  399,  s.  10.  The  question  may  be  determined  by  an  answer  to 
the  question.  Had  the  court  power  to  issue  letters? 

The  court  holds  that  this  interest  which  the  testator  had  in  the 
New  York  corporation  must  be  held  to  the  property  within  the 
meaning  of  the  word  as  used  in  the  Code  giving  the  surrogate's 
court  jurisdiction  over  estates  for  purposes  of  administration. 
And  hence,  the  surrogate's  court  has  under  section  10  of  the  inherit- 
ance act  jurisdiction  to  impose  the  tax.  In  re  Fitch,  160  N.  Y.  87, 
43  N.  E.  701,  affirming  39  N.  Y.  App.  Div.  609. 

"The  appellant  further  contends  that  the  property  in  question 
was  not  'within  this  state,'  according  to  the  true  meaning  of  the 
statute,  and  the  contention  is  supported  by  the  argument  that  it 
^ would  be  unreasonable  to  tax  money  found  upon  the  person  of  a 
non-resident  who  died  while  traveling  in  this  state.  We  should 
hesitate  before  applying  the  statute  to  any  property  casually 
brought  into  the  state  for  a  temporary  purpose,  as  by  a  visitor  or 


1911,  c.  732.]  NEW  YORK.  875 

traveler,  but  the  record  before  us  does  not  present  such  a  case. 
It  might  well  be  held  that  such  property,  although  literally  'within 
this  state,'  was  not  here  in  the  sense  meant  by  the  statute,  on 
account  of  the  transitory  and  accidental  character  of  its  presence 
and  the  immediate  custody  of  the  owner.  {Herron,  Treasurer,  v. 
Keeran,  59  Ind.  472,  476.)  Where,  however,  the  money  of  a  non- 
resident is  invested  in  this  state,  as  it  was  by  Mr.  Romaine  in  the 
bond  and  mortgage  in  question,  and  in  the  deposits  made  by  him 
in  the  savings  banks,  or  where  the  property  of  a  non-resident  is 
habitually  kept,  even  for  safety,  in  this  state,  we  think  that  the 
statute  applies  both  in  the  letter  and  spirit.  Such  property  is 
within  this  state  in  every  reasonable  sense,  receives  the  protection 
of  its  laws  and  has  every  advantage  from  government,  for  the 
support  of  which  taxes  are  laid,  that  it  would  have  if  it  belonged 
to  a  resident.'*  Per  Vann,  J.,  in  In  re  Romaine,  127  N.  Y.  80,  88, 
27  N.  E.  759,  12  L.  R.  A.  401,  affirming  58  Hun  109. 

Loans  from  and  to  Non-resident. 

Loans  from  a  resident  of  New  Jersey  to  another  resident  of  New 
Jersey  do  not  create  a  balance  within  the  state  of  New  York  sub- 
ject to  the  transfer  tax,  and  the  fact  that  in  the  inventory  the 
debtor  is  described  as  a  banker  who  does  business  in  New  York 
cannot  vary  the  result,  where  no  pass  book  or  voucher  was  ever 
delivered,  and  it  does  not  appear  that  the  decedent  ever  drew  checks 
upon  the  account  or  that  it  was  to  be  repaid  otherwise  than 
upon  oral  demand.  In  re  Bentley,  31  Misc.  Rep.  656,  66  N. 
Y.  Suppl.  95. 

**By  Will  or  Intestate  Law"  —  Curtesy,  Dower  and  Statu- 
tory Rights  of  Surviving  Spouse. 

Curtesy. 

The  words  ''intestate  laws  of  this  state"  are  defined  by  N.  Y.  St. 
1911,  c.  732,  to  include  the  curtesy  or  statutory  rights  of  a  husband 
on  the  death  of  his  wife. 

Under  the  statute  of  1905,  chapter  360,  section  220,  the  estate 
by  curtesy  was  not  taxable.  This  estate  is  an  ancient  one  arising 
from  the  marriage  relation  and  not  by  inheritance  or  from  the  wife's 
estate  and  is  not  an  incident  to  the  wife's  death  and  intestacy.  In  re 
Starbuck,  137  N.  Y.  App.  Div.  866,  122  N.  Y.  Suppl.  584,  affirming 
63  Misc.  156,"  116  N.  Y.  Suppl.  1030. 

Personal  estate  of  a  resident  of  New  York  who  dies  intestate 


g76  STATUTES  ANNOTATED.  [N.  Y.  St. 

leaving  a  husband  and  no  descendants  is  not  subject  to  the  inherit- 
ance tax  as  the  estate  devolves  on  the  husband  as  a  matter  of  law  on 
account  of  the  marriage  relation. 

When  a  wife,  a  resident  of  the  state,  dies  without  a  will,  leaving 
her  husband  and  no  descendants,  there  is  no  taxable  transfer  as  the 
husband  takes  by  virtue  of  his  marriage,  and  not  by  virtue  of  the 
death  of  his  wife. 

To  uphold  the  tax  it  must  be  found  that  the  husband  has  taken 
the  property  "by  the  intestate  laws  of  this  state"  and  the  court 
holds  that  the  intestate  laws  refer  simply  to  the  statutes  govern- 
ing the  distribution  of  the  decedent's  property.  In  re  Green,  68 
Misc.  1,  124  N.  Y.  Suppl.  863. 

Dower  Deducted. 

The  widow's  dower  became  vested  as  an  inchoate  estate  upon 
her  marriage  and  consummate  upon  the  death  of  her  husband  inde- 
pendent of  the  will  and  not  by  virtue  thereof,  and  is  therefore  not 
subject  to  the  transfer  tax.     In  re  Weiler,  122  N.  Y.  Suppl.  608. 

A  will  gave  to  the  widow  all  the  decedent's  personal  estate  for 
life  and  devised  all  the  real  estate  to  the  executors  under  a  trust  to 
dispose  of  it  for  the  benefit  of  persons  other  than  the  widow.  The 
will  contained  no  direction  that  the  provision  in  favor  of  the  widow 
should  be  in  lieu  of  doWer.  Under  the  law  the  widow  is  not  put 
to  her  election  as  between  dower  and  the  provision  by  the  will; 
and  therefore  the  value  of  the  wife's  dower  since  it  is  not  taxable 
should  be  deducted  from  the  gross  value  of  the  lands  for  the  pur- 
poses of  the  inheritance  tax.  In  re  Shields,  68  Misc.  264,  124  N.  Y. 
Suppl.  1003;  In  re  Riemann,  42  Misc.  648,  87  N.  Y.  S.  731. 
Legacy  in  Lieu  of  Dower. 

A  legacy  accepted  in  lieu  of  dower  is  subject  to  the  inheritance  tax, 
as  by  the  acceptance  of  the  legacy  the  widow  elected  to  take  under 
the  will  and  release  all  claim  to  dower  {In  re  Riemann,  42  Misc. 
Rep.  648,  87  N.  Y.  Suppl.  731)  although  it  was  claimed  that  the 
legacy  was  given  for  consideration.  In  re  De  Graaf,  24  Misc.  Rep. 
147,  53  N.  Y.  Suppl.  591,  2  Gibbons  516. 
Statutory  Exemptions. 

.  The  husband's  statutory  rights  on  the  death  of  his  wife  are 
subject  to  tax  under  the  act  of  1911,  c.  732. 

The  exemption  to  the  widow  of  certain  articles  enumerated 
under  the  New  York  statute  renders  them  not  subject  to  the 
transfer  tax  whether  the  decedent  died  testate  or  intestate.     This 


1911,  c.  732.]  NEW  YORK.  877 

property  is  not  to  be  included  in  estimating  the  value  qf  the  estate 
subject  to  tax.  In  re  Page,  39  Misc.  Rep.  220,  79  N.  Y.  Suppl.  382. 
A  husband  claimed  that  a  deduction  should  be  made  from  the 
estate  of  his  wife  of  the  exemptions  enumerated  in  the  New  York 
Code,  section  2713,  sub-division  3,  of  things  which  he  would  have 
been  entitled  to  had  they  existed,  but  as  they  did  not  exist  he  was 
nevertheless  entitled  to  receive  their  assumed  cash  value  in  lieu 
of  them,  and  that  accordingly  such  value  is  no  part  of  the  estate 
to  be  transferred  under  the  will  and  subject  to  the  tax.  The 
husband  relied  on  In  re  Williams,  31  N.  Y.  App.  Div.  617,  52  N.  Y. 
Suppl.  700,  but  the  court  decides  that  no  such  exemption  should 
be  allowed  as  the  tax  law  itself  makes  no  provision  for  the  deduc- 
tion from  the  taxable  estate  of  the  value  of  articles  which  would 
have  been  exempted  for  the  use  of  husband  or  wife  had  such 
articles  existed,  but  which  do  not  in  fact  exist.  In  re  Libolt,  102 
N.  Y.  App.  Div.  29,  92  N.  Y.  Suppl.  175. 

**In  Contemplation  of  the  Death." 

Definition. 

The  words  "in  contemplation  of  the  death"  do  not  refer  to  that 
general  expectation  which  every  mortal  entertains,  but  rather 
the  apprehension  which  arises  from  some  existing  condition  of  body 
or  some  impending  peril.  In  re  Baker,  178  N.  Y.  575,  70  N.  E. 
1094,  affirming  83  N.  Y.  App.  Div.  530,  82  N.  Y.  Suppl.  390, 
38  Misc.  151,  77  N.  Y.  Suppl.  170. 

Gifts  Inter  Vivos. 

The  expression  "in  contemplation  of  death"  does  not  refer  simply 
to  a  gift  causa  mortis^  but  does  include  a  gift  inter  vivos.  In  re 
Palmer,  117  N.  Y.  App.  Div.  360,  102  N.  Y.  Suppl.  236.  In  re 
Price,  62  Misc.  149,  116  N.  Y.  Suppl.  283. 

Good  Faith  the  Test, 

The  court  holds  that  "the  rule  may  be  stated  to  be  that  the 
property  transferred  by  gifts  inter  vivos  is  not  taxable  under  the 
provisions  of  the  taxable  transfer  act  unless  made  and  received 
with  the  intent  and  for  the  purpose  of  evading  its  provisions." 
In  re  Spaulding,  163  N.  Y.  60.7,  57  N.  E.  1124,  affirming  49  N.  Y. 
App.  Div.  541,  549. 

The  court  considers  the  evidence  as  to  the  good  faith  of  the 
transaction  by  which  the  grantor  made  a  deed  on  trust  to  care 
for  the  testator  during  his  lifetime,  in  In  re  Thorne,  162  N.  Y. 
238,  56  N.  E.  625,  44  N.  Y.  App.  Div.  8,  60  N.  Y.  Suppl.  419. 


878  STATUTES  ANNOTATED.  [N.  Y.  St. 

The  testator,  at  the  age  of  eighty-three,  gave  his  daughter 
certificates  of  stock  by  transferring  his  certificates  in  writing  on 
the  back  and  delivering  them  to  the  daughter;  but  the  certificates 
were  never  transferred  on  the  books  of  the  company  and  the 
testator  continued  to  receive  the  dividends  and  act  as  officer  of 
the  company  in  question.  The  court  finds  that  though  the  facts 
are  open  to  doubt  that  no  fraud  or  bad  faith  appeared  to  the 
surrogate,  and  his  decision  on  that  matter  is  therefore  final  and 
no  tax  is  therefore  due.  In  re  Bullard,  76  N.  Y.  App.  Div.  207, 
78  N.  Y.  Suppl.  491,  affirming  37  Misc.  663,  76  N.  Y.  Suppl.  309. 

Decedent  Critically  III. 

Where  the  decedent  was  suffering  from  a  chronic  disease  and  ten 
days  before  his  death  he  sends  for  his  attorney  telling  him  that 
he  desired  to  make  such  a  disposition  of  his  property  as  would  save 
his  son  the  nuisance  of  a  will  contest  and  executes  deeds  by  which 
he  conveys  all  his  real  estate  to  his  adopted  son,  this  transfer  is 
subject  to  the  inheritance  tax.  In  re  Price,  62  Misc.  149,  116 
N.  Y.  Suppl.  283. 

Where  a  woman  seventy-nine  years  old  was  afflicted  with 
consumption  from  which  she  knew  she  could  not  recover  and  was 
very  weak,  and  made  a  transfer  of  property  eight  days  before  her 
death,  the  court  finds  that  this  was  made  in  contemplation  of 
death  under  the  New  York  statute.  In  re  Birdsall,  22  Misc.  Rep. 
180,  49  N.  Y.  Suppl.  450,  2  Gibbons  293. 

Consideration.     Transfer  to  Erect  Monument. 

A  transfer  of  stock  to  transferees  who  agree  as  part  of  the  con- 
sideration to  erect  a  monument  is  not  subject  to  taxation  as  the 
provision  for  a  monument  is  considered  part  of  the  funeral  expenses 
and  so  not  subject  to  the  tax  as  ordinarily  understood.  In  re 
Edgerton,  158  N.  Y.  671,  52  N.  E.  1124,  affirming  35  N.  Y.  App. 
Div.  125,  54  N.  Y.  Suppl.  700.  See  further,  as  to  gifts  for  a  monu- 
ment,  post  p.  895. 

Payment  of  Annuity. 

A  transfer  of  stock  to  persons  who  in  return  agree  to  pay  an 
annuity  to  the  transferor  and  to  deposit  the  stock  as  security 
with  a  trust  company  for  the  payment  of  the  annuity  is  not  a 
transfer  in  contemplation  of  death  subject  to  the  inheritance  tax. 
In  re  Edgerton,  158  N.  Y.  671,  52  N.  E.  1124,  affirming  35  N.  Y. 
App.  Div.  125,  54  N.  Y.  Suppl.  700. 


1911,  c.  732.]  NEW  YORK.  879 

Support. 

A  deed  reserving  to  the  grantor  a  right  to  reside  on  premises 
and  made  in  consideration  of  support  is  not  in  contemplation  of 
death  and  is  not  subject  to  the  transfer  tax.  In  re  Hess,  187  N.  Y. 
554,  80  N.  E.  1111,  affirming  110  N.  Y.  App.  Div.  476,  96  N.  Y. 
Suppl.  990. 

To  Relinquish  Child. 

Where  the  testator  made  an  agreement  with  the  mother  of  his 
illegitimate  child  on  consideration  that  the  child  should  be  sur- 
rendered to  him  to  give  his  property  to  the  child  on  his  death,  the 
property  is  not  subject  to  the  transfer  tax  on  his  death  as  this  trans- 
fer is  by  contract  of  bargain  and  sale,  and  such  contract  made  in 
1862  was  not  in  contemplation  of  death  and  therefore  it  is  not 
subject  to  tax.  In  re  Demers,  41  Misc.  Rep.  470,  84  N.  Y.  Suppl. 
1109. 

As  Property  a  Burden. 

Where  an  old  man,  eighty-six  years  old,  physically  feeble  but 
mentally  active,  makes  two  gifts  to  his  children  of  securities  of 
large  amounts  stating  to  them  that  his  property  is  a  burden  to 
him,  that  he  intends  to  give  it  to  them  and  will  divide  a  part  of 
it  at  the  present  time,  and  where  the  securities  are  actually  de- 
livered and  transferred  to  the  donees,  and  the  testator  exercises 
no  control  over  them  whatever,  these  gifts  are  not  gifts  in  con- 
templation of  death  within  the  meaning  of  the  New  York  transfer 
statute,  in  re  Spaulding,  163  N.  Y.  607,  57  N.  E.  1124,  affirming 
49  N.  Y.  App.  Div.  541. 

The  court  finds  on  the  evidence  that  a  certain  gift  of  stock  by 
a  husband  in  good  health  to  his  wife  was  not  made  in  contempla- 
tion of  death  where  it  appeared  that  he  was  gradually  failing  and 
desired  to  be  relieved  from  the  cares  of  business.  In  re  Graves, 
52  Misc.  433,  103  N.  Y.  Suppl.  571. 

For  Convenience. 

The  testator  was  the  president  and  the  owner  of  nearly  all  the 
stock  in  a  corporation  and  it  was  his  duty  to  sign  all  corporation 
notes,  drafts,  checks  and  other  papers,  but  this  duty  becoming 
burdensome  during  his  illness  and  he  having  been  told  by  his 
physician  that  when  he  recovered  he  would  have  to  take  a  long 
vacation,  he  expressed  the  desire  that  he  might  transfer  his  stock 


880  STATUTES  ANNOTATED.  [N.  Y.  St. 

to  his  wife,  so  that  she  could  become  a  member  of  the  company 
at  once  and  transact  the  business  in  his  place.  He  did  this,  retain- 
ing only  one  share  for  himself  so  that  he  might  continue  to  be  a 
member  of  the  company  and  have  a  right  to  vote  at  its  meetings. 
The  court  holds  that  this  is  not  a  transfer  in  contemplation  of 
death  although  the  testator  died  within  three  weeks  after  the 
transfer.  The  testator  had  a  natural  right  to  give  this  stock  to 
his  wife  and  his  wife  took  possession  of  it  and  voted  upon  it  and^ 
the  circumstances  under  which  it  was  transferred  show  that  his 
death  was  not  in  mind  in  making  the  transfer.  The  fact  that  he 
made  a  will  on  the  same  day  was  not  evidence  of  the  contemplation 
of  death  except  as  a  remote  contingency.  There  is  a  strong  dis- 
senting opinion  on  the  ground  that  the  testator  had  been  advised 
to  put  his  worldly  affairs  in  order  and  that  he  was  too  weak  to  sign 
the  assignment  and  was  at  the  time  desperately  ill,  and  that 
positive  evidence  of  an  intention  to  evade  the  statute  should  not 
be  required.  In  re  Mahlstedt,  67  N.  Y.  App.  Div.  176,  73  N.  Y. 
Suppl.  818. 

Heirs  not  Bound  by  Statement  of  Beneficiary. 

The  testator  died  in  1893  giving  his  nephew  a  life  interest  in 
certain  property  and  providing  that  in  default  of  a  will  the  remainder 
of  the  estate  should  pass  to  the  heirs  of  the  nephew.  At  the  ap- 
praisal of  the  estate  of  the  testator  the  nephew  stated  that  the 
testator  at  the  time  of  his  death  was  the  owner  of  certain  real  estate 
although  the  fact  was  that  the  testator  had  previously  executed 
and  delivered  to  the  nephew  a  deed  of  the  property. 

The  court  holds  that  the  heirs  of  the  nephew  are  not  bound  by 
his  acts  but  have  a  right  to  rely  upon  the  deed  rather  than  upon 
the  will  and  that  therefore  they  cannot  be  assessed  for  an  inherit- 
ance tax  for  the  transfer  of  this  real  estate.  In  re  Mather,  179  N.  Y. 
526,  71  N.  E.  1134,  affirming  90  N.  Y.  App.  Div.  382;  85  N.  Y. 
Suppl.  657,  84  N.  Y.  Suppl.  1105,  41  Misc.  414. 

Withholding  Facts  Evidence  of  Bad  Faith. 

Where  the  testator  a  few  months  before  his  death  made  with- 
out consideration  an  assignment  of  all  his  property  to  his  son,  the 
court  on  all  the  evidence  and  in  view  of  the  evasiveness  of  the  son 
-in  answering  questions  holds  that  the  assignment  was  taken  on  a 
trust  to  carry  out  the  will  of  the  testator. 

The  court  holds  that  the  heirs  are  the  only  ones  who  have  the 
power  of  showing  by  direct  evidence  just  the  extent  and  nature  of 


1911,  c.  732.]  NEW  YORK.  881 

the  trust  and  that  a  lack  of  evidence  on  this  question  shows  that 
the  assignment  was  not  made  in  good  faith.  In  re  Palmer,  117 
N.  Y.  App.  Div.  360,  102  N.  Y.  Suppl.  236. 

Deeds    Unrecorded  and   Undelivered. 

Where  the  decedent  made  deeds  of  his  farms  and  the  deeds 
remained  unrecorded  and  in  the  possession  of  the  grantor  until  his 
death;  that  the  insurance  continued  to  be  payable  to  the  grantor 
and  he  made  contracts  with  the  tenants;  that  the  son  continued 
to  reside  on  the  home  farm  and  work  it;  that  the  farms  continued 
to  be  assessed  to  the  grantor  who  paid  the  taxes;  that  the  crops 
were  mostly  marketed  at  the  grantor's  warehouse,  and  the  accounts 
kept  in  his  books,  practically  as  though  he  owned  them;  that  all 
settlements  with  the  tenants  were  made  by  the  grantor,  is  evi- 
dence sufficient  to  show  that  the  transfer  is  within  the  statute  as 
intended  to  take  effect  only  on  death,  hi  re  Jones,  65  Misc.  121, 
120  N.  Y.  Suppl.  862. 

Deeds  not  Delivered. 

Where  a  testator  signed  certain  deeds  and  other  papers  and 
placed  them  in  envelopes  described  as  property  of  persons  by  whom 
they  were  endorsed,  and  placed  the  envelopes  in  a  box  in  a  bank, 
this  property  was  still  his  for  the  purposes  of  the  tax  where  he 
received  the  income  from  it  and  treated  it  as  his  own  during  his 
life.     In  re  Sharer,  36  Misc.  Rep.  502,  73  N.  Y.  Suppl.  1057.  . 

Deed  Signed  by  Decedent  under  Contract  hut  not  Delivered. 

Where  at  the  time  of  the  decedent's  death  she  was  under  contract 
to  sell  lands  in  another  state  and  left  a  conveyance  thereof  which 
was  delivered  on  the  day  after  her  death  in  consideration  of  the  price 
named  in  the  contract,  as  the  land  was  not  subject  to  tax  there  is 
no  tax  on  its  proceeds.  In  re  Baker,  67  Misc.  360,  124  N.  Y.  Suppl. 
827. 

In  Trust  until  Majority. 

Where  a  trust  deed  was  executed  dated  December  1,  1892, 
directing  the  trustees  to  pay  the  net  income  to  the  guardian  of  a 
certain  grandson  until  his  majority  on  December  3,  1895,  when  the 
principal  shall  be  paid  to  him,  this  was  not  subject  to  the  inherit- 
ance tax.  In  re  Masury,  159  N.  Y.  532,  53  N.  E.  1127,  affirming 
28  N.  Y.  App.  Div.  580. 


882  STATUTES  ANNOTATED.  [N.  Y.  St. 

Use  Reserved  to  Grantor. 

In  1901  the  grantor  transferred  by  deed  all  his  real  and  personal 
property  in  consideration  of  the  grantee's  services  rendered  and 
to  be  rendered  in  trust  nevertheless  for  the  use  and  benefit  of  the 
grantor  during  the  term  of  his  natural  life,  and  at  his  death  to 
become  the  property  of  the  grantee  absolutely.  There  was  a 
collateral  agreement  to  the  effect  that  the  grantor  during  his  life 
should  have  the  right  to  use  any  portion  of  the  properties  men- 
tioned. As  the  grantee  never  got  full  title  the  tax  was  assessable. 
In  re  Skinner,  45  Misc.  559,  92  N.  Y.  Suppl.  972  (s.  c.  106  N.  Y. 
App.  Div.  217,  94  N.  Y.  Suppl.  144). 

A  grantor  gave  a  trust  transferring  property  described  in  trust 
for  his  three  sisters,  reserving  to  himself  certain  powers,  namely, 
to  direct  the  payment  of  the  income  to  himself  for  life,  or  to  such 
other  persons  as  he  may  designate  in  writing;  to  withdraw  the 
securities  and  secure  others;  to  alter  or  amend  the  trust  and  add 
property  thereto  and  terminate  the  same  at  any  time  by  a  written 
notice  to  a  trustee. 

The  court  holds  that  the  donor  has  reserved  during  his  life  such 
numerous  and  extensive  powers  over  the  property  transferred  as 
to  preclude  the  legitimate  inference  of  an  intention  on  his  part  that 
they  were  to  take  effect  in  absolute  possession  or  enjoyment  before 
his  death.  If  a  person  intends  in  good  faith  to  make  an  absolute 
gift  of  his  property  during  his  life  to  others  and  thereby  make  a 
provision  for  them  which  shall  not  be  contingent  upon  the  event 
of  his  death,  there  is  no  prohibition  in  the  act  in  that  respect. 
But  in  this  case  the  trust  deed  did  not  constitute  an  absolute  gift  of 
the  grantor's  property  during  his  life.  In  re  Bostwick,  160  N.  Y.  489, 
55  N.  E.  208,  affirming  38  N.  Y.  App.  Div.  223,  56  N.  Y.  Suppl.  495. 

Where  the  decedent  deposited  money  in  savings  banks  in  trust 
for  his  children  these  interests  are  identical  with  those  passing  by 
a  will.  The  decedent  reserved  to  himself  all  of  the  rights  of  own- 
ership in  the  interests  until  his  death  when  he  is  presumed  to  have 
intended  that  each  trust  shall  come  to  an  end  and  that  the  funds 
shall  revert  to  his  estate  if  the  beneficiaries  do  not  survive  him. 
In  re  Barbey,  114  N.  Y.  Suppl.  725. 

Where  a  testator  has  given  personal  property  to  a  trust  com- 
pany in  trust  to  pay  the  income  from  the  fund  to  the  use  of  the 
testator  during  his  natural  life  and  upon  his  death  to  assign  and 
transfer  the  property  to  such  person  and  in  such  shares  as  the  tes- 
tator should  by  his  last  will  and  testament  or  instrument  in  the 


1911,  c.  732.]  NEW  YORK.  883 

nature  thereof  appoint,  and  in  default  of  such  appointment  to  the 
next  of  kin  of  the  testator,  the  court  finds  that  this  trust  is  not 
irrevocable  but  that  the  deceased  retained  after  its  execution  such 
an  interest  or  ownership  as  to  render  it  taxable  under  the  provi- 
sions of  the  statute.  The  trust  company  never  became  owner  of 
the  property  and  "a  fair  construction  should  be  given  to  the  statute 
and  not  a  forced  or  technical  one.  No  opportunity  should  be  given 
parties  to  evade  the  statute  and  prevent  the  taxation  of  the  prop- 
erty fairly  within  its  provisions  and  we  are  unable  to  give  any 
construction  to  the  statute  which  will  aid  parties  in  the  evasion  of 
the  law."     In  re  Ogsbury,  7  N.Y.  App.  Div.  71,  39  N.Y.  Suppl.  978. 

Remainders  Taking  Eifect  on  the  Death  of  the  Donor. 

Where  a  trustee  gives  the  income  of  his  estate  to  beneficiaries 
for  life  and  the  principal  to  them  at  his  death,  it  is  as  to  the  principal 
a  transfer  intended  to  take  effect  at  the  death,  and  hence  subject 
to  the  inheritance  tax.     In  re  Patterson,  127  N.  Y.  Suppl.  284. 

The  decedent  in  1896  transferred  a  large  amount  of  property  to 
one  Crispell  on  an  oral  agreement  that  principal  and  income  should 
belong  to  Crispell,  and  that  he  could  dispose  of  it  at  any  time  he 
chose,  but  that  the  decedent  was  to  have  the  income  as  long  as  he 
lived,  although  the  gift  was  to  be  absolute  to  Crispell.  In  1897 
the  decedent  made  another  gift  to  Crispell  on  a  written  agreement 
that  the  decedent  was  to  have  for  life  such  part  of  the  net  income 
as  he  might  wish,  with  power  to  the  decedent  to  give  his  sister  ten 
thousand  dollars  out  of  the  security  transferred.  The  court  holds 
that  under  these  agreements  the  testator  reserved  a  life  interest 
to  himself;  that  although  possession  of  the  securities  was  given 
to  the  donee,  this  did  not  make  him  their  absolute  owner  and  the 
donee  during  the  donor's  life  held  the  securities  in  trust  to  pay  the 
income  to  the  donor.  The  gift  is  therefore  taxable  under  the  trans- 
fer act  of  1896  as  a  transfer  to  take  effect  after  the  death  of  the 
donor.  In  re  Cornell,  170  N.  Y.  423,  63  N.  E.  445,  modifying  66 
N.  Y.  App.  Div.  162,  73  N.  Y.  Suppl.  32. 

Where  the  decedent  transferred  her  property  to  trustees  on 
trust  to  collect  the  income  and  apply  the  same  to  her  use  during 
her  life,  and  after  her  death  to  divide  and  pay  over  the  same  and 
the  proceeds  among  her  three  nieces,  reserving  the  power  to  modify 
the  instrument,  the  court  holds  that  it  is  not  important  to  deter- 
mine whether  the  trust  instrument  was  made  in  contemplation  of 
death.     The  real  question  is  whether  the  remainders  which  the 


884  STATUTES  ANNOTATED.  [N.  Y.  St. 

nieces  took  were  intended  to  "take  effect  in  possession  or  enjoy- 
ment" at  or  after  the  death  of  the  donor.  And  the  court  holds  that 
it  is  quite  clear  that  these  nieces  did  take  by  an  instrument  intended 
to  take  effect  at  or  after  the  death  of  the  donor.  In  re  Green, 
153  N.  Y.  223,  47  N.  E.  292,  reversing  7  N.  Y.  App.  Div.  339. 

The  decedent  in  1893  transferred  to  his  four  daughters  eleven 
shares  of  stock  in  a  certain  company  and  the  daughters  on  the 
same  day  delivered  to  him  an  instrument  reciting  that  he  had 
transferred  the  stock  on  condition  that  he  is  to  receive  all  divi- 
dends during  his  life ;  and  also  on  condition  that  he  has  the  right 
to  vote  upon  the  stock  as  though  no  transfer  had  been  made.  The 
agreement  further  provided  that  it  was  not  revocable,  but  to  con- 
tinue in  full  force  until  the  death  of  the  decedent.  The  court 
holds  that  the  two  instruments  being  executed  at  the  same  time 
must  be  construed  together  as  a  single  instrument ;  that  the  effect 
of  these  was  to  transfer  to  the  daughters  the  remainder  in  stock 
after  the  donor's  death  reserving  to  the  latter  an  estate  for  his  life. 
The  court  relying  on  In  re  Green,  153  N.  Y.  223,  holds  that  this 
is  a  gift  of  remainder  after  the  death  of  the  donor  and  is  taxable 
as  a  transfer  "intended  to  take  effect  in  possession  or  enjoyment 
at  or  after  such  death."  In  re  Brandeth,  169  N.  Y.  437,  62  N. 
E.  563,  58  L.  R.  A.  148,  reversing  58  N.  Y.  App.  Div.  575,  69 
N.  Y.  Suppl.  142.       ^ 

Deposit  in  Trust, 

A  deposit  in  a  savings  bank  in  trust  for  another  is  taxable  so 
far  as  it  represents  deposits  made  by  the  decedent  out  of  his  own 
funds,  but  not  so  far  as  it  was  contributed  by  a  third  party.  In  re 
Rosenberg,  114  N.  Y.  Suppl.  726. 

**Whenever  ANY  Person  .  .  .  shall  Exercise   a   Power 
OF  Appointment.'* 

Nature  and  Validity  of  Tax. 

The  court  holds  that  the  statute  of  1897  does  not  attempt  to  impose 
a  tax  upon  property,  but  upon  the  exercise  of  the  power  of  appoint- 
ment. The  beneficiary  is  compelled  to  resort  to  the  will  in  order 
to  establish  his  rights,  for  the  deed  alone  would  not  suffice.  "The 
privilege  of  making  a  will  is  not  a  natural  or  inherent  right,  but 
one  which  the  state  can  grant  or  withhold  in  its  discretion.  If 
granted,  it  may  be  upon  such  conditions  and  with  such  limitations 
as  the  legislature  sees  fit  to  create.     The  payment  of  a  sum  in 


1911,  c.  732.]  NEW  YORK.  885 

gross,  or  of  an  amount  measured  by  the  value  of  the  property 
affected,  may  be  exacted,  or  the  right  may  be  limited  to  one  or  more 
kinds  of  property  and  withdrawn  as  to  all  others.  The  legis- 
lature could  provide  that  no  power  of  appointment  should  be 
exercised  by  will,  or  that  it  should  be  exercised  only  upon  the  pay- 
ment of  a  gross  or  ratable  sum  for  the  privilege.  It  could  exact 
this  condition,  independent  of  the  date  or  origin  of  the  power.  All 
this  necessarily  flows  from  the  absolute  control  by  the  legislature 
of  the  right  to  make  a  will."  Quoting  In  re  Vanderbilt,  163  N.  Y. 
597,  and  In  re  Dows,  167  N.  Y.  227.  Per  Vann,  J.,  in  In  re  Delano, 
176  N.  Y.  486,  491,  64  L.  R.  A.  279,  177  N.  Y.  540,  69  N.  E.  1122, 
reversing  82  N.  Y.  App.  Div.  147,  81  N.  Y.  Suppl.  762  (affirmed 
suh  nomine,  Chanter  v.  Kelsey,  205  U.  S.  466,  27  S.  Ct.  550,  51 
L.  Ed.  882). 

Governed  by  Law  in  Effect  at  the  Exercise  of  the  Power. 

The  testator  died  in  1885,  and  at  the  time  of  his  death  the  trust 
fund  in  question  was  not  taxable  under  the  collateral  inheritance 
law.  The  will  created  a  power  to  leave  by  will  which  was  executed 
in  1899  when  the  trust  funds  were  subject  to  the  inheritance  tax. 

It  was  claimed  that  the  execution  of  the  power  of  appointment 
related  back  to  the  will  of  the  testator  and  that  therefore  everything 
connected  with  the  exercise  of  that  power  is  to  be  regarded  as 
coming  under  the  administration  of  the  estate  of  the  testator  and 
must  be  governed  by  the  law  in  operation  at  that  time  and  before 
the  passage  of  the  amendment  of  1897. 

The  court  says  that  there  was  no  complete  vesting  of  an  estate 
in  the  children  of  the  appointee  under  the  power  until  that  power 
was  exercised,  and  that  the  amount  of  the  tax  can  only  be  deter- 
mined after  the  execution  of  the  power.  The  court  holds  that  the 
law  cannot  be  applied  with  more  certainty  than  by  making  the 
tax  relate  to  the  date  of  the  determination  of  the  estate.  In  re 
Vanderbilt,  163  N.  Y.  597,  57  N.  E.  1127,  affirming  50  N.  Y.  App. 
Div.  246,  63  N.  Y.  Suppl.  1079. 

Tax  Assessed  on  Present  Value  of  Property  Appointed. 

Where  a  life  tenant  has  power  to  appoint  the  remainder  and 
does  so,  the  tax  should  be  levied  on  the  whole  value  of  the  property 
transferred  and  not  merely  on  the  value  of  the  remainder  as  assessed 
under  the  will  of  the  original  testator.  In  re  Tucker,  27  Misc. 
Rep.  616,  59  N.  Y.  Suppl.  699. 


886  STATUTES  ANNOTATED.  [N.  Y.  St. 

Relationship  to  Donee  of  Power  the  Test. 

The  statute  of  1897  renders  the  exercise  of  a  power  of  appoint- 
ment a  transfer  taxable  under  the  act,  and  therefore  the  relation- 
ship of  the  appointees  should  be  considered  for  the  purpose  of  the 
inheritance  tax  as  though  the  property  to  which  the  appointment 
relates  belonged  absolutely  to  the  donee  of  such  power  and 
had  been  bequeathed  or  devised  by  such  donee  by  will. 
Therefore,  the  exercise  of  the  power  of  appointment  by  devise 
to  lineal  descendants  of  the  donee  who  were  collateral  heirs  of 
the  donee  should  be  taxed  at  the  rate  of  five  per  cent  and  not 
of  one  per  cent.  In  re  Walworth,  66  N.  Y.  App.  Div.  171,  72 
N.  Y.  Suppl.  984. 

Where  Power  Created  by  Grant,  before  the  Existence  of  the 
Inheritance  Tax. 

It  is  immaterial  how  the  power  is  created,  whether  by  will  or 
by  deed,  in  considering  the  right  to  tax  the  exercise  of  the  power. 
In  re  Delano,  176  N.  Y.  486,  493,  64  L.  R.  A.  279,  177  N.  Y.  540, 
69  N.  E.  1122,  reversing  82  N.  Y.  App.  Div.  147,  81  N.  Y.  Suppl. 
762,  affirmed  suh  nomine^  Chanter  v.  Kelsey,  205  U.  S.  466,  27  S.  Ct. 
550,  51  L.  Ed.  882. 

Notwithstanding  the  common  law  rule  that  the  estate  created  by 
the  execution  of  a  power  takes  effect  as  if  created  by  the  original 
deed,  for  some  purposes  the  execution  of  the  power  is  considered 
a  source  of  title.  The  New  York  court  found  where  the  original 
deed  creating  the  power  was  executed  before  the  passage  of  the 
statute,  but  the  power  was  executed  by  the  will  after  the  passage 
of  the  statute,  that  the  inheritance  tax  was  properly  levied.  That 
the  will  was  effectual  to  transfer  the  estate  was  decided  by  the 
New  York  court  and  its  decision  on  the  question  was  binding  upon 
the  court  of  appeals.  The  supreme  court  says  that  it  cannot  say 
that  property  has  been  taken  without  due  process  of  law  and  that 
the  effect  has  not  been  to  violate  any  contract  right  of  the  parties. 
Chanler  v.  Kelsey,  205  U.  S.  466,  27  S.  Ct.  550,  51  L.  Ed.  882 
affirming  In  re  Delano,  176  N.  Y.  486,  64  L.  R.  A.  279,  177  N. 
Y.  540,  69  N.  E.  1122.  (Holmes  and  Moody,  JJ.,  dissenting,  on 
"the  ground  that  this  was  a  succession  tax  and  it  was  plain 
that  there  was  no  succession  for  it  to  operate  upon,  as  the 
property  passed  under  the  original  deed  and  not  under  the  ap- 
pointment.) 


1911,  c.  732.]  NEW  YORK.  887 

Power  Created  by  Will  before  the  Existence  of  the  Inherit- 
ance Tax. 

The  testator  died  in  1880,  leaving  real  estate  in  trust  to  pay  the 
income  to  his  son  for  life,  and  upon  the  death  of  the  son  the  property 
was  to  go  as  the  son  might  by  last  will  appoint.  But  in  case  the 
son  died  intestate,  then  the  property  was  to  vest  in  his  children. 
And  the  will  gave  the  trustee  power  of  sale  of  the  real  estate  which 
was  exercised  during  the  life  of  the  son  and  the  proceeds  invested 
in  stocks  of  corporations.  The  son  died  January  13,  1899,  leaving 
a  will  exercising  the  power.  And  the  court  imposed  a  tax  on  the 
property  parsing  under  this  power  of  appointment  both  on  the  life 
estates  and  on  the  remainders  created  by  the  will  of  the  son. 

The  court  holds  that  whatever  be  the  technical  source  of  title  of 
a  grantee  under  a  power  of  appointment,  it  cannot  be  denied  that 
in  reality  and  substance  it  is  the  execution  of  the  power  that  gives 
the  grantee  the  property  passing  under  it.  When  the  father 
"devised  this  property  to  the  appointees  under  the  will  of  his  son, 
he  necessarily  subjected  it  to  the  charge  that  the  state  might  impose 
on  the  privilege  accorded  to  the  son  of  making  a  will.  That  charge 
is  the  same  in  character  as  if  it  had  been  laid  on  the  inheritance  of 
the  estate  of  the  son  himself."  .  .  .  "Had  the  fund  passed  in 
default  of  an  exercise  of  the  power  of  appointment,  a  very  different 
proposition  would  be  presented."  In  re  Dows,  167  N.  Y.  227,  232, 
60  N.  E.  439,  52  L.  R.  A.  433,  88  Am.  St.  Rep.  508,  affirming  60 
N.  Y.  App.  Div.  630  (affirmed  suh  nomine,  Orr  v.Gilman,  183  U.  S. 
278,. 22  S.  Ct.  213,  46  L.  Ed.  196). 

The  testator  died  in  1890,  and  his  son  died  in  1899,  leaving  a 
will  exercising  a  power  of  appointment  given  him  in  the  will  of 
his  father,  and  it  was  claimed  that  the  New  York  statute  of  1897, 
section  220,  subdivision  5,  was  in  violation  of  the  fourteenth  amend- 
ment, and  in  violation  of  section  10  of  article  1  of  the  United  States 
constitution.  The  court  quotes  at  length  from  Carpenter  v.  Pennsyl- 
vania, 17  How.  456,  where  a  retroactive  state  statute  was  held 
constitutional. 

The  court  finds  that  the  New  York  court  of  appeals  held  that 
it  was  the  execution  of  the  power  of  appointment  which  subjected 
grantees  under  the  statute  to  the  transfer  tax.  This  conclusion 
is  binding  upon  this  court  in  so  far  as  it  involves  a  construction 
of  the  will  and  of  the  statute.  Even  if  the  view  of  the  New  York 
court  was  wrong,  it  was  an  error  which  the  United  States  supreme 
court  has  no  power  to  review.     Orr  v.  Gilman,  183  U.  S.  278,  288, 


888  STATUTES  ANNOTATED.  [N.  Y.  St. 

22  S.  Ct.  213,  46  L.  Ed.  196,  affirming  In  re  Dow,  167  N.  Y.  227, 
60  N.  E.  439,  52  L.  R.  A.  433,  88  Am.  St.  Rep.  508,  affirming  60 
N.  Y.  App.  Div.  630. 

It  is  quite  immaterial  that  there  was  no  statute  imposing  a 
succession  tax  of  any  kind  in  force  when  the  power  was  created. 
That  transfer  is  not  taxed  and  the  statute  makes  no  effort  to  reach 
it.  It  is  the  practical  transfer  through  the  exercise  of  the  power  by 
will  that  is  taxed  and  nothing  else  under  N.  Y.  St.  1897.  The 
right  of  the  legislature  to  impose  a  tax  on  the  privilege  of  exercising 
a  power  by  will  is  not  affected  by  the  fact  that  no  such  tax  was 
imposed  when  the  power  was  created.  In  re  Delano,  176  N.  Y. 
486,  494,  64  L.  R.  A.  279,  177  N.  Y.  540,  69  N.  E.  1122,  reversing 
82  N.  Y.  App.  Div.  147,  81  N.  Y.  Suppl.  762,  affirmed  suh  nomine, 
Chanler  v.  Kelsey,  205  U.  S.  466,  27  S.  Ct.  550,  51  L.  Ed.  882. 

The  testator  died  in  1869  leaving  property  to  his  wife  for  life 
with  a  power  of  appointment  which  she  exercised  by  a  will  in  1900. 
It  is  the  exercise  and  not  the  creation  of  the  power  of  appointment 
which  affects  the  transfer  upon  which  the  tax  has  been  forced; 
and  hence  the  fund  must  for  taxing  purposes  be  regarded  as  having 
passed  from  a  life  tenant  to  her  appointee.  In  re  Rogers,  172  N.  Y. 
617,  64  N.  E.  1125,  affirming  71  N.  Y.  App.  Div.  461,  75  N.  Y. 
Suppl.  835. 

The  original  testa tordied  in  1877  leaving  property  in  trust  for  a 
life  tenant  with  a  power  of  appointment  on  her  death.  She  died  in 
1899,  and  the  court  holds  that  under  the  amendment  of  1897,  the 
property  passing  under  her  will  in  exercising  the  power  is  subject  to 
the  tax.     Inre  Potter,  51  N.  Y.  App.  Div.  212,  64  N.  Y.  Suppl.  1013. 

Where  Original  Testator  a  Non-resident. 

The  testator  died  in  Maryland,  where  his  will  was  proved.  He 
left  his  property  to  trustees  upon  trust  and  gave  a  power  of  appoint- 
ment. The  donee  of  the  power  died  in  1902,  being  a  resident  of 
New  York.  He  exercised  the  power  by  will,  which  was  admitted 
to  probate  in  New  York  and  subsequently  in  Maryland.  There  is 
no  transfer  subject  to  tax  in  New  York,  as  all  of  the  assets  are  in  the 
state  of  Maryland  held  by  trustees  residing  in  Maryland  under  a 
will  of  a  citizen  of  Maryland  pursuant  to  the  laws  of  that  state. 
In  re  Thomas,  39  Misc.  Rep.  136,  78  N.  Y.  Suppl.  981. 

Where  Donee  is  a  Non-resident. 

Where  a  testator  died  in  1870  a  resident  of  New  York,  leaving  a 
will  under  which  he  gave  his  daughter  a  life  estate  with  the  power 


1911,  c.  732.]  NEW  YORK.  889 

of  appointment;  and  the  daughter  died  in  1908,  being  a  resident  of 
the  state  of  Rhode  Island,  leaving  a  will  by  which  she  exercised  the 
power,  no  tax  can  be  imposed  under  New  York  law,  as  the  life  tenant 
in  making  her  will  exercised  a  privilege  granted  by  the  laws  of  her 
own  state  and  not  by  those  of  the  state  of  New  York.  In  re  Fear- 
ng,  200  N.  Y.  340,  93  N.  E.  956,  affirming  123  N.  Y.  Suppl.  396. 

The  exercise  of  a  power  of  appointment  is  under  the  statute  of 
1897  the  basis  for  the  tax,  and  where  the  grantor  of  the  power  was 
a  resident  of  New  York  but  the  donee  of  the  power  was  a  resident 
of  New  Jersey,  where  it  was  exercised.  The  only  privilege  granted 
by  the  state  of  New  York  was  to  permit  the  transfer  of  the  property 
and  locate  it  in  New  York  to  pass  to  the  appointees  in  accordance 
with  the  provisions  of  the  will  probated  in  New  Jersey ;  and  there- 
fore the  jurisdiction  of  the  state  of  New  York  is  limited  to  the  prop- 
erty situated  in  this  state  at  the  time  of  the  death  of  the  donee  of 
the  power.  In  re  Kissel,  65  Misc.  443,  121  N.  Y.  Suppl.  1088, 
affirmed  in  142  N.  Y.  App.  Div.  934,  127  N.  Y.  Suppl.  1127. 

Where  Exercise  of  Power  is  Like  Will. 

Where  the  will  makes  a  bequest  to  a  life  tenant  with  a  power  in 
the  life  tenant,  those  who  take  on  the  exercise  of  this  power  exactly 
as  in  the  will  take  under  the  will  of  the  original  testator  and  hence 
are  not  taxable  if  he  died  before  1885.  In  re  Backhouse,  185  N.  Y. 
544,  77  N.  E.  1181,  affirming  110  N.  Y.  App.  Div.  737,  96  N.  Y. 
Suppl.  466. 

The  testator  died  in  1890  leaving  property  in  trust  to  a  life  tenant 
and  on  her  death  to  such  children  of  a  relative  as  she  by  last  will 
and  testament  shall  appoint.  The  donee  of  the  power  died  in  1903 
exercising  the  power.  It  appears  that  there  was  a  necessity  for 
exercising  the  power,  that  it  cannot  be  treated  as  a  nullity  and  that 
therefore  the  transfer  tax  under  the  statute  was  properly  assessed. 
In  re  Cooksey,  182  N.  Y.  92,  98,  74  N.  E.  880.  affirming  100  N.  Y. 
App.  Div.  516,  91  N.  Y.  Suppl.  1091. 

Where  the  testator  died  in  1869,  giving  property  to  his  grand- 
daughter subject  to  the  exercise  of  a  power  of  appointment,  and 
the  power  of  appointment  was  exercised  in  favor  of  the  grand: 
daughter,  the  intent  to  exercise  the  power  neither  increased  nor 
diminished  the  estate  of  the  granddaughter  and  did  not  affect  in 
any  degree  the  value  of  her  grandfather's  gift.  It  did  not  affec- 
tively transfer  any  property  whatever,  for  she  took  from  her  grand- 
father and  nothing  was  added  or  taken  away  from  the  gift  by  the 


890  STATUTES  ANNOTATED.  [N.  Y.  St. 

exercise  of  the  power  through  the  will  of  her  mother.  The  execu- 
tion of  the  power  left  the  title  where  it  stood  before  and  the  result 
was  the  same  as  if  there  had  been  no  power  to  exercise.  The 
exercise  of  a  power  which  leaves  everything  as  it  was  before  is  a 
mere  form  with  no  substance.  The  transfer  tax  is  imposed  upon 
the  right  to  succession  or  on  the  privilege  of  making  a  will  and 
thereby  exercising  the  power  of  appointment. 

The  donee  of  the  power  exercised  it  over  property  belonging 
to  her  as  well  as  property  derived  from  the  grandfather,  and  the 
court  holds  that  the  fact  that  the  granddaughter  accepted  under 
the  will  of  the  appointor  property  which  belonged  to  her  does  not 
prove  that  she  accepted  the  title  tendered  by  the  appointment, 
although  both  gift  and  appointment  were  made  by  the  same  in- 
strument. The  granddaughter  could  claim  as  a  devisee  of  her 
mother  and  disclaim  as  her  appointee.  In  re  Lansing,  182  N.  Y. 
238,  245,  74  N.  E.  882,  modifying  103  N.  Y.  App.  Div.  596. 

The  testator  died  in  1892,  leaving  a  will  which  created  a  trust 
for  the  benefit  of  certain  life  tenants,  and  provided  that  on  the 
death  of  either  leaving  issue  a  share  of  the  one  so  dying  shall,  unless 
otherwise  disposed  of  as  directed  by  his  last  will,  be  held  for  the 
use  and  benefit  of  his  lawful  issue.  The  life  tenant  died  in  1905, 
leaving  a  widow  and  four  children  surviving,  and  a  will  providing 
for  those  children.  The  court  holds  that  the  surrogate  should  not 
impose  a  transfer  upon  the  children's  share  in  the  trust  property 
as  they  take  their  interests  directly  under  the  provisions  of  the 
will  of  their  grandfather  and  not  by  virtue  of  the  exercise  of  the 
power  of  appointment  given  their  father.  The  father's  will 
only  "otherwise  disposed  of"  one-fifth  of  the  property  by  giving 
it  to  his  wife  and  the  balance  went  as  provided  in  the  will  of  the 
grandfather.  Instead  of  being  benefited  the  interests  of  the  chil- 
dren were  injured  by  the  exercise  of  the  power  and  therefore 
they  took  under  the  will  of  their  grandfather  and  their  estate  is 
not  subject  to  the  transfer  tax.  In  re  Ripley,  192  N.  Y.  536,  84 
N.  E.  574,  affirming  122  N.  Y.  App.  Div.  419,  106  N.  Y.  Suppl.  844. 

Where  the  will  of  the  donee  of  a  power  neither  adds  to  nor  takes 
from  any  of  the  final  beneficiaries  the  benefits  which  the  will  of 
the  donee  of  the  power  expressly  conferred  upon  them,  no  inher- 
itance tax  can  be  assessed  on  this  transfer.  In  re  Spencer,  119 
N.  Y.  App.  Div.  883,  107  N.  Y.  Suppl.  543,  affirming  91  Hun  141. 

The  testator  died  in  1892,  leaving  a  share  of  his  estate  in  trust 
to  another  for  life,  and  remainder  on  his  death  to  his  lawful  issue, 


1911,  c.  732.]  NEW  YORK.  891 

unless  otherwise  directed  by  the  will  of  the  life  tenant.  The  life 
tenant  died  exercising  the  power  of  appointment,  and  the  court 
holds  that  where  the  exercise  of  the  power  was  to  four  of  the 
beneficiaries  as  named  in  the  original  will  then  no  tax  should  be 
levied  on  these  four,  as  they  took  under  the  original  will  of  the 
testator;  and  that  a  temporary  payment  made  to  the  tax  com- 
missioner by  the  trustees  could  be  recovered  back  in  part  so  as 
to  leave  only  the  portion  due.  People  v.  Williams,  127  N.  Y. 
Suppl.  749. 

Election  to  Take  under  Original  Will  Rather  than  under 
Appointment. 

Where  a  will  creates  a  power  of  appointment  to  such  issue  of 
the  life  tenant  as  she  may  by  will  appoint,  and  in  case  of  failure 
to  appoint  then  to  such  issue  absolutely,  and  she  by  will  exercises 
the  power,  the  issue  have  a  right  to  elect  to  take  under  the  original 
will  instead  of  under  the  exercise  of  the  power  of  appointment. 
In  re  Lewis,  194  N.  Y.  550,  affirming  129  N.  Y.  App.  Div.  905, 
reversing  60  Misc.  643,  on  authority  of  In  re  Lansing,  182  N.  Y. 
238,  and  In  re  Haggerty,  194  N.  Y.  550. 

Where  the  donee  of  the  power  of  appointment  exercises  that  power 
as  provided  by  appointing  to  those  to  whom  the  property  would 
go  under  the  will,  on  failure  to  exercise  the  power  no  transfer  tax 
should  be  collected  on  the  exercise  of  the  power,  and  an  election 
to  take  under  the  original  will  rather  than  under  the  power  need 
not  be  in  any  particular  form  and  it  is  sufficient  if  it  appears  by 
opposition  to  the  imposition  of  a  transfer  tax.  In  re  Chapman, 
133  N.  Y.  App.  Div.  337,  117  N.  Y.  Suppl.  679,  affirming  61  Misc. 
593,  115  N.  Y.  Suppl.  981. 

The  testator  died  in  1875,  leaving  a  will  which  created  a  power 
of  appointment  and  in  default  of  such  appointment  then  over  to 
his  daughters.  The  life  tenant  exercised  the  power  in  favor  of 
the  daughter,  who  prior  to  the  execution  of  that  power  had  a 
vested  remainder  in  the  property.  The  daughter  renounced  her 
rights  under  the  execution  of  the  power  and  claimed  under  the 
original  will,  and  the  court  holds  that  her  interest  is  not  subject 
to  the  inheritance  tax.  In  re  Haggerty,  194  N.  Y.  550,  87  N.  E. 
1120,  affirming  128  N.  Y.  App.  Div.  479,  112  N.  Y.  Suppl.  1017. 

Property  Subject  to  a  Power. 

A  will  gave -a  certain  estate  in  trust  to  pay  the  income  to  the 
wife  for  life,  the  remainder  to  the  nephew;    but  the  codicil  gave 


892  STATUTES  ANNOTATED.  [N.  Y.  St. 

the  wife  power  to  appoint  a  portion  of  the  estate  given  to  the 
nephew.  From  the  interest  of  the  nephew  should  be  deducted  the 
value  of  the  property  over  which  the  wife  had  the  power  of  appoint- 
ment.    In  re  Field,  36  Misc.  Rep.  279,  73  N.  Y.  Suppl.  512. 

Vested  Remainders. 

Where  the  testator  died  in  1880,  leaving  real  estate  in  trust  to 
pay  the  income  to  his  son  for  life,  and  upon  his  death  the  property 
shall  vest  absolutely  in  his  children,  as  he  may  by  will  appoint; 
and  where  the  son  by  will  appoints  for  life  with  vested  remainders 
over,  these  vested  remainders  are  subject  to  taxation  under  the  New 
York  statute  of  1897.  They  are  alienable,  devisable  and  descend- 
ible; therefore,  they  do  not  fall  within  the  exception  of  the  statute 
and  are  subject  to  present  taxation.  In  re  Dows,  167  N.  Y.  227, 
233,  60  N.  E.  439,  52  L.  R.  A.  433,  88  Am.  St.  Rep.  508,  affirming 
60  N.  Y.  App.  Div.  630  (affirmed  suh  nomine,  Orr  v.  Gilman, 
183  U.  S.  278;  22  S.  Ct.  213,  46  L.  Ed.  196). 

Where  Donee  has  Absolute  Estate. 

Where  the  testator  gave  property  to  his  wife  to  be  disposed  of 
as  she  might  think  proper  without  any  remainder  or  trust  being 
created,  this  was  an  absolute  estate  to  the  wife  and  therefore  on 
her  death  without  exercising  her  power  there  was  no  reason  for 
levying  a  tax  on  the  heirs  of  the  original  testator.  In  re  Lynn,  34 
Misc.  681,  70  N.  Y.  Suppl.  730. 

Direction  to  Pay  Loan. 

Where  the  donee  of  the  power  of  appointment  in  her  will  gave  a 
direction  to  repay  a  loan  heretofore  made  to  her  out  of  the  fund 
over  which  she  exercised  her  power,  this  is  a  transfer  to  the  creditor 
and  was  taxable  under  the  statute  of  1897.  In  re  Rogers,  172  N.  Y. 
617,  64  N.  E.  1125,  affirming  71  N.  Y.  App.  Div.  461,  75  N.  Y. 
Suppl.  835. 

When  Interests  Depend  on  Power. 

Where  under  an  original  will  and  in  default  of  the  exercise  of  the 
power  the  children  will  take  an  immediate  and  equal  division  of 
the  estate  and  under  the  power  the  property  is  given  to  a  life  tenant 
^  for  life  and  then  to  three  of  the  four  children  named  in  the  original 
will,  the  children  named  must  make  title  under  the  exercise  of  the 
power  of  appointment  and  this  is  therefore  subject  to  the  inherit- 
ance tax.     In  re  Warren,  62  Misc.  444.  116  N.  Y.  Suppl.  1034. 


911,  c.  732.]  NEW  YORK.  893 

The  testator  by  will  provided  that  her  estate  should  pass  to 
trustees  for  her  children  for  life  and  on  the  death  of  either  of  them 
as  they  might  by  will  appoint  and  in  default  of  a  will  then  to  the 
issue.  The  daughter  bequeathed  to  her  husband  for  life  and 
upon  his  death  to  her  two  children  and  the  court  says  that  as  the 
power  of  appointment  was  exercised  by  the  life  tenant  and  as  it 
was  only  in  case  of  a  failure  to  exercise  the  power  that  the  remainder 
vested  in  the  children  of  the  donee,  they  derived  their  title  to  the 
property  through  the  exercise  of  the  power  of  appointment  and  not 
directly  under  the  will  of  the  testator.  In  re  Lowndes,  60  Misc. 
506,  113  N.  Y.  Suppl.  1114. 

Failure  to  Exercise  Power. 

The  testatrix  died  in  1883  leaving  the  residue  of  her  estate  to 
her  husband  with  the  right  ot  use  and  enjoyment  during  his  life,  and 
giving  him  the  right  to  dispose  of  the  same  on  his  death  by  will,  and 
that  so  much  as  might  remain  undisposed  of  at  his  death  should  pass 
to  two  legatees  named.  The  husband  died  in  1894,  leaving  a  will 
which  directed  his  executors  to  distribute  his  wife's  estate  "accord- 
ing to  the  provisions  of  her  last  will  and  testament."  The  court 
finds  that  this  was  a  refusal  or  renunciation  of  the  power ;  that  the 
legatees  who  took  on  the  death  of  the  husband  therefore  took  under 
the  will  of  the  wife  and  as  she  died  before  the  inheritance  tax  in 
1885,  no  tax  was  collectible  on  the  estate.  In  re  Langdon,  153  N.  Y. 
6,  9,  46  N.  E.  1034,  affirming  11  N.  Y.  App.  Div.  220,  43  N.  Y. 
Suppl.  419. 

Statute  Ineffective  over  Interests  in  Default  of  Exercise  of 
Power. 

The  provision  that  the  failure  or  omission  to  exercise  the  power  of 
appointment  subjects  the  property  to  a  transfer  tax  in  the  same 
manner  as  if  the  donee  of  the  power  had  owned  the  property  and 
devised  it  by  will  is  ineffective,  as  where  there  is  no  transfer  there 
can  be  no  tax;  and  a  transfer  made  before  the  passage  of  the  act 
relating  to  transfers  is  not  affected  by  it. 

If  it  be  assumed  that  a  remainder  interest  in  default  of  the  execu- 
tion of  a  power  is  contingent,  nevertheless  it  is  acquired  under  the 
will  of  the  testator  and  cannot  be  subject  to  tax  when  the  testator 
died  before  the  imposition  of  a  transfer  tax.  It  then  became  a  prop- 
erty right  in  the  remainderman  which  was  just  as  sacred  and  just 
as  immune  from  any  legislative  attack  as  any  other  property  right; 


894  STATUTES  ANNOTATED.  [N.  Y.  St. 

and  where  the  power  of  appointment  is  not  exercised  no  tax  can 
be  laid  upon  it.  In  re  Lansing,  182  N.  Y.  238,  248,  74  N.  E.  882, 
modifying  103  N.  Y.  App.  Div.  596. 

No  Defence  that  Tax  Paid  under  Original  Bequest  Creating 
Power. 

The  testator  died  in  December,  1887,  leaving  a  life  estate  with  a 
power  of  appointment  in  the  life  tenant.  The  life  tenant  died  in 
1904  after  exercising  the  power,  and  the  court  holds  that,  although 
all  property  was  made  subject  to  the  tax  under  the  will  of  the 
original  testator,  still  the  exercise  of  the  power  of  appointment 
is  taxable  under  the  statute  of  1897.  The  court  holds  that  the  fact 
that  the  tax  was  erroneously  assessed  in  1888  on  the  whole  in- 
terest instead  of  merely  on  the  life  interest  does  not  prevent  the 
collection  of  the  tax  on  the  exercise  of  the  power  of  appoint- 
ment. In  re  Buckingham,  106  N.  Y.  App.  Div.  13,  94  N.  Y. 
Suppl.  130. 

S.  221.  [As  amended  by  St.  1911,  c.  732,  in  effect  July  21,  1911.]  Exceptions 
and  limitations.  Any  property  devised  or  bequeathed  for  religious  ceremonies, 
observances  or  commemorative  services  of  or  for  the  deceased  donor,  or  to  any 
person  who  is  a  bishop  or  to  any  religious,  educational,  charitable,  missionary, 
benevolent,  hospital  or  infirmary  corporation,  wherever  incorporated,  including 
corporations  organized  exclusively  for  Bible  or  tract  purpose  shall  be  exempted 
from  and  not  subject  to  the  provisions  of  this  article.  There  shall  also  be 
exempted  from  and  not  subject  to  the  provisions  of  this  article  personal  prop- 
erty other  than  money  or  securities  bequeathed  to  a  corporation  or  association 
wherever  incorporated  or  located,  organized  exclusively  for  the  moral  or  mental 
improvement  of  men  or  women  or  for  scientific,  literary,  library,  patriotic, 
cemetery  or  historical  purposes  or  for  the  enforcement  of  laws  relating  to  chil- 
dren or  animals  or  for  two  or  more  of  such  purposes  and  used  exclusively  for 
carrying  out  one  or  more  of  such  purposes.  But  no  such  corporation  or  associa- 
tion shall  be  entitled  to  such  exemption  if  any  officer,  member  or  employee 
thereof  shall  receive  or  may  be  lawfully  entitled  to  receive  any  pecuniary 
profit  from  the  operations  thereof  except  reasonable  compensation  for  services 
in  effecting  one  or  more  of  such  purposes  or  as  proper  beneficiaries  of  its 
strictly  charitable  purposes;  or  if  the  organization  thereof  for  any  such  avowed 
purpose  be  a  guise  or  pretense  for  directly  or  indirectly  making  any  other  pecun- 
iary profit  for  such  corporation  or  association  or  for  any  of  its  members  or  em- 
ployees or  if  it  be  not  in  good  faith  organized  or  conducted  exclusively  for  one 
or  more  of  such  purposes. 

[See  notes  to  the  Act  of  1885,  c.  483,  s.  1;  1887,  c.  713;  1891,  c.  215;  1892. 
c.  169;  1892,  c.  399,  s.  2;  1896,  c.  908,  s.  221;  1898,  c.  88;  1900,  c.  723;  1901, 
C.458;  1903,  c.  41;  1905,  c.  368;  1907,  c.  204;  1908,  c.  310;  1909,  c.  62,  s.  221; 
1910,  c.  600;  1910,  c.  706;  1911,  c.  732] 


1911,  c.  732.]  NEW  YORK.  895 

Care  of  Cemetery  Lot. 

A  bequest  to  a  cemetery  association  of  a  thousand  dollars,  the 
interest  to  be  used  for  perpetual  care  of  the  testator's  lot,  is  not 
part  of  the  funeral  expenses.  There  is  a  distinction  between 
expenditures  for  a  burial  lot  made  by  an  executor  in  his  discretion 
and  a  bequest  made  by  a  decedent  in  his  last  will  to  a  certain  bene- 
ficiary and  for  a  certain  specific  purpose;  and  as  cemetery  associa- 
tions are  not  specifically  mentioned  as  being  exempt,  the  transfer 
is  subject  to  tax.     In  re  Fay,  62  Misc.  154,  116  N.  Y.  Suppl.  423. 

Monument. 

A  monument  is  part  of  the  funeral  expenses.  In  re  Edgerton, 
158  N.  Y.  671,  52  N.  E.  1124,  affirming  35  N.  Y.  App.  Div.  125, 
54  N.  Y.  Suppl.  700. 

Municipal  Corporations. 

Under  the  New  York  statute  of  1896  there  was  a  material  change 
in  the  exemption  law  as  to  the  property  of  public  corporations. 
The  statute  renders  all  property  in  the  state  taxable  unless  exempt 
from  taxation  by  law  and  in  the  next  section  specifies  property  of 
a  municipal  corporation  as  exempt.  Therefore  a  bequest  to  a 
municipal  corporation  for  a  public  library  is  exempt  from  the  trans- 
fer tax  under  the  New  York  statute  of  1896.  In  re  Thrall,  157 
N.  Y.  46,  51  N.  E.  4il. 

The  United  States. 

It  is  urged  that  the  United  States  if  regarded  as  a  corporation 
is  a  corporation  exempt  from  taxation  under  the  transfer  tax,  but 
the  exemptions  in  the  statute  apply  only  to  domestic  corporations, 
and  the  United  States  is  not  a  domestic  corporation  so  far  as  the 
state  of  New  York  is  concerned.  In  re  Merriam,  141  N.  Y.  479, 
484, 36  N.  E.  505,  affirmed  in  United  States  v.  Perkins,  163  U.  S.  625. 

"This  tax,  in  effect,  limits  the  power  of  testamentary  disposition 
and  legatees  and  devisees  take  their  bequests  and  devises  subject 
to  this  tax  imposed  upon  the  succession  of  property.  This  view 
eliminates  from  the  case  the  point  urged  by  the  appellant  that  to 
collect  this  tax  would  be  in  violation  of  the  well-established  rule 
that  the  state  cannot  tax  the  property  of  the  United  States.  Assum- 
ing this  legacy  vested  in  the  United  States  at  the  moment  of  testa- 
tor's death,  yet  in  contemplation  of  law  the  tax  was  fixed  on  the 
succession  at  the  same  instant  of  time.    This  is  not  a  tax  imposed 


896  STATUTES  ANNOTATED.  [N.  Y.  St. 

by  the  state  on  the  property  of  the  United  States.  The  property 
that  vests  in  the  United  States  under  this  will  is  the  net  amount 
of  its  legacy  after  the  succession  tax  is  paid."  Per  Bartlett,  J., 
in  In  re  Merriam,  141  N.  Y.  479,  484,  36  N.  E.  505,  affirmed  in 
United  States  v.  Perkins,  163  U.  S.  625. 

"The  legislation  taxing  legacies  is  not  directed  against  the  United 
States  nor  against  the  legatees  nor  devisees  who  receive  the  benefit. 
It  operates  against  the  person  making  the  will  because  it  limits  his 
power  of  testamentary  disposition  and  it  is  well  settled  that  it  is 
exclusively  within  the  jurisdiction  of  the  state  to  legislate  upon  and 
regulate  the  general  rights,  duties  and  liabilities  of  its  citizens." 
In  re  Murphy,  4  Misc.  Rep.  230,  25  N.  Y.  Suppl.  107. 

The  testator  died  February  28,  1892,  leaving  a  bequest  to  the 
government  of  the  United  States  on  certain  conditions  and  the 
court  holds  that  as  the  tax  is  upon  the  right  of  succession  and  not 
upon  property,  and  that  this  bequest  is  subject  to  the  New  York 
inheritance  tax.    In  re  Cullum,  5  Misc.  Rep.  173,  25  N.  Y.  Suppl.  699. 

Fund  in  Hands  of  Court. 

The  court  reverses  the  order  of  the  surrogate  to  the  effect  that 
where  a  devise  in  trust  for  the  purpose  of  founding  a  home  for  the 
aged  was  made,  the  trust  to  last  during  two  lives  only,  that  the  fund 
after  the  end  of  the  trust  was  in  the  hands  of  the  supreme  court 
and  therefore  exempt  from  taxation.  The  appellate  division 
remarks  that  the  fund  is  not  a  gift  to  the  state  and  does  not  become 
the  property  of  the  state ;  that  the  omission  of  the  testator  to  supply 
a  trustee  after  the  two  lives  is  supplied  by  the  legislative  interven- 
tion, but  that  does  not  alter  the  character  of  the  gift,  nor  give  any 
control  over  it  for  any  purpose  beyond  that  outlined  by  the  will. 
Furthermore,  a  gift  to  a  municipality  or  to  the  United  States  is 
chargeable  with  the  deduction  for  the  succession  tax  as  either  takes 
the  bequest  subject  to  the  same  burden  as  an  individual.  Knight  v. 
Stevens,  72  N.  Y.  Suppl.  815,  reversing  In  re  Graves,  70  N.  Y. 
Suppl.  727. 

Government  Bonds. 

See  notes  to  the  Acts  of  1885, 1892  and  1897,  ante,  pp.  778, 815, 821. 
-  The  tax  imposed  by  the  act  of  1896  is  a  tax  on  the  right  of  suc- 
cession and  not  on  property;  and  therefore  it  is  immaterial  that 
the  trust  fund  passing  by  will  is  invested  in  bonds  of  the  state  of 
New  York  or  incorporated  companies  liable  to  taxation  on  their 


1911,  c.  732.]  NEW  YORK.  897 

own  capital.  In  re  Dows,  167  N.  Y.  227,  230,  60  N.  E.  439,  52  L.  R. 
A.  433,  88  Am.  St.  Rep.  508,  affirming  60  N.  Y.  App.  Div.  630 
(affirmed  sub  nomine,  Orr  v.  Giltnan,  183  U.  S.  278,  22  S.  Ct.  213, 
46  L.  Ed.  196). 

Government  bonds  are  not  considered  in  arriving  at  the  value 
of  the  property  which  measures  the  taxable  inheritance  as  the 
language  of  the  transfer  act  itself  defines  the  words  "estate"  and 
"property"  to  mean  property  passing  from  the  testator  over  which 
the  state  has  jurisdiction  for  the  purposes  of  taxation. 

Government  bonds,  however,  are  equally  responsible  for  debts 
and  expenses  of  administration  with  other  property,  and  there  is 
therefore  no  reason  for  not  requiring  the  government  bonds  to  bear 
their  proportion  of  the  debts  and  the  expenses.  The  appraiser 
in  finding  the  amount  of  property  subject  to  tax  should  deduct 
only  that  proportion  of  the  value  of  the  bonds  after  deducting  a 
proportional  share  of  the  debts  and  expenses.  In  re  Purdy,  24 
Misc.  Rep.  301,  53  N.  Y.  Suppl.  735,  2  Gibbons  527. 

**For  Religious  Ceremonies."  —  Masses. 

Bequests  for  masses  are  now  exempt  from  taxation  by  a  clause  in- 
troduced in  St.  1910,  c.  600,  and  continued  in  St.  1911,  c.  732,  s.  221. 

The  following  cases  before  the  statutory  exemption  are  of  interest. 

The  testator  left  a  legacy  of  five  hundred  dollars  to  the  execu- 
tors in  trust,  to  be  used  for  masses  for  the  repose  of  the  soul  of  the 
testatrix.  The  testatrix  and  her  husband  had  expressed  her 
desire  that  such  masses  be  celebrated  by  a  certain  priest  named. 
It  was  claimed  that  this  was  part  of  the  funeral  expenses,  but  the 
court  holds  that  this  is  a  distinct  legacy  and  cannot  be  considered 
as  part  of  the  funeral  expenses.  The  court  finds  the  bequest  to 
be  valid.  That  the  beneficiary  has  designated  as  a  wish  on  the 
part  of  the  testatrix  to  have  a  particular  priest  celebrate  the  masses 
is  equivalent  to  a  direction  and  therefore  the  bequest  is  subject  to 
the  inheritance  tax.  In  re  Black,  24  N.  Y.  St.  341,  5  N.  Y.  Suppl. 
452,  1  Con.  Surr.  477. 

The  will  bequeathed  to  a  priest,  or  in  the  event  of  his  death  to 
his  successors,  the  sum  of  $800  to  be  used  in  saying  eight  hundred 
low  masses,  two  hundred  for  each  of  four  different  persons.  This 
bequest  is  not  specially  exempted  and  is  not  a  provision  for  funeral 
expenses,  and  the  low  mass  in  no  sense  is  a  part  of  the  funeral 
service  even  so  far  as  such  masses  were  said  for  the  testator. 
In  re  McAvoy,  112  N.  Y.  App.  Div.  377,  98  N.  Y.  Suppl.  437. 


898  STATUTES  ANNOTATED.  [N.  Y.  St. 

The  testatrix  left  two  legacies  to  churches  for  masses  to  be  read 
for  the  repose  of  her  soul.  It  was  claimed  that  the  bequests  were 
taxable  as  under  the  rules  of  the  Roman  Catholic  Church  all  be- 
quests for  masses  go  to  the  priest  individually  who  says  the  masses 
and  do  not  go  to  the  church  as  a  religious  or  charitable  body.  This 
statement  was  contradicted.  The  court  holds  that  as  the  legacies 
are  bequeathed  directly  to  religious  bodies  and  as  the  provision  for 
masses  is  merely  collateral  and  incidental  they  are  therefore  exempt 
under  section  221.  In  re  Didion,  54  Misc.  201,  105  N.  Y.  Suppl. 
924. 

For  Religious  Use. 

The  testator  bequeathed  certain  sums  to  be  expended  from  time 
to  time  for  masses  for  the  repose  of  her  soul,  and  also  for  the  repose 
of  the  souls  of  her  deceased  parents,  in  the  discretion  of  the  execu- 
tors. The  court  holds  that  a  gift  for  the  saying  of  masses  for  the 
repose  of  the  dead  is  a  gift  for  religious  use,  and  that  therefore, 
under  the  statute  of  1893,  chapter  701,  there  is  a  gift  to  the  execu- 
tors for  a  religious  use  upon  a  valid  trust,  and  the  transfer  should 
be  taxed  at  the  rate  of  five  per  cent.  In  re  Eppig,  63  Misc.  613, 
118  N.  Y.  Suppl.  683. 

To  Bishop. 

This  exemption  covers  a  bequest  made  to  an  archbishop  or  cardi- 
nal archibishop  in  his  official  capacity,  as  they  are  all  bishops  as 
well  as  the  religious  and  temporal  heads  of  their  church.  The  clear 
intent  and  object  of  the  law  was  to  exempt  the  property  held  by 
religious  corporations,  whether  held  in  the  name  of  the  corporation 
itself  or  in  the  name  of  one  of  the  religious  heads  of  the  church  or  de- 
nomination.   In  re  Kelly,  29  Misc.  Rep.  169,  60  N.  Y.  Suppl.  1005. 

"To  ANY  Religious,  Educational.  Charitable,   etc 

Corporation." 

Whether  Retrospective. 

The  statute  of  1900,  chapter  382,  rendered  legacies  to  charitable 
corporations  subject  to  the  transfer  tax,  but  legacies  to  such  cor- 
T)orations  are  only  taxable  where  the  testators  have  died  after  the 
passage  of  that  act.  In  re  Vanderbilt,  68  N.  Y.  App.  Div.  27, 
74  N.  Y.  Suppl.  450  (reversed  on  other  points  in  172  N.  Y.  69), 
citing  In  re  Huntington,  168  N.  Y.  399,  61  N.  E.  643. 


1911.  c.  732.]  NEW  YORK.  899 

New  York  statute  of  1892,  chapter  169,  gave  an  exemption  to 
gifts  to  a  bishop  or  religious  societies.  The  court  holds  that  this 
exemption  applies,  whether  the  devise  had  become  operative  prior 
to  the  operation  of  the  act  or  subsequent  thereto,  and  therefore 
applied  to  a  devise  made  by  a  testator  who  died  in  1885,  where 
the  tax  had  not  been  collected.  Roman  Catholic  Church  v.  NileSy 
86  Hun  221,  33  N.  Y.  Suppl.  243. 

Construction  of  Exemption  Statutes. 

Statutes  of  exemption  from  taxation  must  be  strictly  construed 
against  the  state  where  a  tax  imposed  is  not  a  common  burden 
but  a  special  tax  reaching  only  special  cases.  The  rule  is  that  to 
subject  such  a  class  of  persons  requires  a  clear  legislative  intention. 
In  re  Mergentime,  195  N.  Y.  572,  88  N.  E.  1125,  affirming  129 
N.  Y.  App.  Div.  367,  113  N.  Y.  Suppl.  948. 

Test  of  Exemption  of  Corporation. 

The  status  of  a  corporation  as  to  the  inheritance  tax  should 
be  decided  entirely  by  its  charter  and  the  law  governing  it,  and 
evidence  to  show  what  business  it  actually  does  is  inadmissible. 
In  re  White,  118  N.  Y.  App.  Div.  869,  103  N.  Y.  Suppl.  688. 
See,  however.  Matter  of  Mergentime,  129  N.  Y.  App.  Div.  367, 
113  N.  Y.  Suppl.  948,  as  to  the  test  since  the  amendment  of  1905. 

In  Trust  for  Exempt  Society. 

Where  the  testator  makes  a  direct  bequest  in  absolute  form  and 
where  it  .appears  that  a  valid  parole  trust  was  created  enforceable 
in  equity  in  favor  of  certain  religious  corporations  which  were  of 
a  class  exempt  under  the  statute,  the  bequest  itself  is  exempt  from 
taxation.     In  re  Murphy,  4  Misc.  Rep.  230,  25  N.  Y.  Suppl.  107. 

Failure  to  Claim  Exemption. 

A  charitable  legatee  which  was  exempt  from  tax  and  was  noti- 
fied of  the  proceedings  for  appraisal,  but  which  failed  to  claim  an 
exemption  before  the  appraiser,  to  which  no  notice  of  assessment  of 
tax  on  its  legacy  was  given,  filed  a  petition  more  than  sixty  days 
after  the  entry  of  the  decree  taxing  its  legacy,  that  the  decree  be 
opened  and  modified.  The  court  holds  that  notice  should  have 
been  given  of  the  entry  of  the  decree;  that  the  petition  is  not  an 
appeal  but  is  properly  an  application  to  the  court  to  open  and  modify 
its  decree,  which  the  surrogate  court  has  discretion  to  do.  In  re 
Rep.  Daly,  34  Misc.  Rep.  148,  69  N.  Y.  Suppl.  494. 


900  STATUTES  ANNOTATED.  [N.  Y.  St. 

Corporation  to  be  Created. 

Where  a  non-resident  left  an  interest  in  an  estate  to  a  corpora- 
tion to  be  created  and  no  such  corporation  has  ever  been  created, 
no  tax  can  be  levied  upon  the  gift.  In  re  Chesebrough,  34  Misc. 
Rep.  365,  69  N.  Y.  Suppl.  848. 

The  testator  died  July  21,  1896,  and  under  the  act  of  1896,  s.  220, 
the  court  holds  that  a  corporation  to  be  organized  under  the  testa- 
tor's will  for  a  home  for  the  aged  should  be  free  of  taxation.  In  re 
Graves,  171  N.  Y.  40,  63  N.  E.  787,  reversing  66  N.  Y.  App.  Div. 
267,  72,  N.  Y.  Suppl.  815,  34  Misc.  677,  70  N.  Y.  Suppl.  727. 

Incorporation  in  Several  States. 

Where  one  charitable  corporation  has  only  a  single  entity  but  is 
incorporated  in  three  states  theoretically  it  must  be  said  that  there 
is  a  distinct  entity  in  each  of  three  states,  but  the  substance  is  the 
same  in  all.  It  has  a  single  body  possessing  the  franchises  and  privi- 
leges of  a  domestic  corporation  in  three  states.  To  say  that  the 
bequest  is  to  a  foreign  corporation  merely  because  the  testatrix 
named  the  place  where  its  principal  ofhce  is  located  as  Boston, 
Massachusetts,  is  to  substitute  form  for  substance.  In  re  Lyon, 
141  N.  Y  App.  Div.  34,  128  N.  Y.  Suppl.  1004. 

Particular  Societies. 

Almshouse. — Entrance  Fee. 

A  certain  home  for  aged  men  is  free  of  taxation  as  an  almshouse 
where  its  charter  provides  that  its  object  is  the  support  of  men  who 
are  unable  to  support  themselves,  although  one  of  the  by-laws  of 
the  organization  provides  an  entrance  fee  to  all  those  who  are 
admitted.  In  re  Vassar,  127  N.  Y.  1,  14,  27  N.  E.  394,  reversing 
58  Hun  378,  12  N.  Y.  Suppl.  203. 

Institutions  to  be  exempt  as  an  almshouse  must  be  absolutely 
free  and  all  benefits  must  be  given  gratuitously.  In  re  Vanderbilt, 
10  N.  Y.  Suppl.  239,  2  Con.  Surr.  319. 

An  institution  for  the  blind  which  does  not  receive  pay  from 
patients  under  any  circumstances  is  exempt  as  an  almshouse.  In  re 
Underhill,  20  N.  Y.  Suppl.  134,  2  Con.  Surr.  262. 

A  home  for  aged  women  which  charges  board  is  not  an  almshouse 
and  is  therefore  subject  to  the  tax.     In  re  Lenox,  9  N.  Y.  Suppl.  895. 

The  Baptist  Home  Society  of  New  York  requires  a  payment  of 
an  admission  fee  of  a  thousand  dollars  and  that  all  those  who  enter 
shall  make  a  will  in  its  favor;  and  it  is  therefore  not  an  almshouse 


1911,  c.  732.]  NEW  YORK.  901 

and  so  is  not  exempt  under  the  New  York  statute.     In  re  Keech^ 
57  Hun  588,  11  N.  Y.  Suppl.  265. 

Charity. 

The  New  York  Association  for  Improving  the  Condition  of  the 
Poor  which  is  a  pure  charity  making  no  charge  whatever  is  exempt 
from  taxation.     In  re  Lenox,  9  N.  Y.  Suppl.  895. 

Homes. 

Under  the  statute  of  1905,  chapter  368,  section  221,  a  home  for 
friendless  children  is  exempt  from  the  inheritance  tax.  In  re 
Higgins,  55  Misc.  175,  106  N.  Y.  Suppl.  465. 

Hospitals. 

Hospital  corporations  are  expressly  exempted  by  the  present  act. 
Under  New  York  statute  of  1896,  chapter  908,  section  220, 
imposing  a  tax  on  transfers  to  the  persons  or  corporations  not 
exempt  by  law  from  taxation,  the  Buffalo  General  Hospital  is 
exempt  from  taxation  as  it  is  made  exempt  by  general  law.  The 
mere  fact  that  religious  corporations  are  referred  to  in  the  statute 
of  1896,  chapter  908,  section  4,  subdivision  7,  does  not  confine 
the  exemption  to  religious  corporations.  In  re  Kimberly,  27  N.  Y. 
App.  Div.  470,  50  N.  Y.  Suppl.  586. 

The  St.  John's  Riverside  Hospital  is  a  charitable  institution  whose 
object  is  the  maintenance  and  support  of  a  hospital  for  indigent 
patients  and  as  such  is  an  almshouse  and  so  exempt  under  New 
York  law  from  the  inheritance  tax.  In  re  Curtis,  25  N.  Y.  St. 
1028,  7  N.  Y.  Suppl.  207,  1  Con.  Surr.  471. 

Under  the  statute  of  1905,  chapter  368,  section  221,  a  bequest  to 
a  corporation  organized  to  carry  on  a  general  city  hospital  is  exempt 
from  taxation.     In  re  Higgins,  55  Misc.  175,  106  N.  Y.  Suppl.  465. 

The  Craig  Colony  for  Epileptics  organized  to  treat  a  class  of 
unfortunates  is  charitable  and  therefore  exempt  from  taxation. 
In  re  Moore,  66  Misc.  116,  122  N.  Y.  Suppl.  828. 

Libraries. 

A  bequest  of  money  to  a  memorial  library  association  is  subject 
to  the  transfer  tax  under  N.  Y.  St.  1896,  c.  221,  as  amended  by  N.  Y. 
St.  1905,  c.  368.  N.  Y.  St.  1896,  s.  220,  as  amended  by  N.  Y.  St. 
1903,  c.  41,  gave  a  limited  exemption  of  certain  personal  property 
passing  to  educational,  library  or  certain  other  corporations.     The 


902  STATUTES  ANNOTATED.  [N.  Y.  St. 

Statute  of  1905  transferred  to  the  exempt  class  educational 
corporations  but  retained  in  the  limited  exempt  class  library  cor- 
porations, and  therefore  they  cannot  be  held  to  be  entirely  free 
from  the  tax  although  a  library  association  is  educational.  In  re 
Francis,  189  N.  Y.  554,  82  N.  E.  1126,  affirming  121  N.  Y.  App. 
Div.  129,  105  N.  Y.  Suppl.  643. 

Under  the  statute  of  1905,  chapter  368,  section  221,  a  public 
library  corporation  is  exempt  from  the  transfer  tax.  In  re  Higgins, 
55  Misc.  175,  106  N.  Y.  Suppl.  465. 

Missionary  Societies. 

Under  the  present  act  a  missionary  society  is  exempt. 

The  Board  of  Foreign  Missions  of  the  Presbyterian  Church  was 
subject  to  taxation.  In  re  Board  of  Foreign  Missions,  58  Hun 
116,  33  N.  Y.  St.  789,  11  N.  Y.  Suppl.  310. 

The  missionary  society  of  the  Methodist  Episcopal  Church  is 
not  a  religious  corporation  and  a  legacy  to  it  is  subject  to  tax,  where 
the  testator  died  after  St.  1900,  c.  382.  In  re  Watson,  171  N.  Y. 
256,  63  N.  E.  1109,  reversing  70  N.  Y.  App.  Div.  623,  36  Misc.  Rep. 
504,  73  N.  Y.  Suppl.  1058,  171  N.  Y.  256. 

A  mission  corporation  organized  for  general  mission  purposes 
is  not  a  religious  corporation  and  is  not  exempt  from  taxation. 
In  re  White,  1.18  N.  Y.  App.  Div.  869,  103  N.  Y.  Suppl.  688. 

Museums. 

The  New  York  Art  Museum  is  exempt  under  the  New  York 
statute  of  1905,  c.  368,  as  an  educational  corporation.  In  re  Mer- 
gentime,  195  N.  Y.  572,  88  N.  E.  1125,  affirming  129  N.  Y.  App.  Div. 
367,  113  N.  Y.  Suppl.  948. 

This  museum  had  been  held  subject  to  tax  under  the  statute  of 
1885.     See  ante. 

Prevention  of  Cruelty. 

^^  Societies  for  the  prevention  of  cruelty  may  well  be  exempt  as 
"benevolent"  under  the  present  act. 

The  Society  for  the  Prevention  of  Cruelty  to  Children  is  not 
wtthin  the  wholly  exempt  class  as  this  is  a  corporation  within  the 
partially  exempt  class  "organized  for  the  enforcement  of  laws 
relating  to  children."  In  re  Moses,  123  N.  Y.  Suppl.  443,  modify- 
ing and  affirming  60  Misc.  637,  113  N.  Y.  Suppl.  930. 


1911,  c.  732.]  NEW  YORK.  903 

The  American  Society  for  the  Prevention  of  Cruelty  to  Animals 
is  not  a  charitable  corporation,  as  its  work  is  confined  to  animals 
and  not  to  human  beings.  As  it  is  not  expressly  exempted  from 
taxation  by  its  charter  a  legacy  to  is  it  subject  to  the  New  York 
inheritance  tax.    In  re  Keith,  5  N.  Y.  Suppl.  201,  1  Con.  Surr.  370. 

Publication  Societies. 

The  American  Baptist  Publication  Society  organized  for  the 
purpose  of  promoting  evangelical  religion  by  means  of  the  Bible, 
prmting  press,  colportage,  Sunday  schools  and  other  appropriate 
ways  is  not  a  "charitable"  corporation,  as  a  person  or  corporation 
seeking  to  advance  the  cause  of  religion  only  cannot  be  said  to  be 
engaged  in  a  charitable  work  in  the  ordinary  sense  in  which  that 
term  is  used.  In  re  McCormick,  127  N.  Y.  Suppl.  493.  (The 
society  might,  however,  be  benevolent  under  the  present  act. — Ed.) 

Temperance. 

The  Woman's  Christian  Temperance  Union  falls  within  the  class 
of  benevolent  educational  charitable  corporations  intended  to  be 
exempt.    In  re  Moore,  66  Misc.  116,  122  N.  Y.  Suppl.  828. 

Young  Men's  Christian  Association. 

Under  the  present  act  a  Young  Men's  Christian  Association 
might  well  be  exempt  as  "benevolent"  or  "educational."  The 
Young  Men's  Christian  Association  is  not  a  religious  corporation 
and  hence  a  legacy  to  it  is  subject  to  tax  under  St.  1900,  c.  382. 
In  re  Watson,  171  N.  Y.  256,  63  N.  E.  1109,  reversing  70  N.  Y.  App. 
Div.  623,  36  Misc.  504,  73  N.  Y.  Suppl.  1058. 

The  Young  Men's  Christian  Association  and  the  Young  Women's 
Christian  Association  are  "educational,"  and  therefore  not  subject 
to  tax  under  section  221  of  the  tax  law.  In  re  Moses,  123  N.  Y. 
Suppl.  443,  modifying  and  affirming  60  Misc.  637,  113  N.  Y. 
Suppl.  930.  See,  however.  In  re  Fay,  37  Misc.  Rep.  532,  76 
N.  Y.  Suppl.  62;  Young  Men's  Christian  Association  v.  New  York, 
113  N.  Y.  187,  21  N.  E.  86. 

S.  221  a.  [As  added  by  St.  1911,  c.  732,  In  effect  July  21,  1911]  Rates  of  tax. 
1.  Upon  a  transfer  taxable  under  this  article  of  property  or  any  beneficial  inter- 
est therein,  of  an  amount  in  excess  of  the  value  of  five  thousand  dollars  to  any 
father,  mother,  husband,  wife,  child,  brother,  sister,  wife  or  widow  of  a  son,  or 
the  husband  of  a  daughter,  or  any  child  or  children  adopted  as  such  in  conformity 
with  the  laws  of  this  state,  of  the  decedent,  grantor,  donor  or  vendor,  or  to  any 
child  to  whom  any  such  decedent,  grantor,  donor  or  vendor  for  not  less  than  ten 


904  STATUTES  ANNOTATED.  [N.  Y.  St. 

years  prior  to  such  transfer  stood  in  the  mutually  acknowledged  relation  of  a 
parent,  provided,  however,  such  relationship  began  at  or  before  the  child's  fif- 
teenth birthday  and  was  continuous  for  said  ten  years  thereafter,  or  to  any  lineal 
descendant  of  such  decedent,  grantor,  donor  or  vendor  born  in  lawful  wedlock, 
the  tax  on  such  transfer  shall  be  at  the  rate  of 

One  per  centum  on  any  amount  in  excess  of  five  thousand  dollars  up  to  the  sum 
of  fifty  thousand  dollars. 

Two  per  centum  on  any  amount  in  excess  of  fifty  thousand  dollars  up  to  the 
sum  of  two  hundred  and  fifty  thousand  dollars. 

Three  per  centum  on  any  amount  in  excess  of  two  hundred  and  fifty  thousand 
dollars  up  to  the  sum  of  one  million  dollars. 

Four  per  centum  on  any  amount  in  excess  of  one  million  dollars. 

2.  Upon  a  transfer  taxable  under  this  article  of  property  or  any  beneficial 
interest  therein  of  an  amount  in  excess  of  the  value  of  one  thousand  dollars  to  any 
person  or  corporation  other  than  those  enumerated  in  paragraph  one  of  this  sec- 
tion, the  tax  shall  be  at  the  rate  of 

Five  per  centum  on  any  amount  in  excess  of  one  thousand  dollars  up  to  the  sum 
of  fifty  thousand  dollars. 

Six  per  centum  on  any  amount  in  excess  of  fifty  thousand  dollars  up  to  the  sum 
of  two  hundred  and  fifty  thousand  dollars. 

Seven  per  centum  on  any  amount  in  excess  of  two  hundred  and  fifty  thousand 
dollars  up  to  the  sum  of  one  million  dollars. 

Eight  per  centum  on  any  amount  in  excess  of  one  million  dollars. 

This  section  was  formerly  a  part  of  St.  1896,  c.  908,  s.  221,  and 
was  divided  from  that  section  by  St.  1911,  c.  732.  See  notes  to 
section  221,  ante,  p.  804.  The  graduated  feature  was  first  intro- 
duced by  St.  1901,  c.  706,  and  the  rates  were  materially  reduced  by 
St.  1911,  c.  732.  As  to  the  construction  of  the  graduated  tax  see 
notes  to  the  act  of  1910,  c.  706,  ante,  p.  831. 

Where  No  Next  of  Kin  Appear. 

The  decedent  died  in  New  York  a  native  of  Sweden,  and  inquiry 
failed  to  disclose  his  family  or  next  of  kin.  The  court  holds  that 
on  his  death  his  personal  property  vested  in  a  public  adminis- 
trator who  was  appointed,  and  his  next  of  kin  were  entitled  to  the 
property  upon  proving  their  relationship.  No  such  person  has 
appeared  and  no  such  person  has  been  found  to  be  in  existence. 
There  is  the  presumption,  however,  that  he  left  next  of  kin,  but 
there  is  no  presumption  that  he  left  a  widow  or  descendants. 
It  is  presumed,  therefore,  that  the  property  vested  in  the  next  of 
kin  of  the  deceased  and  is  therefore  taxable  under  section  220  of 
the  tax  law,  and  as  it  does  not  appear  that  it  is  exempt  under  sec- 
tion 221  of  the  tax  law  the  tax  imposed  by  sub-division  6  of  sec- 
tion 220  applies,  and  it  is  taxable  at  the  rate  of  five  per  cent. 


1911,  c.  732.]  NEW  YORK.  906 

In   re  Lind,   132  N.   Y.  App.   Div.  321,   117  N.  Y.  SuppL  49, 
reversing 

Assignment  by  Legatee. 

Where  the  legatee  assigns  his  legacy  and  the  assignee  does  not 
take  from  the  testator  for  he  did  not  give  it  to  him,  the  assignee 
took  as  assignee  and  not  as  legatee.  Unless  she  took  as  assignee 
she  did  not  take  at  all.  The  legatees  assigned  to  her  and  the  rate 
of  taxation  is  fixed  by  their  relation  to  the  testator.  As  she  did 
not  take  through  the  will  a  succession  tax  cannot  be  fixed  at  the 
rate  as  in  the  case  of  a  bequest  to  the  assignee  but  must  be  fixed 
at  the  rate  as  in  the  case  of  a  bequest  to  the  original  legatee.  In  re 
Cook,  187  N.  Y.  253,  259,  79  N.  E.  991,  reversing  114  N.  Y.  App. 
Div.  718,  99  N.  Y.  Suppl.  1049. 

Renunciation  by  Legatee. 

The  court  finds  that  where  a  legacy  is  renounced  by  the  legatee 
that  the  tax  should  be  at  the  rate  at  which  a  gift  to  the  original 
residuary  legatees  would  have  been  imposed.  In  re  Wolfe,  179 
N.  Y.  599,  72  N.  E.  1152,  affirming  89  N.  Y.  App.  Div.  349,  85 
N.  Y.  Suppl.  949. 

Where  One  was  Both  Stepson  and  Nephew. 

The  will  of  one  who  died  October  13,  1907,  provided  that  her 
property  should  go  to  "relatives  of  my  full  blood  only  who  would 
be  entitled  to  receive  my  personal  estate  in  case  of  my  death  unmar- 
ried and  intestate."  The  contestant  was  the  son  of  a  deceased 
sister  of  the  testatrix.  After  the  death  of  his  mother  his  father 
and  the  testatrix  had  intermarried  and  the  question  was  whether 
he  took  as  a  nephew  or  a  stepson. 

The  court  holds  that  if  he  had  been  included  by  name  there 
would  be  no  doubt  that  he  would  be  taxable  as  a  stepchild.  As  a 
stepchild  he  could  not  take  under  the  statute  and  the  will  expressly 
provides  that  the  property  shall  go  to  the  relatives  of  full  blood 
only,  and  therefore  the  respondent  takes  as  a  nephew  as  one  of 
the  class  as  though  he  took  under  the  statute  of  distribution. 

The  court  says  the  transfer  to  the  respondent  was  not  made 
because  of  his  relationship  is  a  stepson  but  as  a  nephew  and 
for  the  purposes  of  this  case  he  must  be  treated  solely  as  a 
nephew.  Inre  Linkletter,  134  N.  Y.  App.  Div.  309,  118  N.  Y. 
Suppl.  878. 


906  STATUTES  ANNOTATED.  [N.  Y.  St. 

**IN  Excess  of  the  Value  of  Five  Thousand  Dollars.'' 
Value  of  Estate  the  Test  under  the  Act  of  1896. 

The  following  decisions  were  rendered  under  the  act  of  1896. 
It  seems  that  under  the  act  of  1911  exemptions  should  be  reckoned 
by  the  value  of  each  inheritance  rather  than  the  estate  as  a  whole. 
The  minimum  amounts  of  five  hundred  dollars  and  $10,000  under 
the  act  of  1896  are  reckoned  by  the  amount  of  the  whole  estate 
and  not  by  the  value  of  each  share. 

Where  the  estate  of  the  intestate  was  valued  at  eleven  thousand 
dollars  to  be  divided  into  thirds,  the  court  holds  that  under  the  act 
of  1896  a  tax  of  five  per  cent  should  be  imposed  upon  the  share  of 
each  niece  and  a  tax  of  one  per  cent  upon  the  shares  of  the  brother 
and  sister;  and  the  tax  was  challenged  on  the  ground  that  the 
aggregate  amount  to  which  the  brother  and  sister  are  en- 
titled is  less  than  ten  thousand  dollars.  It  was  contended  that 
one  per  cent  could  be  imposed  upon  a  sum  passing  to  brothers 
and  sisters  in  the  event  only  that  the  total  amount  passing 
to  them  as  a  class  is  equal  to  the  sum  of  ten  thousand  dollars 
however  large  the  estate  may  be.  The  court,  however,  follows 
the  construction  given  to  N.  Y.  St.  1892,  c.  399,  ss.  2  and  22, 
in  In  re  Hoffman,  143  N.  Y.  327.  The  court  remarks  that  the 
statute  of  1896  is  a  re--enactment  of  the  act  of  1892,  section  2 
becoming  section  21  of  the  latter  act,  and  section  22  becoming 
section  242.  In  re  Corbett,  171  N.  Y.  516,  64  N.  E.  209,  affirm- 
ing 65  N.  Y.  App.  Div.  124. 

It  is  well  settled  that  all  legacies  whether  they  are  in  excess  of 
five  hundred  ($500)  dollars  or  not  are  taxable  if  the  entire  personal 
estate  exceeds  the  sum  of  ten  thousand  ($10,000)  dollars.  In  re 
Curtis,  31  Misc.  Rep.  83,  64  N.  Y.  Suppl.  574. 

As  the  aggregate  of  all  personal  property  passing  to  the  legatees 
by  will  exceeds  ten  thousand  ($10,000)  dollars,  it  is  subject  to  the 
tax,  although  the  value  of  the  individual  legacies  is  less  than  ten 
thousand  ($10,000)  dollars.  In  re  Birdsall,  22  Misc.  Rep.  180, 
49  N.  Y.  Suppl.  450,  2  Gibbons  293,  following  In  re  Hoffman,  143 
N.  Y.  327,  38  N.  E.  311. 

Where  the  amount  of  the  estate  is  $663,  of  which  $372  passes  to 
Sisters  of  the  decedent  and  $291  to  a  nephew  as  the  property 
passmg  from  the  decedent  to  taxable  persons  exceeded  $500  in 
value,  the  transfer  to  the  nephew  must  be  taxed.  In  re  Rosendahl, 
40  Misc.  Rep.  542,  82  N.  Y.  Suppl.  992.     The  court  remarks  that 


1911,  c.  732.]  NEW  YORK.  907 

the  cases  of  In  re  Bliss,  6  N  Y.  App.  Div.  192,  39  N.  Y.  Suppl. 
875,  and  In  re  Conklin,  39  Misc.  Rep.  771,  80  N.  Y.  Suppl.  1124, 
have  been  reversed  in  In  re  Corbett,  171  N.  Y.  516,  64  N.  E.  209, 
affirming  55  N.  Y.  App.  Div.  124,  67  N.  Y.  Suppl.  46. 

The  testator  died  intestate  October  25,  1903,  leaving  as  his  next 
of  kin  one  sister,  two  brothers  and  five  nephews  and  a  niece.  The 
whole  estate  was  of  the  value  of  $10,122,  of  which  one-fourth  was 
distributed  to  each  of  the  brothers  and  sister  and  one-fourth  to 
the  nephews  and  niece.  The  question  was  whether  any  tax  was  due 
on  the  shares  going  to  the  brothers  and  sister.  The  Corbett  case, 
171  N.  Y.  '516,  64  N.  E.  209,  affirming  55  N.  Y.  App.  Div.  124, 
67  N.  Y.  Suppl.  46,  would  have  been  conclusive  of  this  question, 
but  section  221  of  the  tax  law  was  amended  by  the  statute  of 
1903,  chapter  41. 

The  court,  however,  holds  that  there  is  the  same  necessity  for 
resorting  to  the  statutory  definition  of  property  given  in  sec- 
tion 242  now  as  there  was  before  the  amendment  of  1903,  and  that 
the  only  effect  of  the  amendment  is  that  in  estimating  the  value  of 
the  property  passing,  real  estate  as  well  as  personal  property  is  to 
be  now  included,  and  that  property  in  section  221  is  still  to  be  con- 
strued as  it  is  defined  in  section  242.  In  re  Fisher,  96  N.  Y.  App. 
Div.  133,  89  N.  Y.  Suppl.  102. 

Under  the  statute  of  1895,  sections  220,  221  and  242,  a  legacy 
was  given  to  an  uncle  of  $337,  and  other  property  of  $500 
to  the  widow,  and  the  court  holds  that  the  legacy  to  the 
uncle  although  less  than  $500  considered  in  connection  with 
the  legacy  to  the  widow  is  worth  more  than  $500;  and  as  the 
widow  is  not  exempt  from  the  operation  of  the  law  the  legacy 
to  the  uncle  is  subject  to  the  tax.  In  re  Garland,  88  N.  Y.  App. 
Div.  380,  84  N.  Y.  Suppl.  630,  reversing  40  Misc.  579,  82  N.  Y. 
Suppl.  989. 

Where  the  testator  died  July  11,  1896,  it  was  claimed  that  as 
each  of  the  legatees  received  less  than  $10,000  and  were  lineal 
descendants  their  succession  was  not  taxable.  The  court  notes, 
however,  that  In  re  Skillman,  10  Misc.  Rep.  642,  32  N.  Y.  Suppl. 
780,  is  not  authority,  as  it  is  in  conflict  with  the  doctrine  laid  down 
in  In  re  Hoffman,  143  N.  Y.  327,  38  N.  E.  311.  In  re  De  Graaf, 
24  Misc.  147,  53  N.  Y.  Suppl.  591,  2  Gibbons  516.  The  following 
cases  to  the  contrary  have  been  overruled.  In  re  Conklin,  39  Misc. 
Rep.  771,  80'N.  Y.  Suppl.  1124;  In  re  Bliss,  6  N.  Y.  App.  Div.  192, 
39  N.  Y.  Suppl.  875. 


908  STATUTES  ANNOTATED.  [N.  Y.  St. 

Discount  for  Delay  in  Payment. 

Bequests  of  five  hundred  dollars  each  to  several  charitable  insti- 
tutions are  exempt,  as  they  are  payable  at  the  end  of  a  year  from 
the  date  of  the  appointment  of  the  executors,  and  the  cash  value 
therefore  is  less  than  five  hundred  dollars.  In  re  Underhill,  20 
N.  Y.  Suppl.  134,  2  Con.  Surr.  292,  following  In  re  Peck,  9  N.  Y. 
Suppl.  465,  24  Abb.  N.  Cas.  365,  2  Con.  Surr.  201.  Compare 
In  re  De  Graaf,  24  Misc.  147,  53  N.  Y.  Suppl.  591,  2  Gibbons  516. 

Real  Estate  Considered. 

The  testator  gave  his  sister  personal  property  worth  more  than 
$10,000  and  real  estate  to  the  value  of  $6,500,  and  died  in  1904. 
In  section  221  the  words  "real  or  personal  property"  are  to  be  con- 
strued as  in  section  220,  and  therefore  the  total  of  the  property 
both  real  and  personal  should  be  considered  in  fixing  the  exemption. 
Therefore  the  tax  on  the  value  of  the  real  estate  should  be  collected 
in  this  case.    In  re  Hallock,  42  Misc.  Rep.  473,  87  N.  Y.  Suppl.  255. 

Power  of  Appointment. 

The  testator  died  in  1883,  leaving  a  will  applying  property  for 
the  use  of  his  brother's  widow  for  life,  and  on  her  death  giving 
her  a  power  of  disposal.  She  died  in  1899,  exercising  the  power  of 
appointment  in  favor  of  her  son;  and  the  court  holds  that  under 
the  statute  of  1897,  chapter  284,  section  220,  of  the  tax  act  the 
fund  must  be  regarded  for  taxing  purposes  as  having  passed  from 
the  mother  to  the  son,  the  power  of  appointment  being  in  itself  a 
transfer  and  the  case  is  governed  by  section  221  and  not  by  sec- 
tion 220.  It  is  therefore  not  subject  to  tax  unless  the  transfer  is 
of  the  value  of  ten  thousand  ($10,000)  dollars  or  more.  In  re 
Seaver,  63  N.  Y.  App.  Div.  283,  71  N.  Y.  Suppl.  544. 

Tax  on  Entire  Legacy  if  Any  Taxable. 

The  decedent  died  August  6,  1910,  a  resident  of  New  York, 
leaving  legacies  to  various  children.  The  court  holds  tha;t  a  legacy 
to  a  child  of  $700  is  taxable  at  one  per  cent  on  the  entire  legacy  and 
not  on  the  amount  which  exceeds  $500  under  section  220,  sub- 
division 1  and  7  and  section  221.  In  re  Mason,  69  Misc.  280,  126 
N.  Y.  Suppl.  998. 

"Husband  of  a  Daughter." 

This  exemption  applies  to  the  widow,  where  the  daughter  has 
died ,  and  this  even  although  the  widower  has  married  again  before 


1911.  c.  732.]  NEW  YORK.  9Q9 

the  death  of  the  testator.    In  re  Ray,  13  Misc.  Rep.  480,  35  N.  Y. 
Suppl.  481. 

**Child  .  .  .  Adopted  as  Such." 

The  adoption  does  not  need  to  be  under  the  laws  of  New  York. 
A  child  legally  adopted  under  the  laws  of  Massachusetts, 
who  is  taken  into  the  testator's  family  at  the  age  of  two,  is 
treated  as  a  son  and  stayed  in  the  family  for  eleven  years, 
until  the  testator's  death,  is  in  the  mutually  acknowledged 
relation  of  a  parent. 

The  court  says  that  experience  teaches  us  that  children  of  three 
years  recognize  their  parents  and  the  court  finds  no  difficulty  in 
concluding  that  the  appellant  recognized  the  testator  as  his  father 
and  that  the  testator  recognized  him  as  an  adopted  son  for  more 
than  ten  years.  In  re  Butler,  58  Hun  400,  34  N.  Y.  St.  189,  12 
N.  Y.  Suppl.  201. 

"This  boy  was  legally  adopted,  under  laws  substantially  similar 
to  our  own,  so  far  as  the  mode  of  procedure  is  concerned,  and 
that  is  sufficient  to  answer  the  requirements  of  this  law.  More- 
over, the  deceased  stood  in  the  mutually  acknowledged  relation 
of  a  parent  to  this  appellant  for  eleven  years  and  a  half  prior  to 
his  death.  No  evidence  of  adoption  is  required  by  this  portion 
of  the  statute  but  mutual  acknowledgment,  and  that  is  proven  in 
this  case  by  all  the  facts  and  circumstances  which  cluster  round 
these  parties  from  the  commencement  of  their  relation  to  •  the 
death  of  the  testator.  The  appellant,  from  his  earliest  recollec- 
tion, believed  the  testator  to  be  his  father,  recognized  him  as  such, 
and  knew  no  other,  and  the  testator  took  him  to  his  home  as  a 
child  and  treated  him  in  all  respects  as  a  son.  Their  relations 
were  parental,  and  their  entire  conduct  was  a  mutual  acknowledg- 
ment of  their  relation.  The  child  was  taken  in  helpless  infancy, 
with  no  expectation  of  compensation  for  services.  He  was  treated 
as  a  son,  and  was  obedient  to  his  foster  father,  and  dependent 
upon  him,  and  the  statute  requires  no  higher  proof  of  mutual 
acknowledgment.  The  word  'mutual'  in  this  statute  has  no 
abstruse  signification.  It  means  and  required  'reciprocity  of 
action,'  'co-relation,*  and  'interdependence,*  and  finds  its 
best  illustration  and  application  in  the  relation  existing  between 
parents  and  children,  which  are  always  mutual."  Per  Dyk- 
man,  J.,  in  In  re  Butler,  58  Hun  400,  34  N.  Y.  St.  189,  12 
N.  Y.  Suppl.  201. 


910  STATUTES  ANNOTATED.  IN.  Y.  St. 

**MUTUALLY  ACKNOWLEDGED  RELATION  OF  A  PARENT.'' 

See  In  re  Butler,  ante,  p.  909. 

Formal  Adoption  Unnecessary. 

A  person  may  stand  in  the  mutually  acknowledged  relation  of  a 
parent,  although  there  has  been  no  formal  adoption.  In  re  Stil- 
well,  34  N.  Y.  Suppl.  1123.  The  court  follows  In  re  Butler,  58 
Hun  400,  12  N.  Y.  Suppl.  201,  and  In  re  Spencer,  4  N.  Y.  Suppl. 
395,  and  refuses  to  follow  In  re  Hunt,  33  N.  Y.  Suppl.  256. 

Blood  Relations. 

This  language  is  not  confined  to  blood  relations.  In  re  Beach, 
154  N.  Y.  242,  249. 

Adults. 

The  fact  that  at  the  inception  of  the  relationship  the  beneficiary 
was  an  adult  does  not  take  the  case  out  of  the  statute,  although 
the  fact  that  the  person  claiming  to  stand  in  loco  filice  was  an 
adult  when  the  alleged  relationship  had  its  inception  may  well 
be  regarded  in  considering  the  degree  and  sufficiency  of  the  evidence. 
In  re  Beach,  154  N.  Y.  242,  249. 

Parent  Living. 

Two  stepdaughters  of  the  testatrix  had  always  been  recognized 
and  treated  like  her  own  children.  But  the  fact  that  the  father 
is  still  living  prevents  them  from  being  recognized  as  such  and 
given  an  exemption  and  they  are  therefore  taxable  at  five  per  cent. 
In  re  Stebbins,  52  Misc.  438,  103  N.  Y.  Suppl.  563. 

N.  Y.  St.  1905,  c.  368,  amended  the  tax  as  to  persons  standing 
in  the  mutually  acknowledged  relation  of  a  parent  by  inserting  the 
provision  "provided  also  that  the  parents  of  such  child  shall  be 
deceased  when  such  relationship  commenced."  Therefore  legacies 
to  stepchildren  are  taxable  unless  the  parents  of  the  child  were 
dead  when  the  relationship  commenced.  In  re  Wheeler,  115 
N.  Y.  App.  Div.  616,  100  N.  Y.  Suppl.  1044. 

•^  Both  parents  must  have  been  dead  when  the  relationship  com- 
menced, to  entitle  an  adopted  child  standing  in  the  mutually  ac- 
knowledged relation  of  a  parent  to  exemption.  In  re  Harder, 
124  N.  Y.  App.  Div.  77,  108  N.  Y.  Suppl.  154. 


1911,  c.  732.]  NEW  YORK.  911 

**  Widow  of  a  Son." 

Under  section  221  as  amended  by  the  statute  of  1905,  chapter 
368,  a  "widow  of  a  son"  includes  the  widow  of  a  deceased  adopted 
son  of  the  testator.  The  court  follows  In  re  Cook,  187  N.  Y.  253, 
79  N.  E.  991.  In  re  Duryea,  128  N.  Y.  App.  Div.  205,  112  N.  y! 
Suppl.  611. 

Children  of  Adopted  Child. 

The  question  was  raised  whether  the  child  of  an  adopted  child 
came  within  the  class  of  legatees  taxed  at  the  rate  of  one  per  cent 
or  five  per  cent.  The  relation  of  an  adopted  child  to  the  foster 
parent  is  created  by  statute.  Nature  has  nothing  to  do  with  it. 
The  question  is  therefore  what  relation  was  created  by  the  statute 
between  the  descendant  and  the  adopted  child  and  the  foster 
parent  with  reference  to  the  subject  of  succession  to  property. 

The  court  holds  that  where  the  statute  gives  an  adopted  child 
the  same  legal  relation  to  the  foster  parent  as  to  a  child  of  his  body 
that  the  relation  extends  to  the  heirs  and  next  of  kin  of  the  child, 
that  the  artificial  relation  was  given  the  same  effect  as  the  actual 
relation,  and  although  the  N.  Y.  St.  1896,  c.  908,  s.  221,  does  not 
mention  the  heirs  and  next  of  kin  of  adopted  children,  still  the 
natural  relation  and  the  statutory  relation  are  made  one  and  the 
same  as  to  the  devolution  of  property.  Therefore  these  children 
must  be  taxed  at  one  per  cent.  In  re  Cook,  187  N.  Y.  253,  261,  79 
N.  E.  991,  reversing  114  N.  Y.  App.  Div.  718,  99  N.  Y.  Suppl.  1.049. 

The  contrary  result  had  been  reached  in  the  following  cases. 
In  re  Moore,  90  Hun  162,  35  N.  Y.  Suppl.  782;  In  re  Bird,  32  N.  Y. 
St.  899,  11  N.  Y.  Suppl.  895,  2  Con.  Surr.  376;  In  re  Fisch,  34 
Misc.  146,  69  N.  Y.  Suppl.  493. 

Illegitimates. 

The  words  exempting  those  who  have  stood  in  the  mutually 
acknowledged  relation  of  parent  are  not  confined  to  illegitimate 
children.  In  re  Nichol,  91  Hun  134,  36  N.  Y.  Suppl.  538;  In  re 
Beach,  154  N.  Y.  242,  48  N.  E.  516. 

Living  with  Foster  Parent. 

The  circumstance  that  the  parties  lived  together  is  important 
to  show  the  relation  of  a  parent.  So  stepdaughters  of  a  testatrix 
who  had  lived  with  her  for  a  long  time  and  called  her  "mother" 
were  found  to  stand  in  the  mutually  acknowledged  relation  of 


912  STATUTES  ANNOTATED.  [N.  Y.  St. 

parent,  while  another  stepdaughter  who  was  married  and  did  not 
live  with  her  did  not  come  within  that  class,  in  In  re  Capron, 
30  N.  Y.  St.  948,  10  N.  Y.  Suppl.  23.  The  mutually  acknowledged 
relation  of  parent  was  found  to  exist  where  the  niece  when  twenty- 
two  years  old  had  gone  to  live  with  her  aunt,  was  a  member  of  the 
family  for  twenty-eight  years,  and  always  addressed  her  as  "Auntie, " 
and  where  during  her  residence  there  the  niece  married  and  with 
her  husband  continued  to  live  with  her  aunt,  the  testatrix,  who 
supported  the  household.  In  re  Spencer,  4  N.  Y.  Suppl.  395,  1 
Con.  Surr.  208. 

But  mere  living  in  the  same  house  does  not  of  itself  prove  the 
parental  relationship.  The  mere  fact  that  the  testator  lived  with 
his  sister  and  her  children  as  one  family,  that  the  household  ex- 
penses were  met  out  of  a  common  fund  to  which  each  contributed, 
and  that  the  sister  died,  and  from  that  time  one  of  the  children 
had  charge  of  the  household  affairs  and  they  continued  to  live 
together  as  one  family  down  to  the  death  of  the  testator,  and  that 
the  testator  was  very  affectionate  with  his  nieces,  is  not  enough 
to  show  the  mutually  acknowledged  relation  of  a  parent,  as  the 
testator  did  not  take  them  into  his  family  and  support  and  edu- 
cate and  maintain  them.  In  re  Moulton,  11  Misc.  Rep.  694, 
33  N.  Y.  Suppl.  578.  Where  a  maiden  aunt  is  in  possession  of  a 
farm  as  a  housekeeper  as- tenant  in  common  with  her  adult  nephews, 
the  acknowledged  relation  of  parent  was  not  found,  in  In  re  Sweet- 
land,  20  N.  Y.  Suppl.  310.  Where  an  aunt,  a  wealthy  woman, 
took  care  of  her  two  infant  nieces  and  charged  them  out  of  their 
estate  with  all  sorts  of  trivial  expenses,  the  court  finds  that  the 
mutually  acknowledged  relation  of  a  parent  and  child  did  not  exist 
under  the  statute  of  1892,  chapter  399.  In  re  Birdsall,  22  Misc.  Rep. 
180,  49  N.  Y.  Suppl.  450,  2  Gibbons  293. 

How  Designated  in  Family. 

The  mere  fact  that  a  transferee  is  described  in  a  will  as  "my  niece 
and  adopted  daughter"  does  not  exempt  her  from  the  inheritance 
tax.  Further  evidence  of  the  mutually  acknowledged  relation 
of  a  parent  must  be  given.  In  re  Fisch,  34  Misc.  146,  69  N.  Y. 
Suppl.  493. 

»^The  fact  that  the  alleged  foster  parents  and  children  addressed 
each  other  by  some  other  relationship  is  a  circumstance  tending 
to  show  the  parental  relationship  did  not  exist,  though  it  is  not 
conclusive.     In  re  Spencer,  N.  Y.  Suppl.  395,  Con.  Surr.  208. 


1911,  c.  732.]  NEW  YORK.  913 

The  court  holds  that  the  mutually  acknowledged  relation  of 
parent  did  not  exist  where  children  lived  with  their  uncle  and 
aunt  and  always  referred  to  them  as  uncle  and  aunt,  and  the  latter 
referred  to  the  former  as  niece  and  the  terms  father,  mother  or 
daughter  were  never  used.  In  re  Deutsch,  107  N.  Y.  App.  Div. 
192,  95  N.  Y.  Suppl.  65.  The  court  relies  upon  In  re  Davis,  98 
N.  Y.  App.  Div.  546,  90  N.  Y.  Suppl.  244. 

Where  a  legatee  was  an  orphan  and  had  lived  in  the  family  of  the 
testator  since  the  age  of  six  years,  and  was  always  treated  like  one  of 
the  family,  she  is  one  to  whom  the  testator  stood  in  the  mutually 
acknowledged  relation  of  a  parent,  although  she  was  designated 
by  the  will  as  a  "friend"  and  not  a  "daughter."  In  re  Wheeler, 
1  Misc.  Rep.  450,  22  N.  Y.  Suppl.  1075. 

The  court  sustains  the  finding  that  a  niece  stood  in  the  "mutually 
acknowledged  relationship  of  a  parent"  to  her  uncle  where  it  appears 
that  she  had  been  in  her  uncle's  family  for  thirteen  years  and  sup- 
ported by  him  although  it  also  appears  that  she  did  not  call  her 
uncle  and  aunt  father  and  mother,  nor  did  they  call  her  daughter. 
It  was  also  objected  that  the  uncle  did  not  account  to  the  niece 
for  the  income  received  by  him  on  her  legacy  under  her  grand- 
father's will.  It  is  urged  that  this  shows  that  he  assumed  to  set 
off  the  expense  of  her  support  against  such  income.  Where  the 
niece  had  been  thirteen  years  in  the  family  of  her  uncle  supported 
wholly  at  his  expense  before  she  had  any  property  whatever,  it 
was  natural  that  after  the  legacy  had  become  payable  to  her  the 
uncle  should  think  it  wise  to  apply  that  income  to  give  her  greater 
educational  advantages  than  he  felt  himself  able  to  afford.  A 
father  might  have  done  the  same,  even  if  we  assume  that  without 
authority  from  some  court  it  would  have  been  unjustified.  In  re 
Davis,  184  N.  Y.  299,  77  N.  E.  259,  reversing  98  N.  Y.  App.  Div. 
546,  90  N.  Y.  Suppl.  244. 

Evidence. 

The  fact  that  the  beneficiaries  were  taken  into  the  family  of  the 
testatrix  in  their  infancy,  were  reared,  educated  and  provided  for 
as  children,  were  called  by  her  name  and  adopted  the  same,  and 
were  treated  as  her  children,  and  that  the  testatrix  spoke  of  and 
to  them  as  her  daughters  and  furnished  them  on  their  marriage 
with  their  wedding  and  outfit  as  is  customary,  is  sufficient  to  bring 
them  within  the  words  of  the  statute  providing  exemption  where  the 
mutually  acknowledged  relation  of  parent  exists.  In  re  Nichol, 
91  Hun  134,  36  N.  Y.  Suppl.  538. 


914  STATUTES  ANNOTATED.  [N.  Y.  St. 

The  evidence  showed  the  mutually  acknowledged  relation  of  a 
parent  in  In  re  Lane,  39  Misc.  Rep.  522,  80  N.  Y.  Suppl.  380. 

Burden  of  Proof. 

The  burden  is  upon  the  one  claiming  an  exemption  as  standing 
in  the  acknowledged  relation  of  a  child  to  prove  it.  In  re  Davis, 
98  N.  Y.  App.  Div.  546,  90  N.  Y.  Suppl.  244. 

**To  ANY  Lineal  Descendant." 

The  words  "lineal  descendants"  are  restricted  to  descendants 
of  the  ancestor  and  do  not  extend  to  collateral  heirs.  In  re  Smith, 
5  Dem.  Surr.  (N.  Y.)  90. 

S.  222.  Accrual  and  payment  of  tax.  All  taxes  imposed  by  this  article 
shall  be  due  and  payable  at  the  time  of  the  transfer,  except  as  herein  otherwise 
provided.  Taxes  upon  the  transfer  of  any  estate,  property  or  interest  therein 
limited,  conditioned,  dependent  or  determinable  upon  the  happening  of  any 
contingency  or  future  event  by  reason  of  which  the  fair  market  value  thereof 
cannot  be  ascertained  at  the  time  of  the  transfer  as  herein  provided,  shall  accrue 
and  become  due  and  payable  when  the  persons  or  corporations  beneficially 
entitled  thereto  shall  come  into  actual  possession  or  enjoyment  thereof.  Such 
tax  shall  be  paid  to  the  state  comptroller  in  a  county  in  which  the  office  of  ap- 
praiser is  salaried  and  in  other  counties,  to  the  county  treasurer,  and  said  state 
comptroller  or  county  treasurer  shall  give,  and  every  executor,  administrator 
or  trustee  shall  take,  duplicate  receipts  from  him  of  such  payment  as  provided 
in  section  two  hundred  and  thirty-six. 

[See  notes  to  the  act  of  1885,  c.  483,  s.  4;  1892,  c.  399,  s.  3;  1896,  c.  908,  s. 
222;  1897,  c.  284,  s.  3;  1899,  c.  76;  1901,  c.  173;  1905,  c.  368.] 

The  tax  accrues  on  the  death  of  the  testator,  see  ante,  p.  803. 

Taxes  upon  the  Transfer  of  any  Estate  .  .  .  Determin- 
able upon  the  Happening  of  any  Contingency  or  Future 
Event. 

This  section  of  the  statute  has  no  application  to  vested  remainders 
after  a  life  estate  where  they  are  absolute  and  not  subject  to  be 
divested  or  to  fail  in  any  contingency  whatever.  The  present 
value  of  these  remainders  is  capable  of  ready  computation  by  the 
annuity  tables,  and  they  are  therefore  subject  to  present  taxation. 
In  re  Dows,  167  N.  Y.  227,  233,  60  N.  E.  439,  52  L.  R.  A.  433,  88 
'Am.  St.  Rep.  508,  affirming  60  N.  Y.  App.  Div.  630  (affirmed  sub 
nomine,  Orr  v.  Gilman,  183  U.  S.  278,  22  S.  Ct.  213,  46  L.  Ed.  196). 

Date  for  appraisal  of  contingent  and  remainder  interests,  see 
ante,  p.  820. 


1909,  c.  62.]  NEW  YORK.  915 

Applies  to  Gifts  Causa  Mortis. 

The  court  remarks  that  the  rule  that  the  will  takes  effect  from 
the  death  of  the  testator  and  that  if  the  inheritance  tax  was  in 
force  at  the  death  of  the  testator  then  the  tax  should  be  collected 
applies  also  to  gifts  causa  mortis.  In  re  Masury,  159  N.  Y.  532, 
53  N.  E.  1127,  affirming  28  N.  Y.  App.  Div.  580. 

S.  223.  Discount  and  interest.  If  such  tax  is  paid  within  six  months 
from  the  accrual  thereof,  a  discount  of  five  per  centum  shall  be  allowed  and 
deducted  therefrom.  If  such  tax  is  not  paid  within  eighteen  months  from  the 
accrual  thereof,  interest  shall  be  charged  and  collected  thereon  at  the  rate  of 
ten  per  centum  per  annum  from  the  time  the  tax  accrued;  unless  by  reason 
of  claims  made  upon  the  estate,  necessary  litigation  or  other  unavoidable  cause 
of  delay,  such  tax  cannot  be  determined  and  paid  as  herein  provided,  in  which 
case  interest  at  the  rate  of  six  per  centum  per  annum  shall  be  charged  upon  such 
tax  from  the  accrual  thereof  until  the  cause  of  such  delay  is  removed,  after 
which  ten  per  centum  shall  be  charged. 

[See  notes  to  act  of  1885,  c.  483,  s.  4;  1887,  c.  713;  1892,  c.  399;  1896,  c.  908, 
s.  223;  1905,  c.  368.] 

Interest.  —  Delay. 

The  executor  should  not  be  charged  with  five  per  cent  interest 
upon  the  amount  of  the  transfer  tax  on  the  estate  upon  the 
ground  that  he  should  have  had  the  tax  assessed  and  paid  within 
six  months  after  the  death  of  the  testator,  where  the  testator  died 
October  10,  1896,  and  probate  was  issued  February  3,  1897,  and 
the  tax  was  assessed  May  27,  1897.  In  re  Sudds,  32  Misc.  Rep. 
182,  66  N.  Y.  Suppl.  231. 

Ignorance  of  Law  no  Reason  for  Remitting  Penalty. 

Hardship  resulting  from  ignorance  of  the  law  is  no  reason  for 
relieving  from  the  ten  per  cent  penalty  provided  by  the  New  York 
statute  for  non-payment  of  the  tax.  In  re  Piatt,  8  Misc.  Rep. 
144,  29  N.  Y.  Suppl.  396. 

Litigation  as  Ground  for  Remitting  Penalty. 

Litigation  over  an  estate  is  a  proper  ground  for  remitting  the 
penalty  of  six  per  cent  for  failure  to  pay  the  tax.  In  re  Bolton, 
35  Misc.  Rep.  688,  72  N.  Y.  Suppl.  430. 

Appeal. 

A  decree  assessing  taxes  does  not  concern  itself  with  the  amount 
of  interest  or  penalty  and  therefore  the  penalty  is  not  a  proper 


916  STATUTES  ANNOTATED.  [N.  Y.  St. 

ground  of  appeal.  If  the  penalty  is  to  be  remitted  a  special  appli- 
cation should  be  mad^  to  the  surrogate.  In  re  De  Graaf,  24  Misc. 
147,  53  N.  Y.  Suppl.  591,  2  Gibbons  516. 

S.  224.  Lien  of  tax  and  collection  by  executors,  administrators  and 
trustees.  Every  such  tax  shall  be  and  remain  a  lien  upon  the  property  trans- 
ferred until  paid  and  the  person  to  whom  the  property  is  so  transferred,  aad 
the  executors,  administrators  and  trustees  of  every  estate  so  transferred  shall 
be  personally  liable  for  such  tax  until  its  payment.  Every  executor,  adminis- 
trator or  trustee  shall  have  full  power  to  sell  so  much  of  the  property  of  the 
decedent  as  will  enable  him  to  pay  such  tax  in  the  same  manner  as  he  might 
be  entitled  by  law  to  do  for  the  payment  of  the  debts  of  the  testator  or  intestate. 
Any  such  executor,  administrator  or  trustee  having  in  charge  or  in  trust  any 
legacy  or  property  for  distribution  subject  to  such  tax  shall  deduct  the  tax 
therefrom  and  shall  pay  over  the  same  to  the  state  comptroller  or  county  treasurer 
as  herein  provided.  If  such  legacy  or  property  be  not  in  money,  he  shall  collect 
the  tax  thereon  upon  the  appraised  value  thereof  from  the  person  entitled  thereto. 
He  shall  not  deliver  or  be  compelled  to  deliver  any  specific  legacy  or  property 
subject  to  tax  under  this  article  to  any  person  until  he  shall  have  collected  the 
tax  thereon.  If  any  such  legacy  shall  be  charged  upon  or  payable  out  of  real 
property,  the  heir  or  devisee  shall  deduct  such  tax  therefrom  and  pay  it  to  the 
executor,  administrator  or  trustee,  and  the  tax  shall  remain  a  lien  or  charge 
on  such  real  property  until  paid;  and  the  payment  thereof  shall  be  enforced 
by  the  executor,  administrator  or  trustee  in  the  same  manner  that  payment  of 
the  legacy  might  be  enforced,  or  by  the  district  attorney  under  section  two  hun- 
dred and  thirty-five  of  this  chapter.  If  any  such  legacy  shall  be  given  in  money 
to  any  such  person  for  a  liniited  period,  the  executor,  administrator  or  trustee 
shall  retain  the  tax  upon  the  whole  amount,  but  if  it  be  not  in  money,  he  shall 
make  application  to  the  court  having  jurisdiction  of  an  accounting  by  him, 
to  make  an  apportionment,  if  the  case  require  it,  of  the  sum  to  be  paid  into 
his  hands  by  such  legatees,  and  for  such  further  order  relative  thereto  as  the  case 
may  require. 

[See  notes  to  the  act  of  1885,  c.  483,  ss.  4  and  7;  1887,  c.  713;  1892,  c.  399, 
s.  5;  1896,  c.  908,  s.  224;   1901,  c.  173;   1905,  c.  368.] 

Executor's  Liability. 

The  liability  to  pay  upon  the  executor  is  enforced  by  refusing 
to  allow  him  credit  of  such  liability  on  his  accounting  unless  he 
produce  the  voucher  required  by  the  act.  In  re  Jones,  5  Dem. 
Surr.  (N.  Y.)  30. 

Relying  on  Void  Order. 

^  The  court  holds  that  where  executors  have  paid  a  legacy  in  good 
faith  relying  upon  a  void  order  of  the  surrogate  they  are  person- 
ally liable.  If  the  surrogate  had  no  jurisdiction  then  it  is  difficult 
to  see  how  such  decree  could  be  a  protection  for  anybody  for  any- 


1909,  c.  62.]  NEW  YORK.  917 

thing  done  in  pursuance  thereof.     In  re  Wolfe,  21  N.  Y.  Suppl. 
522,  reversing  15  N.  Y.  Suppl.  539. 

Distribution  to  Beneficiaries  under  Decree  of  Court  is  no 
Defence. 

The  fact  that  an  administrator  who  was  also  the  sole  next  of 
kin  had  paid  out  the  whole  amount  received  under  a  decree  on  her 
own  account  prior  to  the  assessing  of  the  tax  is  no  excuse  for  non- 
payment of  the  tax.  In  re  Hacket,  14  Misc.  Rep.  282,  35  N.  Y. 
Suppl.  1051. 

Lien. 

On  Real  Estate  to  be  Sold. 

Where  the  testator  directs  that  real  estate  shall  be  sold  for  carry- 
ing out  the  provisions  of  his  will  and  paying  debts  and  legacies 
and  the  real  estate  is  not  specifically  devised  nor  expressly  charged 
with  the  payment  of  any  legacy,  but  formed  a  part  of  the  testa- 
tor's general  estate,  the  court  holds  that  under  the  statute  of  1905, 
chapter  368,  section  224,  no  lien  exists  against  the  real  estate. 
The  lien  provided  by  this  section  attaches  only  to  the  fund  to  be 
distributed  or  the  particular  property  when  it  passes  by  specific 
devise  or  bequest.  Brown  v.  Lawrence  Park  Realty  Co.,  133  N.  Y. 
App.  Div.  753,  118  N.  Y.  Suppl.  132. 

On  Mortgaged  Real  Estate. 

''This  Hen,  however,  was  not  paramount  to  the  lien  of  the  mort- 
gage, which  was  in  existence  prior  to  the  decease  of  the  testatrix. 
So  far  as  the  mortgagee  is  concerned,  his  rights  could  not  well  be 
impaired  by  subsequent  devolutions  of  the  title  and  the  creation 
of  liens  associated  therewith.  The  tax  in  question  is  not  to  be 
assimilated  with  the  general  taxes  which  are  imposed  by  public 
authority,  and  which  attach  to  property  affected  thereby  as  a 
whole,  and  without  discrimination  with  respect  to  particular 
estates  or  interests  therein.  The  right  of  the  state  in  such  cases 
is  always  paramount.  It  is  not  concerned  with  the  particular  estates 
or  liens  which  affect  the  property,  but,  dealing  with  it  as  a  whole, 
imposes  the  tax,  leaving  it  to  the  parties  interested  in  the  property 
to  secure,  as  between  themselves,  such  an  adjustment  of  the  burden 
as  the  circumstances  of  the  case  may  seem  to  require.  But  in  the 
case  of  the  transfer  tax  a  different  condition  exists.  It  is  imposed 
upon  the  right  of  succession,  and  is  levied  upon  successors  in  respect 


918  STATUTES  ANNOTATED.  [N.  Y.  St 

to  the  shares  to  which  they  succeed.  In  re  Hoffman,  143  N.  Y. 
327,  331,  38  N.  E.  311.  In  no  sense,  then,  can  the  tax  be  deemed 
to  affect  the  interest  of  one  who  had  a  lien  upon  the  property  which 
was  paramount  to  the  ownership  of  the  testatrix,  and  therefore 
superior  to  any  estate  or  interest  which  the  testatrix  might  assume 
to  create  in  the  property."  Per  Beekman,  J.,  in  Kitching  v. 
Shear,  26  Misc.  Rep.  436,  57  N.  Y.  Suppl.  464. 

On  the  foreclosure  of  a  mortgage  where  the  mortgagor  has  died, 
the  lien  of  the  transfer  tax  although  subordinate  to  the  mortgage 
still  cannot  be  wiped  out  as  the  statutes  give  the  mortgagee  no 
right  to  make  the  state  a  party  to  the  foreclosure  proceedings; 
and  therefore  the  mortgagee  cannot  tender  a  title  which  a  purchaser 
is  bound  to  take.  The  legislature  should  remedy  this  situation 
which  exists  under  the  statute  of  1892,  chapter  399.  Kitching  v. 
Shear,  26  Misc.  Rep.  (N.  Y.)  436,  57  N.  Y.  Suppl.  464.  [The  diffi- 
culty suggested  in  this  case  does  not  seem  to  be  remedied  as 
y^t.— Ed] 

On  Real  Estate  Devised  for  Life  with  Remainder  Over. 

Where  real  estate  was  left  to  a  life  tenant  with  remainder  to  the 
brothers  and  sisters  who  survived,  with  a  contingent  remainder 
over,  the  court  holds  that  the  property  is  subject  to  a  lien  for  the 
payment  of  the  whole  lax,  and  that  if  there  is  no  money  forth- 
coming to  pay  the  whole  tax,  it  is  the  duty  of  the  executor  to  pay 
it.  And  the  court  directs  the  sale  of  so  much  of  the  whole  of  that 
property  as  may  be  necessary  to  raise  the  fund  to  pay  the  whole 
tax.    In  re  Wilcox,  118  N.  Y.  Suppl.  254. 

S.  225.  Refund  of  tax  erroneously  paid.  If  any  debts  shall  be  proven 
against  the  estate  of  a  decedent  after  the  payment  of  any  legacy  or  distributive 
share  thereof,  from  which  any  such  tax  has  been  deducted  or  upon  which  it  has 
been  paid  by  the  person  entitled  to  such  legacy  or  distributive  share,  and  such 
person  is  required  by  order  of  the  surrogate  having  jurisdiction,  on  notice  to 
the  state  comptroller,  to  refund  the  amount  of  such  debts  or  any  part  thereof,  an 
equitable  proportion  of  the  tax  shall  be  repaid  to  him  by  the  executor,  adminis- 
trator or  trustee,  if  the  tax  has  not  been  paid  to  the  state  comptroller  or  county 
treasurer;  or  if  such  tax  has  been  paid  to  such  state  comptroller  or  county 
treasurer,  such  officer  shall  refund  out  of  the  funds  in  his  hands  or  custody  to 
the  credit  of  such  taxes  such  equitable  proportion  of  the  tax,  and  credit  himself 
with  the  same  in  the  account  required  to  be  rendered  by  him  under  this  article. 
If  after  the  payment  of  any  tax  in  pursuance  of  an  order  fixing  such  tax,  made 
by  the  surrogate  having  jurisdiction,  such  order  be  modified  or  reversed  within 
two  years  from  and  after  the  date  of  entry  of  the  order  fixing  the  tax,  on  due 
notice  to  the  state  comptroller,  the  state  comptroller  shall,  if  such  tax  was  paid 


1909,  c.  62.]  NEW  YORK.  919 

in  a  county  in  which  the  office  of  appraiser  is  salaried,  refund  to  the  executor, 
administrator,  trustee,  person  or  persons  by  whom  such  tax  was  paid,  the 
amount  of  any  moneys  paid  or  deposited  on  account  of  such  tax  in  excess  of  the 
amount  of  the  tax  fixed  by  the  order  modified  or  reversed,  out  of  the  funds 
in  his  hands  or  custody  to  the  credit  of  such  taxes,  and  to  credit  himself 
with  the  same  in  the  account  required  to  be  rendered  by  him  under  this 
article,  or  if  paid  in  a  county  in  which  the  office  of  appraiser  is  not  salaried, 
he  shall  by  warrant  direct  and  allow  the  county  treasurer  of  the  county  to  refund 
such  amount  in  the  same  manner;  but  no  application  for  such  refund  shall  be 
made  after  one  year  from  such  reversal  or  modification,  and  the  representatives 
of  the  estate,  legatees,  devisees  or  distributees  entitled  to  any  refund  under 
this  section  shall  not  be  entitled  to  any  interest  upon  such  refund,  and  the  state 
comptroller  shall  deduct  from  the  fees  allowed  by  this  article  to  the  county 
treasurer  the  amount  theretofore  allowed  him  upon  such  overpayment.  Where 
it  shall  be  proved  to  the  satisfaction  of  the  surrogate  that  deductions  for  debts 
were  allowed  upon  the  appraisal,  since  proved  to  have  been  erroneously  allowed, 
it  shall  be  lawful  for  such  surrogate  to  enter  an  order  assessing  the  tax  upon  the 
amount  wrongfully  or  erroneously  deducted. 

[See  notes  to  the  act  of  1885,  c.  483,  ss.  10  and  12;  1892,  c.  399,  s.  6;  1896, 
c.  908,  s.  225;  1897,  c.  284,  s.  4;  1900,  c.  382;  1901,  c.  173;  1905,  c.  368;  1907, 
c.  323.] 

Power  of  surrogate  under  this  section  to  modify  his  own  decree 
and  order  the  tax  refunded,  see  post,  p.  962. 

What  Law  Governs. 

The  right  to  obtain  a  refund  of  a  tax  is  governed  by  the  law  in 
effect  at  the  time  that  the  proceeding  is  commenced  and  not  .by 
the  law  in  force  at  the  death  of  the  testator.  In  re  Coogan,  27 
Misc.  Rep.  563,  59  N.  Y.  Suppl.  111. 

Appeal  not  a  Prerequisite. 

The  executor  does  not  need  to  appeal  from  the  order  assessing 
the  tax  in  order  to  avail  himself  of  the  refunding  provisior  of  the 
statute  of  1896,  chapter  908,  section  225.  In  re  Sherar,  25  Misc. 
Rep.  138,  54  N.  Y.  Suppl.  930,  2  Gibbons  28. 

Mistake  of  Law. 

Where  a  widow  by  misconception  of  the  law  advanced  the  money 
to  pay  more  than  was  really  chargeable  to  her  and  where  the 
property  is  sold  for  the  tax  she  is  subrogated  to  the  rights  of  the 
state  and  should  be  repaid  what  she  has"  erroneously  paid  with 
interest  at  six  per  cent  from  the  time  of  repayment.  In  re  Wilcox, 
118  N.  Y.  Suppl.  254. 


920  STATUTES  ANNOTATED.  IN.  Y.  St. 

Payment  under  Unconstitutional  Statute. 

Where  a  tax  was  collected  under  a  statute  declared  void  in 
In  re  Pell,  171  N.  Y.  48,  the  comptroller  was  obliged  under  N.  Y. 
St.  1896,  c.  908,  s.  225,  as  amended,  to  refund  the  taxes  collected. 
The  court  remarks:  'The  tax  in  question  was  imposed  and  col- 
lected by  the  state  under  color  of  a  law  that  was  absolutely  void. 
It  was  a  void  tax  and  not  merely  voidable  for  some  irregularity 
or  error,  and  had  no  support  except  an  unconstitutional  statute. 
Such  a  law  is  simply  void.  It  confers  no  rights,  imposes  no  duties, 
confers  no  power,  and  in  legal  contemplation  is  as  inoperative,  for 
any  purpose,  as  if  it  had  never  been  passed."  Per  O'Brien,  J.,  in 
In  re  O'Berry,  179  N.  Y.  285,  287,  72  N.  E.  109,  affirming  91  N.  Y. 
App.  Div.  3. 

Temporary  Payment. 

A  temporary  payment  of  the  account  to  the  comptroller  is  de- 
ductible from  the  amount  finally  due  and  if  nothing  be  due  then 
it  must  be  refunded,  but  it  is  not  the  concern  of  the  appraiser  or 
the  surrogate.  In  re  Skinner,  106  N.  Y.  App.  Div.  217,  94  N.  Y. 
Suppl.  144,  modifying  92  N.  Y.  Suppl.  972. 

Mandamus. 

A  mandamus  is  the  proper  proceeding  to  compel  the  state  comp- 
troller to  make  the  refund.  In  re  Coogan,  27  Misc.  Rep.  563, 
59  N.  Y.  Suppl.  HI. 

Interest. 

As  the  state  has  promised  to  refund  the  tax  the  obligation  to 
refund  money  received  and  retained  without  right  implies  and 
carries  with  it  the  right  to  interest,  although  section  225  makes 
no  mention  of  interest  while  section  256  relating  to  the  repayment 
of  illegal  or  excessive  taxes  expressly  provides  for  the  payment  of 
interest.  Interest  should  be  reckoned  at  six  per  cent.  In  re 
O'Berry,  179  N.  Y.  285,  287,  72  N.  E.  109,  affirming  91  N.  Y. 
App.  Div.  3;  In  re  Wilcox,  118  N.  Y.  Suppl.  254. 

Where  a  remainderman  recovers  taxes  paid  by  his  trustee  under 
an  unconstitutional  statute  of  1899,  chapter  76,  he  is  entitled  to 
interest  on  the  money  recovered.  The  question  of  interest  was 
not  discussed  in  In  re  Scrimgeour,  175  N.  Y.  507,  67  N.  E.  1089, 
but  it  was  necessarily  involved  in  the  order  made  in  that  case. 
In  re  Wood,  91  N.  Y.  App.  Div.  3,  86  N.  Y.  Suppl.  269,  affirming 
38  Misc.  Rep.  64,  76  N.  Y.  Suppl.  967. 


1909,  c.  62.]  NEW  YORK.  921 

Relief  Denied  to  Perjurer. 

Where  a  person  was  named  as  a  life  tenant  in  a  will  who  really 
was  the  owner  of  the  property  under  a  deed  in  his  possession  and 
he  testifies  that  he  is  only  a  life  tenant  and  does  not  disclose  his 
ownership  under  the  deed  and  pays  the  tax  as  life  tenant,  the 
surrogate  court  eight  years  later  refuses  to  allow  a  refunding  of 
the  tax.     In  re  Mather,  41  Misc.  Rep.  414,  84  N.  Y.  Suppl.  1105. 

Limitations. 

The  executor  may  make  a  motion  for  a  refunding  of  part  of  the 
transfer  tax  even  after  the  end  of  two  years  provided  by  section 
1290  of  the  Code  of  Civil  Procedure.  In  re  Sherar,  25  Misc.  Rep. 
138,  54  N.  Y.  Suppl.  930,  2  Gibbons  28. 

An  illegal  tax  was  paid  in  November,  1895,  and  the  law  then  in 
force,  the  statute  of  1892,  gave  the  taxpayer  five  years  in  which 
to  apply  for  a  refund  of  any  part  of  the  transfer  tax.  This  period 
had  not  expired  when  the  statute  of  1897,  c.  284,  went  into  effect, 
apparently  providing  for  an  unlimited  period  in  which  to  apply 
for  a  modification  or  reversal  of  the  original  order,  but  required  the 
application  for  the  refund  to  be  made  within  one  year  after  such 
modification  or  reversal.  N.  Y.  St.  1900,  c.  382,  limited  the 
period  within  which  both  the  application  for  modification  or 
reversal  and  for  a  refund  must  be  made.  The  taxpayer  applied 
to  the  surrogate  in  October,  1903,  for  an  order,  modifying  the 
original  order,  which  fixed  the  transfer  tax,  and  the  court  holds 
that  under  section  6,  article  7,  of  the  state  constitution  "neither 
the  legislature,  the  canal  board  nor  any  person  or  persons  acting 
in  behalf  of  the  state  shall  audit,  allow  or  pay  any  claim  which, 
as  between  citizens  of  the  state,  would  be  barred  by  lapse  of  time." 
It  therefore  seems  clear  that  the  comptroller  could  not  have 
audited,  allowed  or  paid  this  claim  even  if  the  two  years'  limi- 
tation in  the  statute  of  1900  did  not  apply.  While  it  is  to  be 
observed,  moreover,  that  the  statute  of  1900,  with  its  two  years* 
limitation,  is  to  be  treated  as  purely  prospective,  the  same  test 
must  be  applied  to  the  act  of  1897  in  which  event  the  respondent 
is  relegated  to  the  statute  of  1892  with  its  five  years'  limita- 
tion which  had  elapsed  by  more  than  three  years  before  he  sought 
relief.  In  re  Hoople,  179  N.  Y.  308,  313,  72  N.  E.  229,  reversing 
93  N.  Y.  App.  Div.  486,  87  N.  Y.  Suppl.  842. 

S.  226.    Taxes  upon  devises  and  bequests  in  lieu  of  commissions. 

If  a  testator  bequeaths  or  devises  property  to  one  or  more  executors  or  trustees 


922  STATUTES  ANNOTATED.     '  [N.  Y.  St. 

in  lieu  of  their  commissions  or  allowances,  or  makes  them  his  legatees  to  an 
amount  exceeding  the  commissions  or  allowances  prescribed  by  law  for  an 
executor  or  trustee,  the  excess  in  value  of  the  property  so  bequeathed  or  de- 
vised above  the  amount  of  commissions  or  allowances  prescribed  by  law  in 
similar  cases  shall  be  taxable  under  this  article. 

[See  notes  to  the  act  of  1885,  c.  483,  s.  3;  1887,  c.  713;  1892,  c.  399,  s.  8;  1896, 
c.  908,  s.  227;  1905,  c.  368.    As  to  trustees'  commissions  see  post,  p.  952.] 

S.  227.  Liability  of  certain  corporations  to  tax.  If  a  foreign  executor, 
administrator  or  trustee  shall  assign  or  transfer  any  stock  or  obligations  in  this 
state  standing  in  the  name  of  a  decedent,  or  in  trust  for  a  decedent,  liable  to 
any  such  tax,  the  tax  shall  be  paid  to  the  state  comptroller  or  the  treasurer  of 
the  proper  county  on  the  transfer  thereof.  No  safe  deposit  company,  trust 
company,  corporation,  bank  or  other  institution,  person  or  persons  having  in 
possession  or  under  control  securities,  deposits,  or  other  assets  belonging  to  or 
standing  in  the  name  of  a  decedent  who  was  a  resident  or  non-resident,  or 
belonging  to,  or  standing  in  the  joint  names  of  such  a  decedent  and  one  or  more 
persons,  including  the  shares  of  the  capital  stock  of,  or  other  interests  in,  the 
safe  deposit  company,  trust  company,  corporation,  bank  or  other  institution 
making  the  delivery  or  transfer  herein  provided,  shall  deliver  or  transfer  the 
same  to  the  executors,  administrators  or  legal  representatives  of  said  decedent, 
or  to  the  survivor  or  survivors  when  held  in  the  joint  names  of  a  decedent  and 
one  or  more  persons,  or  upon  their  order  or  request,  unless  notice  of  the  time 
and  place  of  such  intended  delivery  or  transfer  be  served  upon  the  state  comp- 
troller at  least  ten  days  prior  to  said  delivery  or  transfer;  nor  shall  any  such 
safe  deposit  company,  trust  company,  corporation,  bank  or  other  institution, 
person  or  persons,  deliver  or  transfer  any  securities,  deposits  or  other  assets 
belonging  to  or  standing  in  the  name  of  a  decedent,  or  belonging  to,  or  standing 
in  the  joint  names  of  a  decedent  and  one  or  more  persons,  including  the  shares 
of  the  capital  stock  of,  or  other  interests  in,  the  safe  deposit  company,  trust 
company,  corporation,  bank  or  other  institution  making  the  delivery  or  transfer, 
without  retaining  a  sufficient  portion  or  amount  thereof  to  pay  any  tax  and 
interest  which  may  thereafter  be  assessed  on  account  of  the  delivery  or  transfer 
of  such  securities,  deposits  or  other  assets,  including  the  shares  of  the  capital 
stock  of,  or  other  interests  in,  the  safe  deposit  company,  trust  company,  cor- 
poration, bank  or  other  institution  making  the  delivery  or  transfer,  under  the 
provisions  of  this  article,  unless  the  state  comptroller  consents  thereto  in  writing. 
And  it  shall  be  lawful  for  the  said  state  comptroller,  personally  or  by  repre- 
sentative, to  examine  said  securities,  deposits  or  assets  at  the  time  of  such 
delivery  or  transfer.  Failure  to  serve  such  notice  or  failure  to  allow  such  exami- 
nation or  failure  to  retain  a  sufficient  portion  or  amount  to  pay  such  tax  and  inter- 
est as  herein  provided  shall  render  said  safe  deposit  company,  trust  company, 
corporation,  bank  or  other  institution,  person  or  persons,  liable  to  the  payment 
of  the  amount  of  the  tax  and  interest  due  or  thereafter  to  become  due  upon  said 
securities,  deposits  or  other  assets,  including  the  shares  of  the  capital  stock  of, 
or  other  interests  in,  the  safe  depos'it  company,  trust  company,  corporation, 
bank  or  other  institution  making  the  delivery  or  transfer  and  in  addition  thereto, 
a  penalty  of  not  less  than  five  or  more  than  twenty-five  thousand  dollars;  and 
the  payment  of  such  tax  and  interest  thereon,  or  of  the  penalty  above  prescribed. 


1909,  c.  62.]  NEW  YORK.  923 

or  both,  may  be  enforced  in  an  action  brought  by  the  state  comptroller  in  any 
court  of  competent  jurisdiction. 

[See  notes  to  the  act  of  1885,  c.  483,  s.  11;  1892,  c.  399,  s.  9;  1896,  c.  908, 
s.  228;   1901,  c.  173;   1902,  c.  101;   1905,  c.  368;   1908,  c.  310.] 

St.  1911,  c.  736,  would  seem  to  have  rendered  a  large  portion  of 
this  section  inapt  at  the  present  time.  There  is,  for  example,  now 
no  reason  for  requiring  notice  of  the  transfer  of  stock  in  domestic 
corporations  owned  by  non-residents.  Possibly  such  provisions 
have  been  repealed  by  implication  by  the  act  of  1911.  This  view 
would  seem  to  find  favor  from  the  ruling  in  Dunham  v.  City  Trust 
Co.,  noted  post. 

We  are  informed  by  the  attorney  for  the  tax  commissioner  that 
the  practice  of  his  office  is  still  to  require  notice  as  before. 

Stock  in  a  foreign  corporation  owned  by  a  non-resident  is 
non-taxable  and  therefore  the  consent  of  the  state  comptroller 
provided  for  by  this  section  is  not  necessary  to  the  transfer. 
Dunham  v.  City  Trust  Co.,  115  N.  Y.  App.  Div.  584,  101  N.  Y. 
Suppl.  87. 

S.  228.  Jurisdiction  of  the  surrogate.  The  surrogate's  court  of  every 
county  of  the  state  having  jurisdiction  to  grant  letters  testamentary  or  of  admin- 
istration upon  the  estate  of  a  decedent  whose  property  is  chargeable  with  any 
tax  under  this  article,  or  to  appoint  a  trustee  of  such  estate  or  any  part  thereof, 
or  to  give  ancillary  letters  thereon,  shall  have  jurisdiction  to  hear  and  deter- 
mine all  questions  arising  under  the  provisions  of  this  article,  and  to  do  any 
act  in  relation  thereto  authorized  by  law  to  be  done  by  a  surrogate  in  other 
macters  or  proceedings  coming  within  his  jurisdiction;  and  if  two  or  more 
surrogates'  jourts  shall  be  entitled  to  exercise  any  such  jurisdiction,  the  surro- 
gate first  acquiring  jurisdiction  hereunder  shall  retain  the  same  to  the  exclusion 
of  every  other  surrogate.  Every  petition  for  ancillary  letters  testamentary  or 
ancillary  letters  of  administration  made  in  pursuance  of  the  provisions  of  article 
seven,  title  three,  chapter  e  ghteen  of  the  code  of  civil  procedure  shall  set  forth 
the  name  of  the  state  comptroller  as  a  person  to  be  cited  as  therein  prescribed, 
and  a  true  and  correct  statement  of  all  the  decedent's  property  in  this  state  and 
the  value  thereof;  and  upon  the  presentation  thereof  the  surrogate  shall  issue 
a  citation  directed  to  the  state  comptroller;  and  upon  the  return  of  the  citation 
the  surrogate  shall  determine  the  amount  of  the  tax  which  may  be  or  become 
due  under  the  provisions  of  this  article  and  his  decree  awarding  the  letters  may 
contain  any  provision  for  the  payment  of  such  tax  or  the  giving  of  security 
therefor  which  might  be  made  by  such  surrogate  if  the  state  comptroller  were 
a  creditor  of  the  decedent.. 

[See  notes  to  the  act  of  1885,  c.  483,  s.  15;   1892,  c.  399,  s.  10;   1896,  c.  908 
s.  229;  1901,  c.  173,  s.  4;  1905,  c.  368.] 


924 


STATUTES  ANNOTATED.  [N.  Y.  St. 


To  Settle  Exemptions. 
Petition  for  Exemption. 

An  administrator's  petition  for  an  order  of  exemption  is  insuffi- 
cient to  support  such  an  order  where  it  relates  only  to  the  personal 
property  of  the  decedent  and  contains  no  proof  that  he  did  not  die 
seized  of  real  estate  liaole  to  taxation  under  the  statute  of  1903, 
chap.  41.  In  re  Collins,  104  N.Y.  App.  Div.  184, 93  N.Y.  Suppl.  342. 

Order  of  Exemption. 

There  is  no  provision  in  the  tax  law  which  expressly  empowers 
the  surrogate's  court  to  grant  an  order  of  exemption,  but  the  order 
may  properly  be  made,  however,  in  a  proceeding  to  appraise  the 
estate  in  view  of  the  language  of  section  229.  In  re  Collins,  104 
N.  Y.  App.  Div.  184,  93  N.  Y.  Suppl.  342. 

Notice  to  Comptroller. 

Section  231  expressly  requires  that  where  there  is  an  appraisal, 
notice  of  the  time  and  place  thereof  must  be  given  to  the  state 
comptroller  and  it  would  seem,  therefore,  that  an  order  of  exemp- 
tion should  be  made  only  after  notice  to  the  state  comptroller. 
In  re  Collins,  104  N.  Y.  App.  Div.  184,  93  N.  Y.  Suppl.  342. 

S.  229.  (As  amended  by  St.  1910,  c.  706.)  Appointment  of  appraisers, 
stenographers  and  clerks.  The  state  comptroller  shall  appoint  and  may  at 
pleasure  remove  not  to  exceed  six  persons  in  the  county  of  New  York;  three  persons 
in  the  county  of  Kings,  and  one  person  in  the  counties  of  Albany,  Dutchess,  Erie, 
Monroe,  Nassau,  Oneida,  Onondaga,  Orange,  Queens,  Rensselaer,  Richmond, 
Suffolk  and  Westchester,  to  act  as  appraisers  therein.  The  appraisers  so 
appointed  shall  receive  an  annual  salary  to  be  fixed  by  the  state  comptroller, 
together  with  their  actual  and  necessary  traveling  expenses  and  witness  fees, 
as  hereinafter  provided,  payable  monthly  by  the  state  comptroller  out  of  any 
funds  in  his  hands  or  custody  on  account  of  transfer  tax.  The  salaries  of  each 
of  the  appraisers  so  appointed  shall  not  exceed  the  following  amounts:  In  New 
York  county,  four  thousand  dollars;  in  Kings  county,  four  thousand  dollars; 
in  Erie  county,  three  thousand  dollars;  in  Westchester  and  Albany  counties, 
twenty-five  hundred  dollars;  in  Nassau  county,  two  thousand  dollars;  in  Queens, 
Monroe  and  Onondaga  counties,  one  thousand  five  hundred  dollars;  in  Dutchess, 
Oneida,  Orange,  Rensselaer,  Richmond  and  Suffolk  counties,  one  thousand 
dollars.  Each  of  the  said  appraisers  shall  file  with  the  state  comptroller  his 
Qath  of  office  and  his  official  bond  in  the  penal  sum  of  not  less  than  one  thousand 
dollars,  in  the  discretion  of  the  state  comptroller,  conditioned  for  the  faithful 
performance  of  his  duties  as  such  appraiser,  which  bond  shall  be  approved  by 
the  attorney  general  and  the  state  comptroller.  The  state  comptroller  shall 
retain  out  of  any  funds  in  his  hands  on  account  of  said  tax  the  following  amounts: 


1909,  c.  62.]  NEW  YORK.  925 

First,  a  sum  sufficient  to  provide  the  appraisers  of  New  York  county  with  six 
stenographers,  three  clerks  and  an  examiner  of  values,  of  Kings  county  with 
three  stenographers,  and  of  Erie  county  with  one  clerk,  appointed  by  the  state 
comptroller,  whose  salary  shall  not  exceed  fifteen  hundred  dollars  a  year  each. 
Second,  a  sum  to  be  used  in  defraying  the  expenses  for  office  rent,  stationery, 
postage,  process  serving  and  other  similar  expenses  necessarily  incurred  in  the 
appraisal  of  estates,  not  exceeding  ten  thousand  five  hundred  dollars  a  year 
in  New  York  county,  and  three  thousand  dollars  a  year  in  Kings  county.  Third, 
a  sum  not  exceeding  ten  thousand  dollars  to  be  used  in  defraying  the  expenses 
for  extra  clerical  and  stenographic  services  in  the  transfer  tax  bureau  of  the 
comptroller's  office  at  Albany,  during  the  period  ending  September  thirtieth, 
nineteen  hundred  and  eleven. 

[See  notes  to  the  acts  of  1885,  c.  483,  s.  13;  1892,  c.  399,  ss.  11,  14;  1896, 
c.  908,  s.  230;  'l897,  c.  284,  s.  6;  1899,  c.  76;  1900,  c.  658;  1901,  c.  173,  s.  4; 
1901,  c.  493;  1902,  c.  496;  1904,  c.  758;  1905,  c.  368;  1906,  c.  567;  1907, 
c.  709;  1908,  c.  310;  1908,  c.  312;  1908,  c.  321;  1909,  c.  283;  1909,  c.  62, 
s.  229;   1910,  c.  706.] 

Application  to  Appoint. 

An  application  of  the  state  comptroller  upon  a  verified  petition 
setting  forth  every  fact  upon  which  the  jurisdiction  of  the  surro- 
gate to  act  depended  made  upon  information  and  belief  is  a  proper 
application  to  force  the  surrogate  to  appoint  appraisers.  Kelsey  v. 
Church,  112  N.  Y.  App.  Div.  408,  98  N.  Y.  Suppl.  535. 

Appointment  Compelled  by  Mandamus. 

Section  230  of  the  tax  law  that  the  surrogate  shall  appoint  a 
competent  person  as  appraiser  whenever  occasion  may  require 
is  mandatory  and  he  may  be  forced  to  appoint  such  an  appraiser 
by  an  application  for  a  mandamus.  Kelsey  v.  Church,  112  N.  Y. 
App.  Div.  408.  98  N.  Y.  Suppl.  535. 

Jurisdiction  of  Comptroller  and  Surrogate  to  Appoint. 

The  surrogate  is  bound  to  appoint  as  appraiser  a  person  appointed 
under  the  provision  of  the  New  York  statute  of  1900,  chapter  658. 
In  re  Sondheim,  69  N.  Y.  App.  Div.  5,  74  N.  Y.  Suppl.  510,  66  N.  Y. 
Suppl.  726. 

N.  Y.  St.  1896,  c.  368,  a.  10,  ss.  229  and  234,  provide  for  the 
appointment  of  tax  appraisers  and  tax  assistants  by  the  comp- 
troller of  the  state.  The  court  holds  that  these  sections  invest 
the  comptroller  with  absolute  power  of  appointing  and  removing 
such  officials.  The  transfer  tax  assistants,  however,  are  connected 
with  the  administration  of  the  surrogate's  office  and  the  statute 
therefore  plainly  provides  for  the  joint  action  of  both  officials  and 
selection  and  control  of  this  clerk. 


926  STATUTES  ANNOTATED.  [N.  Y.  St. 

The  surrogate's  power,  however,  is  limited  to  a  recommendation, 
and  if  the  recommendation  is  not  satisfactory  the  comptroller  is 
not  compelled  to  accept  it  and  make  the  appointment,  and  the  posi- 
tion remains  vacant.  Duell  v.  Glynn,  191  N.  Y.  357,  84  N.  E.  282, 
affirming  122  N.  Y.  App.  Div.  314,  56  Misc.  41,  106  N.  Y.  Suppl. 
716. 

Under  the  statute  of  1896,  section  230,  the  surrogate  had  juris- 
diction to  appoint  an  appraiser  with  or  without  a  petition  and  of 
his  own  motion  whenever  in  the  sound  exercise  of  his  discretion 
he  deems  it  proper  to  do  so,  in  a  case  in  which  he  is  officially  cog- 
nizant of  the  fact  that  property  has  been  transferred  so  as  to  be 
subject  to  the  tax.  As  the  surrogate  may  of  his  own  motion  appoint 
an  appraiser  without  petition  his  authority  is  not  limited  because 
the  petition  is  presented  by  a  competent  person  with  allegations 
made  upon  information  and  belief.  In  re  O'Donohue,  44  N.  Y. 
App.  Div.  186,  60  N.  Y.  Suppl.  690. 

Removal  of  Appraisers. 

The  statute  of  1900,  chapter  658,  authorized  the  removal  of  a 
state  transfer  tax  appraiser  by  the  state  comptroller  without  a 
hearing  and  although  there  were  no  charges  of  incompetency  or 
misconduct  against  him.  People  v.  Glynn,  128  N.  Y.  App.  Div. 
257,  112  N.  Y.  Suppl.-695. 

S.  230.  Proceedings  by  appraiser.  In  each  county  in  which  the  office 
of  appraiser  is  not  salaried  the  county  treasurer  shall  act  as  appraiser.  The 
surrogate,  either  upon  his  own  motion,  or  upon  the  application  of  any  interested 
person,  including  the  state  comptroller,  shall  by  order  direct  the  person  or  one  of 
the  persons  appointed  pursuant  to  section  two  hundred  and  twenty-nine  of 
this  article  in  counties  in  which  the  office  of  appraiser  is  salaried,  and  in  other 
counties,  the  county  treasurer,  to  fix  the  fair  market  value  of  property  of  persons 
whose  estates  shall  be  subject  to  the  payment  of  any  tax  imposed  by  this  article. 

Every  such  appraiser  shall  forthwith  give  notice  by  mail  to  all  persons  known 
to  have  a  claim  or  interest  in  the  property  to  be  appraised,  including  the  state 
comptroller,  and  to  such  persons  as  the  surrogate  may  by  order  direct,  of  the 
time  and  place  when  he  will  appraise  such  property.  He  shall  at  such  time  and 
place  appraise  the  same  at  its  fair  market  value  as  herein  prescribed;  and  for 
that  purpose  the  said  appraiser  is  authorized  to  issue  subpoenas  and  to  compel 
the  attendance  of  witnesses  before  him  and  to  take  the  evidence  of  such  witnesses 
under  oath  concerning  such  property  and  the  value  thereof;  and  he  shall  make 
report  thereof  and  of  such  value  in  writing,  to  the  said  surrogate,  together  with 
the  depositions  of  the  witnesses  examined,  and  such  other  facts  in  relation  thereto 
and  to  said  matter  as  the  surrogate  may  order  or  require.  Every  appraiser, 
except  in  the  counties  in  which  the  office  of  appraiser  is  salaried,  for  which 
provision  is  hereinbefore  made,  shall  be  paid  by  the  state  comptroller  and  after 


1909,  c.  62.]  NEW  YORK.  927 

the  audit  of  said  state  comptroller,  his  actual  and  necessary  traveling  expenses 
and  the  fees  paid  such  witnesses,  which  fees  shall  be  the  same  as  those  now 
paid  to  witnesses  subpoenaed  to  attend  in  courts  of  record,  payment  to  be  made 
out  of  funds  in  the  hands  of  the  county  treasurer  of  the  proper  county  on  account 
of  the  tax  imposed  under  the  provisions  of  this  article. 

The  value  of  every  future  or  limited  estate,  income,  interest  or  annuity  depend- 
ent upon  any  life  or  lives  in  being,  shall  be  determined  by  the  rule,  method  and 
standard  of  mortality  and  value  employed  by  the  superintendent  of  insurance 
in  ascertaining  the  value  of  policies  of  life  insurance  and  annuities  for  the  deter- 
mination of  liabilities  of  life  insurance  companies,  except  that  the  rate  of  interest 
for  making  such  computation  shall  be  five  per  centum  per  annum. 

In  estimating  the  value  of  any  estate  or  interest  in  property,  to  the  beneficial 
enjoyment  or  possession  whereof  there  are  persons  or  corporations  presently 
entitled  thereto,  no  allowance  shall  be  made  on  account  of  any  contingent  in- 
cumbrance thereon,  nor  on  account  of  any  contingency  upon  the  happening 
of  which  the  estate  or  property  or  some  part  thereof  or  interest  therein  might  be 
abridged,  defeated  or  diminished;  provided,  however,  that  in  the  event  of  such 
incumbrance  taking  effect  as  an  actual  burden  upon  the  interest  of  the  benefi- 
ciary, or  in  the  event  of  the  abridgment,  defeat  or  diminution  of  said  estate  or 
property  or  interest  therein  as  aforesaid,  a  return  shall  be  made  to  the  person 
properly  entitled  thereto  of  a  proportionate  amount  of  such  tax  on  account  of 
the  incumbrance  when  taking  effect,  or  so  much  as  will  reduce  the  same  to  the 
amount  which  would  have  been  assessed  on  account  of  the  actual  duration  or 
extent  of  the  estate  or  interest  enjoyed.  Such  return  of  tax  shall  be  made  in 
the  manner  provided  by  section  two  hundred  and  twenty-five  of  this  article. 

Where  any  property  shall,  after  the  passage  of  this  chapter,  be  transferred 
subject  to  any  charge,  estate  or  interest,  determinable  by  the  death  of  any 
person,  or  at  any  period  ascertainable  only  by  reference  to  death,  the  increase 
accruing  to  any  person  or  corporation  upon  the  extinction  or  determination  of 
such  charge,  estate  or  interest,  shall  be  deemed  a  transfer  of  property  tajiable 
under  the  provisions  of  this  article  in  the  same  manner  as  though  the  person  or 
corporation  beneficially  entitled  thereto  had  then  acquired  such  increase  from 
the  person  from  whom  the  title  to  their  respective  estates  or  interests  is  derived. 

When  property  is  transferred  in  trust  or  otherwise,  and  the  rights,  interest 
or  estates  of  the  transferees  are  dependent  upon  contingencies  or  conditions 
whereby  they  may  be  wholly  or  in  part  created,  defeated,  extended  or  abridged, 
a  tax  shall  be  imposed  upon  said  transfer  at  the  highest  rate  which,  on  the 
happening  of  any  of  the  said  contingencies  or  conditions,  would  be  possible 
under  the  provisions  of  this  article,  and  such  tax  so  imposed  shall  be  due  and 
payable  forthwith  by  the  executors  or  trustees  out  of  the  property  transferred; 
provided,  however,  that  on  the  happening  of  any  contingency  whereby  the  said 
property,  or  any  part  thereof,  is  transferred  to  a  person  or  corporation  exempt 
from  taxation  under  the  provisions  of  this  article,  or  to  any  person  taxable  at 
a  rate  less  than  the  rate  imposed  and  paid,  such  person  or  corporation  shall  be  en- 
titled to  a  return  of  so  much  of  the  tax  imposed  and  paid  as  is  the  difference 
between  the  amount  paid  and  the  amount  which  said  person  or  corporation 
should  pay  under  the  provisions  of  this  article,  with  interest  thereon  at  the  rate 
of  three  per  centum  per  annum  from  the  time  of  payment.  Such  return  of 
overpayment  shall  be  made  in  the  manner  provided  by  section  two  hundred  and 
twenty-five  of  this  article. 


928  STATUTES  ANNOTATED.  [N.  Y.  St. 

Estates  in  expectancy  which  are  contingent  or  defeasible  and  in  which  pro- 
ceedings for  the  determination  of  the  tax  have  not  been  taken  or  where  the 
taxation  thereof  has  been  held  in  abeyance,  shall  be  appraised  at  their  full, 
undiminished  value  when  the  persons  entitled  thereto  shall  come  into  the  benefi- 
cial enjoyment  or  possession  thereof,  without  diminution  for  or  on  account  of 
any  valuation  theretofore  made  of  the  particular  estates  for  purposes  of  taxation, 
upon  which  said  estates  in  expectancy  may  have  been  limited. 

Where  an  estate  for  life  or  for  years  can  be  divested  by  the  act  or  omission  of 
the  legatee  or  devisee  it  shall  be  taxed  as  if  there  were  no  possibility  of  such 
divesting. 

The  report  of  the  appraiser  shall  be  made  in  duplicate,  one  of  which  dupli- 
cates shall  be  filed  in  the  office  of  the  surrogate  and  the  other  in  the  office  of 
the  state  comptroller. 

[See  notes  to  the  acts  of  1885,  c.  483,  s.  13;  1887,  c.  713;  1892,  c.  167;  1892, 
c.  399,  ss.  11,  12;  1896,  c.  908,  s.  231;  1897,  c.  284,  s.  6;  1899,  c.  76;  1900,  c. 
658;   1901,  c.  173,  s.  5;   1902,  c.  496;   1905,  c.  368.] 

Duty  of  Executor. 

N.  Y.  St.  1887,  c.  713,  s.  13,  makes  it  primarily  the  duty  of  the 
executor  to  apply  for  an  appraisement  so  that  he  may  ascertain 
and  pay  the  tax;  and  the  power  given  to  the  surrogate  on  his  own 
motion  to  cause  appraisement  to  be  made  was  not  intended  to 
relieve  the  executor  from  his  duty  in  the  matter.  Frazer  v. 
People,  3  N.  Y.  Suppl.  134,  6  Dem.  Surr.  174. 

Under  the  statute  of  1885,  chapter  483,  the  administrator  was 
under  no  duty  or  obligation  voluntarily  to  aid  the  appraiser  in  any 
manner  whatever  in  making  the  appraisal ;  and  the  court  holds, 
therefore,  that  the  administrator  was  not  guilty  of  any  fraudulent 
acts  in  failing  to  appraise  the  appraiser  of  certain  claims  belonging  to 
the  estate.     In  re  Smith,  14  Misc.  Rep.  169,  35  N.  Y.  Suppl.  701. 

Notice. 

Notice  to  Comptroller. 

A  surrogate's  decree  producing  an  assessment  made  without 
notice  to  the  state  comptroller  and  county  treasurer  in  1899  should 
be  vacated.     In  re  Fulton,  30  Misc.  Rep.  70,  62  N.  Y.  Suppl.  995. 

An  appraisal  is  irregular  where  the  proof  of  service  does  not  show 
that  the  comptroller  of  the  city  of  New  York  was  notified  of  the 
time  and  place  of  the  appraisal.     In  re  Bolton,  35  Misc.  Rep.  688, 

72  N.  Y.  Suppl.  430. 

♦- 

Notice  to  Heirs. 

The  district  attorney  sought  to  obtain  an  order  for  the  payment 
of  the  inheritance  tax  by  the  administrators,  and  they  appeared 


1909,  c.  62.]  NEW  YORK.  929 

in  opposition  as  well  as  one  of  the  heirs.  It  appeared  that  no 
notice  of  the  appraisement  was  given  to  an  heir,  although  a  condi- 
tion of  affairs  might  arise  in  which  she  would  be  personally  liable 
for  the  tax  and  could  be  compelled  to  pay  it  as  a  person  who  "had 
received  the  property  transferred." 

The  district  attorney  claimed  that  the  tax  must  be  paid  and  if 
any  part  of  it  is  shown  to  be  illegal  it  might  be  refunded.  But 
the  court  holds  that  this  would  place  an  unjust  burden  upon  the 
estate;  that  the  proceeding  is  fatally  defective  and  that  therefore 
the  tax  assessed  cannot  be  collected.  The  court  set  aside  the  report 
of  the  appraiser  and  allowed  an  application  to  be  made  for  a  new 
appraisal.     In  re  Winter,  21  Misc.  Rep.  552,  48  N.  Y.  Suppl.  1097. 

It  was  claimed  that  an  order  affirming  the  appraisal  was  made 
without  notice.  The  court  finds  that  it  is  sufficient  that  the 
appraiser  was  duly  appointed  and  that  he  gave  notice  as  required 
by  law  of  the  time  and  place  the  appraisal  would  be  made.  The 
court  says  that  the  beneficiary  had  a  right  of  appeal  from  the 
decision  of  the  surrogate.  In  re  Miller,  110  N.  Y.  216,  224,  18 
N.  E.  139,  affirming  47  Hun  394. 

On  the  Death  of  the  Testator. 

Propert}^  should  in  general  be  valued  as  of  the  date  of  the  death 
of  the  testator.  In  re  Davis,  149  N.  Y.  539,  547,  44  N.  E.  185, 
affirming  91  Hun  53. 

The  report  of  an  appraiser  is  defective  in  not  stating  the  value 
of  the  property  subject  to  tax  on  the  date  of  the  death  of  the 
testator.  '  In  re  Earle,  74  N.  Y.  App.  Div.  458,  77  N.  Y.  Suppl. 
503,  affirming  71  N.  Y.  Suppl.  1038. 

Where  Executor  Disclaims  Property. 

The  surrogate  has  authority  under  the  New  York  statute  of 
1892,  chapter  399,  section  11,  to  appoint  an  appraiser  to  appraise 
property  adjudged  to  be  subject  to  the  will  of  a  deceased  person 
in  an  action  between  the  heirs,  although  the  executor  had  claimed 
that  it  was  not  a  part  of  the  estate  as  it  had  been  given  to  a  certain 
heir  during  the  life  of  the  decedent.  In  re  Lansing,  31  Misc. 
Rep.  148,  64  N.  Y.  Suppl.  1125. 

Only  Property  of  Taxable  Beneficiaries  Included. 

It  is  the  duty  of  an  appraiser  under  the  statute  of  1885  to  fix 
the  value  only  of  property  of  persons  taking  by  succession  from 


930  STATUTES  ANNOTATED.  [N.  Y.  St. 

the  decedent  and  the  appraisers  need  not  fix  the  value  of  the  whole 
estate  of  the  testator.     In  re  Jones,  5  Dem.  Surr.  (N.  Y.)  30 

Report  to  Subject  After-discovered  Property. 

In  a  report  in  a  proceeding  to  subject  after-discovered  property 
to  the  payment  of  an  inheritance  tax,  the  report  should  clearly 
express  that  it  embraces  all  other  property  which  may  be  taxed 
at  the  date  of  the  death  of  the  testator.  Where  the  surrogate 
signs  a  report  defective  in  this  particular,  he  has  authority  to 
vacate  it  and  set  it  aside.  In  re  Earle,  74  N.  Y.  App.  Div.  458, 
77  N.  Y.  Suppl.  503,  affirming  71  N.  Y.  Suppl.  1038. 

Postponement  where  Value  of  Property  Unknown. 

Where  the  real  estate  of  the  testator  consisted  almost  entirely 
of  partnership  property  used  in  the  prosecution  of  the  lumbering 
and  tannery  business,  and  where  the  actual  value  of  such  real 
estate  is  dependent  largely  upon  the  manner  in  which  it  is  con- 
trolled, it  is  impracticable  to  ascertain  the  value  of  such  interests 
at  present,  but  would  seem  to  be  a  very  proper  case  for  post- 
poning the  assessment  and  collection  of  the  tax  to  which  the 
same  might  be  subject  until  the  parties  entitled  come  into  actual 
possession  or  enjoyment  thereof.  In  re  Wheeler,  1  Misc.  Rep. 
450,  22  N.  Y.  Suppl.  1075. 

When  Litigation  over  Title. 

Where  litigation  is  threatened  over  the  title  to  certain  property 
it  is  proper  not  to  impose  a  transfer  tax  upon  it.  In  re  Newcomb, 
35  Misc.  Rep.  589,  72  N.  Y.  Suppl.  58. 

Evidence  of  Securities  Owned. 

The  testimony  of  one  hostile  witness  that  ten  years  before  the 
death  of  the  testator  he  was  shown  by  the  testator  a  box  contain- 
ing securities  which  the  testator  then  stated  amounted  to  $420,000, 
and  that  five  years  prior  to  the  death  of  the  testator  the  witness 
was  taken  to  a  safe  deposit  vault  and  shown  a  box  of  securities 
which  the  testator  stated  were  worth  $700,000,  which  the  witness 
did  not  handle,  estimate  or  count,  is  insufficient  as  a  basis  for 
inheritance  tax  proceedings.  In  addition  to  this,  accounts  with 
brokers  and  with  a  national  bank  showing  considerable  amounts 
of  money  passing  through  the  account  are  insufficient  especially 
where  it  appears  that  the  testator  was  speculating  in  the  stock 
market.     In  re  Kennedy,  113  N.  Y.  App.  Div.  4,  99  N.  Y.  Suppl.  72. 


1909,  c.  62.]  NEW  YORK.  931 

In  estimating  the  value  of  the  shares  in  a  joint  stock  association 
for  the  purpose  of  the  inheritance  tax,  the  value  of  the  real  estate 
owned  by  the  association  should  be  taken  into  account  notwith- 
standing it  is  compelled  to  pay  a  tax  upon  the  same  periodically. 
In  re  Jones,  28  Misc.  Rep.  356,  59  N.  Y.  Suppl.  983, 

Construction  of  Will. 

In  proceedings  for  appraisal  under  the  transfer  tax  act  the 
will  may  be  construed.  In  re  Peters,  69  N.  Y.  App.  Div.  465,  74 
N.  Y.  Suppl.  1028. 

Claims. 

A  claim  of  an  estate  on  another  estate  which  is  in  genuine  liti- 
gation may  be  excluded  from  consideration  for  the  purpose  of 
the  inheritance  tax.  In  re  Skinner,  106  N.  Y.  App.  Div.  217, 
94  N.  Y.  Suppl.  144,  modifying  45  Misc.  559,  92  N.  Y.  Suppl.  972. 

Where  an  administrator  makes  an  honest  and  prudent  com- 
promise of  a  claim  of  the  estate  against  another,  the  claim  will 
not  be  appraised  at  a  greater  value  than  the  compromise.  In  re 
Thomas,  39  Misc.  Rep.  223,  79  N.  Y.  Suppl.  571. 

Claims  in  Favor  of  Estate. 

Where  the  administrator  had  brought  suit  on  a  note  made 
payable  to  the  intestate,  which  the  maker  of  the  note  claimed 
had  been  paid  and  litigation  was  still  pending  at  the  time  of  the 
appraisal,  it  was  the  duty  of  the  surrogate  to  exclude  this  claim 
from  the  valuation  at  the  time,  reserving  it  for  future  appraisal 
in  case  the  administrator  succeeded  in  collecting  it.  In  re  West- 
urn,  152  N.  Y.  93, 103,  46  N.  E.  315,  reversing  8  N.  Y.  App.  Div.  59. 

The  question  raised  was  whether  a  certain  worthless  account 
is  to  be  deemed  to  be  property  transferred  or  disposed  of  by  will 
within  the  contemplation  of  the  statute  and  to  be  included  in  the 
value  of  the  estate  for  the  purpose  of  taxation. 

The  court  holds  that  the  tax  is  imposed  upon  the  shares  of  the 
estate  that  the  beneficiaries  take  under  the  will  and  the  account 
or  item  in  question  does  not  represent  any  property  that  passed 
from  the  deceased  to  anyone  within  the  fair  meaning  of  the  statute ; 
hence  the  final  order  of  the  surrogate  excluding  the  account  from 
the  estimated  value  of  the  estate  was  correct.  In  re  Manning, 
169  N.  Y.  449,  62  N.  E.  565,  affirming  59  N.  Y.  App.  Div.  624. 


932  STATUTES  ANNOTATED.  [N.  Y.  St. 

Claim  of  Estate  against  Legatee. 

Where  a  bequest  of  the  residue  of  an  estate  includes  a  note  made 
by  the  residuary  legatee,  the  legatee  must  either  accept  the  benefit 
provided  by  the  will  under  the  condition  of  assuming  with  it  the 
burden  imposed  by  law,  or  he  may  reject  it.  If  he  elects  to  reject 
the  legacy  the  legacy  would  go  as  in  case  of  intestacy.  In  that 
event  the  next  of  kin  could  sue  upon  the  note.  The  tax  should 
properly  include  the  value  of  this  note.  In  re  Tuigg,  15  N.  Y. 
Suppl.  548,  2  Con.  Surr.  633,  following  Tyson's  Appeal,  10  Pa.  St. 
220. 

Claim  against  Beneficiary. 

Where  the  estate  has  a  claim  against  a  beneficiary  but  of  a  less 
amount  than  the  beneficiary  is  entitled  to  under  the  will,  the 
claim  should  be  appraised.  However  a  failure  to  appraise  cannot 
be  corrected  by  a  proceeding  to  set  aside  the  appraisal  but  only  by 
appeal.     In  re  Smith,  14  Misc.  Rep.  169,  35  N.  Y.  Suppl.  701. 

Claim  vs.  Worthless  Legatee. 

Where  a  testator  held  notes  against  certain  relatives  and  by  his 
will  the  notes  and  the  amounts  due  thereon  were  given  to  the  makers 
of  the  notes,  and  the  directors  were  directed  to  cancel  and  surrender 
the  notes  to  the  makers  without  payment,  the  court  holds  that  as 
the  makers  Of  the  notes  were  insolvent  it  is  fair  to  appraise  the 
legacy  as  valueless.  It  was  claimed  that  notwithstanding  the 
insolvency  of  the  makers  inasmuch  as  the  notes  were  given  as 
legacies  to  the  makers  themselves  they  should  be  assessed  at  their 
fair  value.  But  the  court  replies  that  under  section  230  of  the 
statute  "fair  market  value"  is  the  test.  No  such  exception  of 
cases  where  promissory  notes  are  given  to  their  makers  is  made 
by  the  statute.  Morgan  v.  Warner,  162  N.  Y.  612,  57  N.  E.  1118, 
affirming  45  N.  Y.  App.  Div.  424. 

Claim  against  Unsettled  Estate  of  another  Decedent. 

The  testator  died  in  1874  leaving  a  will  giving  his  wife  one  third 
of  his  property  for  life  with  remainder  to  his  son  and  daughter  and 
vesting  in  his  widow  the  power  to  appoint  remainders  to  such  of 
his  descendants  as  she  might  by  will  direct.  The  son  died  in  1879 
leaving  property  to  his  mother  for  life,  remainder  to  his  sister, 
and  the  mother  died  in  1895  having  exercised  the  power  of  appoint- 
ment in  favor  of  her  daughter.     The  mother's  will  was  admitted 


1909,  c.  62.]  NEW  YORK.  933 

to  probate  February  29,  1896,  and  the  daughter  died  on  that  same 
day,  and  her  will  was  admitted  to  probate  in  January,  1898,  the 
daughter  being  a  residuary  legatee  under  the  will  of  her  mother. 

The  court  holds  that  the  two  estates  in  remainder  which  vested 
absolutely  in  the  daughter  on  the  death  of  her  mother  under  her 
father's  and  brother's  wills  were  taxable  in  passing  to  the  residuary 
legatee  of  the  daughter. 

It  was  also  decided  that  the  amount  to  which  the  daughter  was 
entitled  as  a  residuary  legatee  under  her  mother's  will  was  not 
taxable,  it  appearing  that  there  had  been  no  settlement  of  the 
executor's  accounts  under  the  will,  and  consequently  the  amount 
of  the  residuary  estate,  if  any  there  should  be,  was  unascertained. 
But  the  court  holds  that  when  the  estate  of  the  mother  is  settled 
it  will  be  the  duty  of  the  executor  to  see  that  the  transfer  tax  is  paid 
before  distributing  the  residue  to  the  legal  representative  of  the 
daughter. 

As  to  the  two  estates  in  remainder  under  the  wills  respectively 
of  the  father  and  brother  of  the  daughter,  the  latter  was  vested 
with  the  title  to  the  residue  on  the  death  of  each  testator,  but  pos- 
session and  enjoyment  were  postponed  until  the  falling  in  of  the 
life  estate,  and  when  that  event  occurred  the  entire  estate,  legal 
and  equitable,  vested  instantly  in  the  remainderman.  The  execu- 
tor of  the  daughter,  under  the  circumstances,  was  liable  to  pay  the 
transfer  tax  before  he  could  distribute  the  personal  property  in  his 
hands,  or  to  the  possession  of  which  he  was  immediately  entitled. 
In  re  Rohan-Chabot,  167  N.  Y.  280,  283,  60  N.  E.  598,  affirming  44 
N  Y.  App.  Div.  340. 

Test  of  Value. 
Joint  Interests. 

Where  the  testator  and  his  brother  had  been  doing  business 
under  an  agreement  dated  1877,  reciting  that  the  parties  are 
"jointly"  interested  in  firm  property  on  the  death  of  the  intestate, 
the  court  on  the  evidence  finds  that  the  whole  estate  of  the  intestate 
is  subject  to  the  inheritance  tax.  In  re  Wormser,  28  Misc.  608, 
59  N.  Y.  Suppl.  1088. 

Good  Will. 

The  court  holds  that  there  was  no  authority  for  fixing  the  value 
of  the  good  will  in  a  business  at  the  amount  of  the  decedent's  share 
of  the  profits  of  the  business  for  the  year  immediately  preceding. 


934  STATUTES  ANNOTATED.  [N.  Y.  St. 

The  amount  fixed  by  the  agreement  of  the  parties  at  the  time  must 
determine  the  value.  What  is  to  be  determined  is  the  value  of 
the  good  will  as  of  the  time  of  the  decedent's  death.  In  re  Vivanti, 
138  N.  Y.  App.  Div.  281,  122  N.  Y.  Suppl.  954,  reversing  63  Misc. 
618,  118  N.  Y.  Suppl.  680. 

The  court  approves  the  suggestion  that  the  proper  rule  for  ascer- 
taining the  value  of  good  will  based  on  earnings  would  be  to  multiply 
the  net  earnings  by  a  certain  number  of  years,  depending  on  the 
nature  of  the  business,  and  where  a  net  profit  upon  a  compara- 
tively small  capital  was  about  $26,000  per  annum  and  it  was  not 
a  business  that  depended  upon  any  special  qualifications  in  the  de- 
cedent, the  court  estimates  the  value  at  about  three  times  the  annual 
net  profits.     In  re  Keahon,  60  Misc.  508,  113  N.  Y.  Suppl.  926. 

Inactive  Securities. 

The  statute  of  1891,  chapter  34,  providing  for  appraisal  of 
stocks  customarily  bought  or  sold  in  the  open  market,  does  not 
apply  to  a  stock  held  largely  by  a  private  family  with  only  a  few 
sales  of  small  lots.  On  this  question  expert  witnesses  are  admissi- 
ble.   In  re  Curtice,  111  N.  Y.  App.  Div.  230,  97  N.  Y.  Suppl.  444. 

The  value  of  stock  not  listed  on  the  stock  exchange  is  sufficiently 
shown  by  testimony  of  various  purchases  during  the  year,  although 
the  stock  was  very  inactive  and  the  sales  infrequent.  Evidence  of 
sales  for  a  reasonable  time  after  as  well  as  before  the  death  of  the 
testator  is  admissible.  In  re  Proctor,  41  Misc.  Rep.  79,  83  N.  Y. 
Suppl.  643. 

Where  stock  had  no  market  value,  as  the  corporation  made 
porous  plasters  and  medicines  dependent  on  certain  trade  secrets, 
the  earning  power  of  the  corporation  is  competent  evidence  of 
its  value  and  is  to  be  considered  in  determining  the  valuation  to 
be  placed  upon  the  stock  for  the  purposes  of  taxation.  Where  it 
is  impossible  for  an  appraiser  to  ascertain  the  market  value  of 
the  stock  of  a  corporation  by  reason  of  the  fact  that  there  is  none, 
the  state  does  not  thereby  lose  the  tax  upon  the  transfer.  The 
ownership  of  secret  receipts  is  not  tangible  and  is  to  some  extent 
of  uncertain  and  precarious  value  dependent  upon  the  good  faith 
of  those  who  possess  the  secret.  Still  a  large  portion  of  their 
v^lue  lies  in  judicious  advertising  and  in  the  name  under  which 
they  have  sold,  and  therefore  these  secret  receipts  are  properly 
to  be  considered  in  estimating  the  value.  In  re  Brandreth,  28 
Misc.  Rep.  468,  59  N.  Y.  Suppl.  1092. 


1909,  c.  62.]  NEW  YORK.  935 

Sales. 

Where  a  manufacturing  company  paid  eight  per  cent  dividends 
during  the  first  year  of  its  incorporation  its  stock  is  not  necessarily 
worth  par  in  view  of  sales  during  the  year  at  fifty  dollars  a 
share.     In  re  Smith,  71  N.Y.  App.  Div.  602,  76  N.Y.  Suppl.  185. 

It  appeared  that  the  devisee  of  real  property  had  sold  it  for 
the  best  price  that  she  could  obtain  and  therefore  the  court  holds 
it  unjust  to  fix  the  price  much  larger  than  that  simply  on 
account  of  the  evidence  of  a  real  estate  appraiser.  In  re  Arnold, 
114  N.  Y.  App.  Div.  244,  99  N.  Y.  Suppl.  740,  37  Civ.  Prod. 
Rep.  177.      , 

The  average  sales  of  stock  for  the  three  months  first  prior  to 
the  decedent's  death  is  a  proper  way  to  ascertain  the  value  of  the 
stock  under  the  New  York  statute  of  1891,  chapter  34,  section  1. 
In  re  Crary,  31  Misc.  Rep.  72,  64  N.  Y.  Suppl.  566. 

Opinions. 

The  executor  was  permitted  to  give  his  opinion  on  the  value  of 
certain  notes  in  Morgan  v.  Warner,  162  N.  Y.  612,  57  N.  E.  1118, 
affirming  45  N.  Y.  App.  Div.  424. 

The  declarations  of  the  testator  are  not  evidence  as  to  the  value 
of  certain  notes  bequeathed.  Morgan  v.  Warner,  162  N.  Y.  612, 
57  N.  E.  1118,  affirming  45  N.  Y.  App.  Div.  424. 

Experts. 

Expert  witnesses  may  be  heard  as  to  value  of  inactive  securities. 
In  re  Curtice,  HI  N.  Y.  App.  Div.  230,  97  N.  Y.  Suppl.  444. 

Joint  Stock  Association  Owning  Real  Estate. 

Where  the  testator  bequeathed  shares  in  a  joint  stock  associa- 
tion and  died  in  1891,  and  where  the  N.  Y.  St.  1891,  c.  215,  did 
not  levy  a  tax  on  a  bequest  of  real  estate  to  lineal  descendants, 
the  court  holds  that  the  real  estate  should  be  considered  in  apprais- 
ing property.  The  real  estate  constituted  a  greater  part  of  the 
assets  of  the  association.  The  shares  were  not  listed  upon  the 
stock  exchange  or  sold  in  open  market  and  the  only  way  to  get 
at  their  value  was  to  ascertain  the  property  they  repre- 
sented. In  re  Jones,  172  N.  Y.  575,  586,  65  N.  E.  570, 
60  L.  R.  A.'  476,  reversing  69  N.  Y.  App.  Div.  237,  74  N.  Y. 
Suppl.  702. 


936  statutes  annotated.  [n.  y.  st. 

Marshaling  Assets. 

Marshaling  securities  for  payment  of  indebtedness  of  non- 
resident to  stock-brokers,  see  post,  p.  949. 

Right  of  Executor  to  Elect  to  Pay  Certain  Legacies  with 
New  York  Assets. 

A  foreign  executor  may  marshal  the  assets  by  paying  legacies 
to  collaterals  or  strangers  out  of  assets  in  his  jurisdiction  and  pay- 
ing legacies  to  lineals  out  of  assets  in  the  jurisdiction  where  some 
of  the  personal  property  may  happen  to  be,  and  thus  escape  a 
tax  in  New  York.  The  property  of  which  an  English  testator 
died  possessed  in  Great  Britain  was  largely  in  excess  of  the  amount 
given  by  him  in  legacies  and  some  portion  of  these  legacies  had 
already  been  paid  from  the  English  estate  and  the  executor  had 
declared  his  determination  of  appropriating  that  part  of  the  tes- 
tator's property  to  their  payment  so  that  the  American  estate 
should  constitute  the  residuary  estate  disposed  of  by  the  will  in 
favor  of  the  testator's  brothers. 

"This  he  may  rightly  do  and  thus  save  the  estate  from  the 
payment  of  the  succession  tax  imposed  by  our  laws.  The  fact 
of  such  an  appropriation  will,  of  course,  appear  upon  his  accounting. 
If  the  executor  determines  to  pay  the  legacies  from  the  English 
estate,  the  American  estate  is  thereby  freed  from  the  burden  of 
the  special  tax,  the  imposition  of  which  depends  upon  the  fact 
of  a  succession  by  the  legatee  to  some  property  which  is  within 
the  state.  If  the  American  estate  is  appropriated  to  persons  who 
are  within  the  excepted  degrees  of  relationship  to  the  testator,  the 
right  to  claim  the  tax  from  the  executor  is  gone.  It  does  not  lie 
with  the  officers  of  the  state  to  say  in  such  a  case  which  part  of 
the  testator's  property  shall  be  appropriated  to  the  payment  of 
the  legacies.  The  law  is  not  arbitrary  in  its  application.  It  is 
simply  absolute  in  its  requirements  when  the  precise  case  arises 
which  it  was  framed  to  meet;  and  where,  as  here,  the  case  is  not 
presented  of  an  appropriation  of  any  part  of  the  American  estate 
in  payment  of  the  legacies  to  the  foreign  legatees,  this  special  tax 
law  cannot  and  should  not  apply.  To  this  view  we  are  all  the  more 
disposed  because  to  hold  otherwise  might  be  to  subject  this  estate 
to  taxation  both  in  Great  Britain  and  in  this  state.  Such  a  result 
of  a  double  taxation  is  one  which  the  courts  should  incline  to 
avoid  whenever  it  is  possible  within  reason  to  do  so."  Per 
Gray,  J.,  in  In  re  James,  144  N.  Y.  6,  11,  38  N.  E.  961,  affirm- 
ing 77  Hun  211,  27  N.  Y.  Suppl.  288,  6  Misc.  206. 


1909,  c.  62.]  NEW  YORK.  937 

Where  property  outside  the  state  has  been  used  by  the  executor 
in  the  exercise  of  his  acknowledged  right  of  election  to  pay  the 
pecuniary  legacies,  where  it  has  proved  sufficient  to  pay  all  of 
them,  and  all  property  in  this  state  passes  to  a  residuary  legatee 
who  is  in  the  class  of  persons  taxable  at  one  per  cent,  the  tax 
must  be  imposed  at  that  rate.  (See,  however,  N.  Y.  St.  1908, 
c.  310,  noted  post,  p.  939.)  In  re  Whiting,  127  N.  Y.  Suppl.  960, 
reversing  113  N.  Y.  S.  941. 

It  was  the  practice  under  these  decisions  for  the  executor  to 
file  with  the  surrogate  a  formal  election. 

Administrator  no  Right  to  Elect. 

Where  nine  per  cent  of  the  decedent's  total  personal  estate  was 
in  the  state  of  New  York,  it  is  proper  for  the  surrogate's  court  to 
deduct  nine  per  cent  of  the  debts  and  expenses  of  the  estate  of  the 
non-resident  decedent,  and  the  balance  is  the  net  assets  within 
this  state.  In  re  Ramsdill,  190  N.  Y.  492,  493,  83  N.  E.  584,  revers- 
ing 119  N.  Y.  App.  Div.  890. 

Where  the  administrator  of  the  foreign  intestate  elects  to  appro- 
priate all  the  assets  situated  within  the  state  of  New  York  in  pay- 
ment of  the  distributive  share  of  the  intestate's  brother,  the  court 
holds  that  this  action  cannot  prevent  the  imposition  of  an  inherit- 
ance tax  in  the  state  of  New  York.  The  court  distinguishes  the 
case  of  In  re  James,  144  N.  Y.  6,  as  in  that  case  the  property  was 
appropriated  to  the  specific  legacies  and  it  was  property  which 
was  in  fGreat  Britain  and  never  came  within  the  jurisdiction  of 
New  York.  The  persons  entitled  to  the  legacies  could  have  com- 
pelled their  payment  out  of  the  English  fund  without  resort  to 
the  New  York  courts.  In  the  case  at  hand  the  situation  is  radically 
different.  Upon  the  intestate's  death  his  estate  passed  eo  instanti 
to  the  persons  who,  by  virtue  of  the  intestate  law,  were  entitled 
thereto. 

The  New  York  statute  involves  a  tax  upon  transfers  based  upon 
the  portion  of  the  estate  found  within  our  jurisdiction,  but  this  is 
not  a  tax  upon  the  specific  property  which  passes.  The  right  of 
the  state  to  the  tax  is  therefore  coincident  with  the  devolution  of 
title  or  interest;  and  the  right  of  the  state  to  exact  the  tax  as  well 
as  the  obligation  of  the  transferee  to  pay  it  depend  not  upon  a 
formal,  complete  and  immediate  change  of  title  or  possession,  but 
upon  the  instant  right  to  a  beneficial  share  or  interest  subject  only 
to  the  due  administration  of  the  estate. 


938  STATUTES  ANNOTATED.  [N.  Y.  St. 

"When  a  specific  foreign  legatee  of  a  foreign  testator  can  obtain 
satisfaction  of  his  legacy  in  a  foreign  jurisdiction,  the  executor 
cannot  be  compelled  to  pay  such  a  legacy  out  of  the  assets  within 
our  jurisdiction.  This  is  the  necessary  result  of  the  practical  and 
obvious  distinction  between  testacy  and  intestacy  as  applied  to 
this  subject  of  taxation.  If  a  specific  legatee  needs  not  the  inter- 
vention of  our  laws  or  courts  to  obtain  what  comes  to  him  under  a 
foreign  will  through  foreign  assets  in  a  foreign  jurisdiction,  our 
laws  cannot  coerce  an  executor  into  paying  his  legacy  out  of  funds 
within  our  jurisdiction  for  the  sole  purpose  of  exacting  a  tax.  But 
in  a  case  of  intestacy  the  rule  is  essentially  different,  because  the 
distributee  takes  an  undivided  interest  in  the  whole  estate;  and 
if  part  of  it  happens  to  be  within  our  jurisdiction,  he  can  only  get 
his  share  of  what  is  here  under  our  laws  and  through  our  courts. 
This  is  the  theory  upon  which  the  nephews  and  nieces  of  the  intes- 
tate in  the  case  at  bar  are  clearly  taxable  under  our  statute."  Per 
Werner,  J.,  in  In  re  Ramsdill,  190  N.  Y.  492,  496,  83  N.  E.  584, 
reversing  119  N.  Y.  App.  Div.  890. 

Executor  Presumed  to  Elect. 

The  decedent  was  a  resident  of  New  Jersey  leaving  personal 
property  in  New  York  and  also  in  New  Jersey.  The  executor  paid 
taxable  legacies  out  of  the  New  Jersey  assets  and  distributed  the 
New  York  assets  among  people  of  one  per  cent  class  who  were  not 
taxable  at  all,  because  the  New  York  assets  are  less  than  ten  thou- 
sand dollars  in  amount.  The  court  holds  that  it  was  the  legal  right 
of  the  executor  to  elect  to  pay  the  taxable  legacies  out  of  the  New 
Jersey  assets  and  to  distribute  the  New  York  assets  to  persons  who 
under  our  law  are  exempt  from  any  tax  whatever.  "It  was  his 
plain  duty  to  exercise  this  right  in  the  interests  of  parties  claiming 
under  the  will  as  legatees,  and  he  owed  no  duty  to  the  state  of 
New  York  to  do  anything  different.  He  had  this  right  of  election 
until  he  had  actually  appropriated  the  New  York  assets  to  the 
payment  of  debts  and  legacies.  There  was  no  warrant  of  law  to 
justify  the  appraiser  in  assuming  that  the  taxable  legacies  would 
be  paid  pro  rata  out  of  both  funds.  The  natural  inference  was 
that  the  assets  would  be  marshaled  in  such  a  way  as  to  require  the 
smallest  payment  of  tax,  and-  if  the  intent  of  the  executor  was 
material  to  produce  a  different  result,  the  burden  of  proving  the  fact 
rested  upon  the  state  and  the  executor  should  have  been  questioned 
upon  the  subject  by  the  appraiser  before  the  report  was  made."  Per 
Thomas,  S.,  in  In  re  McEwan,  51  Misc.  455,  101  N.  Y.  Suppl.  733. 


1908,  c.  310.1  NEW  YORK.  939 

The  Act  of  1908. 

The  act  of  1908,  c.  310,  noted  ante,  p.  828,  was  passed  in  view  of 
the  Ramsdill  case  supra,  p.  937,  intending  to  make  the  practice 
the  same  for  executors  as  for  administrators.  This  act  was  incor- 
porated in  the  Consolidated  Laws  of  1909  as  section  220,  subd.  3, 
and  appears  in  the  present  act,  ante,  pp.  840,  841.  The  statute 
does  away  with  marshaling. 

Under  the  statute  of  1908,  chapter  310,  the  executors  have  no 
right  to  marshal  assets  by  electing  to  appropriate  New  York  assets 
to  the  payment  of  legacies  exempt  or  taxable  at  the  minimum  rate 
leaving  the  payment  of  legacies  at  a  higher  rate  from  assets  out- 
side the  state.  The  executor  claimed  that  when  he  selected  the 
securities  in  New  York  to  pay  the  two  legacies  in  question  such 
securities  became  in  effect  as  much  "specifically  bequeathed"  as 
if  named  directly  in  the  will.  But  the  court  holds  that  the  will 
fixed  the  character  of  the  legacies  as  general  legacies  and  that  the 
act  of  the  executor  could  not  change  this  character.  In  re  Porter, 
67  Misc.  19,  124  N.  Y.  Suppl.  676. 

Annuities. 
Value  of  Annuity. 

A  tax  on  an  annuity  as  covered  in  section  230  of  the  New  York 
statute  should  be  ascertained  by  fixing  the  value  under  the  insur- 
ance tables  and  then  computing  the  amount  of  the  transfer  tax 
thereon,  which  becomes  payable  forthwith  out  of  the  fund  set 
aside  for  creating  the  annuity.  The  method  of  returning  to 
the  estate  the  tax  so  paid  by  the  trustees  is  as  follows : 
"Take  for  illustration  an  annuitant  whose  probable  duration 
of  life  is  ten  years.  The  trustees  would  deduct  from  each 
annual  payment  as  made  one-tenth  of  the  tax  and  restore  it 
to  the  residuary  estate." 

Where  the  death  of  the  annuitant  took  place  before  the  tax  had 
been  restored  to  the  estate  entirely,  any  portion  of  a  transfer 
tax  not  restored  to  the  estate  by  the  process  indicated  at  the  time 
of  the  annuitant's  death  would  be  a  loss  which  the  estate  must 
sustain.  In  re  Tracy,  179  N.  Y.  501,  509,  72  N.  E.  519,  reversing 
87  N.  Y.  App.  Div.  215. 

Legacy  for  Care. 

The  direction  by  will  that  certain  persons  shall  receive  $75 
per  month  for  caring  for  the  brother  of  the  testatrix  is  subject 


940  STATUTES  ANNOTATED.  [N.  Y.  St. 

to  a  tax  at  the  rate  of  five  per  cent.     In  re  Eaton,  55  Misc.  472, 
106  N.  Y.  Suppl.  682. 

Legacy  Subject  to  Annuity. 

The  personal  property  was  limited  on  the  life  of  the  testator's 
widow  subject  to  an  annuity  to  be  paid  to  his  sister.  It  was  claimed 
that  from  the  life  estate  should  be  deducted  the  actual  amount 
of  principal  necessary  to  produce  annuities  at  the  rate  of  five  per 
cent  per  annum.  The  court,  however,  holds  that  the  proper 
method  is  to  treat  the  present  values  of  the  annuities  as  specific 
legacies  bequeathed  to  the  annuitants  deducted  from  the  residuary 
personal  estate  on  the  theory  that  the  widow's  life  interest  is 
limited  on  the  remainder  only.  In  effect  her  interest  is  ascertained 
to  be  the  present  value  of  the  life  estate  in  the  entire  fund  less 
the  present  value  of  the  annuities  charged  upon  such  fund.  In  re 
Maresi,  74  N.  Y.  App.  Div.  76,  77  N.  Y.  Suppl.  76. 

Life  Estates. 

See  notes  to  the  acts  of  1885  and  1892,  ante,  pp.  783,  810. 

Life  Estates  not  Ascertainable. 

Where  a  devise  is  made  to  two  for  life  and  to  the  survivor  of 
them  the  remainder  to  the  surviving  children  of  M.  and  remainder  in 
fee  to  the  children  of  A.  and  W.  if  the  latter  have  issue,  the  life 
estates  of  the  first  takers  are  alone  taxable  since  it  is  impossible 
to  tell  which  of  the  children  of  M.  will  take  the  second  life  estate; 
nor  can  it  be  known  into  what  number  of  shares  the  estate  in 
remainder  will  be  divided.  In  re  Eldridge,  29  Misc.  Rep.  734,  62 
N.  Y.  Suppl.  1026. 

What  is  a  Life  Estate? 

Where  property  is  left  to  the  widow  to  be  used  and  enjoyed  and 
at  her  disposal  during  her  life  with  bequests  over  of  "that  may 
remain"  the  widow  has  a  life  estate  only  with  the  power  of  dis- 
position and  followed  by  valid  executory  devises.  In  re  Cager, 
111  N.  Y.  343,  19  N.  Y.  St.  497,  18  N.  E.  866,  affirming  46  Hun 
657. 

Under  N.  Y.  St.  1896,  c.  908,  as  amended  by  N.  Y.  St.  1899, 
c.  76,  and  N.  Y.  St.  1900,  c.  658,  under  section  230,  it  is  the  duty 
of  the  executors  and  trustees  to  ascertain  the  value  of  the  respective 
life  estates  and  estates  in  remainder  and  having  done  this  they 


1909,  c.  62.]  NEW  YORK.  941 

should  compute  the  transfer  tax  and  pay  the  same  out  of  the  property 
transferred.  The  result  is  that  the  life  tenant  loses  during  the 
continuance  of  his  estate  the  interest  upon  the  corpus  of  the  trust 
so  paid  out  and  eventually  the  remainderman  receives  his  estate 
diminished  by  the  amount  of  said  payment.  The  court  is  not 
concerned  with  the  question  of  whether  this  works  out  justice  as 
between  the  life  tenant  and  the  remainderman.  The  legislative  in- 
tention is  clear  that  the  transfer  tax  shall  be  paid  out  of  the  corpus 
of  the  trust  estate  and  not  out  of  the  income.  The  court  remarks 
that  In  re  Vanderbilt,  172  N.  Y.  69,  dealt  only  with  the  con- 
tingent remainder  and  is  therefore  not  strictly  in  point,  but  that 
the  principle  announced  therein  is  necessarily  involved  in  life 
estates  created  by  trusts.  In  re  Tracy,  179  N.  Y.  501,  509,  72  N.  E. 
519,  reversing  87  N.  A.  App.  Div.  215. 

Where  the  life  tenant  died  between  the  death  of  the  original 
decedent  and  the  appraisal  under  the  transfer  tax  the  life  tenant's 
interest  should  be  appraised  not  in  accordance  with  the  term  of 
its  actual  duration,  but  in  accordance  with  the  provisions  of  the 
act  requiring  a  valuation  as  of  the  date  of  the  death,  by  the  use 
of  the  annuity  tables.  In  re  Jones,  28  Misc.  Rep.  356,  59  N.  Y. 
Suppl.  983. 

Future,  Contingent  or  Defeasible  Interests. 
Deduction  for  Postponing  Payment. 

Legacies  of  five  hundred  dollars  payable  at  the  end  of  a  year 
are  not  of  the  fair  market  or  cash  value  of  five  hundred  dollars, 
but  they  are  of  the  value  of  that  amount  less  the  interest  until 
payable.  In  re  Peck,  9  N.  Y.  Suppl.  465,  24  Abb.  N.  Cas.  365, 
2  Con.  Surr.  201. 

A  money  legacy  of  five  hundred  dollars  is  of  the  fair  value  of 
five  hundred  dollars  under  the  New  York  statute  of  1887  and  the 
appraisers  have  no  right  to  deduct  five  per  cent  from  its  face 
value  on  the  ground  that  that  is  what  it  is  worth  to  the  legatee 
at  the  end  of  the  year;  so  legacies  of  five  hundred  dollars  each  are 
subject  to  the  tax.  In  re  Bird,  32  N.  Y.  St.  899,  11  N.  Y.  Suppl. 
895,  2  Con.  Surr.  376. 

Of  Vested  Remainder. 

A  vested  remainder  after  the  death  of  the  life  tenant  can  be 
appraised  on  the  death  of  the  testator  by  ascertaining  the  value 


942  STATUTES  ANNOTATED.  [N.  Y.  St. 

of  the  life  estate  and  deducting  that  from  the  value  of  the  whole 
estate.    In  re  Lange,  25  Misc.  Rep.  466,  55  N.  Y.  Suppl.  750. 

Where  Remaindermen  Known. 

Where  the  testator  gave  his  property  to  his  wife  for  life  with 
remainder  over,  the  persons  to  whom  the  property  passes  after 
the  death  of  the  life  tenant  are  known,  hence  the  entire  estate 
was  taxable  at  the  death  of  the  testator.  In  re  Runcie,  36  Misc. 
Rep.  607,  73  N.  Y.  Suppl.  1120. 

Vested  Remainder. 

Where  the  testatrix  devised  property  in  trust,  the  income  to 
be  paid  to  the  grandsons  during  the  life  of  the  sons  and  the  grand- 
sons to  succeed  to  the  estate  on  the  sons'  death  if  they  should 
then  be  fifty  years  of  age,  the  grandsons  took  a  vested  remainder 
on  the  death  of  the  testatrix  and  hence  such  devise  was  taxable. 
In  re  Sherman,  30  Misc.  Rep.  547,  63  N.  Y.  Suppl.  957. 

Efect  of  Omission  from  Appraisal  on  Death  of  Testator. 

Where  a  will  left  funds  in  trust  to  pay  the  income  to  a  grandson 
after  he  reached  the  age  of  thirty,  the  appraiser  did  not  appraise 
the  interest  of  the  grandson  at  the  death  of  the  testator.  Sub- 
sequently, however,  after  he  attained  the  age  of  thirty  proceedings 
were  brought  to  appraise  his  interest  and  it  was  claimed  that  the 
interest  was  actually  vested  from  the  death  of  the  testator;  that 
the  order  entered  omitting  to  tax  it  then  was  in  effect  an  adjudi- 
cation that  it  was  exempt.  The  court  notes,  however,  that  the 
first  appraiser  reported  that  these  interests  were  not  then  tax- 
able for  the  reason  that  their  value  could  not  then  be  ascer- 
tained and  the  ultimate  legatees  were  indefinite  and  uncertain 
and  the  doctrine  of  res  judicata  has  no  application  for  there  is 
not  only  no  judgment  of  exemption  but  a  specific  postponement 
of  the  consideration  of  the  matter.  In  re  Irwin,  36  Misc.  Rep. 
277,  73  N.  Y.  Suppl.  415. 

Contingent  Remainders. 

See  notes  to  the  acts  of  1885,  1892,  and  1899,  c.  76,  ante,  pp. 
^82,  808,  822. 

The  policy  of  the  state  toward  contingent  remainders  was  altered 
by  the  act  of  1899,  c.  76,  which  made  the  tax  on  contingent  or  defeas- 
ible estates  accrue  forthwith  at  the  highest  rate  which  would  be 
possible  on  the  happening  of  any  contingency. 


1909,  c.  62.]  NEW  YORK.  943 

A  transfer  tax  can  be  imposed  before  the  vesting  of  the  contin- 
gent estate.  In  re  Post,  85  N.  Y.  App.  Div.  611,  82  N.  Y.  Suppl. 
1079. 

Where  the  testator  devised  to  her  brother  the  use  of  her  personal 
property  with  the  right  to  use  as  much  of  the  principal  as  was 
necessary  for  his  maintenance,  no  transfer  tax  can  be  assessed 
upon  the  remainder  as  it  is  impracticable  to  appraise  it  until  it  is 
known  what  property  will  pass  in  remainder.  In  re  Babcock,  81 
N.  Y.  App.  Div.  645,  81  N.  Y.  Suppl.  1117,  affirming  37  Misc.  Rep. 
445,  75  N.  Y.  Suppl.  926. 

Where  a  remainder  is  bequeathed  to  the  issue  of  the  life  tenant 
and  she  has  no  issue  this  remainder  interest  is  not  now  taxable 
since  no  transfer,  defeasible  or  otherwise,  has  yet  been  made.  But 
if  any  child  of  the  life  tenant  is  now  in  existence  such  child  is  now 
vested  with  an  estate  in  such  remainder,  subject  to  be  divested  by 
his  death  prior  to  his  mother,  and  also  subject  to  open  and  let  in 
after-born  children,  and  the  tax  can  now  be  imposed.  In  re 
Clarke,  39  Misc.  Rep.  73,  78  N.  Y.  Suppl.  869. 

Contingency  Extinguished  before  Death. 

Where  remainders  in  trust  estates  were  left  to  such  of  certain 
persons  named  as  might  survive  the  termination  of  the  trust  estates 
and  one  of  these  persons  named  died  before  the  termination  of 
the  trust  estate  his  estate  was  not  subject  to  taxation.  He  never 
took  anything  beneficial  under  the  will  and  his  estate  can  take 
nothing.  It  was  never  intended  by  the  law  to  tax  a  theory  having 
no  real  Substance  behind  it.  What  passed  was  rather  a  theoretical 
possibility  than  a  tangible  reality.  In  re  Curtis,  142  N.  Y.  219, 
36  N.  E.  887,  affirming  73  Hun  185,  56  N.  Y.  St.  113,  25  N.  Y. 
Suppl.  909. 

Where  Testator  Died  before  Statute  Enacted. 

Where  the  testatrix  died  in  1883,  leaving  property  to  a  life  tenant 
with  a  contingent  remainder  over  and  the  life  tenant  died  in  1894, 
the  court  holds  that  the  remainder  is  not  taxable,  following  In  re 
Seaman,  147  N.  Y.  69,  41  N.  E.  401.  In  re  Langdon,  affirming  153 
N.Y.  6,  46  N.E.  1034,  11  N.Y.  App.  Div.  220,  43  N.Y.  Suppl.  419. 

Defeasible  Interest. 

Under  the  statute  of  1896,  section  230,  providing  that  "where 
an  estate  for  life  or  for  years  can  be  divested  by  the  act  or  omission 


944  STATUTES  ANNOTATED.  IN.  Y.  St. 

of  a  legatee  or  devisee  it  shall  be  taxed  as  if  there  was  no  possibility 
of  such  divesting,"  the  court  holds  that  a  bequest  to  the  sister  until 
her  marriage  or  death  unmarried  should  be  taxed  as  a  life 
estate.  In  re  Plum,  37  Misc.  Rep.  466,  75  N.  Y.  Suppl.  940. 
Where  a  life  estate  is  determinable  upon  the  remarriage  of  the 
life  tenant,  on  the  remarriage  of  the  life  tenant  the  surrogate  should 
instruct  the  appraiser  to  deduct  from  the  principal  fund  the  value 
of  the  estate  of  the  widow  during  the  term  of  her  widowhood.  In 
re  Sloane,  154  N.  Y.  109,  114,  47  N.  E.  978,  19  N.  Y.  App.  Div. 
411,  46  N.  Y.  Suppl.  264. 

Inequality  in  Rates  on  Remainders. 

The  court  suggests  to  the  legislature  that  N.  Y.  St.  1899,  c.  76, 
providing  for  the  present  appraisal  and  taxation  of  remainders 
causes  an  inequality  which  is  an  injustice  on  life  estates.  The  tax 
on  the  remainders  being  paid  out  of  the  corpus  of  the  estate  dimin- 
ishes the  income  of  the  life  tenant  by  the  interest  on  the  amount  of 
the  tax;  and  if  it  is  desired  to  make  taxes  on  remainders  pay- 
able immediately  it  would  be  fairer  to  the  life  tenant  to  have  the 
tax  assessed  at  the  lowest  rate  on  any  succession  provided  for  by 
the  will.  In  case  the  remainder  eventually  vesting  should  prove 
taxable  at  a  higher  rate  then  such  increased  tax  should  be  payable 
at  the  time  of  its  enjoyment.  The  court  remarks  that  its  experi- 
ence is  that  in  the  majority  of  cases  the  lowest  rate  of  tax  usually 
proves  the  final  rate,  and  where  the  state  imposes  in  the  first  in- 
stance a  higher  rate  of  tax  it  becomes  obligated  to  repay  the  excess 
after  a  lifetime  at  six  per  cent  interest,  while  it  could  borrow  money 
at  half  that  rate.  In  re  Brez,  172  N.  Y.  609,  611,  64  N.  E.  958, 
reversing  69  N.  Y.  App.  Div.  619. 

Vested  Remainder. 

The  testator  died  in  1887  and  an  appraisal  was  made  soon  after 
his  death.  The  testator  devised  to  a  life  tenant  and  on  his  death 
to  his  issue  and  no  appraisal  was  made  of  the  remainder  after  the 
death  of  the  life  tenant.  The  life  tenant  died  in  1892  leaving 
is^ue.  The  remainder  vested  in  these  remaindermen  at  the  date 
of  the  death  of  the  testator  although  the  amount  that  the  benefi- 
ciaries would  receive  could  not  be  definitely  ascertained  until  the 
death  of  the  life  tenant.     Therefore  the  appraisal  should  be  made 


1909,  c.  62.]  NEW  YORK.  945 

as  of  the  date  of  the  testator's  death  and  on  the  value  at  that  time. 
In  re  Meyer,  83  N.  Y.  App.  Div.  381,  82  N.  Y.  Suppl.  329. 

Remainder  Assessed  under  Original  Will. 

Where  under  a  will  the  wife  took  a  life  estate  with  remainder 
over  to  the  daughter  the  daughter  took  under  the  father's  will 
and  not  through  the  mother,  and  as  this  estate  has  once  paid  the 
tax  it  is  not  subject  to  a  second  tax.  In  re  Whitney,  124  N.  Y. 
Suppl.  909. 

Contingent  .Remainder.  —  Defeasible  Interest. 

Formerly  the  tax  on  a  contingent  remainder  or  other  indeter- 
minate interest  was  assessed  only  when  the  interest  vested  in 
possession,  but  this  rule  was  reversed  by  the  statute  of  1899, 
chapter  76,  and  now  the  tax  on  all  such  interests  accrues  on  the 
death  of  the  testator  to  be  assessed  at  the  highest  rate  possible  in 
view  of  all  the  contingencies. 

The  legislature  by  the  amendment  of  1899  intended  to  change 
the  law  upon  the  subject  and  to  make  the  transfer  tax  upon  prop- 
erty transferred  in  trust  payable  forthwith.  It  is  not  required 
to  be  paid  by  the  conditional  transferee  as  it  is  to  be  paid  out 
of  the  property  transferred,  so  that  whoever  may  ultimately  take 
the  property  takes  that  which  remains  after  the  payment  of  the 
tax.  It  therefore  contemplates  defeasible  transfers  as  well  as  abso- 
lute transfers.  In  re  Vanderbilt,  172  N.  Y.  69,  72,  64  N.  E.  782, 
modifying  68  N.  Y.  App.  Div.  27,  74  N.  Y.  Suppl.  450,  followed  in 
In  re  Brez,  172  N.  Y.  609,  64  N.  E.  958,  reversing  69  N.  Y.  App. 
Div.  619. 

Effect  of  Trusts. 

Where  Decedent  is  only  a  Trustee. 

No  inheritance  tax  should  be  levied  where  the  decedent  is  merely 
a  trustee.  So  where  an  executrix  without  authority  purchases 
land  in  her  own  name  the  property  is  impressed  with  a  trust  in 
favor  of  the  remaindermen,  and  on  her  death  no  inheritance  tax 
should  be  levied  as  the  fact  that  she  took  title  in  her  own  name 
did  not  make  the  property  hers.  In  re  Wheeler,  115  N.  Y.  App. 
Div.  616,  100  N.  Y.  Suppl.  1044. 

Where  the  testatrix  in  the  purchase  of  real  estate  used  money 
which  she  held  as  executrix  of  the  estate  of  another  the  legatees 


946  STATUTES  ANNOTATED.  [N.  Y.  St. 

may  assert  that  they  take  this  property  under  the  will  of  the  origi- 
nal testator  who  was  their  father  and  not  under  the  will  of  the  testa- 
trix.   Inre  Wheeler,  115  N.  Y.  App.  Div.  616, 100  N.  Y.  Suppl.  1044. 

The  testator  made  deposits  of  money  as  trustee  for  his  wife  and 
children,  each  account  being  in  his  name  as  trustee  for  a  particular 
person  named.  The  testator  had  kept  his  wife  and  children 
advised  of  the  deposits  and  the  deceased  declared  to  them  his  pur- 
pose in  opening  accounts  and  making  the  deposits,  and  often  stated 
to  the  children  that  the  funds  set  apart  for  them  would  belong 
to  them  at  the  age  of  twenty-one  years. 

The  court  holds  that  the  trust  became  absolute  and  irrevocable 
during  the  lifetime  of  the  donor  and  the  mere  fact  that  the  accounts 
were  not  changed  in  form  and  the  moneys  paid  over  to  the  children 
at  the  age  of  twenty-one  is  not  a  controlling  circumstance  to  show 
that  the  trust  was  merely  tentative.  In  re  Pierce,  132  N.  Y.  App. 
Div.  465,  116  N.  Y.  Suppl.  816,  reversing  60  Misc.  25,  112  N.  Y. 
Suppl.  594. 

Legatee's  Interest  Impressed  with  Trust. 

The  testator  died  in  1890  giving  a  portion  of  the  residue  of  her 
property  to  three  men  as  tenants  in  common.  Subsequently  by 
an  action  for  construction  it  was  held  by  the  court  that  this  legacy 
was  really  in  trust  for  certain  purposes  exempt  from  taxation. 
The  court  holds,  however,  that  the  right  of  the  state  to  collect  a 
tax  was  not  concluded  by  the  judgment  of  the  supreme  court, 
but  that  they  might  look  also  at  the  judgment  in  the  court  of  appeals 
in  the  action  for  construction.  The  court  finds  that  the  court  of 
appeals  decided  that  the  legatee  took  an  absolute  legacy  and  never 
became  trustee  for  the  brother;  that  he  obtained  under  the  will  a 
legal  title  and  that  the  equitable  rights  of  the  brother  arose  not 
under  the  will  but  from  facts  appearing  extrinsic  thereto.  As  no 
trust  was  imposed  by  the  will  the  legacy  was  subject  to  tax  although 
the  legatee  took  it  impressed  with  a  trust  in  favor  of  his  brother. 
In  re  Edson,  159  N.  Y.  568,  54  N.  E.  1092,  affirming  38  N.  Y. 
App.  Div.  19,  56  N.  Y.  Suppl.  409. 

A  legacy  to  an  executor  individually  under  a  contract  with  him 
to  use  the  money  for  her  brother  creates  a  valid  trust  within  the 
exemptions  of  the  statute  and  the  executor  would  therefore  not  be 
liable  for  the  tax.     In  re  Farley,  15  N.  Y.  St.  Rep.  727. 

Where  the  legatee  was  a  trustee  for  a  charity,  no  tax  was  levied 
in  In  re  Murphy,  4  Misc.  230,  25  N.  Y.  Suppl.  107. 


1909,  c.  62.]  NEW  YORK.  947 

Debts  and  Expenses. 

Expense  of  monument  and  care  of  cemetery  lot  as  funeral  ex- 
penses, see  pp.  895,  950. 

Whether  a  bequest  for  masses  is  part  of  the  funeral  expenses, 
see  p.  897. 

Authority  to  Consider  Debts. 

The  early  construction  of  the  statute  followed  strict  lines  to  the 
effect  that  the  appraiser  has  no  right  to  hear  evidence  in  regard 
to  the  debts  of  the  deceased,  the  funeral  expenses  and  the  expenses 
of  administration.  In  re  Ludlow,  4  Misc.  594,  25  N.  Y.  S.  989;  In 
re  Millward',  6  Misc.  Rep.  425,  27  N.  Y.  Suppl.  286. 

This  view  was  based  on  the  absence  of  express  authority  in  the 
statute  to  make  such  deductions,  but  did  recognize  authority  in  the 
surrogate  to  make  the  deductions.  In  re  Millward,  6  Misc.  Rep. 
425,  27  N.  Y.  Suppl.  286. 

The  appraiser's  functions  have,  however,  since  been  broadened 
in  scope  by  the  construction  of  the  statute,  and  it  is  now  held  that 
an  appraiser  may  hear  evidence  in  regard  to  the  debts,  funeral 
expenses  and  expenses  of  administration  of  an  estate.  In  re 
Wormser,  36  Misc.  Rep.  434,  73  N.  Y.  Suppl.  748. 

Disbursements  which  it  is  admitted  were  made  by  the  executor 
for  debts  must  be  allowed  by  the  appraiser  and  it  is  error  for  him 
to  reduce  these  amounts  arbitrarily.  In  re  Dimon,  82  N.  Y.  App. 
Div.  107,  81  N.  Y.  Suppl.  428. 

Expenses  of  Administration  Deducted. 

The  transfer  tax  is  a  tax  not  on  the  property  of  the  estate  but 
on  the  succession  by  the  beneficiaries  to  the  fortune  of  the  de- 
ceased. Personal  property  does  not  pass  directly  from  the  deceased 
to  the  legatee  or  next  of  kin,  but  all  that  such  legatee  or  next  of 
kin  takes  is  what  may  be  coming  to  him  from  the  estate  on  its 
distribution  after  settlement.  The  amount  represented  by  the 
expenditures  of  the  administrator  or  expense  of  administration 
never  passes  to  the  legatee  or  next  of  kin,  therefore  is  not  subject 
to  the  tax.  The  court  distinguishes  In  re  Westurn,  152  N.  Y.  93. 
In  re  Gihon,  169  N.  Y.  443,  62  N.  E.  561,  modifying  64  N.  Y.  App. 
Div.  504,  72  N.  Y.  Suppl.  1104. 

Estimate  Unpaid  Debts  and  Expenses  of  Administration. 

The  court  approves  of  the  practice  of  estimating  the  unpaid 
debts  and  expenses  of  administration  in  so  far  as  the  estate  has  not 


948  STATUTES  ANNOTATED.  [N.  Y.  St- 

been  administered  at  the  time  of  the  appraisal,  provided  the  report 
and  order  of  the  appraisers  reserve  the  right  of  those  whose  interests 
are  assessed  to  a  rebate  in  case  it  shall  appear  that  the  debts  or 
expenses  have  been  estimated  too  low,  and  a  provision  for  a  further 
assessment,  though  perhaps  this  is  not  strictly  necessary,  if  they 
are  estimated  too  high.  In  re  Dimon,  82  N.  Y.  App.  Div.  107, 
81  N.  Y.  Suppl.  428. 

Debts  Secured  by  Mortgage. 

The  court  holds  that  in  appraising  the  residuary  personal  prop- 
erty the  principal  of  a  bond  not  due  signed  by  the  decedent  and 
secured  by  a  mortgage  upon  his  real  estate  should  not  be  deducted 
before  estimating  the  taxable  value  of  the  bequests.  In  re  Maresi, 
74  N.  Y.  App.  Div.  76,  77  N.  Y.  Suppl.  76. 

In  determining  that  debts  of  the  testator  secured  by  mortgage 
on  his  real  estate  should  not  be  deducted  from  the  personal  prop- 
erty, the  court  in  In  re  Sutton,  3  N.  Y.  App.  Div.  208,  212,  affirmed 
149  N.  Y.  618,  said:  — 

"It  is  of  no  importance  to  the  executor  or  beneficiary,  except  for 
the  purpose  of  determining  the  tax,  from  which  fund  the  mortgages 
shall  be  paid;  and  they  cannot  be  permitted  to  be  paid  from  the 
personal  estate  for  the  sole  purpose  of  increasing  the  exemption  of 
real  estate  and  decreasing  the  amount  of  the  tax  to  be  paid.  The 
testator  has  transferred  his  whole  estate  as  a  single  fund  for  the 
use  and  benefit  of  his  children.  In  holding  that  for  the  purpose 
of  determining  the  tax  the  real  estate  owned  by  the  testator  at 
the  time  of  his  death  must  be  treated  as  such,  we  could  not 
extend  that  exemption  beyond  the  value  of  the  testator's  interest 
therein.  It  was  such  interest  only  that  was  transferred,  and  which 
will  be  held  for  the  use  of  the  beneficiaries,  and  such  only  that  can 
be  held  to  be  exempt."  (This  case  was  distinguished  on  account 
of  the  difference  of  the  statute  in  In  re  Fox,  154  Mich.  5,  14,  159 
Mich.  420.) 

Direction  to  Pay  Mortgages. 

Where  the  testator  owned  equities  in  real  estate  subject  to  mort- 
gages and  directed  the  executors  to  pay  these  mortgages,  the 
cburt  holds  that  this  is  an  equitable  conversion  of  the  personal 
property  into  real  property,  and  that  therefore  the  appraiser  had 
no  right  to  deduct  from  the  personal  property  the  amount  of  the 
mortgages  upon  the  real  estate  in  fixing  the  fair  market  value  of  the 


1909,  c.  62.J  NEW  YORK. 

personal  property.  In  re  Berry,  23  Misc.  Rep.  230,  51  N.  Y. 
Suppl.  1132,  2  Gibbons  346.  The  court  refuses  to  follow  In  re 
Hopkins,  57  Hun  9,  10  N.  Y.  Suppl.  264. 

Debt  of  Non-resident  Secured  by  Pledge. 

The  testator,  a  resident  of  Illinois,  at  his  death  was  the  owner  of 
bonds  and  stocks  actually  within  the  state  of  New  York  of  corpora- 
tions organized  under  the  laws  of  New  York  state;  and  he  also 
owned  other  personal  property  in  New  York,  the  aggregate  value 
of  all  this  property  being  about  $774,000.  At  the  time  of  his  death 
he  was  inde,bted  to  various  persons  in  New  York  in  the  sum  of 
something  over  $800,000.  That  indebtedness  was  secured  by  a 
pledge  of  bonds  actually  located  within  the  state  worth  $20,000  and 
partly  by  a  pledge  of  stock  of  various  corporations  incorporated 
under  the  laws  of  states  other  than  the  state  of  New  York,  the 
market  value  of  such  stocks  being  in  excess  of  that  amount  of  the 
whole  indebtedness. 

The  court  holds  that  for  the  purposes  of  taxation  the  testator's 
personal  estate  in  New  York  amounted  to  $744,000,  from  which 
should  be  deducted  the  expenses  of  administration,  executor's 
commissions  and  debts  to  the  amount  of  $58,000,  that  being  the 
value  of  the  bonds  and  of  the  stock  of  New  York  corporations 
pledged  as  collateral  security  to  the  creditors  in  the  city  of  New 
York. 

It  was  claimed  that  inasmuch  as  the  decedent  at  the  time  of  his 
death  was  indebted  to  local  creditors  to  an  amount  greater  than 
the  market  value  of  the  local  assets,  there  was  no  property  of  the 
decedent  within  the  state  of  New  York  subject  to  a  transfer  tax; 
and  that  all  the  local  assets  of  the  decedent  were  primarily  liable 
for  the  payment  of  the  indebtedness  to  local  creditors  to  the  entire 
extent  of  such  property;  and  that  the  local  assets  to  the  amount 
of  $58,000,  specifically  pledged  as  collateral  security  for  the  pay- 
ment of  the  indebtedness  to  local  creditors  are  liable  to  be  entirely 
used  for  the  purpose  of  such  payment. 

Where  the  whole  estate  is  within  the  state  of  New  York  and  the 
decedent  is  a  resident  of  the  state  undoubtedly  debts  are  to  be 
deducted  from  the  value  of  the  property,  but  in  this  case  the  in- 
debtedness to  the  New  York  creditors  is  a  general  indebtedness 
against  the  whole  estate.  Here  domestic  creditors  have  in  their 
hands  legal  title  by  a  pledge  and  a  right  to  resort  for  the  payment 
of  their  debts  to  securities  belonging  to  a  non-resident  decedent 


950  STATUTES  ANNOTATED.  [N.  Y.  St. 

which  are  not  taxable  under  the  laws  of  this  state ;  and  therefore 
the  indebtedness  due  such  creditors  is  not  to  be  offset  against  the 
value  of  the  property  of  such  decedent  otherwise  taxable  under 
the  transfer  law  of  the  state.  In  re  Pullman,  46  N.  Y.  App.  Div. 
574,  62  N.  Y.  Suppl.  395. 

Burial  Lot. 

The  cost  of  a  burial  lot  and  fencing  and  sodding  it  should  be 
deducted  before  assessing  the  inheritance  tax.  In  re  Liss,  39 
Misc.  Rep.  123,  78  N.  Y.  Suppl.  969. 

Care  of  Burial  Lot. 

A  bequest  of  income  for  the  maintenance  of  a  burial  plot  should 
be  looked  upon  as  a  personal  expenditure  for  the  benefit  of  the 
decedent  and  as  part  of  the  funeral  expenses  and  therefore  exempt. 
In  re  Vinot,  7  N.  Y.  Suppl.  517. 

A  bequest  of  a  sum  in  trust  for  keeping  a  burial  lot  in  condition 
and  repair  is  reasonably  a  part  of  the  funeral  expenses.  In  re 
Maverick,  135  N.  Y.  App.  Div.  44,  119  N.  Y.  Suppl.  914.  The 
court  distinguishes  In  re  Gould,  156  N.  Y.  423,  51  N.  E.  287,  and 
In  re  McAvoy,  112  N.  Y.  App.  Div.  377,  98  N.  Y.  Suppl.  437, 
as  in  the  Gould  case  the  testator  had  made  a  large  bequest  to  his 
son  as  a  reward  for  fafthful  services,  and  in  the  McAvoy  case  the 
bequest  was  to  pay  for  masses  for  others  and  the  testator 

Contested  Claims  against  Estate. 

A  claim  in  litigation  should  be  referred  to  the  appraiser  to  take 
evidence  and  report  what,  if  any,  rebate  or  deduction  from  the 
tax  imposed  should  be  made  because  of  the  claim.  In  re  Morgan, 
36  Misc.  753,  74  N.  Y.  Suppl.  478. 

It  was  proper  to  withhold  half  the  sum  claimed  by  a  claimant 
against  the  estate  from  appraisal  and  taxation.  But  it  is  better 
practice  that  the  order  determining  the  tax  should  contain  an 
appropriate  recital  to  the  effect  that  the  determination  of  the 
taxability  of  the  sum  claimed  is  suspended  until  the  disposition 
of  litigation.     In  re  Wormser,  28  Misc.  608,  59  N.  Y.  Suppl.  1088. 

The  expenses  of  resisting  a  claim  under  an  alleged  contract  under 
which  claimant  alleged  that  he  was  entitled  to  the  whole  estate 
should  be  deducted  from  the  value  of  the  estate  for  the  purposes 
of  the  inheritance  tax.  In  re  Sanford,  66  Misc.  395,  123  N.  Y. 
Suppl.  284. 


1909,  c.  62.]  NEW  YORK.  951 

Compromise  of  Will  Contest. 

Money  paid  to  a  niece  under  an  agreement  under  which  she 
withdrew  objections  to  the  probate  of  a  will  cannot  be  deducted 
as  an  expense  of  administration.  The  court  distinguishes  this 
case  from  a  case  where  some  claim  is  made  against  the  estate 
which  is  compromised,  as  here  the  compromise  did  not  change 
or  affect  the  estate  in  any  way.  In  re  Mark,  40  Misc.  Rep.  507, 
82  N.   Y.  Suppl.  803. 

The  expenses  of  a  controversy  among  distributees  as  to  the  proper 
distribution  of  an  estate  do  not  diminish  the  fund  for  inherit- 
ance taxation.     In  re  Sanford,  66  Misc.  395,  123  N.  Y.  Suppl.  284. 

Commissions. 

Broker's  Commission. 

The  commissions  of  a  broker  on  sale  of  real  estate  should  be 
paid  as  a  necessary  expense  of  administration.  In  re  Rothschild, 
63  Misc.  615,  118  N.  Y.  Suppl.  654. 

Executor's  Commission. 

Where  the  estate  in  the  hands  of  the  executor  increases  in  value 
so  that  the  executor's  commissions  are  increased,  the  increased 
commissions  should  be  deducted  from  the  inheritance  tax,  although 
the  tax  itself  can  be  estimated  only  on  the  value  of  the  property 
at  the  death  of  the  testator.  In  re  Van  Pelt,  63  Misc.  616,  118 
N.  Y.  Suppl.  655. 

Where  a  will  provided  that  no  compensation  or  commission  as 
such  should  be  paid  to  any  living  executor  or  trustee  for  any 
services  as  executor  or  trustee,  it  was  obvious  that  the  testator 
intended  that  his  estate  should  not  be  diminished  by  these  ordinary 
expenses  of  administration,  and  it  is  clearly  obvious  that  the 
legacies  given  to  the  executors  were  not  given  in  lieu  of  commissions. 
The  court,  therefore,  finds  nothing  to  authorize  the  deduction 
from  the  total  assessed  value  of  the  fees  and  commissions  of  execu- 
tors and  trustees.  In  re  Vanderbilt,  68  N.  Y.  App.  Div.  27,  74 
N.  Y.  Suppl.  450. 

Commissions  of  Foreign  Executor. 

In  appraising  the  New  York  property  of  a  resident  of  Pennsyl- 
vania, the  appraiser  should  not  deduct  commissions  to  executors 


962  STATUTES  ANNOTATED.  [N.  Y.  St. 

which  would  be  excessive  under  New  York  law  in  the  absence  of 
evidence  of  the  Pennsylvania  law  on  this  subject.  In  re  Kennedy, 
20  Misc.  Rep.  531,  46  N.  Y.  Suppl.  906,  2  Gibbons  220. 

Trustee's  Commissions. 

Under  the  act  of  1896,  s.  227,  the  executors'  commissions  as 
trustees  should  be  deducted  in  assessing  the  transfer  tax.  In  re 
Silliman,  175  N.  Y.  513,  67  N.  E.  1090,  affirming  79  N.  Y.  App. 
Div.  98,  80,  N.  Y.  Suppl.  336,  reversing  77  N.  Y.  Suppl.  267. 

The  commissions  allowed  by  law  to  trustees  for  life  tenants 
should  be  deducted  from  the  valuation  of  the  interest  of  the  life 
tenants.  In  re  Gihon,  169  N.  Y.  443,  446,  62  N.  E.  561,  modi- 
fying 64  N.  Y.  App.  Div.  504,  72  N.  Y.  Suppl.  1104. 

The  estimated  commissions  of  trustees  to  whom  a  fund  is  turned 
over  by  the  executor  should  not  be  deducted  from  the  estate  in 
estimating  the  value  for  purposes  of  the  inheritance  tax.  The 
commissions  of  trustees  form  no  part  of  the  regular  administra- 
tion of  the  estate,  but  are  an  expense  to  be  borne  by  the  trust  and 
its  beneficiaries  and  cannot  be  deducted  to  reduce  the  tax  due 
to  the  state.     In  re  Becker,  26  Misc.  Rep.  633,  57  N.  Y.  Suppl.  940. 

Taxes. 

Tax  Paid  from  Principal. 

The  inheritance  tax  where  property  is  bequeathed  to  trustees 
for  a  life  tenant  with  remainder  over  should  be  paid  from  the 
corpus  of  the  estate  unless  the  will  expressly  provides  that  it  shall 
be  paid  from  the  income.  In  re  Bass,  57  Misc.  531, 109  N.  Y.  Suppl. 
1084. 

Where  a  legacy  is  given  for  a  specified  amount  the  tax  must  be 
deducted  from  the  amount  of  the  legacy  and  the  balance  only  given 
to  the  legatee.  A  testator  may  direct  that  the  tax  on  a  particular 
legacy  shall  be  paid  out  of  his  estate;  nevertheless  in  reality  the 
tax  is  still  paid  out  of  the  legacy,  the  effect  of  the  direction  of 
the  testator  being  merely  to  increase  the  legacy  by  the  amount  of 
the  tax.  In  re  Gihon,  169  N.  Y.  443,  447,  62  N.  E.  561,  modifying 
64  N.  Y.  App.  Div.  504,  72  N.  Y.  Suppl.  1104. 

Direction  for  Payment  without  Deduction. 

A  will  provided  that  the  executors  were  authorized  and  em- 
powered to  pay  any  or  all  of  the  legacies  within  one  year  after 
the  decease  of  the  testator   "without  any  rebate  or  deduction 


1909,  c.  762.]  NEW  YORK.  953 

whatever."  The  will  was  executed  in  1884,  and  the  court  holds 
that  this  clause  can  hardly  have  been  intended  to  apply  to  a 
succession  or  legacy  tax,  although  it  was  reaffirmed  by  a  codicil 
executed  after  the  passage  of  the  statute.  Apart  from  this  the 
court  holds  that  the  words  used  would  not  have  the  effect  of  en- 
titling the  legatee  to  the  legacy  free  of  tax  even  if  the  will  had  been 
executed  after  the  passage  of  the  inheritance  tax.  The  tax  is 
paid  on  account  of  the  legatee  and  in  legal  effect  is  precisely  the 
same  as  if  the  legacy  was  to  be  paid  over  to  the  legatee  intact, 
and  then  the  tax  was  to  be  collected  from  him.  Strictly  speaking, 
therefore,  the  tax  is  not  a  "rebate  or  deduction"  from  the  legacy. 
The  tax  is  not  a  tax  upon  the  estate  or  legacy  devised  or  bequeathed 
but  is  a  tax  imposed  upon  the  legatee  for  the  privilege  of  succeed- 
ing to  the  property.  It  is  merely  for  the  convenience  of  the  state 
to  ensure  certainty  of  collection  of  the  duties  cast  upon  the  executors 
of  paying  the  tax.  Jackson  v.  Tailer,  41  Misc.  Rep.  36,  83  N.  Y. 
Suppl.  567. 

Federal  Inheritance  Tax. 

The  amount  paid  on  account  of  the  federal  inheritance  tax 
cannot  be  deducted  in  fixing  the  valuation  for  the  purpose  of  the 
New  York  transfer  tax.  It  is  not  true  that  the  federal  taxes  are 
payable  primarily  out  of  the  estate;  and  the  court  finds  that  the 
federal  tax  is  of  exactly  the  same  nature  as  the  state  tax  and  is  a  tax 
on  property  and  not  on  succession.  The  federal  tax  is  on  the  legacy 
and  not  on  account  of  the  estate. 

The  fact  that  this  may  result  in  great  hardship  does  not  alter 
the  rule  but  results  from  the  rate  of  taxation  prescribed  by  the  fed- ' 
eral  statutes.  In  re  Gihon,  169  N.  Y.  443,  62  N.  E.  561,  modify- 
ing 64  N.  Y.  App.  Div.  504,  72  N.  Y.  Suppl.  1104,  overruling  68 
N.  Y.  Suppl.  381,  33  Misc.  206.  Contra,  In  re  Vanderbilt,  68  N.  Y. 
App.  Div.  27,  74  N.  Y.  Suppl.  450,  relying  on  In  re  Gihon,  64  N.  Y. 
App.  Div.  504,  68  N.  Y.  Suppl.  381,  72  N.  Y.  Suppl.  1104. 

The  United  States  transfer  tax  should  not  be  deducted  from  an 
estate  before  the  assessment  of  the  state  tax  upon  it.  The  percent- 
age fixed  by  the  state  for  its  own  use  cannot  be  diminished  even 
by  the  law  of  the  United  States.  The  title  and  possession  of 
property  when  transmitted  upon  the  death  of  the  owner  are  by 
consent  of  the  state,  not  the  United  States.  '  Therefore  the  percent- 
age fixed  for  its  own  use  cannot  be  diminished  by  even  subtracting 
the  tax  fixed  by  the  United  States  for  war  revenue.     In  re  Becker, 


954  STATUTES  ANNOTATED.  [N.  Y.  St. 

26  Misc.  Rep.  633,  57  N.  Y.  Suppl.  940;  In  re  Irish,  28  Misc.  Rep. 
647,  60  N.  Y.  Suppl.  30;  In  re  Curtis,  31  Misc.  Rep.  83,  64  N.  Y. 
Suppl.  574. 

(The  rule  is  otherwise  in  Massachusetts.     See  p.  567.) 

Legacy  Tax  of  Another  State. 

The  decedent  was  a  resident  of  Pennsylvania  owning  stock  in 
New  York  corporations.  The  property  in  New  York  was  in  pro- 
portion to  the  entire  estate  as  two  to  five  and  the  appraiser  deducted 
that  proportion  of  the  total  debts,  funeral  and  administrations 
expenses,  from  the  taxable  estate  in  this  state;  but  he  refused  to 
deduct  this  proportionate  sum  from  the  amount  of  the  legacy  tax 
paid  upon  the  entire  estate  in  Pennsylvania. 

The  court  holds  that  the  fact  that  the  Pennsylvania  tax  has  been 
paid  cannot  be  considered  in  assessing  the  New  York  tax.  In  re 
Kennedy,  20  Misc.  Rep.  531,  46  N.  Y.  Suppl.  906,  2  Gibbons  220. 

Real  Estate  Taxes. 

Taxes  on  real  estate  which  are  a  lien  and  payable  at  the  time  of  the 
decedent's  death  should  be  deducted  from  the  value  of  the  estate 
in  order  to  ascertain  its  net  value,  in  proceedings  under  the  transfer 
tax  act.     In  re  Liss,  3a  Misc.  Rep.  123,  78  N.  Y.  Suppl.  969. 

Where  the. testator  died  January  30,  1900,  the  annual  taxes  for 
the  year  1900  not  assessed  nor  a  lien  nor  payable  at  that  time  under 
the  New  York  statute  should  not  be  deducted  before  the  levying 
of  the  inheritance  tax.  In  re  Maresi,  74  N.  Y.  App,  Div.  76,  77 
N.  Y.  Suppl.  76. 

Where  the  testator  died  December  9,  1895,  the  tax  levied  and 
becoming  a  lien  on  December  13,  1895,  should  be  deducted  from 
the  valuation  of  the  estate  for  the  purposes  of  the  inheritance  tax, 
as  the  assessment  had  been  made  before  that  time  and  was  binding 
upon  him  although  the  precise  amount  of  the  tax  had  not  been 
ascertained  until  the  warrants  were  delivered  to  the  collectors. 
In  re  Brundage,  31  N.  Y.  App.  Div.  348,  52  N.  Y.  Suppl.  362. 

The  testator  died  June  17,  1902,  after  the  completion  under  the 
New  York  charter  of  the  annual  record  of  assessed  valuations  and 
sybsequently  to  the  time  when  application  could  be  made  for  the 
correction,  cancellation  or  revision  of  any  assessment,  but  prior 
to  the  delivery  of  the  assessment  rolls  by  the  board  of  taxes  and 
assessment  to  the  board  of  aldermen  and  prior  to  the  extension 


1909,  c.  62.]  NEW  YORK.  955 

thereon  of  the  amounts  of  the  tax.  The  court  holds  that  the  case 
was  within  the  spirit  of  In  re  Babcock,  115  N.  Y.  450,  22  N.  E. 
263,  and  that  the  taxes  for  1902  on  both  real  and  personal  property 
should  be  deducted  before  an  appraisal  under  the  transfer  tax  act 
as  they  were  debts  against  the  estate.  In  re  Hoffman,  42  Misc. 
Rep.  90,  85  N.  Y.  Suppl.  1082. 

Real  Estate  Taxes  Paid  by  Stranger. 

Where  a  stranger  paid  taxes  on  land  these  payments  should  not 
be  deducted  from  the  valuation  of  the  property  transferred  as 
these  taxes  were  paid  by  a  person  not  a  party  to  the  title  and  any 
payments  made  by  him  are  rather  in  the  character  of  a  loan  than 
of  a  payment  which  entitles  him  to  a  lien  on  the  land.  In  re  Wood, 
123  N.  Y.  Suppl.  574. 

Tax  Paid  by  Mistake. 

Where  the  executrix  has  paid  a  tax  to  the  federal  government 
which  it  now  seems  was  not  a  proper  charge  against  the  estate,  this 
should  not  be  surcharged  against  the  executrix  where  it  is  admitted 
that  the  sum  may  be  recovered  back.  In  re  Marx,  117  N.  Y.  App. 
Div.  890,  103  N.  Y.  Suppl.  446,  reversing  49  Misc.  280,  99  N.  Y. 
Suppl.  334. 

Apportionment  of  Debts. 

The  court  holds  that  the  deduction  to  be  made  for  debts  owing 
to  non-resident  creditors,  mortuary  expenses,  commissions  on 
property  without  the  state  and  other  administration  expenses  "in 
respect  to  such  property  should  be  in  proportion  which  the  net 
New  York  estate,  after  all  deductions  are  made  for  debts  owing  to 
resident  creditors.  New  York  commissions,  and  New  York  adminis- 
tration expenses,  bears  to  the  entire  or  gross  estate  wherever  situ- 
ated.    In  re  Porter,  67  Misc.  19,  124  N.  Y.  Suppl.  676. 

Local  Debts  Set  Off  against  Local  Property  of  Non-resident. 

The  property  of  a  non-resident  located  within  the  state  is  not 
subject  to  taxation  when  it  appears  that  his  indebtedness  to  creditors 
who  are  residents  of  the  state  is  in  excess  of  the  value  of  the  testa- 
tor's property  within  the  state.  The  fact  that  to  release  the  debts 
the  executor  brought  money  of  the  decedent  from  out  of  the  state 
and  paid  the  debts  so  that  the  securities  in  New  York  could  be 
transmitted  to  be  administered  at  the  residence  of  the  decedent 
cannot  make  any  difference.  In  re  Grosvenor,  124  N.  Y.  App. 
Div.  331,  108  N.  Y.  Suppl.  926. 


956  STATUTES  ANNOTATED.  [N.  Y.  St. 

The  decedent,  a  resident  of  the  state  of  Illinois,  was  a  member 
of  the  partnership  doing  business  in  New  York  and  in  Chicago. 
The  New  York  branch  was  mainly  occupied  with  manufacturing 
and  the  Chicago  branch  in  selling,  and  therefore  the  debts  owing 
to  the  New  York  creditors  exceeded  the  value  of  the  New  York 
assets;  but  that  the  firm  did  not  owe  the  persons  from  whom  it 
purchased  the  goods  is  immaterial  as  it  did  owe  for  discounts  and 
loans  effected,  the  proceeds  of  which  were  applied  towards  the 
purchase  price  of  the  property.  Therefore,  as  debts  in  New  York 
exhausted  the  value  of  the  property  here  no  tax  could  be  imposed. 
In  re  King,  172  N.  Y.  616,  64  N.  E.  1122,  affirming  71  N.  Y.  App. 
Div.  581,  76  N.  Y.  Suppl.  220. 

S.  231.  Determination  of  surrogate.  From  such  report  of  appraisal  and 
other  proof  relating  to  any  such  estate  before  the  surrogate,  the  surrogate  shall 
forthwith,  as  of  course,  determine  the  cash  value  of  all  estates  and  the  amount  of 
tax  to  which  the  same  are  liable;  or  the  surrogate  may  so  determine  the  cash 
value  of  all  such  estates  and  the  amount  of  tax  to  which  the  same  are  liable, 
without  appointing  an  appraiser. 

The  superintendent  of  insurance  shall,  on  the  application  of  any  surrogate, 
determine  the  value  of  any  such  future  or  contingent  estates,  income  or  interest 
therein  limited,  contingen  ,  dependent  or  determinable  upon  the  life  or  lives  of 
persons  in  being,  upon  the  facts  contained  in  any  such  appraiser's  report,  and 
certify  the  same  to  the  surrogate,  and  his  certificate  shall  be  conclusive  evidence 
that  the  method  of  computation  adopted  therein  is  correct. 

The  surrogate  shall  immediately  give  notice,  upon  the  determination  by  him 
as  to  the  value  of  any  estate  which  is  taxable  under  this  article,  and  of  the  tax 
to  which  it  is  liable,  to  all  persons  known  to  be  interested  therein,  and  shall 
immediately  forward  a  copy  of  such  taxing  order  to  the  state  comptroller.  The 
surrogate  shall  also  forward  to  the  state  comptroller  copies  of  all  orders  entered 
by  him  in  relation  to  or  affecting  in  any  way  the  transfer  tax  on  any  estate,  includ- 
ing orders  of  exemption. 

If,  however,  it  appear  at  any  stage  of  the  proceedings  that  any  of  such  persons 
known  to  be  interested  in  the  estate  is  an  infant  or  an  incompetent,  the  surro- 
gate may,  if  the  interest  of  such  infant  or  incompetent  is  presently  involved  and 
is  adverse  to  that  of  any  of  the  other  persons  interested  therein,  appoint  a  special 
guardian  of  such  infant;  but  nothing  in  this  provision  shall  effect  the  right  of 
an  infant  over  fourteen  years  of  age  or  of  any  one  on  behalf  of  an  infant  under 
fourteen  years  of  age  to  nominate  and  apply  for  the  appointment  of  a  special  guar- 
dian for  such  infant  at  any  stage  of  the  proceedings. 

[See  notes  to  the  act  of  1885,  c.  483,  s.  13;  1887,  c.  713;  1892,  c.  399,  s.  13; 
1896,  c.  908,  s.  232;  1897,  c.  284,  s.  7;  1899,  c.  672;  1901,  c.  173,  s.  7;  1905, 
e.  368.] 

S.  232.  Appeal  and  other  proceedings.  The  state  comptroller  or  any 
person  dissatisfied  with  the  appraisement  or  assessment  and  determination  of 
tax  may  appeal  therefrom  to  the  surrogate  within  sixty  days  from  the  fixing, 


1909,  c.  62.]  NEW  YORK.  957 

assessing  and  determination  of  tax  by  the  surrogate  as  herein  provided,  upon 
fiUng  in  the  office  of  the  surrogate  a  written  notice  of  appeal,  which  shall  state  the 
grounds  upon  which  the  appeal  is  taken;  but  no  costs  shall  be  allowed  by  the  surro- 
gate on  such  appeal. 

Within  two  years  after  the  entry  of  an  order  or  decree  of  a  surrogate  deter- 
mining the  value  of  an  estate  and  assessing  the  tax  thereon,  the  state  comptroller 
may,  if  he  believes  that  such  appraisal,  assessment  or  determination  has  been 
fraudulently,  collusively  or  erroneously  made,  make  application  t)  a  justice  of 
the  supreme  court  of  the  judicial  district  embracing  the  surrogate's  court  in  which 
the  order  or  decree  has  been  filed,  for  a  reappraisal  thereof.  The  justice  to  whom 
such  application  is  made  may  there  upon  appoint  a  competent  person  to  reappraise 
such  estate.  Such  appraiser  shall  possess  the  powers  and  be  subject  to  the  duties 
of  an  appraiser  under  section  two  hundred  and  thirty  and  shall  receive  compensa- 
tion at  the  rate  of  five  dollars  per  day  for  every  day  actually  and  necessarily 
employed  in  such  appraisal.  Such  compensation  shall  be  payable  by  the  state 
comptroller  or  county  treasurer  out  of  any  funds  he  may  have  on  account  of  any 
tax  imposed  under  the  provisions  of  this  article,  upon  the  certificate  of  the  jus- 
tice appointing  him.  The  report  of  such  appraiser  shall  be  filed  with  the  justice 
by  whom  he  was  appointed,  and  thereafter  the  same  proceedings  shall  be  taken 
and  had  by  and  before  such  justice  as  are  herein  provided  to  be  taken  and  had  by 
and  before  the  surrogate.  The  determination  and  assessment  of  such  justice 
shall  supersede  the  determination  and  assessment  of  the  surrogate,  and  shall 
be  filed  by  such  justice  in  the  office  of  the  state  comptroller,  and  a  certified  copy 
thereof  transmitted  to  the  surrogate's  court  of  the  proper  county. 

[See  notes  to  the  act  of  1885,  c.  483,  s.  13;  1892,  c.  399;  1896,  c.  908,  s.  232; 
1899,  c.  672;  1901,  c.  173,  s.  8;   1905,  c.  368;   1908,  c-  310.] 

Appeal. 
Nature. 

N.  Y.  St.  1896,  c.  908,  s.  231  and  s.  232,  provide  for  the  action  of 
the  surrogate  in  a  dual  capacity.  By  section  231  he  may  act  as  a 
taxing  officer  or  appraiser;  and  under  section  232  any  person  dis- 
satisfied with  the  appraisement  or  assessment  may  appeal  to  the 
surrogate.  It  was  insisted  that  this  practice  was  anomalous  and 
unnecessary  and  that  an  appeal  could  be  taken  from  the  surrogate 
acting  as  appraiser  directly  to  the  appellate  division.  The  court 
remarks  that  it  is  somewhat  unusual  that  a  judicial  officer  should 
sit  in  review  of  his  own  decision  as  an  assessor,  but  finds  that  this 
practice  is  proper  as  the  surrogate  is  a  mere  taxing  officer  or 
assessor  when  acting  under  section  231.  In  re  Costello,  189  N.  Y. 
288,  82  N.  E.  139,  modifying  117  N.  Y.  App.  Div.  807,  103  N.  Y. 
Suppl.  6. 

The  function  of  an  appraiser  is  somewhat  similar  to  a  jury  called 
by  the  court  in  an  equity  case  to  aid  its  conscience.  The  whole 
matter  is  with  the  surrogate  and  continues  with  him  until  final 


958  STATUTES  ANNOTATED.  [N.  Y.  St. 

determination  after  appeal.  The  purpose  of  the  appeal  from  the 
surrogate  to  the  surrogate  is  not  simply  to  review  his  former 
determination,  but  it  is  proper  on  the  appeal  to  receive  evidence 
that  a  certain  transfer  was  made  in  contemplation  of  death,  and 
that  the  property  transferred  should  be  included  in  the  transfer 
tax.  In  re  Thompson,  57  N.  Y.  App.  Div.  317,  9  N.  Y.  Ann. 
Cas.  290,  68  N.  Y.  Suppl.  18. 

Pleadings. 

Under  New  York  statute  of  1896,  section  232,  a  notice  of  appeal 
must  state  the  grounds  of  the  appeal.  In  re  Stone,  56  Misc.  247, 
107  N.  Y.  Suppl.  385. 

Grounds  of  Appeal  Specified  are  Exclusive. 

An  order  fixing  the  transfer  tax  upon  an  estate  is  an  entirety  and 
the  party  claiming  to  be  aggrieved  thereby  in  taking  an  appeal 
should  present  upon  that  appeal  every  objection  which  he  has  to 
the  order.  It  would  lead  to  endless  delay  and  confusion  if  he  were 
permitted  to  take  a  separate  appeal  for  each  objection  made  to 
the  order  of  the  surrogate.  The  specification  of  one  or  more 
objections  is  deemed  equivalent  that  the  appellant  regards  the 
decree  in  all  other  respects  correct.  In  re  Cook,  194  N.  Y.  400, 
403,  87  N.  E.  786,  affirming  125  N.  Y.  App.  Div.  114,  109  N.  Y. 
Suppl.  417. 

Where  the  time  for  appeal  has  gone  by  and  subsequently  a 
proceeding  is  commenced  by  new  heirs  claiming  the  estate  and 
attempting  to  revoke  the  letters  of  administration  already  granted, 
the  surrogate  has  jurisdiction  under  the  notice  of  appeal  already 
given  to  consider  the  new  question  arising;  and  is  not  excluded 
from  doing  so  on  the  ground  that  it  was  not  specified  in  the  notice 
of  appeal.  In  re  Westurn,  152  N.  Y.  93,  104,  46  N.  E.  315,  revers- 
ing 8  N.  Y.  App.  Div.  59. 

Filing  Notice  of  Appeal. 

Under  this  section  the  appeal  is  taken  out  by  filing  in  the  office 
of  the  surrogate  a  notice  of  appeal,  and  to  be  effective  such  notice 
maist  be  filed  within  sixty  days  from  the  assessing  of  the  tax.  Where 
the  appellants  did  not  file  their  notice  of  appeal  in  time  it  never 
became  effective  and  the  surrogate  never  acquired  jurisdiction  to 
hear  it.     In  re  Seymour,   128  N.  Y.  Suppl.   775. 


1909,  c.  62.]  NEW  YORK.  959 

Service  of  Notice. 

The  admission  of  service  of  the  notice  of  appeal  by  the  attorney 
of  the  state  comptroller  cannot  be  accepted  as  a  waiver  of  default 
in  appealing,  for  the  validity  of  the  appeal  depended,  not  upon  ser- 
vice of  notice  thereof  upon  the  attorney,  but  upon  timely  filing 
of  the  notice  in  the  surrogate's  office.  In  re  Seymour,  128  N.  Y. 
Suppl.  775. 

Effect  of  Failure  to  Appeal* 

Failure  to  appeal  from  a  notice  assessing  the  tax  will  bar  a 
party  from  claiming  that  the  valuation  is  incorrect.  In  re  Racket, 
14  Misc.  Rep.  282,  35  N.  Y.  Suppl.  1051. 

Appeal  by  City  Comptroller. 

The  comptroller  of  the  city  of  New  York  in  1900  was  authorized 
to  prosecute  an  appeal  from  the  decision  of  the  surrogate  although 
the  powers  and  duties  in  respect  thereto  devolved  upon  the  state 
comptroller.  Such  condition  would  authorize  a  substitution  of  the 
state  comptroller  but  until  such  substitution  is  had  the  appeal  was 
properly  prosecuted  by  the  officer  who  instituted  it.  In  re  Black- 
stone,  171  N.  Y.  682,  affirming  69  N.  Y.  App.  Div.  127. 

No  Appeal  from  Penalty  Imposed. 

A  decree  assessing  taxes  does  not  concern  itself  with  the  amount 
of  interest  or  penalty,  and  therefore  the  penalty  is  not  a  proper 
ground  of  appeal.  If  the  penalty  is  to  be  remitted  a  special  appli- 
cation must  be  made  to  the  surrogate.  In  re  De  Graaf,  24  Misc. 
Rep.  147,  53  N.  Y.  Suppl.  591,  2  Gibbons  516. 

Questions  of  Fact. 

The  court  of  appeals  refused  to  disturb  the  finding  of  the  lower 
court  on  the  ground  that  it  involved  simply  a  question  of  fact  as 
to  the  effect  of  a  certain  deed.  In  re  Thorne,  162  N.  Y.  238, 
56  N.  E.  625,  44  N.  Y.  App.  Div.  8,  60  N.  Y.  Suppl.  419. 

Vacating  Assessment. 

General  Authority  of  Surrogate. 

A  surrogate  under  the  Code  of  Civil  Procedure,  section  2481, 
should  open  and  vacate  his  judgment  in  a  tax  proceeding  only  as 
the  same  power  would  be  exercised  by  a  court  of  record.  In  re 
Barnum,  129  N.  Y.  App.  Div.  418,  114  N.  Y.  Suppl.  33. 


960  STATUTES  ANNOTATED.  [N.  Y.  St. 

The  surrogate  has  no  authority  to  amend  an  order  made  in  a 
transfer  tax  proceeding  as  he  has  no  general  powers  or  jurisdiction 
and  the  only  authority  is  to  be  found  in  the  act  itself.  The 
jurisdiction  is  special  and  specially  conferred  by  the  act.  In  re 
Crerar,  56  N.  Y.  App.  Div.  479,  67  N.  Y.  Suppl.  795,  9  Ann.  Cas. 
101. 

The  surrogate  has  authority  in  a  proper  case  to  modify  his 
amended  order  assessing  a  transfer  tax.  In  re  Warren,  62  Misc. 
444,  116  N.  Y.  Suppl.  1034;  In  re  Silliman,  175  N.  Y.  513,  67  N.  E. 
1090,  affirming  79  N.  Y.  App.  Div.  98,  80  N.  Y.  Suppl.  336,  revers- 
ing 77  N.  Y.  Suppl.  267. 

Where  Acts  without  Jurisdiction. 

The  surrogate  has  power  to  modify  his  own  decree  where  he  acts 
beyond  his  jurisdiction  without  notice.  In  re  Backhouse,  185 
N.  Y.  544,  77  N.  E.  1181,  affirming  110  N.  Y.  App.  Div.   737, 

96  N.  Y.  Suppl.  466. 

The  surrogate  has  the  power  to  vacate  a  decree  made  by  him 
without  jurisdiction  under  the  Code  of  Civil  Procedure,  section 
2481,  sub-division  6,  even  after  the  time  for  appeal  has  expired.  He 
may  therefore  reverse  an  order  including  in  the  value  of  the  estate 
certain  United  States  bonds,  as  his  order  was  to  that  extent  a 
nullity.     In  re  Coogan^  27  Misc.  Rep.  563,  59  N.  Y.  Suppl.  111. 

To  Correct  Clerical  Errors. 

The  surrogate  may  set  aside  an  order  imposing  a  transfer  tax 
where  evidence  was  furnished  which  is  not  contradicted  that  the 
transfer  tax  should  not  have  been  imposed,  although  if  there  is  any 
question  about  it  the  surrogate  instead  of  vacating  the  trial  order, 
should  have  remitted  the  whole  matter  to  the  official  appraiser 
to  make  the  computation  upon  which  the  taxability  of  the  property 
depends.     In  re  Cameron,  181  N.  Y.  560,  74  N.  E.  1115,  affirming 

97  N.  Y.  App.  Div.  436,  89  N.  Y.  Suppl.  977. 

After  the  surrogate  had  determined  the  cash  value  of  the  estate 
subject  to  tax  certain  judgments  on  claims  which  the  executor 
had  denied  were  recovered.  The  court  holds  that  the  power  of 
the  surrogate  to  correct  errors  is  limited  to  clerical  errors  or  mistakes 
which  do  not  involve  questions  of  law.  In  re  Connelly,  38  Misc. 
Rep.  466,  77  N.  Y.  Suppl.  1032.. 

The  surrogate  has  power  to  modify  his  own  decree,  where  it 
appears  that  the  legatee  died  before  the  testator.  Morgan  v. 
Cowie,  49  N.  Y.  App.  Div.  612. 


1909,  c.  62.1  NEW  YORK.  961 

Not  to  Correct  Errors  of  Law. 

The  surrogate's  court  has  no  authority  to  amend  or  correct  an 
order  assessing  an  inheritance  tax  where  the  order  was  claimed  to 
be  erroneous  on  the  ground  that  it  included  certain  United  States 
bonds  which  were  later  decided  to  be  exempt.  The  surrogate, 
Thomas,  denies  an  application  on  the  ground  that  his  decision  in 
In  re  Earle,  71  N.  Y.  Suppl.  1038,  has  been  overruled  by  In  re 
Crerar,  56  N.  Y.  App.  Div.  479,  67  N.  Y.  Suppl.  795.  In  re  Von 
Post,  35  Misc.  367,  71  N.  Y.  Suppl.  1039. 

The  surrogate's  court  under  the  Code  of  Civil  Procedure, 
section  2481,  sub-division  6,  has  no  authority  to  vacate  its  decree 
fixing  the  tax  on  legacies  simply  on  the  ground  that  certain  things 
were  included  and  excluded  erroneously  on  the  appraisal,  as  this 
is  not  a  clerical  error,  but  an  error  of  law  within  the  section  of 
the  code.     In  re  Wallace,  28  Misc.  Rep.  603,  59  N.  Y.  Suppl.  1084. 

The  surrogate  has  no  jurisdiction  to  pass  an  order  that  no 
transfer  tax  is  legally  payable  on  the  securities  and  that  the  transfer 
tax  thereon  was  erroneously  made.  The  original  order  remained 
unreversed  and  unmodified  and  consequently  had  the  same  force 
prior  to  this  attempt  on  the  part  of  the  surrogate  to  decree  it 
erroneous.  The  court  intimates  that  the  surrogate  had  no  power 
even  to  modify  the  original  order  as  the  time  for  appeal  had  expired. 
In  re  Schermerhorn,  38  N.  Y.  App.  Div.  350,  57  N.  Y.  Suppl.  26. 

Mere  evidence  of  a  sale  of  property  after  the  appraisal  lower  than 
the  appraised  valuation  does  not  give  the  surrogate  power  to 
modify  his  decree  of  appraisal.  In  re  Lowry,  89  N.  Y.  App.  Div. 
226,  85  JSr.  Y.  Suppl.  924.  See,  however,  In  re  Fulton,  30  Misc. 
Rep.  70,  62  N.  Y.  Suppl.  995. 

After  Time  for  Appeal  has  Expired. 

In  those  cases  where  the  surrogate  has  authority  to  amend  his 
own  decree  he  may  do  so  after  the  expiration  of  the  time  allowed 
for  appeal.  A  decree  assessing  a  tax  made  under  the  N.  Y.  St. 
1899,  c.  76,  which  was  declared  unconstitutional,  may  be  vacated 
by  the  surrogate  after  the  time  for  appeal  has  gone  by.  In  re 
Scrimgeour,  175  N.  Y.  507,  67  N.  E.  1089,  affirming  80  N.  Y.  App. 
Div.  388,  80  N.  Y.  Suppl.  636,  78  N.  Y.  Suppl.  971,  39  Misc.  128. 

In  the  Scrimgeour  case,  175  N.  Y.  507,  the  tax  was  imposed  under 
an  unconstitutional  provision  of  the  statute,  a  fact  which  the  blind 
report  of  the  case  conceals.  In  re  Backhouse,  185  N.  Y.  544,  77 
N.  E.  1181,  affirming  110  N.  Y.  App.  Div.  737. 


962  STATUTES  ANNOTATED.  [N.  Y.  St. 

Under  the  Code  of  Civil  Procedure,  section  1290,  the  surrogate's 
court  has  power  to  vacate  or  modify  a  decree  in  a  proper  case  after 
two  years  from  the  final  judgment.  In  re  Mather,  41  Misc.  Rep. 
414,  84  N.  Y.  Suppl.  1105. 

Oral  Opinion. 

Where  on  an  affidavit  of  the  executor  as  to  the  assets  the  surro- 
gate expresses  the  opinion  orally  that  the  estate  is  not  subject 
to  tax,  but  enters  no  order  or  judgment,  the  state  is  not  barred  from 
subsequently  asking  for  an  appraisal.  In  re  Schmidt,  39  Misc. 
Rep.  77,  78  N.  Y.  Suppl.  879. 

Power  to  Order  Refund. 

Under  section  225,  the  surrogate  may  correct  an  error  in  his 
order  fixing  the  transfer  tax  within  two  years  and  the  tax  may  be 
ordered  refunded.  In  re  Willet,  51  Misc.  176,  100  N.  Y.  Suppl. 
850,  affirmed  119  N.  Y.  App.  Div.  119,  104  N.  Y.  Suppl.  1150. 

So  where  by  mistake  the  executor  has  omitted  a  debt  of  the 
decedent  from  the  transfer  tax  the  surrogate  may  amend  his  decree 
and  order  the  excess  refunded.  In  re  Campbell,  50  Misc.  485,  100 
N.  Y.  Suppl.  637.  But  the  surrogate  has  no  power  to  modify  an 
order  made  within  his  jurisdiction  and  allow  a  partial  refund  simply 
because  of  a  newly-discovered  debt  due  by  the  estate  after  the 
time  for  appeal  has  expired.  In  re  Hamilton,  41  Misc.  Rep.  268, 
84  N.  Y.  Suppl.  44. 

The  surrogate  may  refuse  to  insert  in  an  order  vacating  an  as- 
sessment a  direction  to  the  state  comptroller  to  refund  the  amount 
of  the  tax.  Such  an  order  is  entirely  proper,  but  is  not  essential,  as 
the  statute  itself  commands  the  state  comptroller  to  direct  the 
treasurer  of  the  county  or  the  comptroller  of  the  city  of  New  York 
to  refund.  See  section  225.  In  re  Cameron,  181  N.  Y.  560,  74 
N.  E.  1115,  affirming  97  N.  Y.  App.  Div.  436,  89  N.  Y.  Suppl. 
977. 

Reappraisal. 

New  Appraisal  Unwarranted. 

Where  property  was  brought  to  the  attention  of  the  appraisers 
and  is  not  included  in  the  appraisal,  a  new  appraisal  under  section 
230  is  not  authorized  on  the  ground  that  the  property  was  omitted 
from  the  former  appraisal.  In  re  Crerar,  56  N.  Y.  App.  Div. 
479,  67  N.  Y.  Suppl.  795,  9  N.  Y.  Ann.  Cas.  101. 


1909,  c.  62.]  NEW  YORK.  963 

Where  an  appraiser  reports  that  remaindermen  were  indefinite 
and  uncertain  and  that  the  tax  could  not  then  be  determined  and 
this  report  is  confirmed  in  1894,  the  court  has  no  power  to  appoint 
another  appraiser  in  1898.  The  report  was  the  final  determina- 
tion of  the  subject.  In  re  Lawrence,  96  N.  Y.  App.  Div.  29, 
88  N.  Y.  Suppl.  1028. 

Evidence  Necessary  for  Rehearing. 

An  appeal  from  the  decree  on  appraisal  cannot  be  sustained 
unless  it  appears  that  there  is  some  definite  evidence  to  be  pro- 
duced on  a  rehearing  that  would  increase  the  valuation  on  stock 
claimed  by  the  comptroller  to  be  valued  too  low.  In  re  Johnson, 
37  Misc.  Rep.  542,  75  N.  Y.  Suppl.  1046. 

On  Motion. 

A  motion  may  be  made  to  remit  the  report  of  an  appraiser  back 
to  the  appraisers  before  the  court  has  acted  upon  it,  for  the  intro- 
duction of  additional  proof.  In  re  Kelly,  29  Misc.  Rep.  169, 
60  N.  Y.  Suppl.  1005. 

This  remedy  is  not  exclusive  but  the  taxpayer  may  appeal  under 
the  New  York  Code  of  Civil  Procedure,  section  2570,  to  the  appel- 
late division  from  the  order  of  the  surrogate's  court  approving  the 
appraisal,  if  he  believes  that  such  appraisal  .  .  .  has  been  fraudu- 
lentljy  collusively  or  erroneously  made.  Morgan  v.  Warner,  162 
N.  Y.  612,  57  N.  E.  1118,  affirming  45  N.  Y.  App.  Div.  424. 

Some  clear  evidence  of  undervaluation  must  be  produced  before 
a  reappraisal  will  be  ordered.  Matter  of  Johnson,  37  Misc.  542,  75 
N.  Y.  S.  1046. 

Where  no  appraisal  is  made  at  all  for  the  reason  that  both 
appraiser  and  surrogate  took  the  view  which  proved  to  be  mistaken, 
that  the  bequest  was  not  subject  to  tax,  this  is  not  within  the 
statute  and  therefore  a  reappraisal  cannot  be  had  under  this 
section,  which  applies  only  to  errors  of  fact.  In  re  Niven,  29  Misc. 
Rep.  550,  61  N.  Y.  Suppl.  956. 

Reappraisements  will  not  be  ordered  in  the  absence  of  evidence 
of  mistake  or  fraud  simply  because  at  public  auction  the  property 
was  sold  for  a  price  exceeding  the  appraisal.  In  re  Bruce,  59  N.  Y. 
Suppl.  1083. 

S.  233.  Composition  of  transfer  tax  upon  certain  estates.  The  state 
comptroller,  by  and  with  the  consent  of  the  attorney  general  expressed  in  writing 
is  hereby  empowered  and  authorized  to  enter  into  an  agreement  with  the  trustees 


964 


STATUTES  ANNOTATED.  [N.  Y.  St. 


of  any  estate  in  which  remainders  or  expectant  estates  have  been  of  such  a  nature, 
or  so  disposed  and  circumstanced,  that  the  taxes  therein  were  held  not  presently 
payable,  or  where  the  interests  of  the  legatees  or  devisees  were  not  ascertainable 
under  the  provisions  of  chapter  four  hundred  and  eighty-three  of  the  laws  of 
eighteen  hundred  and  eighty-five;  chapter  three  hundred  and  ninety-nine  of 
the  laws  of  eighteen  hundred  and  ninety-two,  or  chapter  nine  hundred  and  eight 
of  the  laws  of  eighteen  hundred  and  ninety-six,  and  the  several  acts  amendatory 
thereof  and  supplemental  thereto;  and  to  compound  such  taxes  upon  such  terms 
as  may  be  deemed  equitable  and  expedient;  and  to  grant  discharge  to  said  trus- 
tees upon  the  payment  of  the  taxes  provided  for  in  such  composition,  provided, 
however,  that  no  such  composition  shall  be  conclusive  in  favor  of  said  trustees 
as  against  the  interest  of  such  cestuis  que  trust  as  may  possess  either  present  rights 
of  enjoyment,  or  fixed,  absolute  or  indefeasible  rights  of  future  enjoyment,  or  of 
such  as  would  possess  such  rights  in  the  event  of  the  immediate  termination 
of  particular  estates,  unless  they  consent  thereto,  either  personally,  when  com- 
petent, or  by  guardian  or  committee.  Composition  or  settlement  made  or 
effected  under  the  provisions  of  this  section  shall  be  executed  in  triplicate,  and 
one  copy  filed  in  the  office  of  the  state  comptroller,  one  copy  in  the  office  of 
the  surrogate  of  the  cou  nty  in  which  the  tax  was  paid,  and  one  copy  delivered 
to  the  executors,  administrators  or  trustees  who  shall  be  parties  thereto. 

[See  notes  to  the  acts  of  1896,  c.  908,  s.  230;  1897,  c.  284;  1899,  c.  76;  1900, 
c.  379;  1901,  c.  173,  s.  9;  1905,  c.  368,  s.  233.] 

S.  234.     Surrogates*  assistants  in  New  York,  Kings  and  other  counties. 

The  state  comptroller  may,  upon  the  recommendation  of  the  surrogate,  appoint, 
and  may  at  pleasure  remove,  assistants  and  clerks  in  the  surrogate's  offices  of  the 
foil  owing  counties,  at  annual  salaries  to  be  fixed  by  him  not  to  exceed  the  amounts 
hereinafter  specified:  — 

1.  In  New  York  county,  a  transfer  tax  assistant,  four  thousand  dollars;  a 
transfer  tax  clerk,  two  thousand  four  hundred  dollars;  an  assistant  clerk,  eighteen 
hundred  dollars;  a  recording  clerk,  thirteen  hundred  dollars;  a  stenographer, 
eight  hundred  dollars;  and  shall  be  entitled  to  expend  not  more  than  seven 
hundred  and  fifty  dollars  a  year  in  such  office  for  expenses  necessarily  incurred 
in  the  assessment  and  collection  of  taxes  under  this  article. 

2.  In  Kings  county,  a  transfer  tax  assistant,  four  thousand  dollars;  a  transfer 
tax  clerk,  two  thousand  dollars;  an  assistant  clerk,  fifteen  hundred  dollars;  and 
shall  be  entitled  to  expend  not  more  than  five  hundred  dollars  a  year  for  expenses 
necessarily  incurred  in  the  assessment  and  collection  of  taxes  under  this  article. 

3.  In  Erie  county,  a  transfer  tax  clerk,  eighteen  hundred  dollars. 

4.  In  Westchester  county,  a  transfer  tax  assistant,  two  thousand  five  hundred 
dollars. 

5.  In  Albany  county,  a  transfer  tax  clerk,  twelve  hundred  dollars. 

6.  In  Queens  county,  a  transfer  tax  clerk,  one  thousand  dollars. 

7.  In  Onondaga  county,  a  transfer  tax  clerk,  twelve  hundred  dollars. 

^  8.  In  Monroe  county,  two  transfer  tax  clerks,  seven  hundred  and  fifty  dollars 
each;  and  shall  be  entitled  to  expend  not  more  than  two  hundred  dollars  a  year 
for  expenses  necessarily  incurred  in  the  assessment  and  collection  of  taxes  under 
this  article. 

9.    In  Dutchess  county,  a  transfer  tax  clerk,  nine  hundred  dollars. 


1909,  c.  62.]  NEW  YORK.  965 

10.  In  Oneida  county,  not  more  than  two  transfer  tax  clerks,  twelve  hundred 
dollars  in  the  aggregate. 

11.  In  Suffolk  county,  a  transfer  tax  clerk,  one  thousand  dollars. 

12.  In  Ulser  county,  a  transfer  tax  clerk,  seven  hundred  and  twenty  dollars. 
Such  salaries  and  expenses  shall  be  paid  monthly  by  the  state  comptroller, 

upon  proper  vouchers,  out  of  any  funds  in  his  hands  on  account  of  taxes  col- 
lected under  this  article.     (As  amended  by  L.  1910,  ch.  70.) 

[See  notes  to  the  acts  of  1885,  c.  483,  s.  13;  1892,  c.  399,  s.  17;  1896,  c.  908, 

s.  233;    1896,  c.  952;    1898,  c.  289;    1899,  c.  269;    1899,  c.  270;    1899,  c.  389; 

1899,  c.  406;   1901,  c.  173,  s.  10;   1901,  c.  288;   1902,  c.  283;   1905,  c.  368;   1906, 
c.  699;    1908,  c.  312;    1910,  c.  70.] 

S.  235.  Proceedings  by  district  attorneys.  If,  after  the  expiration  of 
eighteen  months  from  the  accrual  of  any  tax  under  this  article,  such  tax  shall 
remain  due  and  unpaid,  after  the  refusal  or  neglect  of  the  persons  liable  therefor 
to  pay  the  same,  the  state  comptroller  shall  notify  the  district  attorney  of  the 
county,  in  writing,  of  such  failure  or  neglect,  and  such  district  attorney  shall 
apply  to  the  surrogate's  court  for  a  citation,  citing  the  persons  liable  to  pay  such 
tax  to  appear  before  the  court  on  the  day  specified,  not  more  than  three  months 
after  the  date  of  such  citation,  and  show  cause  why  the  tax  should  not  be  paid. 
The  surrogate,  upon  such  application,  and  whenever  it  shall  appear  to  him  that 
any  such  tax  accruing  under  this  article  has  not  been  paid  as  required  by  law, 
shall  issue  such  citation,  and  the  service  of  such  citation,  and  the  time,  manner  and 
proof  thereof,  and  the  hearing  and  determination  thereon  and  the  enforcement 
of  the  determination  or  order  made  by  the  surrogate  shall  conform  to  the  pro- 
visions of  the  code  of  civil  procedure  for  the  service  of  citations  out  of  the  surro- 
gate's court,  and  the  hearing  and  determination  thereon  and  its  enforcement  so 
far  as  the  same  may  be  applicable.  The  surrogate  or  his  clerk  shall,  upon  request 
of  the  district  attorney  or  the  state  comptroller,  furnish,  without  fee,  one  or 
more  transcripts  of  such  decree,  which  shall  be  docketed  and  filed  by  the  county 
clerk  of  any  county  of  the  state  without  fee,  in  the  same  manner  and  with  the 
same  effect  as  provided  by  law  for  filing  and  docketing  transcripts  of  decrees 
of  the  surrogate's  court.  The  costs  awarded  by  any  such  decree  after  the  col- 
lection and  payment  of  the  tax  to  the  state  comptroller  or  county  treasurer  may 
be  retained  by  the  district  attorney  for  his  own  use.  Such  costs  shall  be  fixed 
by  the  surrogate  in  his  discretion,  but  shall  not  exceed  in  any  case  where  there 
has  not  been  a  contest,  the  sum  of  one  hundred  dollars,  or  where  there  has  been 
a  contest,  the  sum  of  two  hundred  and  fifty  dollars.  Whenever  the  surrogate 
shall  certify  that  there  was  probable  cause  for  issuing  a  citation  and  taking  the 
proceedings  specified  in  this  section,  the  state  comptroller,  after  the  same  shall 
have  been  audited  by  him,  shall  pay  all  expenses  incurred  for  the  service  of  cita- 
tions and  other  lawful  disbursements  not  otherwise  paid,  from  funds  in  his  hands 
on  account  of  such  tax,  or  in  a  county  in  which  the  office  of  appraiser  is  not  salaried 
by  a  warrant  upon  the  county  treasurer  of  such  county  for  the  payment  by  him 
of  the  same  from  funds  in  his  hands  on  account  of  such  tax.  In  proceedings 
to  which  the  state  comptroller  is  cited  as  a  party  under  sections  two  hundred  and 
twenty-eight  and  two  hundred  and  thirty  of  this  article,  he  is  authorized  to  desig- 
nate and  retain  counsel  to  represent  him  and  to  pay  the  expenses  thereby  incurred 
out  of  the  funds  which  may  be  in  his  hands  on  account  of  this  tax  in  any  case  in  a 


966  STATUTES  ANNOTATED.  IN.  Y.  St. 

county  where  the  office  of  appraiser  is  salaried,  and  in  any  other  county  the  state 
comptroller  shall  by  warrant  direct  the  county  treasurer  to  pay  such  expenses  out 
of  any  funds  which  may  be  in  his  hands  on  account  of  this  tax,  provided,  how- 
ever, that  in  the  collection  of  taxes  upon  estates  of  non-resident  decedents  the 
state  comptroller  shall  not  allow  for  legal  services  up  to  and  including  the  entry 
of  the  order  of  the  surrogate  fixing  the  tax  a  sum  exceeding  ten  per  centum  of 
the  taxes  and  penalties  collected. 

[See  notes  to  the  acts  of  1885,  c.  483,  ss.  16,  17;  1892,  c.  399,  ss.  11,  12;  1896, 
c.  908,  s.  235;  1901,  c.  173,  s.  11;  1905,  c.  368;  1908,  c.  310.] 

Burden  of  Proof. 

The  state  has  the  burden  of  proving  that  the  transfer  tax  should 
be  imposed.  In  re  Miller,  77  N.  Y.  App.  Div.  473,  78  N.  Y.  Suppl. 
930,  overruling  75  N.  Y.  Suppl.  929. 

Evidence  of  Legatee. 

A  legatee  is  not  barred  by  the  code  of  civil  procedure,  section 
829,  from  testifying  as  to  his  conversations  and  relations  with  the 
decedent  or  to  show  that  the  mutually  acknowledged  relation  of 
a  parent  existed.  The  code  of  civil  procedure,  section  829,  pro- 
vided that  a  party  shall  not  be  exempt  as  a  witness  in  his  own  be- 
half as  to  any  communication  or  personal  transaction  with  a  deceased 
person.  In  re  Brundage,  31  N.  Y.  App.  Div.  348,  52  N.  Y.  Suppl. 
362.     In  re.Bentley,  31  Misc.  Rep.  656,  66  N.  Y.  Suppl.  95. 

Parties  to  Action  to  Enforce  Ante-nuptial  Contract. 

The  state  comptroller  was  not  a  necessary  party  to  an  action 
for  the  specific  performance  of  an  ante-nuptial  contract.  In  re 
Kidd,  115  N.  Y.  App.  Div.  205,  100  N.  Y.  Suppl.  917,  reversed 
on  another  point  in  188  N.  Y.  274,  80  N.  E.  924. 

S.  236.    Receipts  from  county  treasurer  or  comptroller.    One  of  the 

duplicate  receipts  issued  for  the  payment  of  any  tax  under  this  article,  as  pro- 
vided by  section  two  hundred  and  twenty-two,  shall  be  countersigned  by  the 
state  treasurer  if  the  same  was  issued  by  the  state  comptroller,  and  by  the  state 
comptroller,  if  issued  by  any  county  treasurer.  The  officer  so  countersigning 
the  same  shall  charge  the  officer  receiving  the  tax  with  the  amount  thereof  and 
affix  the  seal  of  his  office  to  the  same  and  return  to  the  proper  person;  but  no 
^executor,  administrator  or  trustee  shall  be  entitled  to  a  final  accounting  of  an 
estate  in  settlement  of  which  a  tax- is  due  under  the  provisions  of  this  article 
unless  he  shall  produce  a  receipt  so  sealed  and  countersigned,  or  a  certified  copy 
thereof.  Any  person  shall,  upon  the  payment  of  fifty  cents  to  the  officer  issuing 
such  receipt,  be  entitled  to  a  duplicate  thereof,  to  be  signed,  sealed  and  counter- 
signed in  the  same  manner  as  the  original. 


1909,  c.  62.]  NEW  YORK.  967 

Any  person  shall,  upon  the  payment  of  fifty  cents,  be  entitled  to  a  certificate 
of  the  state  comptroller  that  the  tax  upon  the  transfer  of  any  real  estate  of  which 
any  decedent  died  seized  has  been  paid,  such  certificate  to  designate  the  real 
property  upon  which  such  tax  is  paid,  the  name  of  the  person  so  paying  the  same, 
and  whether  in  full  of  such  tax.  Such  certificate  may  be  recorded  in  the  office 
of  the  county  clerk  or  register  of  the  county  where  such  real  property  is  situate, 
in  a  book  to  be  kept  by  him  for  that  purpose,  which  shall  be  labeled  "transfer 
tax." 

[See  notes  to  the  acts  of  1885,  c.  483,  ss.  8,  23;  1892,  c.  399,  ss.  3,  16;  1896, 
c.  908,  s.  222;   1901,  c.  173,  s.  11;   1905,  c.  368,  s.  236.] 

S.  237.  Fees  of  county  treasurer.  The  treasurer  of  each  county  in  which  the 
office  of  appraiser  is  not  salaried  shall  be  allowed  to  retain,  on  all  taxes  paid  and 
accounted  for  by  him  each  fiscal  year  under  this  article,  five  per  centum  on  the 
first  fifty  thousand  dollars,  two  and  one-half  per  centum  on  the  next  fifty  thousand 
dollars,  and  one  per  centum  on  all  additional  sums.  Such  fees  shall  be  in  addi- 
tion to  the  salaries  and  fees  now  allowed  by  law  to  such  officers. 

•[See  notes  to  the  acts  of  1885,  c.  483,  s.  22;  1887,  c.  713;  1892,  c.  399,  s.  17; 
1896,  c.  908,  s.  237;   1898,  c.  289;  1901,  c.  173,  s.  12;  1905,  c.  368;  1908,  c.  310.) 

S.  238.     Books  and  forms  to  be  furnished  by  the  state  comptroller. 

The  state  comptroller  shall  furnish  to  each  surrogate  a  book,  which  shall  be  a 
public  record,  and  in  which  he  shall  enter  the  name  of  every  decedent  upon  whose 
estate  an  application  to  him  has  been  made  for  the  issue  of  letters  of  administra- 
tion, or  letters  testamentary,  or  ancillary  letters,  the  date  and  place  of  death  of 
such  decedent,  the  estimated  value  of  his  real  and  personal  property,  the  names, 
places  of  residence  and  relationship  to  him  of  his  heirs-at-law,  the  names  and 
places  of  residence  of  the  legatees  and  devisees  in  any  will  of  any  such  decedent, 
the  amount  of  each  legacy  and  the  estimated  value  of  any  real  property  devised 
therein,  and  to  whom  devised.  These  entries  shall  be  made  from  the  data  con- 
tained in  th«  papers  filed  on  any  such  application,  or  in  any  proceedmg  relating 
to  the  estate  of  the  decedent.  The  surrogate  shall  also  enter  in  such  book  the 
amount  of  the  personal  property  of  any  such  decedent,  as  shown  by  the  inven- 
tory thereof  when  made  and  filed  in  his  office,  and  the  returns  made  by  any 
appraiser  appointed  by  him  under  this  article,  and  the  value  of  annuities,  life 
estates,  terms  of  years,  and  other  property  of  any  such  decedent  or  given  by 
him  in  his  will  or  otherwise,  as  fixed  by  the  surrogate,  and  the  tax  assessed  thereon, 
and  the  amounts  of  any  receipts  for  payment  of  any  tax  on  the  estate  of  such 
decedent  under  this  article  filed  with  him.  The  state  comptroller  shall  also 
furnish  to  each  surrogate  forms  for  the  reports  to  be  made  by  such  surrogate, 
which  shall  correspond  with  the  entries  to  be  made  in  such  book. 

[See  notes  to  the  acts  of  1885,  c.  483,  s.  20;  1892,  c.  399,  s.  18;  1896,  c.  908, 
s.  238;    1905,  c.  368.] 

S.  239.  Reports  of  surrogate  and  county  clerk.  Each  surrogate  shall, 
on  January,  April,  July  and  October  first  of  each  year,  make  a  report,  upon  the 
forms  furnished  by  the  comptroller  containing  all  the  data  and  matters  required 
to  be  entered  in  such  book,  which  shall  be  immediately  forwarded  to  the  state 


968  STATUTES  ANNOTATED.  IN.  Y.  St. 

comptroller.  The  county  clerk  of  each  county,  except  in  the  counties  where  the 
registers  perform  the  duties  of  the  county  clerk  with  respect  to  the  recording 
of  deeds,  and  when  in  such  counties  the  registers,  shall,  at  the  same  times,  make 
reports  containing  a  statement  of  any  deed  or  other  conveyance  filed  or  recorded 
in  his  office,  of  any  property,  which  appears  to  have  been  made  or  intended  to 
take  effect  in  possession  or  enjoyment  after  the  death  of  the  grantor  or  vendor, 
with  the  name  and  place  of  residence  of  such  grantor  or  vendor,  the  name  and  place 
of  residence  of  the  grantee  or  vendee,  and  a  description  of  the  property  trans- 
ferred, which  shall  be  immediately  forwarded  to  the  state  comptroller. 

[See  notes  to  the  acts  of  1885,  c.  483,  s.  18;  1892,  c.  399,  s.  19;  1896,  c.  908, 
s.  239;  1901,  c.  173,  s.  13;  1905,  c.  368.] 

S.  240.  Reports  of  county  treasurer.  Each  county  treasurer  in  a  county 
in  which  the  office  of  appraiser  is  not  salaried  shall  make  a  report,  under  oath, 
to  the  state  comptroller,  on  January,  April,  July  and  October  first  of  each  year, 
of  all  taxes  received  by  him  under  this  article,  stating  for  what  estate  and  by  whom 
and  when  paid.  The  form  of  such  report  may  be  prescribed  by  the  state  comp- 
troller. He  shall,  at  the  same  time,  pay  the  state  treasurer  all  taxes  received 
by  him  under  this  article  and  not  previously  paid  into  the  state  treasury,  and 
for  all  such  taxes  collected  by  him  and  not  paid  into  the  state  treasury  within 
thirty  days  from  the  times  herein  required,  he  shall  pay  interest  at  the  rate  of 
ten  per  centum  per  annum. 

[See  notes  to  the  acts  of  1885,  c.  483,  s.  21;  1892,  c.  399,  s.  20;  1896,  c.  908 
s.  240;    1901,  c.  173,  s.  13;   1905,  c.  368.] 

S.  241.  Report  of  state  comptroller:  payment  of  taxes.  The  state 
comptroller  shall  deposit  all  taxes  collected  by  him  under  this  article  in  a  respon- 
sible bank,  banking  house  or  trust  company  in  the  city  of  Albany,  which  shall 
pay  the  highest  rate  of  interest  to  the  state  for  such  deposit,  to  the  credit  of  the 
state  comptroller  on  account  of  the  transfer  tax.  And  every  such  bank,  banking 
house  or  trust  company  shall  execute  and  file  in  his  office  an  undertaking  to  the 
state,  in  the  sum,  and  with  such  sureties,  as  are  required  and  approved  by  the 
comptroller,  for  the  safe  keeping  and  prompt  payment  on  legal  demand  therefor 
of  all  such  moneys  held  by  or  on  deposit  in  such  bank,  banking  house  or  trust 
company,  with  interest  thereon  on  daily  balances  at  such  rate  as  the  comptroller 
may  fix.  Every  such  undertaking  shall  have  indorsed  thereon,  or  annexed  thereto , 
the  approval  of  the  attorney  general  as  to  its  form.  The  state  comptroller  shall 
on  the  first  day  of  each  month  make  a  verified  return  to  the  state  treasurer  of  all 
taxes  received  by  him  under  this  article,  stating  for  what  estate,  and  by  whom 
and  when  paid;  and  shall  credit  himself  with  all  expenditures  made  since  his  last 
previous  return  on  account  of  such  taxes,  for  salary,  refunds  or  other  purposes 
lawfully  chargeable  thereto.  He  shall  on  or  before  the  tenth  day  of  each  month 
pay  to  the  state  treasurer  the  balance  of  such  taxes  remaining  in  his  hands  at  the 
close  of  business  on  the  last  day  of  the  previous  month,  as  appears  from  such 
returns.     (Former  sec.  240  a  without  change.) 

[See  notes  to  the  acts  of  1901,  c.  173,  s.  14;  1905,  c.  368,  s.  240a;  1906,  c.  111- 
1909,  c.  62,  s.  241.] 


1909,  c.  62.]  NEW  YORK.  969 

S.  242.  Application  of  taxes.  All  taxes  levied  and  collected  under  this 
article  when  paid  into  the  treasury  of  the  state  shall  be  applicable  to  the  expenses 
of  the  state  government  and  to  such  other  purposes  as  the  legislature  shall  by 
law  direct.     (Former  sec.  241  without  change.) 

[See  notes  to  the  acts  of  1885,  c.  483,  s.  24;  1892,  c.  399,  s.  21;  1896,  c.  908, 
s.  241;   1901,  c.  173,  s.  15;   1905,  c.  368;   1909,  c.  62.] 

S.  243  (as  amended  by  St.  1911,  c.  732,  in  effect  July  21,  1911).  Definitions. 
The  words  "estate"  and  "property,"  as  used  in  this  article,  shall  be  taken  to 
mean  the  property  or  interest  therein  passing  or  transferred  to  individual  or  cor- 
porate legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees  or  vendees,  and  not 
as  the  property  or  interest  therein  of  the  decedent,  grantor,  donor  or  vendor 
and  shall  include  all  property  or  interest  therein,  whether  situated  within  or  with- 
out this  state.  The  words  "tangible  property"  as  used  in  this  article  shall  be 
taken  to  mean  corporeal  property  such  as  real  estate  and  goods,  wares  and  mer- 
chandise, and  shall  not  be  taken  to  mean  money,  deposits  in  bank,  shares  of  stock, 
bonds,  notes,  credits  or  evidences  of  an  interest  in  property  and  evidences  of  debt. 
The  words  "intangible  property"  as  used  in  this  article  shall  be  taken  to  mean 
incorporeal  property,  including  money,  deposits  in  bank,  shares  of  stock,  bonds, 
notes,  credits,  evidences  of  an  interest  in  property  and  evidences  of  debt.  The 
word  "transfer,"  as  used  in  this  article,  shall  be  taken  to  include  the  passing  of 
property  or  any  interest  therein  in  the  possession  or  enjoyment,  present  or  future, 
by  inheritance,  descent,  devise,  bequest,  grant,  deed,  bargain,  sale  or  gift,  in  the 
manner  herein  prescribed.  The  words  "county  treasurer"  and  "district  attor- 
ney," as  used  in  this  article,  shall  be  taken  to  mean  the  treasurer  or  the  district 
attorney  of  the  county  of  the  surrogate  having  jurisdiction  as  provided  in  section 
two  hundred  and  twenty-eight  of  this  article.  The  words  "the  intestate  laws 
of  this  state,"  as  used  in  this  article,  shall  be  taken  to  refer  to  all  transfers  of 
property,  or  any  beneficial  interest  therein,  effected  by  the  statute  of  descent  and 
distribution  and  the  transfer  of  any  property,  or  any  beneficial  interest  thefein, 
effected  by  operation  of  law  upon  the  death  of  a  person  omitting  to  make  a  valid 
disposition  thereof,  including  a  husband's  right  as  tenant  by  the  curtesy  or  the 
right  of  a  husband  to  succeed  to  the  personal  property  of  his  wife  who  dies  intes- 
tate leaving  no  descendants  her  surviving. 

[See  notes  to  the  acts  of  1892,  c.  399,  s.  22;  1896,  c.  908,  s.  242;  1898,  c.  88; 
1901,  c.  173,  s.  16;   1905,  c.  368;   1909,  c.  62,  s.  243;   1910,  c.  70.] 

S.  244.  Exemptions  in  article  one  not  applicable.  The  exemptions 
enumerated  in  section  four  of  this  chapter  shall  not  be  construed  as  being  appli- 
cable in  any  manner  to  the  provisions  of  this  article.  (Former  sec.  243  without 
change  of  substance.) 

[See  notes  to  the  act  of  1900,  c.  382;   1905,  c.  368.] 

S.  245.  Limitation  of  time.  The  provisions  of  the  code  of  civil  procedure 
relative  to  the  limitation  of  time  of  enforcing  a  civil  remedy  shall  not  apply  to 
any  proceeding  or  action  taken  to  levy,  appraise,  assess,  determine  or  enforce 
the  collection  of  any  tax  or  penalty  prescribed  by  this  article,  and  this  section 


970  STATUTES  ANNOTATED.  IN.  Y.  St. 

shall  be  construed  as  having  been  in  effect  as  of  date  of  the  original  enactment 
of  the  inheritance  tax  law,  provided,  however,  that  as  to  real  estate  in  the  hands 
of  bona  fide  purchasers,  the  transfer  tax  shall  be  presumed  to  be  paid  and  cease 
to  be  a  lien  as  against  such  purchasers  after  the  expiration  of  six  years  from  the 
date  of  accrual.     (Part  of  former  article  13,  sec.  282.) 

[Seenotestotheactof  1899,  c.  737;  1905,  c.  368;  1909,  c.  60.] 

Statute  of  Limitations. 

The  testator  died  in  1888  and  it  was  claimed  that  proceedings 
begun  later  were  barred  through  the  operation  of  the  code  of 
civil  procedure,  section  382,  sub-division  2,  wliich  fixes  a  limi- 
tation of  six  years  upon  an  action  to  recover  a  statutory  liability. 
The  court  holds,  however,  that  the  statute  of  1899,  chapter  737, 
relieved  this  bar  and  was  retroactive.  In  re  Strang,  117  N.  Y. 
App.  Div.  796,  102  N.  Y.  Suppl.  1062. 

N.  Y.  St.  1887,  c.  713,  s.  17,  authorizing  the  issue  of  a  citation 
to  show  cause  after  a  refusal  or  neglect  to  pay  the  inheritance 
tax  means  that  no  proceedings  can  be  instituted  to  enforce  the 
tax  within  eighteen  months  in  view  of  section  4.  And  where  a 
proceeding  is  begun  within  that  time  no  costs  should  be  allowed 
against  the  taxpayer.  Frazer  v.  People,  3  N.  Y.  Suppl.  134,  6  Dem. 
Surr.  174. 

The  testator  died  in  1893  when  there  was  a  limitation  of  eighteen 
months  for  the  payment  of  the  inheritance  tax.  This  limitation 
was  withdrawn  by  the  statute  of  1899,  chapter  737,  providing 
that  the  limitation  should  be  no  defence  to  a  proceeding  to  collect 
a  transfer  tax. 

The  court  holds  that  a  proceeding  begun  in  1902  is  not  barred. 
In  re  Moench,  39  Misc.  Rep.  480,  80  N.  Y.  Suppl.  222. 


FORMS. 

The  following  form  of  return  was  issued  by  the  office  of  the 
tax  commissioner  under  the  act  of  1910  to  foreign  executors:  — 


Forms.]  NEW  YORK.  971 


SURROGATE'S  COURT, 
NEW  YORK  COUNTY. 

IN  THE   MATTER 
of  the 
Transfer  Tax  upon  the  Estate  of 
Deceased. 


AFFIDAVIT  FOR 
APPRAISAL. 


STATE  OF  ) 

COUNTY  OF  1^^* 

,  being  duly  sworn  deposes 

and  says: 


I.     That  he  resides  at. 


II.  That  said  decedent  died  on  the day  of 

,....,  a  resident  of , 

State  of ,  leaving  a  last  will  and  testament 

which  was  duly  admitted  to  probate  by  the 

,  State  of , 

on  the day  of 

III.  That  deponent  was  appointed  executor  of  said  will,  has  duly 
qualified  and  is  now  acting  as  such  executor. 

IV.  That  hereto  annexed  and  made  a  part  hereof  is  an  itemized  statement 
marked  "A,"  of  all  the  property,  real  and  personal,  of  which  said  decedent  died 
seized  and  possessed,  situated  within  the  State  of  New  York,  and  an  itemized 
statement,  marked  "B,"  of  all  the  personal  property  situated  without  the  State 
of  New  York. 

V.  That  at  the  time  of  h  death,  decedent  had  no  safe  deposit  box,  no 
bonds,  public  or  private,  no  mortgages  and  no  money  within  the  State  of  New 
York;  he  had  no  interest  in  any  business  or  co-partnership  carried  on  therein; 
he  owned  no  shares  of  stock  in  National  Banks  situated  therein  and  owned  no 
shares  of  stock  in  corporations  organized  and  existing  under  the  laws  of  the  State 
of  New  York,  physically  located  either  within  or  without  said  State;  he  had  no 
interest  in  the  estate  of  a  New  York  resident;  he  had  no  claims  against,  and  there 
were  no  debts  due  and  owing  h  from  residents  of  the  State  of  New  York;  he 
had  no  deposits  in  banks,  trust  companies  or  savings  banks  in  the  State  of  New 
York  in  h  own  name,  jointly  or  in  trust;  he  owned  no  jewelry,  horses,  carriages 
or  furniture;  and  was  possessed  of  no  other  personal  property  of  any  kind  whatso- 
ever in  said  State  except  as  set  forth  in  Schedule  "A." 

VI.  That  the  decedent  at  the  time  of  h  death  owned  no  real  estate  situ- 
ated within  the  State  of  New  York. 

VII.  That  prior  to  h  death  decedent  made  no  transfer  of  property  in  the 
State  of  New  York  by  deed,  grant,  bargain,  sale  or  gift  in  contemplation  of  death 
or  intended  to- take  effect  at  or  after  death;  that  the  decedent  had  no  power  of 
appointment  over  property,  real  or  personal,  located  therein. 


972  STATUTES  ANNOTATED.  [N.  Y.  St. 

VIII.  That  the  fair  ^narket  value  of  the  entire  personal  estate  of  said  decedent 
at  the  time  of  h      death,  wheresoever  situated,  was  the  sum  of $ 

That  the  funeral  expenses  of  said  decedent  amounted  to  the  sum  of 

I 

That  the  debts  itemized  in  a  statement  hereto  annexed,  marked  "C,"  due  and 
owing  by  decedent  at  the  time  of  h  death,  exclusive  of  funeral  expenses,  mort- 
gages on  real  estate,  inheritance  taxes  paid  to  the  United  States  Government, 
or  to  any  Foreign  or  State  Government,  or  loans  secured  by  collateral,  amount 
to  the  sum  of $ 

That  the  administration  expenses  incurred  and  to  be  incurred,  itemized  in  a 
statement  hereto  annexed,  marked  "D,"  exclusive  of  expenses  in  the  preceding 
paragraphs,  amount  to  the  sum  of $ 

That  the  comwissions  allowed  me  as  executor  amount  to  the  sum  of 

$ 

IX.  That  annexed  hereto,  marked  Schedule  "E"  and  made  a  part  hereof' 
is  a  true  copy  of  said  decedent's  last  will  and  testament. 

X.  That  all  the  parties  in  interest  are  alive,  of  full  age  and  sound  mind, 
unless  otherwise  stated  in  the  following  paragraph. 

XI.  That  all  the  persons  who  are  entitled  to  share  in  the  estate  of  said  dece- 
dent, their  addresses,  ages  of  life  tenants,  the  amounts  of  their  respective  shares 
and  their  relationship  to  decedent,  are  as  follows:  — 

Name  and  Ages  of  Amount  or 

Relationship.  Life  Tenants.  Address.  Share. 


Sworn  before  me  this . 
dayof 


Attach 

County  Clerk's 
Certificate. 

SCHEDULE   "A." 
Property  within  the  State  of  New  York. 

SCHEDULE   "B." 
Property  outside  the  State  of  New  York. 

SCHEDULE   "F." 

List  of  debts  owing  to  residents 

of  the  State  of  New  York. 


N.  C.  Stat.]  NORTH  CAROLINA.  973 


NORTH  CAROLINA. 


In  General. 

North  Carolina  had  a  collateral  inheritance  tax  from  1847  to  1874. 
A  modest  tax  was  imposed  on  both  direct  and  collateral  inheritances 
in  1897.  In  1901  the  rates  were  substantially  increased  and  made 
progressive  with  a  maximum  of  15  per  cent.  This  enactment  was 
much  more  radical  than  that  adopted  by  any  of  the  other  states 
up  to  that  time,  but  almost  duplicated  the  national  inheritance  tax 
of  1898,  which  was  then  in  force.  The  exemption  applies  to  each 
individual  share  and  not  to  the  estate  as  a  whole. 

North  Carolina  taxes  stock  in  a  North  Carolina  corporation 
owned  by  a  non-resident.  It  holds  the  corporation  responsible  if  it 
permits  the  transfer  of  such  stock  before  the  tax  is  paid .  The  statute 
applies  to  the  transfer  by  the  corporation  of  bonds  as  well,  but  no 
tax  is  being  collected  on  bonds  of  North  Carolina  corporations 
owned   by  non-residents. 

List  of  Statutes. 

1847.  Statutes  of  North  Carolina,  c.  72,  p.  139. 

1848-49.         "         "       "  "         c.  81. 

1851.  Tredell's  Digested  Manual,  p.  259,  ss.  1-7. 

1855.  Statutes  of  North  Carolina,  c.  37. 

1855.  Revised  Code  of  North  Carolina,  c.  99,  ss.  7-19. 

1856-57.  Statutes  of  North  Carolina,  c.  34. 

1858-59.         "         "      "  "        c.  25. 

1860-61.         "         "       "  "         c.  32. 

1861.  2d  extra  session,  c.  31. 

1862-63.  Adjourned  session,  c.  70. 

1864-65.  Statutes  of  North  Carolina,  c.  27. 

1866.  "         "       "  "         c.  21. 

1866-67.  "         "       "  "         c.  72. 

1868-69.         "         "       "  "         c.  108. 

1869-70.         "         "       "  "         c.  229. 

1870-71.         "         "       "  "        c.  227. 

1871-72.         "         "       "  "        c.  58. 

1872-73.         "         "       "  "        c.  144. 

1873.  Battle's  Revisal,  c.  102. 

1873-74.  Statutes  of  North  Carolina,  c.  134. 

1883.  Code  of  1883,  s.  3867. 


974  STATUTES  ANNOTATED.  [N.  C.  St. 

1897.  Statutes  of  North  Carolina,  c.  168,  s.  41. 
1901.  "         "       "  "         c.      9,  p.  123,  ss.  12-27. 

1903.  See  revenue  act  of  1903,  c.  247,  ss.  6-21. 

'  1905.  Statutes  of  North  Carolina,  c.  588,  p.  614. 

1905.  Revisal  of  1905,  vol.  2,  c.  110,  ss.  5111-5126. 

1907.  Statutes  of  North  Carolina,  c.  256,  3s.  6-21. 

1908.  Pell's  Revisal,  vol.  2,  ss.  5111-5126. 

1909.  Statutes  of  North  Carolina,  c.  438,  ss.  6-21. 
1911.       ,         "         "       "  "         c.  46,  ss.  6-21. 

Constitutional  Limitations. 

North  Carolina  Constitution,  1876,  a.  5,  s.  3. 

Laws  shall  be  passed  taxing,  by  a  uniform  rule,  all  moneys,  credits,  invest- 
ments in  bonds,  stocks,  joint-stock  companies,  or  otherwise;  and,  also,  all  real 
and  personal  property,  according  to  its  true  value  in  money.  The  general 
assembly  may  also  tax  trades,  professions,  franchises,  and  incomes,  provided 
that  no  income  shall  be  taxed  when  the  property  iroxa  which  the  income  is 
derived  is  taxed. 

Nature  of  Tax. 

The  legacy  tax  under  N.  C.  St.  1869-70  is  not  a  tax  on  property, 
but  is  rather  a  tax  imposed  on  a  succession;  on  the  right  of  the 
legatee  to  take  under  the  will,  or  of  a  collateral  distribution  in  the 
case  of  intestacy.  It  cannot  be  held  that  the  tax  is  a  tax  on  property, 
merely  because  the  amount  of  the  tax  is  measured  by  the  value  of 
the  property.    Pullen  v.  Commissioners ,  66  N.  C.  361. 

The  succession  tax  is  based  on  two  principles.  First,  that  a  suc- 
cession tax  is  a  tax  upon. the  right  of  succession  to  property  and 
not  on  the  property  itself.  Second,  that  the  right  to  take  property 
by  devise  or  descent  is  not  one  of  the  natural  rights  of  man,  but  is  a 
creature  of  the  law.    In  re  Morris,  138  N.  C.  259,  50  S.  E.  682. 

History. 

"The  inheritance  or  succession  tax  is  of  very  ancient  origin.  It 
is  no  new  invention  of  the  legislative  power  for  the  purpose  of  put- 
ting money  in  the  public  cofifers.  Gibbon,  the  historian,  traces  its 
origin  to  the  Emperor  Augustus,  and  says  it  wais  suggested  by  him 
to  the  senate  as  a  means  of  supporting  the  Roman  army ;  that  it  was 
imposed  at  the  rate  of  5  per  cent  upon  all  legacies  or  inheritance  above 
a  certain  value,  but  that  it  waLs  not  collected  from  the  nearest  rela- 
tives upon  the  father's  side;  and  that  the  tax  was  the  most  fruit- 
ful as  well  as  most  comprehensive."  1  Gibbon's  Rome,  133;  Encyc. 
Brit.  (8th  Am.  ed.)  65,  tit.  "Taxation." 


1876,  a.  5.]  NORTH  CAROLINA.  975 

"It  was  called  vicessima  hereditatum  et  legatorum.  In  this  country 
the  tax  is  variously  called  an  'inheritance  tax,*  a  'legacy  tax,'  a 
'transfer  tax*  and  a  'succession  duty.'  It  is  defined  as  follows: 
'A  burden  imposed  by  government  upon  all  gifts,  legacies,  inheri- 
tances and  successions,  whether  of  real  or  personal  property,  or 
both,  or  any  interest  therein,  passing  to  certain  persons  (other  than 
those  specially  excepted)  by  will,  by  intestate  law,  or  by  any  deed  or 
instrument  made  inter  vivos,  intended  to  take  effect  at  or  after  the 
death  of  the  grantor,*  Dos  Passos  (2d  ed.),  s.  2.  This  method 
of  taxation  has  been  long  resorted  to  in  European  countries  and  was 
introduced  into  Great  Britain  by  Lord  North  and  adopted  in  1780. 
Of  the  states  of  the  American  union,  Pennsylvania  was  the  first  to 
adopt  it,  in  1826,  since  which  date  it  has  been  adopted  as  a  means  of 
governmental  support  by  a  great  many  other  states.  As  a  means  of 
raising  revenue,  the  method  is  generally  commended  by  writers  on 
political  economy."  Mill's  Political  Economy,  bk.  5,  c.  62,  s.  3. 
"It  is  generally  conceded  that  no  tax  can  be  less  burdensome,  and 
interfere  less  with  the  industrial  agencies  of  society."  Smith's 
Wealth  of  Nations,  683.    In  re  Morris,  138  N.  C.  259,  50  S.  E.  682. 

Power  of  Legislature. 

The  legislature  has  an  unlimited  right  to  tax  all  persons  and 
property  within  the  state.  Pullen  v.  Commissioners  (1872),  66 
N.  C.  361.  It  is  not  necessary  to  the  validity  of  the  tax  that  the 
state  constitution  should  contain  a  specific  delegation  of  power 
authorizing  the  legislature  to  impose  such  taxation.  The  power  of 
the  legislature  over  the  state  legislation  is  absolute  unless  restricted 
by  the  constitution  of  the  state  or  nation.  In  re  Morris,  138  N.  C. 
259,  50  S.  E.  682. 

"The  right  to  give  or  take  property  is  not  one  of  those  natural 
and  inalienable  rights  which  are  supposed  to  precede  all  government, 
and  which  no  government  can  rightfully  impair.  There  was  a 
time,  at  least  as  to  gift  by  will,  it  did  not  exist;  and  there  may  be  a 
time  again  when  it  will  seem  wise  and  expedient  to  deny  it.  These 
are  the  uncontested  powers  of  the  legislature  upon  which  no  article  of 
the  constitution  has  laid  its  hands  to  impair  them.  If  the  legislature 
may  destroy  this  right,  may  it  not  regulate  it?  May  it  not  impose 
conditions  upon  its  exercise?  And  the  condition  it  has  imposed  in 
this  case  is  a  tax.  It  is  argued,  however,  that  because  the  consti- 
tution (article  V,  section  3)  says  that  'the  general  assembly  may 
also  tax  trades,  professions,  franchises  and  incomes,'  and  as  this 


976  STATUTES  ANNOTATED.  [N.  C.  St. 

right  of  succession  cannot  be  technically  classed  under  either  of 
these  heads,  it  must  be  implied  that  the  legislature  is  forbidden  to 
tax  such  a  right,  on  the  rule  of  interpretation  that  the  expression  of 
one  thing  implies  the  exclusion  of  any  other.  We  think  the  impli- 
cation is  too  slight  to  restrict  the  legislative  power  in  the  exercise 
of  so  vital  a  portion  of  it  as  that  of  taxation,  and  especially  so  when 
we  can  conceive  of  no  reason  of  policy  or  justice  requiring  such  a 
restriction.  It  might  as  well  be  contended  that  since  section  6  says 
the  legislature  may  exempt  cemeteries,  etc.,  enumerating  several 
matters  of  which  the  right  in  question  is  not  one,  the  legislature  is 
thereby  impliedly  forbidden  to  exempt  this  right  or  any  other  pos- 
sible subject  of  taxation  whatever  not  mentioned  in  the  section. 
It  is  not  by  such  artificial  rules  that  constitutions  are  to  be  con- 
strued."   Per  Rodman,  J.,  in  Pullen  v.  Commissioners,  66  N.  C.  361. 

THE  EARLY  STATUTES. 

N.  C.  St.  1847,  c.  72,  ratified  January  18,  1847,  provided  a  tax  on  collateral 
kindred  or  others  than  lineal  descendants  except  the  widow  of  the  decedent, 
of  one  (1)  per  cent  on  real  estate  descended  or  devised  of  the  value  of  three 
hundred  ($300)  dollars  or  more  and  of  one  (1)  per  cent  on  personal  property 
of  two  hundred  ($200)  dollars  or  more  bequeathed  to  strangers  or  collaterals. 

[The  balance  of  the  act  provides  for  the  collection  and  payment  of  the  tax.] 

Remainder  Taxable.  ~ 

N.  C .  St.  1847,  c.  72,  imposed  a  tax  on  legacies  to  collateral  kin- 
dred. The  court  holds  that  the  words  of  the  act  are  sufificiently 
extensive  to  embrace  a  legacy  in  remainder.  Attorney  General  v. 
Pierce,  59  N.  C.  249. 

N.  C.  St.  1848-49,  c.  81,  approved  January  27,  1849,  makes  it  the  duty  of 
executors  before  making  distribution  to  apply  for  appraisers  for  the  inheritance 
tax. 

N.  C.  St.  1855,  c.  37,  approved  February  12,  1855,  s.  7,  provides  that  the 
tax  shall  be  one  (1)  per  cent  on  brothers  or  sisters  or  their  descendants,  and 
two  (2)  per  cent  on  brothers  or  sisters  of  the  father  or  mother  of  the  deceased 
or  their  descendants,  and  three  (3)  per  cent  on  other  collaterals. 

N.  C.  St.  1855,  was  repeated  in  N.  C.  St   1856,  c.  34,  s.  7. 

THE  REVISED  CODE  OF  1855. 
Exemptions. 

N.  C.  Revised  Code,  c.  99,  s.  7,  contains  no  exemption  in  favor  of 
a  college  or  church  and  therefore  these  distributees  are  liable  to  pay 
the  tax.    Barringer  v.  Cowan,  55  N.  C.  436. 


1855,  c.  99.]  NORTH  CAROLINA.  977 

Property  out  of  the  State. 

N.  C.  Revised  Code,  c.  99,  ss.  7-12,  does  not  impose  a  tax  on 
property  of  the  decedent  which  is  not  in  the  state  though  given  by 
will  or  devolving  by  law  upon  one  of  our  citizens.  State  v.  Brevard^ 
62  N.  C.  141. 

Executors  Liable. 

Under  N.  C.  Revised  Code,  c.  99,  ss.  7-12,  the  executors  are 
liable  for  a  tax  on  a  legacy  to  one  of  them.  State  v.  Brevard,  62  N. 
C.  141. 

When  Paid. — On  Settlement. 

N.  C.  Revised  Code,  c.  99,  s.  8,  provided  that  the  executor  "shall 
retain  out  of  the  legacy  or  distributive  share  of  every  such  legatee 
or  next  of  kin"  .  .  .  "on  his  settlement  of  the  estate."  The  words 
"on  his  settlement"  do  not  refer  to  a  final  settlement  of  the  estate,  but 
its  settlement  so  far  as  the  legatee  or  distributee  is  concerned,  out 
of  whose  legacy  or  share  the  tax  is  to  be  retained  and  the  tax  on  each 
should  be  paid  as  soon  as  this  legacy  itself  was  paid.  Attorney  Gen- 
eral V.  Allen  (1860),  59  N.  C.  144. 

Where  Property  Depreciates. 

Where  the  executors  have  confederate  money  in  their  hands  which 
has  become  valueless  the  tax  upon  this  money  cannot  be  determined 
until  it  is  decided  whether  the  executors  will  be  allowed  for  this  loss 
on  settlement  with  legatees.  If  the  legatees  get  good  money  the 
state  must  of  course  have  a  tax  from  it.  State  v.  Brevard,  62  N.  C. 
141. 

Non-residents. 

This  statute  fixes  the  tax  according  to  the  situs  of  the  property, 
not  according  to  the  domicile  of  the  testator.  So  where  a  Canadian 
dies  leaving  personal  property  in  North  Carolina,  the  distributee 
receives  the  property  from  the  administrator  appointed  here  and 
must  pay  the  North  Carolina  tax.  Alvany  v.  Powell  (1854),  55  N.  C. 
51,  explained  in  State  y.  Brim,  ^7  N.  C.  300. 

Where  a  testator  died  domiciled  abroad  where  his  personal  es- 
tate is,  and  leaves  property  to  collateral  relatives  in  North  Carolina, 
the  relatives  in  North  Carolina  were  not  liable  to  the  tax.  State  y. 
Brim,  57  N.  C.  300. 


978  STATUTES  ANNOTATED.  [N.  C.  St. 

LATER  ACTS. 

N.  C.  St.  1858,  ratified  February  16,  1859,  c.  25,  s.  27  (18),  enacts  the  same 
tax  as  before  on  real  and  personal  estate  above  the  value  of  one  hundred  ($100) 
dollars. 

N.  C.  St.  1860,  ratified  February  23,  1861,  c.  32,  s.  2  (7),  provides  that  the 
executors  shall  return  in  the  inventory  the  relationship  of  beneficiaries. 

N.  C.  St.  1861,  c.  31,  s.  54  (14),  ratified  September  3,  1861,  repeats  the  tax 
on  collateral  inheritances. 

N.  C.  St.  1864-5,  c.  27,  s.  52  (16),  approved  December  23,  1864,  makes  the 
taxes  on  brothers  and  sisters  two  (2)  per  cent;  on  brothers  and  sisters  of  father 
and  mother  of  deceased,  or  their  children  four  (4)  per  cent;  and  on  more  remote 
relations  or  strangers,  six  (6)  per  cent. 

N.  C.  St.  1866,  c.  21,  s.  13,  approved  March  12,  1866,  omits  the  exemption 
of  one  hundred  ($100)  dollars. 

N.  C.  St.  1866,  c.  72,  s.  16,  ratified  February  26,  1867,  provides  a  tax  on 
brothers  and  sisters  of  a  father  or  mother  of  the  deceased  or  their  issue  of  one 
(1)  per  cent;  and  on  more  remote  relations  or  strangers  of  one  and  one-half 
(1  1-2)  per  cent. 

N.  C.  St.  1868-69,  c.  108,  s.  2,  ratified  April  1,  1869,  provides  for  a  tax  of 
one  (1)  per  cent  on  a  brother  or  sister  of  the  father  or  mother  and  on  their  issue, 
and  on  a  more  remote  relation  or  a  stranger  a  tax  of  two  (2)  per  cent. 

N.  C.  St.  1869,  c.  229,  s.  2,  ratified  March  28,  1870,  provides  for  a  tax  on  the 
brother  or  sister  of  the  father  or  mother  of  the  deceased  or  their  issue  of  one 
(1)  per  cent  and  one  (1)  per  cent  on  a  more  remote  relation  or  stranger,  and 
also  provides  particularly  for  the  collection  of  the  tax. 

[As  to  the  nature  of  the  tax  under  this  statute,  see  p.  974.] 

N.  C.  St.  1870-71,  c.  227,  s.  2,  ratified  April  5,  1871,  provides  for  a  tax  on  the 
brother  or  sister  of  the  father  or  mother  of  the  deceased  or  their  issue  of  one 
(1)  per  cent;  on  a  more  remote  relation  or  a  stranger  of  two  and  one-half  {2}4) 
per  cent. 

N.  C.  St.  1870-71,  c.  227,  is  not  retrospective,  and  could  not  con- 
stitutionally be  so.     Pullen  v.  Commissioners,  66  N.  C.  267. 

N.  C.  St.  1871-72,  c.  58,  ratified  January  24,  1872,  s.  2,  provides  a  tax  on 
brothers  or  sisters  of  the  father  or  mother  of  the  deceased  or  their  issue  of  one 
(1)  per  cent;  and  on  a  more  remote  relation  or  stranger  of  two  and  one-half  (2>^) 
per  cent. 

N.  C.  St.  1872-73,  c.  144,  approved  March  3,  1873,  s.  2,  provides  a  tax  on  a 
brother  or  sister  of  the  father  or  mother  of  the  deceased  or  their  issue  of  one 
(1)  per  cent;  and  on  a  more  remote  relation  or  a  stranger  of  two  and  one-half  (2^) 
per  cent. 
^The  collateral  inheritance  tax  was  dropped  from  the  Revenue  Act  of  1874. 
See  N.  C.  Laws,  1873-74,  c.  134. 

N.  C.  Code  of  1883,  s.  3867,  provides  that  "all  public  and  general  statutes 
not  contained  in  this  Code  are  hereby  repealed,  with  the  exceptions  and  limita- 
tions hereinafter  mentioned.    The  Code  contains  no  inheritance  tax. 


1911,  c,  46.]  NORTH  CAROLINA.  979 

THE   RECENT    STATUTES. 

N.  C.  St.  1897,  c.  168,  ratified  March  9,  1897,  s.  41,  provides  an  inheritance 
tax  of  two-thirds  of  one  per  cent  on  direct  inheritances  and  one  and  one-half 
per  cent  on  collaterals. 

N.  C.  St.  1901,  c.  9,  s.  12,  approved  March  15,  1901,  creates  an  inheritance 
tax  graduated  according  to  relationship  and  amount. 

N.  C.  St.  1903,  c.  247,  s.  6,  provides  a  tax  of  three-quarters  of  one  per  cent  on 
lineals  or  the  brother  or  sister,  or  where  the  person  to  whom  the  property  devised 
stood  in  the  relation  of  a  child  to  the  decedent ;  and  one  and  one-half  per  cent 
on  descendants  of  brothers  or  sisters;  three  per  cent  to  uncles  and  aunts  and 
their  descendants;  four  per  cent  on  a  brother  or  sister  of  a  grandfather  or 
grandmother  or  their  descendants;  five  per  cent  on  strangers  and  other  col- 
laterals with  a  graduated  rate  on  five  thousand  dollars  up  to  fifty  thousand 
dollars  as  in  the  statute  of  1909. 

N.  C.  St.  1903,  c.  247,  is  constitutional.  In  re  Morris,  138  N.  C. 
259,  50  S.  E.  682. 

Assessment. 

It  is  not  proper  or  necessary  for  the  court  on  appeal  to  adjudicate 
the  amount  of  the  tax  to  be  levied.  It  is  the  duty  of  the  clerk  to 
have  an  appraisement  made  under  s.  15  of  N.  C.  St.  1903,  and  to 
ascertain  and  declare  the  amount  of  the  tax  to  be  paid.  In  re  Morris, 
138N.C.259,  50S.  E.682. 

The  Statute  Overrides  the  Testator's  Direction  to  Make  no 
Returns. 

The  provisions  of  N.  C.St.  1903,  c.  247,  ss.  6-21,  govern  and  should 
be  followed;  and  the  fact  that  the  testator  in  his  will  directed  his 
executors  not  to  make  any  returns  of  his  property  cannot  be  per- 
mitted to  have  the  effect  of  nullifying  the  statute.  In  re  Morris, 
138  N.  C.  259,  50  S.  E.  682. 

N.  C.  St.  1905,  c.  588,  s.  6,  approved  March  6,  1905,  provides  an  inheritance 
tax  graduated  according  to  relationship  and  amounts. 

N.  C.  St.  1907,  c.  256,  s.  6,  approved  March  11,  1907,  provides  an  inheritance 
tax  graduated  according  to  relationship  and  amount. 

THE  PRESENT  ACT. 

N.  C.  St.  1911,  c.  46. 

SCHEDULE  AA. 

S.  6.  Rate  of  inheritance  tax.  From  and  after  the  passage  of  this  act, 
all  real  and  personal  property  of  whatever  kind  and  nature  which  shall  pass  by 
will  or  by  the  intestate  laws  of  this  state  from  any  person  who  may  die  seized  or 
possessed  of  the  same  while  a  resident  of  this  state,  whether  the  person  or 


980  STATUTES  ANNOTATED.  IN.  C.  St. 

persons  dying  seized  thereof  be  domiciled  within  or  out  of  the  state,  or  if  the 
decedent  was  not  a  resident  of  this  state  at  the  time  of  his  death,  such  property 
or  any  part  thereof  within  this  state,  or  any  interest  therein  or  income  there- 
from which  shall  be  transferred  by  deed,  grant,  sale  or  gift,  made  in  contem- 
plation of  the  death  of  the  grantor,  bargainor,  donor  or  assignor,  or  intended 
to  take  effect,  in  possession  or  enjoyment  after  such  death,  to  any  person  or 
persons  or  to  bodies  corporate  or  politic,  in  trust  or  otherwise,  or  by  reason 
whereof  any  person  or  body  corporate  or  politic  shall  become  beneficially  entitled 
in  possession  or  expectancy  to  any  property  or  the  income  thereof,  shall  be  and 
hereby  is  made  subject  to  a  tax  for  the  benefit  of  the  state,  as  follows,  that  is 
to  say:  Where  the  whole  amount  of  the  property,  real  or  personal,  which  shall 
pass  from  a  decedent  to  an  heir  at  law,  distributee,  devisee,  or  legatee,  by  will, 
by  the  intestate  laws  of  this  state,  or  by  deed,  grant,  sale  or  gift  made  in  con- 
templation of  death,  shall  exceed  in  value  the  sum  of  two  thousand  dollars,  as 
determined  by  the  appraisal  hereinafter  provided  for,  the  tax  upon  the  excess 
shall  be  as  follows: 

First.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  lineal  issue  or  lineal  ancestor,  brother  or  sister  of  the  per- 
son who  died  possessed  of  such  property  aforesaid,  or  where  the  person  to  whom 
such  property  shall  be  devised  or  bequeathed  stood  in  the  relation  of  child  to 
the  person  who  died  possessed  of  such  property  aforesaid,  at  the  rate  of  seventy- 
five  cents  for  each  and  every  hundred  dollars  of  the  clear  value  of  such  interest 
in  such  property;  and  this  clause  shall  apply  to  all  cases  where  the  taxes  have 
not  been  paid  by  the  executor  or  administrator  or  other  representative  of  the 
deceased  person.  The  clerk  of  the  superior  court  shall  determine  whether 
any  person  to  whom  property  is  so  devised  or  bequeathed  stands  in  the  relation 
of  child  to  the  decedent. 

Second.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  descendant  of  a  brother  or  sister  of  the  person  who  died 
possessed  as  aforesaid,  at  the  rate  of  one  dollar  and  fifty  cents  for  each  and  every 
hundred  dollars  of  the  clear  value  of  such  interest. 

Third.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  father  or  mother,  or  a  descendant 
of  the  brother  or  sister  of  the  father  or  mother  of  the  person  who  died  possessed 
as  aforesaid,  at  the  rate  of  three  dollars  for  each  and  every  hundred  dollars 
of  the  clear  value  of  such  interest. 

Fourth.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in 
such  property  shall  be  the  brother  or  sister  of  the  grandfather  or  grandmother, 
or  a  descendant  of  the  brother  or  sister  of  the  grandfather  or  grandmother  of 
the  person  who  died  possessed  as  aforesaid,  at  the  rate  of  four  dollars  for  each 
and  every  hundred  dollars  of  the  clear  value  of  such  interest. 

Fifth.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  here- 
inbefore stated,  or  shall  be  a  stranger  in  blood  to  the  person  who  died  possessed 
as^oresaid,  or  shall  be  a  body  politic  or  corporate,  where  the  whole  amount  of 
said  legacy  or  distributive  share  of  real  or  personal  property  shall  exceed  two 
thousand  dollars  and  shall  not  exceed  five  thousand  dollars,  the  tax  shall  be  at 
the  rate  of  five  dollars  for  each  and  every  hundred  dollars  of  the  clear  value  of 
such  interest:   Provided,  that  all  legacies  or  property  passing  by  will  or  by  laws 


1911,  c.  46.]  NORTH  CAROLINA.  981 

of  this  state  to  husband  or  wife  of  the  person  who  died  possessed  as  aforesaid, 
or  for  religious,  charitable  or  educational  purposes,  shall  be  exempt  from  tax  or 
duty.  Where  the  amount  or  value  of  said  property  shall  exceed  the  sum  of  five 
thousand  dollars,  but  shall  not  exceed  the  sum  or  value  of  ten  thousand  dollars, 
the  rates  of  tax  above  set  forth  shall  be  multiplied  by  one  and  one-half;  and 
where  the  amount  or  value  of  said  property  shall  exceed  the  sum  of  ten  thousand 
dollars,  but  shall  not  exceed  the  sum  of  twenty-five  thousand  dollars,  such  rates 
of  tax  shall  be  multiplied  by  two ;  and  where  the  amount  or  value  of  said  property 
shall  exceed  the  sum  of  twenty-five  thousand  dollars,  but  shall  not  exceed  the 
sum  of  fifty  thousand  dollars,  such  rates  of  tax  shall  be  multiplied  by  two  and 
one-half;  and  where  the  amount  or  value  of  said  property  shall  exceed  the  sum 
of  fifty  thousand  dollars,  such  rates  of  tax  shall  be  multiplied  by  three;  but 
this  graduated  increase  of  rate  shall  only  apply  to  the  provisions  of  subdivision 
five  of  this  section:  Protided,  that  when  property  is  devised  or  bequeathed  to 
a  trustee  for  another  or  others,  the  rate  of  such  inheritance  tax  to  be  paid  on 
such  devise  or  bequest  shall  be  determined  by  the  relationship  of  the  cestui 
que  trust  or  cestuis  que  trustent  to  the  testator. 

Sixth.  That  whenever  an  estate  subject  to  the  tax  under  this  act  shall  be 
settled  or  divided  among  the  heirs  at  law,  legatees  or  devisees,  without  the  quali- 
fication and  appointment  of  a  personal  representative,  the  clerk  of  the  superior 
court  of  the  county  wherein  the  estate  is  situated  shall  certify  the  same  to  the 
corporation  commission,  and  shall  also  require  such  heirs  at  law,  legatees  or 
devisees,  to  report  to  him  under  oath  the  value  of  said  personal  estate,  and  he 
shall  ascertain  the  value  of  the  real  estate  from  the  tax  returns  as  aforesaid, 
and  shall  report  said  valuation  to  the  Corporation  Commission.  The  clerk  is 
authorized  and  required  to  cite  all  interested  parties  to  appear  before  him  and 
make  the  report  herein  required  and  pay  to  him  the  amount  of  the  inheritance 
tax  due  upon  said  property,  and  the  clerk  shall  transmit  the  amount  thereof  to 
the  state  treasurer,  and  the  clerk  shall  be  allowed  three  per  cent  of  the  tax 
collected  by  him  from  the  parties  liable  for  the  inheritance  tax  collected  from  an 
estate  upon  which  there  is  no  administration.  In  case  payment  is  not  made 
as  required  herein,  the  clerk  shall  certify  to  the  sheriff  the  amount  of  tax  due  upon 
such  inheritance,  and  the  sheriff  shall  collect  the  same  as  other  taxes. 

Property  out  of  the  state,  see  977. 
Tax  on  non-residents,  see  977. 

Only  those  especially  exempted  are  free  of  tax.  Barringer  v. 
Cowan,  55  N.  C.  408. 

Liability  of  executors  on  a  legacy  to  one  of  them,  see  977. 
Tax  on  remainders,  see  976. 

S.  7.     When  all  heirs,  legatees,  etc.,  are  discharged  from  liability. 

All  heirs,  legatees,  devisees,  administrators,  executors  and  trustees  shall  only 
be  discharged  from  liability  for  the  amount  of  such  taxes,  the  settlement  of 
which  they  may  be  charged  with,  by  paying  the  same  for  the  use  aforesaid  as 
hereinafter  provided. 

S.  8.  Interest.  That  if  said  tax  is  not  paid  at  the  end  of  two  years  after 
the  death  of  the  decedent  six  per  cent  per  annum  shall  be  charged  thereon  until 
same  is  paid. 


STATUTES  ANNOTATED.  IN.  C.  St. 

S.  9.  Executor,  etc.,  shall  deduct  tax.  The  executor  or  administrator 
or  other  trustee  paying  any  legacy  or  share  in  the  distribution  of  any  estate 
subject  to  said  tax  shall  deduct  therefrom  at  the  rate  prescribed,  or  if  the  legacy 
or  share  in  the  estate  be  not  money  he  shall  demand  payment  of  a  sum  to  be 
computed  at  the  same  rates  upon  the  appraised  value  thereof  for  the  use  of  the 
state,  and  no  executor  or  administrator  shall  be  compelled  to  pay  or  deliver 
any  specific  legacy  or  article  to  be  distributed,  subject  to  tax,  except  on  the  pay- 
ment into  his  hands  of  a  sum  computed  on  its  value  as  aforesaid;  and  in  case 
of  neglect  or  refusal  on  the  part  of  said  legatee  to  pay  the  same  such  specific 
legacy  or  article  or  so  much  thereof  as  shall  be  necessary  shall  be  sold  by  such 
executor  or  administrator  at  public  sale,  after  notice  to  such  legatee,  and  the 
balance  that  may  be  left  in  the  hands  of  the  executor  or  administrator  shall  be 
distributed  as  is  or  may  be  directed  by  law;  and  every  sum  of  money  retained 
by  any  executor  or  administrator  or  paid  into  his  hands  on  account  of  any 
legacy  or  distributive  share  for  the  use  of  the  state  shall  be  paid  by  him  to  the 
proper  officer  without  delay. 

When  tax  is  payable,  see  977. 

Rights  on  depreciation  of  property  in  hands  of  executors,  see 
977. 

S.  10.    Legacy  for  life,  etc.,  tax  to  be  retained  upon  the  whole  amount. 

If  the  legacy  subject  to  said  tax  be  given  to  any  person  for  life  or  for  a  term 
of  years  or  for  any  other  limited  period,  upon  a  condition  or  contingency,  if  the 
same  be  money,  the  tax  thereon  shall  be  retained  upon  the  whole  amount;  but 
if  not  money,  application  shall  be  made  to  the  court  having  jurisdiction  of  the 
accounts  of  executors  and  administrators  to  make  apportionment,  if  the  case 
requires  it,  of  the  sum  to  be  paid  by  such  legatee,  and  for  such  further  order 
relative  thereto  as  equity  shall  require. 

S.  11.  Legacy  charged  upon  real  estate,  heir  or  devisee  to  deduct 
and  pay  to  executor,  etc.  Whenever  such  legacy  shall  be  charged  upon  or 
payable  out  of  real  estate  the  heir  or  devisee  of  such  real  estate,  before  paying 
the  same  to  such  legatee,  shall  deduct  therefrom  at  the  rates  aforesaid,  and  pay 
the  amount  so  deducted  to  the  executor  or  administrator,  and  the  same  shall 
remain  a  charge  upon  such  real  estate  until  paid,  and  in  default  thereof  the 
same  shall  be  enforced  by  the  decree  of  the  court  in  the  same  manner  as  the 
payment  of  such  legacy  may  be  enforced:  Provided,  that  all  taxes  imposed 
by  this  act  shall  be  a  lien  upon  the  personal  property  of  the  estate  on  which  the 
tax  is  imposed  or  upon  the  proceeds  arising  from  the  sale  of  such  property,  from 
the  time  said  tax  is  due  and  payable,  and  shall  continue  a  lien  until  said  tax  is 
paid  and  receipted  for  by  the  proper  officer  of  the  state. 

S.  12.  Executor  or  administrator  to  take  duplicate  receipts  from  the 
clerk  of  the  court.  It  shall  be  the  duty  of  any  executor  or  administrator,  on 
the  payment  of  said  tax,  to  take  duplicate  receipts  from  the  clerk  of  the  court, 
one  of  which  shall  be  forwarded  forthwith  to  the  auditor  of  the  state,  whose  duty 
it  shall  be  to  charge  the  clerk  receiving  the  money  with  the  amount  and  seal 
with  the  seal  of  his  office  and  countersign  the  receipt  and  transmit  it  to  the 


1911,  c.  46.]  NORTH  CAROLINA.  983 

executor  or  administrator,  whereupon  it  shall  be  a  proper  voucher  in  the  settle- 
ment of  the  estate,  but  in  no  event  shall  an  executor  or  administrator  be  entitled 
to  a  credit  in  his  account  by  the  clerk  unless  the  receipt  is  so  sealed  and  counter- 
signed by  the  auditor  of  the  state. 

S.  13.  Foreign  executor  or  administrator  transferring  stock  shall 
pay  the  tax  on  such  transfer.  Whenever  any  foreign  executor  or  administra- 
tor or  trustee  shall  assign  or  transfer  any  stocks  or  bonds  in  this  state  standing 
in  the  name  of  the  decedent  or  in  trust  for  a  decedent,  which  shall  be  liable  for 
the  said  tax,  such  tax  shall  be  paid  on  the  transfer  thereof  to  the  clerk  of  the 
court  of  the  county  where  such  transfer  is  made;  otherwise,  the  corporation 
permitting  such  transfer  shall  become  liable  to  pay  such  tax. 

Tax  on  non-residents,  see  p.  977. 

S.  14.  Proportion  of  tax  to  be  repaid  upon  certain  conditions.  When- 
ever debts  shall  be  proven  against  the  estate  of  a  decedent,  after  the  distribution 
of  legacies  from  which  the  inheritance  tax  has  been  deducted  in  compliance 
with  this  act,  and  the  legatee  is  required  to  refund  any  portion  of  the  legacy, 
a  proportion  of  the  said  tax  shall  be  repaid  to  him  by  the  executor  or  administra- 
tor if  the  said  tax  has  not  been  paid  into  the  state  treasury,  or  shall  be  refunded 
by  the  state  treasurer  if  it  has  been  so  paid  in. 

S.  15.  Appraiser  to  be  appointed  by  the  clerk,  etc.  It  shall  be  the  duty 
of  the  clerk  of  the  court  of  the  county  in  which  letters  testamentary  or  of  admin- 
istration are  granted  to  appoint  an  appraiser,  as  often  as  and  whenever  occasion 
may  require,  to  fix  the  valuation  of  estates  which  are  or  shall  be  subject  to 
inheritance  tax,  and  it  shall  be  the  duty  of  said  appraiser  to  make  a  fair  and 
conscionable  appraisement  of  such  estates;  and  it  shall  further  be  the  duty  of 
such  appraiser  to  assess  and  fix  the  cash  value  of  all  annuities  and  life  estates 
growing  out  of  said  estates,  upon  which  annuities  and  life  estates  the  inheri- 
tance tax  shall  be  immediately  payable  out  of  the  estate  at  the  rate  of  such 
valuation :  Provided,  that  any  person  or  persons  not  satisfied  with  said  appraise- 
ment shall  have  the  right  to  appeal  within  sixty  days  to  the  court  of  the  proper 
county  on  paying  or  giving  security  to  pay  all  costs,  together  with  whatever 
tax  shall  be  fixed  by  said  court,  and  upon  such  appeal  said  court  shall  have 
jurisdiction  to  determine  all  questions  of  valuation  and  of  the  liability  of  the 
appraised  estate  for  such  tax,  subject  to  the  right  of  appeal  to  the  supreme 
court  as  in  other  cases.  The  compensation  of  appraisers  appointed  under  this 
act  shall  be  at  the  rate  of  three  dollars  per  day  for  each  day  necessarily  em- 
ployed in  making  the  appraisement,  together  with  such  necessary  traveling 
expenses  as  may  be  incurred,  a  statement  of  which  shall  be  properly  itemized 
and  sworn  to,  subject  to  the  final  approval  of  the  auditor  of  state  before  pay- 
ment is  made  by  the  clerk  of  the  court. 

Assessment  by  appraiser  and  not  by  the  court  on  appeal,  see 
p.  979. 

S.  16.  Misdemeanor  for  appraiser  to  take  fee  or  reward  from  executor 
or  administrator.     It  shall  be  a  misdemeanor  for  any  appraiser  appointed 


984  STATUTES  ANNOTATED.  [N.  C.  St. 

by  the  clerk  to  make  any  appraisement  in  behalf  of  the  state  to  take  any  fee 
or  reward  from  any  executor  or  administrator,  legatee,  next  of  kin  or  heir  of 
any  decedent,  and  for  any  such  offense  the  clerk  of  the  court  shall  dismiss  him 
from  such  service,  and  upon  conviction  in  the  superior  court  he  shall  be  fined 
not  exceeding  five  hundred  dollars  and  imprisoned  not  exceeding  one  year,  or 
both,  or  either,  at  the  discretion  of  the  court. 

S.  17.  Clerk  to  enter  returns  made  by  appraisers,  etc.  It  shall  be  the 
duty  of  the  clerk  of  the  court  to  enter  in  a  book  to  be  provided  at  the  expense 
of  the  state,  to  be  kept  for  that  purpose,  and  which  shall  be  a  public  record,  the 
returns  made  by  all  appraisers,  under  this  act,  opening  an  account  in  favor  of 
the  state  against  the  decedent's  estate;  and  the  clerk  may  give  certificates  of 
payment  of  such  tax  from  such  record;  and  it  shall  be  the  duty  of  the  clerk 
of  the  court  to  transmit  to  the  auditor  of  the  state  on  the  first  Monday  of  each 
month  a  statement  of  all  returns  made  by  appraisers  during  the  preceding 
month,  giving  the  name  of  the  estate  and  the  clear  valuation  thereof,  subject 
to  the  foregoing  tax,  and  the  amount  of  the  tax,  which  statement  shall  be 
entered  by  the  auditor  in  a  book  to  be  kept  by  him  for  that  purpose;  and  when- 
ever any  such  tax  shall  have  remained  due  and  unpaid  for  one  year  it  shall  be 
lawful  for  the  clerk  of  the  court  to  apply  to  the  court  by  bill  or  petition  to 
enforce  the  payment  of  the  same;  whereupon  said  court,  having  caused  due  notice 
to  be  given  to  the  owner  or  owners  of  the  estate  charged  with  the  tax  and  to 
such  other  person  or  persons  as  may  be  interested,  shall  proceed  according  to 
equity  to  make  such  decrees  or  orders  for  the  payment  of  the  said  tax  out  of 
such  estates  as  shall  be  just  and  proper. 

S.  18.    Court  may  order,  executor,  etc.,  to  file  account,  etc.     If  the 

clerk  of  the  court  shall  discover  that  said  tax  has  not  been  paid  according  to 
law,  the  court  shall  be  authorized  to  cite  the  executors  or  administrators  of 
the  decedent  whose  estate  is  subject  to  the  tax  to  file  an  account  or  to  issue 
a  citation  to  the  executors,  administrators,  legatees  or  heirs,  citing  them  to 
appear  on  a  day  certain  and  show  cause  why  the  said  tax  should  not  be  paid, 
and  when  personal  service  cannot  be  had,  notice  shall  be  given  for  four  weeks, 
once  a  week,  in  at  least  one  newspaper  published  in  said  county;  and  if  the  said 
tax  shall  be  found  to  be  due  and  unpaid,  the  said  delinquent  shall  pay  said  tax, 
interest  and  costs;  and  it  shall  be  the  duty  of  the  solicitor  of  the  district  in  which 
the  said  delinquent  resides  to  sue  for  the  recovery  and  amount  of  such  tax,  and 
for  such  services  he  shall  be  allowed  a  fee,  to  be  fixed  by  the  judge,  not  to  exceed 
five  per  cent  of  the  amount  recovered.  The  auditor  of  the  state  is  authorized 
and  empowered,  in  settlement  of  accounts  of  any  clerk,  to  allow  him  costs  of 
advertising  and  other  reasonable  fees  and  expenses  incurred  in  the  collection 
of  said  tax. 

Duty  to  file  returns  notwithstanding  direction  in  will,  see  p.  979. 

S.  19.    Clerk  to  be  agent  of  the  state  for  collection  of  said  tax.    The 

clerks  of  the  courts  of  the  several  counties  of  this  state  shall  be  the  agents  of  the 
state  for  the  collection  of  the  said  tax,  and  for  services  rendered  in  collecting  and 
paying  over  the  same  the  said  agents  shall  be  allowed  to  retain  for  their  own 


1911,  c.  46.]  NORTH  CAROLINA.  986 

use  such  percentage  as  may  be  allowed  by  the  auditor,  not  exceeding  three 
per  centum  on  all  taxes  paid  and  accounted  for. 

S.  20.  Clerk  to  be  liable  on  his  official  bond.  The  said  clerks  of  the 
courts  shall  be  liable  on  their  official  bonds  to  the  state  for  the  faithful  perfor- 
mance of  the  duties  hereby  imposed  and  for  the  regular  accounting  and  paying 
over  of  the  amounts  to  be  collected  and  received. 

S.  21.     Clerk  to  make  returns  and  payments  to  the  state  treasurer. 

It  shall  be  the  duty  of  the  clerk  of  the  court  of  each  county  to  make  returns  and 
payments  to  the  state  treasurer  of  the  taxes  under  this  act  which  he  shall  have 
received,  stating  for  what  estate  paid,  on  the  first  Monday  of  each  month; 
and  for  all  taxes  collected  by  him  and  not  paid  over  to  the  state  treasurer  within 
ten  days  after  said  monthly  return  of  the  same  he  shall  pay  interest  at  the  rate 
of  twelve  per  centum  pet  annum  until  paid. 


986  STATUTES  ANNOTATED.  [N.  D.  Code. 


NORTH  DAKOTA, 


North  Dakota  adopted  a  collateral  inheritance  tax  in  1903. 
Collateral  inheritances  only  are  taxed.  The  rate  is  uniformly  two 
per  cent  on  the  excess  over  $25,000.  Inheritances  not  taxed  are 
those  to  father,  mother,  husband,  wife,  lineal  descendent,  adopted 
child,  lineal  descendent  of  adopted  child.  Stock  in  a  North  Dakota 
corporation  owned  by  a  non-resident  is  not  taxed. 

Constitutional  Limitations. 
North  Dakota  Constitution,  1889,  a.  11,  s.  176. 

Laws  shall  be  passed  taxing  by  uniform  rule  all  property  according  to  its 
true  value  in  money,  but  the  property  of  the  United  States  and  the  state,  county 
and  municipal  corporations,  both  real  and  personal,  shall  be  exempt  from  taxa- 
tion; and  the  legislative  assembly  shall  by  a  general  law  exempt  from  taxation 
property  used  exclusively  for  school,  religious,  cemetery  or  charitable  purposes 
and  personal  property  to  any  amount  not  exceeding  in  value  two  hundred 
dollars  for  each  individual  liable  to  taxation.  ... 

List  of  Statutes. 

1903.     Statutes  of  North  Dakota,  c.  171,  approved  March  10,  1903. 
1905.     Revised  Code,  c.  10,  ss.  8320-8339. 

THE  PRESENT  ACT. 

North  Dakota  Revised  Code  of  1905,  c.  10. 

S.  8320.  Rate.  All  property  within  the  jurisdiction  of  this  state,  and  any 
interest  therein,  whether  belonging  to  the  inhabitants  of  this  state  or  not,  and 
whether  tangible  or  intangible,  which  shall  pass  by  will  or  by  the  statutes  of 
succession  or  inheritance  of  this  or  any  other  state,  or  by  deed,  grant,  sale  or 
gift  intended  to  take  effect  in  possession  or  in  enjoyment  after  the  death  of  the 
grantor  or  donor,  to  any  person  in  trust  or  otherwise,  other  than  to  or  for 
the  use  of  the  father,  mother,  hudband,  wife,  lineal  descendant,  adopted  child,  the 
lineal  descendant  of  an  adopted  child  of  a  decedent  or  to  or  for  charitable,  educa- 
tional or  religious  societies  or  institutions  within  this  state,  shall  be  subject  to 
a  tax  of  two  per  centum  of  its  valuation,  above  the  sum  of  twenty-five  thousand 
dollars,  after  the  payment  of  all  debts,  for  the  use  of  the  state;  and  all  admin- 
istrators, executors  and  trustees,  and  any  such  grantee  under  a  conveyance, 
and  any  such  donee  under  a  gift,  made  during  the  grantor's  or  donor's  life,  shall 
be  respectively  liable  for  all  such  taxes  to  be  paid  by  them  respectively, 
except  as  herein  otherwise    provided,  with   lawful  interest  as  hereinafter  set 


1905,  c.  10.]  NORTH  DAKOTA.  987 

forth,  until  the  same  shall  have  been  paid.  The  tax  aforesaid  shall  be  and 
remain  a  lien  on  such  estate  from  the  death  of  the  decedent  until  paid.  (1903, 
ch.  171,  s.  1.) 

S.  8321.  Debts  deducted.  The  term  "debts"  shall  include,  in  addition 
to  debts  owing  by  decedent  at  the  time  of  his  death,  the  local  or  state  taxes 
due  from  the  estate  prior  to  his  death,  and  a  reasonable  sum  for  funeral  expenses, 
court  costs,  including  the  costs  of  appraisement  made  for  the  purpose  of  assess- 
ing the  collateral  succession  or  inheritance  tax,  the  statutory  fees  of  executors, 
administrators  or  trustees,  and  no  other  sum;  but  said  debts  shall  not  be  de- 
ducted unless  the  same  are  approved  and  allowed,  within  fifteen  months  from 
the  death  of  decedent,  as  established  claims  against  the  estate,  unless  otherwise 
ordered  by  the  judge  or  court  of  the  proper  county.     (1903,  ch.  171,  s.  2.) 

S.  8322.  Property  subject  to  tax.  Except  as  to  property  passing  to  persons* 
corporations  or  societies  exempted  by  section  8320  from  the  collateral  succession 
or  inheritance  tax,  and  real  property  located  outside  of  the  state  passing  in  fee 
from  the  decedent  owner,  the  tax  imposed  under  the  provisions  of  this  chapter 
shall  be  assessed  against  and  be  collected  from,  property  of  every  kind,  which, 
at  the  death  of  the  decedent  owner  is  subject  to  or  thereafter,  for  the  purpose 
of  distribution,  is  brought  into  this  state  for  distribution  purposes,  or  which  was 
owned  by  any  decedent  domiciled  within  the  state  at  the  time  of  the  death  of 
such  decedent  even  though  the  property  of  said  decedent  so  domiciled  was 
situated  outside  of  the  state.     (1903,  ch.  171,  s.  3.) 

S.  8323.  Construction.  In  the  construction  of  this  chapter  the  words 
"collateral  heirs"  shall  be  held  to  mean  all  persons  who  are  not  excepted  from  the 
provisions  of  the  collateral  succession  or  inheritance  tax  under  the  provisions 
of  this  chapter,  except  section  8322,  shall  apply  to  all  pending  estates  which  are 
not  closed,  and  the  property  subjected  by  this  chapter  to  the  said  tax  is  liable  to 
the  provisions  herein  contained,  as  to  the  amount  and  lien  hereof,  and  the 
manner  of  enforcement  and  collection  thereof,  except  as  herein  specifically 
provided  otherwise.     (1903,  ch.  171,  s.  4.) 

S.  8324.  Foreign  estates  and  deduction  of  debts.  Whenever  any  property 
belonging  to  a  foreign  estate,  which  estate,  in  whole  or  in  part  is  liable  to  pay 
a  collateral  succession  or  inheritance  tax  in  this  state,  and  said  tax  shall  be 
assessed  upon  the  market  value  of  said  property  remaining  after  the  payment  of 
such  debts  and  expenses  as  are  chargeable  to  the  property  under  the  laws  of 
this  state;  in  the  event  that  the  executor,  administrator  or  trustee  of  such  foreign 
estate  files  with  the  clerk  of  the  court  having  ancillary  jurisdiction,  and  with  the 
state  treasurer,  duly  certified  statements  exhibiting  the  true  market  value  of  the 
entire  estate  of  the  decedent  owner,  and  the  indebtedness  for  which  the  said 
estate  has  been  adjudged  liable,  which  statement  shall  be  duly  attested  by  the 
judge  of  the  court  having  original  jurisdiction,. the  beneficiaries  of  said  estate 
shall  then  be  entitled  to  have  deducted  such  proportion  of  the  said  indebted- 
ness of  the  decedent  from  the  value  of  the  property  as  the  value  of  the  property 
within  this  state  bears  to  the  value  of  the  entire  estate.     (1903,  ch.  171,  s.  5.) 


988  STATUTES  ANNOTATED.  [N.  D.  Code. 

S.  8325.  Foreign  estates  and  direct  and  collateral  beneficiaries.  When- 
ever any  property,  real  or  personal,  within  this  state  belongs  to  a  foreign  estate, 
and  said  foreign  estate  is  in  part  exempt  from  the  collateral  succession  or  inheri- 
tance tax,  and  in  part  subject  to  said  collateral  succession  or  inheritance  tax, 
and  it  is  within  the  authority  or  discretion  of  the  foreign  executor,  adminis- 
trator or  trustee  administering  the  estate  to  dispose  of  the  property,  not  specifi- 
cally devised  to  direct  heirs  or  devisees  in  the  payment  of  the  debts  owing  by 
decedent  at  the  time  of  his  death,  or  in  the  satisfaction  of  legacies,  devises  or 
trusts  given  to  direct  and  collateral  legatees  or  devisees,  or  in  payment  of  the 
distributive  shares  of  any  direct  and  collateral  heirs,  then  the  property  within 
the  jurisdiction  of  this  state  belonging  to  such  foreign  estate,  shall  be  subject 
to  the  collateral  succession  or  inheritance  tax  imposed  under  the  provisions 
hereof,  and  the  tax  due  thereon  shall  be  assessed  as  provided  in  section  8324, 
and  with  the  same  proviso  respecting  the  deduction  of  the  proportionate  share 
of  the  indebtedness,  as  herein  provided.     (1903,  ch.  171,  s.  6.) 

S.  8326.  Lien.  It  shall  be  the  duty  of  the  executor,  administrator  or 
trustee,  immediately  upon  his  appointment,  to  make  and  file  a  separate  inventory, 
any  will  to  the  contrary  notwithstanding,  of  all  the  real  estate  of  the  decedent 
liable  to  such  tax,  and  to  cause  the  lien  of  the  same  to  be  entered  upon  the  lien 
book  in  the  office  of  the  clerk  of  the  court  in  each  county  where  each  particular 
part  of  said  real  estate  is  situated,  and  no  conveyance  of  said  estate  or  interest 
therein,  which  is  subject  to  such  tax  before  or  after  the  entering  of  said  lien, 
shall  discharge  the  estate  so  conveyed  from  the  operation  thereof.  (1903,  ch. 
171,  s.  7.) 

S.  8327.  Appraisal.  All  the  real  estate  of  the  decedent  subject  to  such 
tax  shall,  except  as  hereinafter  provided,  be  appraised  within  thirty  days  next 
after  the  appointment  of  an  executor,  administrator  or  trustee,  and  the  tax 
thereon,  calculated  upon  the  appraised  value  after  deducting  debts  for  which 
the  estate  is  liable  shall  be  paid  by  the  person  entitled  to  said  estate  within 
fifteen  months  from  the  approval  by  the  court  of  such  appraisement,  unless  a 
longer  period  is  fixed  by  the  court,  and  in  default  thereof,  the  court  shall  order 
the  same,  or  so  much  thereof  as  may  be  necessary  to  pay  such  tax,  to  be  sold. 
(1903,  ch.  171,  s.  8.) 

S.  8328.  Remainders.  When  any  person  whose  estate,  over  and  above 
the  amount  of  his  just  debts,  exceeds  the  sum  of  one  thousand  dollars  shall 
bequeath  or  devise  any  real  property  to  or  for  the  use  of  the  father,  mother, 
husband,  wife,  lineal  descendant,  adopted  child,  or  lineal  descendant  of  such  child, 
during  life  or  for  a  term  of  years,  and  the  remainder  to  a  collateral  heir  or  to  a 
stranger  to  the  blood,  the  court,  upon  the  determination  of  such  estate  for  life 
or  years,  shall  upon  its  own  motion  or  upon  the  application  of  the  state  treasurer, 
cause  such  estate  to  be  appraised  at  its  then  actual  market  value,  from  which 
shall  be  deducted  the  value  of  any  improvements  thereon,  or  betterments  thereto, 
if  any,  made  by  the  remainderman  during  the  time  of  the  prior  estate,  to  be 
ascertained  and  determined  by  the  appraisers,  and  the  tax  on  the  remainder 
shall  be  paid  by  such  remainderman  within  sixty  days  from  the  approval  by 
the  court  of  the  report  of  the  appraisers.  If  such  tax  is  not  paid  within  said 
time,  the  court  shall  then  order  said  real  estate,  or  so  much  thereof  as  shall  be 
necessary  to  pay  such  tax,  to  be  sold.     (1903,  ch.  171,  c.  9.) 


1905,  c.  10.]  NORTH  DAKOTA. 

S.  8329.  Life  estate.  Whenever  any  real  estate  of  a  decedent  shall  be 
subject  to  such  tax,  and  there  be  a  life  estate  or  interest  for  a  term  of  years  given 
to  a  party  other  than  named  in  the  preceding  section,  and  the  remainder  to  a 
collateral  heir  or  stranger  to  the  blood,  the  court  shall  direct  the  interest  of  the 
life  estate  or  term  of  years  to  be  appraised  at  the  actual  market  value  thereof, 
and  upon  the  approval  of  such  appraisement  by  the  court,  the  party  entitled 
to  such  life  estate,  or  term  of  years,  shall  within  sixty  days  thereafter  pay  such 
tax,  and  in  default  thereof  the  court  shall  order  such  interest  in  said  estate, 
or  so  much  thereof  as  shall  be  necessary  to  pay  such  tax,  to  be  sold.  Upon  the 
determination  of  such  life  estate  or  term  of  years,  the  same  provision  shall 
apply  as  to  the  ascertainment  of  the  amount  of  the  tax  and  the  collection  of 
the  same  on  the  real  estate  in  remainder  as  in  like  cases  is  provided  in  the  pre- 
ceding section.  Whenever  any  personal  estate  of  a  decedent  shall  be  subject 
to  such  tax,  and  there  be  a  life  estate  or  interest  for  a  term  of  years  given  to  a 
party  other  than  named  in  the  preceding  section,  and  the  remainder  to  a  collat- 
eral heir  or  stranger  to  the  blood,  the  court  shall  inquire  into  and  determine  the 
value  of  the  life  estate  or  interest  for  a  term  of  years,  and  order  and  direct  the 
amount  of  the  tax  thereon  to  be  paid  by  the  prior  estate  and  that  to  be  paid  by 
the  remainderman,  each  of  whom  shall  pay  their  proportion  of  such  tax  within 
sixty  days  from  such  determination,  unless  a  longer  period  is  fixed  by  the  court, 
and  in  default  thereof  the  executor,  administrator  or  trustee  shall  pay  the  same 
out  of  said  property,  and  hold  the  same  from  distribution,  and  invest  it  at 
interest  under  the  order  of  the  court  until  said  tax  is  paid,  or  until  the  interest 
on  the  same  equals  the  amount  of  such  tax,  which  shall  thereupon  be  paid, 
(1903,  ch.  171,  s.  10.) 

S.  8330.  Executors  or  trustees.  Whenever  a  decedent  appoints  one  or 
more  executors  or  trustees,  and  in  lieu  of  their  allowance  or  commission,  makes 
a  bequest  or  devise  of  property  to  them  which  would  otherwise  be  liable  to  said 
tax,  or  appoints  them  his  residuary  legatees,  and  said  bequests,  devises,  or 
residuary  legacies,  exceed  what  would  be  a  reasonable  compensation  for  .their 
services,  such  excess  shall  be  liable  to  such  tax,  and  the  court  having  jurisdic- 
tion of  their  accounts,  upon  its  own  motion  or  on  the  application  of  the  state 
treasurer,  shall  fix  such  compensation.     (1903,  ch.  171,  s.  11.) 

S.  8331.  Legacies  charged  upon  land.  Whenever  any  legacies  subject 
to  said  tax  are  charged  upon  or  payable  out  ot  any  real  estate,  the  heir  or  devisee, 
before  paying  the  same,  shall  deduct  said  tax  therefrom  and  pay  it  to  the  executor, 
administrator,  trustee  or  state  treasurer,  and  the  same  shall  remain  a  charge 
and  be  a  lien  upon  said  real  estate  until  it  is  paid;  and  payment  thereof  shall 
be  enforced  by  the  executor,  administrator,  trustee  or  state  treasurer  in  his  name 
of  office,  in  the  same  manner  as  the  payment  of  the  legacy  itself  could  be  en- 
forced.    (1903,  ch.  171,  s.  12.) 

S.  8332.  Payment  by  executor  or  trustee.  Every  executor,  adminis- 
trator or  trustee  having  in  charge  or  trust  any  property  subject  to  said  tax,  and 
which  is  made  payable  to  him,  shall  deduct  the  tax  therefrom,  or  shall  collect 
the  tax  thereon  from  the  legatee,  or  person  entitled  to  said  property,  and  he 
shall  not  deliver  a  specific  legacy  or  property  subject  to  said  tax  to  any  person 
until  he  has  collected  the  tax  thereon.     (1903,  ch.  171,  s.  13.) 


9Q0  STATUTES  ANNOTATED.  [N.  D.  Code. 

S.  8333.  Payment  to  state.  All  taxes  imposed  by  the  provisions  of  this 
chapter  shall  be  payable  to  the  state  treasurer,  and  those  which  are  made  payable 
by  executors,  administrators  or  trustees  shall  be  paid  within  fifteen  months 
from  the  death  of  the  testator  or  intestate,  or  within  fifteen  months  from  assum- 
ing of  the  trust  by  such  trustee,  unless  a  longer  period  is  fixed  by  the  court. 
All  taxes  not  paid  within  the  time  prescribed  in  this  chapter  shall  draw  interest 
at  the  rate  of  eight  per  centum  per  annum  until  paid.     (1903,  ch.  171,  s.  14.) 

S.  8334.  Method  of  appraisement.  All  appraisements  of  real  estate 
subject  to  such  tax  shall  be  made  and  filed  in  the  manner  provided  for  appraise- 
ment of  personal  property.  When  such  real  estate  is  situated  in  another  county 
the  same  appraisers  may  serve,  or  others  may  be  appointed.     (1903,  ch.  171,  s.  15.) 

S.  8335.  Collections.  1 1  is  hereby  made  the  duty  of  all  executors,  adminis- 
trators or  trustees  charged  with  the  management  or  settlement  of  any  estate  sub- 
ject to  the  tax  provided  for  in  this  chapter,  to  collect  and  pay  to  the  state 
treasurer  the  amount  of  the  tax  due  from  any  devisee,  grantee  or  donee  of  the 
decedent,  except  in  cases  falling  under  the  provisions  of  sections  8329  and 
8330  hereof,  in  which  cases  the  state  treasurer  shall  collect  the  same.  Appli- 
cations may  be  made  to  the  district  court  by  such  executor,  administrator, 
trustee  or  state  treasurer  to  sell  the  real  estate  subject  to  said  tax  in  an  equit- 
able action,  or,  if  made  to  the  court  having  charge  of  the  settlement  of  said  estate, 
the  proceedings  shall  conform  as  nearly  as  may  be  to  those  for  the  sale  of  real 
estate  of  a  decedent  for  the  settlement  of  his  debts.     (1903,  ch.  171,  s.  16.) 

S.  8336.  Property  certified  to  treasurer.  Whenever  any  real  estate  of 
a  decedent  shall  so  pass,  either  in  possession  and  enjoyment  or  in  remainder  as 
to  the  subject  of  such  tax,  the  executor,  administrator  or  trustee,  within  six 
months  after  he  has  assumed  the  duties  of  his  trust,  shall  file  with  the  state 
treasurer  a  description  of  such  real  estate,  giving  the  name  of  the  county  where 
the  same  is  situated,  the  name  of  the  decedent,  the  name  of  the  person  or  per- 
sons to  wnom  it  so  passes,  whether  the  same  passes  in  possession  and  enjoyment  in 
fee,  for  life  or  for  a  term  of  years,  naming  the  term  of  years,  and  if  a  prior  estate 
is  created,  he  shall  give  the  name  of  the  remainder-man.   (1903,  ch.  171,  s.  17.) 

S.  8337.  Copy  of  appraisement.  As  soon  as  any  such  real  estate  is 
appraised,  it  shall  be  the  duty  of  the  executor,  administrator  or  trustee,  if  he  has 
not  been  discharged,  and  if  he  has  finally  been  discharged,  then  it  shall  be  the 
duty  of  the  clerk,  to  file  with  the  state  treasurer  a  copy  of  such  appraisement, 
stating  the  amount  of  tax  to  be  paid  and  within  what  time  ordered  to  be  paid. 
(1903,  ch.  171,  s.  18.) 

5^8338.  Settlements  with  executors  or  trustees.  No  final  settlement 
of  the  account  of  any  executor,  administrator  or  trustee  shall  be  accepted  or 
allowed  unless  it  shall  show,  and  the  court  shall  find,  that  taxes  imposed  by  the 
provisions  of  this  chapter  upon  any  property  or  interest  therein  belonging  to 
the  estate  to  be  paid  by  such  executors,  administrators  or  trustees,  and  to  be 


1905,  c.  10.]  NORTH  DAKOTA.  991 

settled  by  said  account,  shall  have  been  paid,  and  the  receipt  of  the  state  treas- 
urer for  such  tax  shall  be  the  proper  voucher  for  such  payment.  (1903,  ch.  171, 
s.  19.) 

S.  8339.  Jurisdiction  of  the  court.  The  district  court  having  either 
principal  or  ancillary  jurisdiction  of  the  settlement  of  the  estate  of  the  decedent 
shall  have  jurisdiction  to  hear  and  determine  all  questions  in  relation  to  said 
tax  that  may  arise  affecting  any  devise,  legacy  or  inheritance,  or  any  grant  or 
gift,  under  this  chapter,  subject  to  appeal  as  in  other  cases,  and  the  state  treasurer 
shall  in  his  name  of  office  represent  the  interests  of  the  state  in  any  such  pro- 
ceeding.    (1903,  ch.  171,  s.  20.) 


992  STATUTES  ANNOTATED.  (Ohio  St. 


OHIO, 


In  General. 

Ohio  imposed  a  collateral  inheritance  tax  in  1893.  In  1894 
it  was  the  first  state  to  tax  direct  inheritances,  and  was  also  the 
first  state  to  adopt  rates  increasing  progressively  according  to  the 
size  of  the  estate.  The  act  was  held  unconstitutional  in  1895,  on 
account  of  the  progressive  feature,  and  because  it  was  not  pro- 
vided that  the  exemption  ($20,000)  should  be  deducted  from  all 
estates  exceeding  that  amount.  This  decision  has  not  been  gener- 
ally followed  in  other  jurisdictions. 

In  1904  a  uniform  tax  of  two  per  cent  was  imposed  on  direct 
inheritances  with  an  exemption  of  $300.  This  was  repealed  in  1906. 
At  present  collateral  inheritances  only  are  taxed.  The  rate  is 
uniformly  five  per  cent  and  the  exemption  is  $200,  which  applies 
to  the  estate  as  a  whole,  not  to  the  individual  shares.  The  inheri- 
tances which  are  altogether  exempt  are  those  to  father,  mother, 
husband,  wife,  brother,  sister,  niece,  nephew,  lineal  descendant, 
adopted  child  and  its  lineal  descendant,  wife  or  widow  of  son  and 
husband  of  daughter.  Stock  in  an  Ohio  corporation  owned  by 
a  non-resident  is  not  taxed. 

List  of  Statutes. 

1893.  Statutes  of  Ohio,  Vol.  90,  p.  14. 

1894.  "         "       "        "     91,  p.  166.      (The  direct  inheritance  tax.) 
1894.  "         "       "        "     91,  p.  169.     (The  collateral  inheritance  tax.) 
1896.          "        "      "       "     92,  p.  374. 

1900.  "         "      "       "     94,  p.  101. 

1903.  Bates  Annotated  Statutes,  ss.  2731-1  to  2731-17. 

1904.  Statutes  of  Ohio,  Vol.  97,  p.  398. 

1905.  Bates  Annotated  Statutes  (5th  Ed.),  ss.  2731-1  to  2731-17;  2731-1  to 
2731-31. 

•^  1906.     Statutes  of  Ohio,  Vol.  98,  p.  229. 
1787-1908.     Bates  Annotated  Ohio  Statutes  (6th  Ed.),  Vol.  1,  ss.  2731-1  to 
2731-17;  2731-18  to  2731-31. 

1910.     Gen.  Code  of  Ohio,  Vol.  2,  ss.  5331  to  5348. 


Nature.]  OHIO.  993 

Nature  of  Inheritance  Tax. 

The  fact  that  an  inheritance  tax  is  made  a  lien  on  property 
does  not  render  it  a  tax  on  property.  State  v.  Ferris,  53  Ohio 
St.  314,  326,  41  N.  E.  579,  30  L.  R.  A.  218,  distinguishing  Estate 
ofBittinger,  129  Pa.  St.  338,344. 

The  Ohio  St.  1894  is  upon  its  face  a  taxation  of  property  itself, 
but  the  court  construing  the  operation  and  effect  of  the  statute 
regards  it  as  a  tax  upon  the  right  or  privilege  rather  than  the 
property.  It  is  upon  the  right  and  privilege  to  receive  and  not 
upon  the  right  to  transmit.  The  right  to  receive  property  is  under 
the  control  of  the  legislature  and  it  has  the  power  to  regulate  and 
lay  such  burdens  thereon  as  it  may  see  fit.  State  v.  Ferris,  53 
Ohio  St.  314,  325,  41  N.  E.  579,  30  L.  R.  A.  218. 

"Man's  dominion  over  his  property  ceases  at  his  death,  where- 
fore in  all  civilized  countries  the  state  provides  how  he  may  devolve 
it  to  others  at  his  death  and  what  shall  become  of  it  when  he  dies 
intestate. 

"The  right  so  given  either  to  devolve  or  to  succeed  to  property 
is  subject  to  the  power  of  the  state  to  tax,  and  generally  is  taxed. 
To  use  a  homely  simile,  it  may  be  likened  to  the  taking  of  toll  from 
the  grist  that  is  sent  to  the  mill,  and  aside  from  considerations 
of  convenience  it  is  immaterial  whether  the  whole  toll  be  taken  as 
soon  as  the  grist  is  received  or  proportionately  as  the  flour  is  de- 
livered. Generally,  but  not  necessarily,  the  amount  of  the  tax 
is  measured  by  the  value  of  the  property.  Our  state,  however, 
deeming  it  to  the  interest  of  the  public  not  to  make  the  tax  oppres- 
sive, has  imposed  it  upon  the  right  of  succession,  and  has  exempted  to 
three  thousand  dollars  the  value  of  the  property  in  determining 
the  amount  of  the  tax. 

"But  while  the  tax  has  been  likened  to  the  toll  that  is  taken  for 
the  grinding  of  a  grist,  it  must  not  be  overlooked  that  it  is  the 
right  to  devolve  or  to  succeed  to  property  that  is  taxed,  and  that 
an  additional  exaction  might  be  made  as  is  done  in  some  states 
for  the  service  in  passing  the  property,  sometimes,  as  in  England, 
called  probate  duties.  So  that  the  right  of  the  state  to  and 
the  liability  of  the  successor  for  the  tax  generally  arises  upon  the 
death  of  the  owner  of  the  property  and  is  not  dependent  upon 
the  right  of  succession  ripening  into  possession  or  enjoyment,  and 
the  fact,  if  it  be  a  fact,  that  the  state  may  have,  by  measuring  the 
amount  of  the  tax  by  the  value  of  the  property  succeeded   to, 


994  STATUTES  ANNOTATED.  Ohio  St. 

made  it  impracticable  or  difficult  to  collect  the  tax  until  the  right 
has  ripened  into  possession,  does  not  change  the  subject  of  the 
tax,  but  merely  postpones  its  collection."  Per  Summers,  J. 
Eury  V.  State,  72  Ohio  St.  448,  74  N.  E.  650. 

Power  to  Tax  Inheritances. 

The  constitution  is  silent  as  to  the  application  of  revenue 
received  otherwise  than  on  property,  and  therefore,  if  such  taxes 
can  be  levied  and  collected  at  all,  their  application  is  within  the 
sole  and  exclusive  power  and  discretion  of  the  general  assembly. 
Article  12,  s.  2,  of  the  constitution  provides  that  laws  shall  be 
passed  taxing  by  a  uniform  rule  all  property,  but  this  did  not 
confine  the  power  of  the  legislature  to  a  property  tax,  as  under 
a.  2,  s.  1,  of  the  constitution  the  general  assembly  is  given  legis- 
lative power.  This  power,  being  unlimited,  is  broad  enough  to 
include  the  power  to  tax  rights,  privileges  and  franchises.  State 
V.  Ferris,  53  Ohio  St.  314,  41  N.  E.  579,  30  L.  R.  A.  218. 

Constitutional  Limitations. 
Ohio  BiU  of  Rights. 

S.  1.  Right  to  freedom  and  protection  of  property.  All  men,  are,  by 
nature,  free  and  independent,  and  have  certain  inalienable  rights,  among  which 
are  those  of  enjoying  and  defending  life  and  liberty,  acquiring,  possessing,  and 
protecting  property,  and  seeking  and  obtaining  happiness  and  safety. 

The  provisions  of  the  first  section  of  the  fourteenth  amendment 
to  the  federal  constitution,  which  provide  that  no  state  shall  "deny 
to  any  person  within  its  jurisdiction  the  equal  protection  of  its 
laws,"  is  not  broader  than  the  second  section  of  the  Ohio  bill  of 
rights,  to  the  effect  that  government  is  instituted  for  the  equal 
protection  and  benefit  of  the  people.  State  v.  Ferris,  53  Ohio  St. 
314,  41  N.  E.  579,  30  L.  R.  A.  218. 
Ohio.  Const,  a.  2. 

S.  26.  What  laws  to  have  a  uniform  operation.  All  laws,  of  a  general 
nature,  shall  have  a  uniform  operation  throughout  the  state;  nor,  shall  any 
act,  except  as  such  as  relates  to  public  schools,  be  passed,  to  take  effect  upon  the 
approval  of  any  other  authority  than  the  general  assembly,  except,  as  otherwise 
provided  in  this  constitution. 

Ohio  Const,  a.  12. 

S.  2.  Laws  shall  be  passed,  taxing  by  a  uniform  rule,  all  moneys,  credits, 
investments  in  bonds,  stocks,  joint  stock  companies,  or  otherwise;  and  also  all 
real  and  personal  property,  according  to  its  true  value  in  money;  but  burying 
grounds,  public  school  houses,  houses  used  exclusively  for  public  worship,  insti- 


1893,  p.  14.]  OHIO,  995 

tutions  of  purely  public  charity  public  property  used  exclusively  for  any  public 
purpose,  and  personal  property,  to  an  amount  not  exceeding  in  value  two  hun- 
dred dollars,  for  each  individual  may,  by  general  laws,  be  exempted  from  taxa- 
tion; but,  all  such  laws  shall  be  subject  to  alteration  or  repeal;  and  the  value  of 
all  property,  so  exempted,  shall,  from  time  to  time,  be  ascertained  and  published, 
as  may  be  directed  by  law. 

Ohio  Const.  1851,  a.  12,  s.  2.     As  amended  November,  1905. 

Laws  shall  be  passed,  taxing  by  a  uniform  rule,  all  moneys,  credits,  invest- 
ments in  bonds,  stocks,  joint  stock  companies,  or  otherwise  and  also  all  real 
and  personal  property  according  to  its  true  value  in  money,  excepting  bonds  of 
the  state  of  Ohio,  bonds  of  any  city,  village,  hamlet,  county,  or  township  in  this 
state,  and  bonds  issued  in  behalf  of  the  public  schools  of  Ohio  and  the  means 
of  instruction  in  /;onnection  therewith,  which  bonds  shall  be  exempt  from  taxa- 
tion; but  burying  grounds,  public  schoolhouses,  houses  used  exclusively  for 
public  worship,  institutions  of  purely  public  charity,  public  property  used  exclu- 
sively for  any  public  purpose,  and  personal  property,  to  an  amount  not  exceed- 
ing in  value  two  hundred  dollars,  for  each  individual,  may,  by  general  laws,  be 
exempted  from  taxation;  but  all  such  laws  shall  be  subject  to  alteration  or 
repeal;  and  the  value  of  all  property,  so  exempted,  shall,  from  time  to  time,  be 
ascertained  and  published  as  may  be  directed  by  law. 

This  section  requires  uniformity  and  equality  in  the  imposition 
of  the  burdens  of  taxation.  State  v.  Guilbert,  70  Ohio  St.  229, 
71  N.  E.  636.  The  section  permits  an  exemption  from  taxation 
of  personal  property  not  exceeding  $200.  It  was  said  in  State  v. 
Ferris,  53  Ohio  St.  314,  41  N.  E.  579,  30  L.  R.  A.  218,  that  this 
provision  of  the  constitution  showed  that  an  exemption  up  to 
$200  in  value  would  be  regarded  as  for  the  equal  protection  and 
benefit  of  the  people.  The  court  does  not  assent  to  this  proposi- 
tion, but  believes  that  article  12,  s.  2,  treats  wholly  and  only  of  tax- 
ation of  property.  Article  12,  s.  2,  is  not  a  grant  of  power,  but  a 
regulation  of  a  power  already  granted  in  the  first  section  of  the 
second  article.  The  court  is  of  opinion  that  an  excise  tax  which 
operates  uniformly  throughout  the  state  and  applies  equally  to 
all  the  subjects  embraced  within  its  terms  does  not  deprive  anyone 
of  the  equal  protection  of  the  law  or  in  any  manner  violate  the  bill 
of  rights  nor  any  section  of  the  constitution.  State  v.  Guilbert, 
70  Ohio  St.  229,  253  (upholding  the  act  of  1904). 

;^  .  .  THE  ACT  OF  1893. 

Origin. 

This  act  seems  to  have  been  framed  on  those  of  the  states  of 
Virginia  and  Maine,  each  of  which  exempts  the  lineal  descendants, 
and  some  of  the  collateral,  and  together  all  of  the  collaterals 
exempted  in  Ohio.  Dyer  v.  Hagerty,  5  Ohio  Cir.  Dec.  701,  12 
Ohio  Cir.  Ct.  606. 


996  STATUTES  ANNOTATED.  [Ohio  St. 

Ohio  St.  1893,  approved  January  27,  1893,  p.  14. 

S.  1.  Be  it  enacted  by  the  general  assembly  of  the  state  of  Ohio,  that  all 
property  within  the  jurisdiction  of  this  state,  and  any  interest  therein,  whether 
belonging  to  inhabitants  of  this  state  or  not,  and  whether  tangible  or  intangible, 
which  shall  pass  by  will  or  by  the  intestate  laws  of  this  state,  or  by  deed,  grant, 
sale  or  gift  made  or  intended  to  take  effect  in  possession  or  enjoyment  after  the 
death  of  the  grantor,  to  any  person  in  trust  or  otherwise,  other  than  to  or  for  the 
use  of  the  father,  mother,  husband,  wife,  brother,  sister,  niece,  nephew,  lineal 
descendant,  adopted  child,  the  lineal  descendant  of  any  adopted  child,  the  wife 
or  widow  of  a  son,  the  husband  of  the  daughter  of  a  decedent,  shall  be  liable  to  a 
tax  of  three  and  one-half  per  centum  of  its  value,  above  the  sum  of  ten  thousand 
dollars,  for  the  use  of  the  state,  and  all  administrators,  executors  and  trustees, 
and  any  such  grantee  under  a  conveyance  made  during  the  grantor's  life  shall  be 
liable  for  all  such  taxes,  with  lawful  interest  as  hereinafter  provided,  until  the 
same  shall  have  been  paid  as  hereinafter  directed. 

**Within  the  Jurisdiction  of  this  State." 

The  testator,  a  resident  of  Kentucky,  owned  securities  and 
money  on  deposit  in  banks  in  Ohio,  and  the  court  holds  that  the 
tax  should  be  paid  on  these  securities  and  whether  the  decedent 
is  a  resident  or  a  non-resident  is  immaterial,  residence  not  being 
a  primary  consideration  to  be  had  in  view  in  enforcing  the  law. 
As  the  court  has  jurisdiction  over  the  property  the  tax  should 
be  levied.     In  re  Speers,  4  Ohio  N.  P.  238,  6  Low.  D.  398. 

Bequest  for  Masses. " 

A  bequest  of  $300  for  three  hundred  masses  is  a  beneficial 
estate  to  the  priest  who  will  say  the  masses,  and  is  therefore 
liable  for  the  collateral  inheritance  tax.  In  re  Brinkman,  38 
Ohio  Wkly.  L.  Bui.  304. 

Computing  Exemption. 

It  was  claimed  that  in  addition  to  excluding  the  exemption 
due  to  each  legatee  the  amount  of  the  tax  due  from  such  persons 
is  to  be  deducted  and  the  amount  payable  computed  upon  the 
balance;  but  the  court  holds  that  the  tax  is  payable  upon  the 
value  of  the  legacy  less  the  exemption  and  that  the  amount  of 
the  tax  is  not  to  be  deducted  from  the  legacy  and  the  tax  com- 
puted upon  the  balance.  In  re  Hooper,  6  Low.  D.  560,  4  Ohio 
N.  P.  186. 

Exemption. 

The  exemption  applies  to  each  specific  legacy.  In  re  Thomson, 
48  Ohio  Wkly.  L.  Bui.  212. 


1893,  p.  14.]  OHIO.  997 

Various  Gifts  to  the  Same  Person. 

Where  in  separate  items  of  a  will  two  or  more  legacies  or  devises 
are  given  to  the  same  non-exempt  person,  it  matters  not  whether 
the  property  pass  under  one  or  more  items  of  the  will  or  whether  the 
property  passing  under  more  than  one  item  be  real  or  personal, 
the  tax  is  collectable  on  the  aggregate  of  such  property  less  two 
hundred  dollars,  which  is  exempt.  Under  the  Ohio  statute  in  force 
in  1900  which  provided  that  all  "property  which  shall  pass  .  .  . 
shall  be  liable  to  a  tax  of  five  per  centum  of  its  value  above  the 
sum  of  two  thousand  dollars."  In  re  Inheritance  Tax,  7  Ohio 
N.  P.  547,  5  Low.  Dec.  555. 

What  Relatives  Exempt. 

Half-brothers  are  exempt  from  the  payment  of  the  collateral 
inheritance  tax  in  force  in  1900.  In  re  Ormsby,  7  Ohio  N.  P. 
542,  5  Ohio  S.  &  C.  P.  Dec.  553. 

The  following  are  not  exempt :  A  brother-in-law  or  sister-in-law, 
{Estate  of  McDermott,  48  Ohio  Wkly.  L.  Bui.  211;  In  re  Thomson, 
48  Ohio  Wkly.  L.  Bui.  212) ;  stepsons  {In  re  Hooper,  6  Low.  D. 
560,  4  Ohio  N.  P.  186) ;  a  stepsister  {In  re  Thomson,  48  Wkly.  L. 
Bui.  212);  grandnieces  {In  re  Bates,  7  Ohio  N.  P.  625,  5  Ohio 
S.  &  C.  P.  Dec.  547;  In  re  Simon,  7  Ohio  N.  P.  667,  39  Wkly.  L. 
Bui.  369) ;  a  nephew  of  the  wife  of  the  decedent  (In  re  Wolf,  48 
Ohio  Wkly.  L.  Bui.  211);  nieces  of  the  husband  of  testatrix  {In  re 
Bates,  7  Ohio  N.  P.  625,  5  Ohio  S.  &  C.  P.  Dec.  547). 

Where  the  husband  dies  leaving  his  property  to  his  wife  abso- 
lutely, and  on  her  death  the  property  goes  back  to  the  brothers 
and  sisters  of  the  deceased  husband,  the  inheritance  tax  is  to  be 
collected,  as  it  is  a  transfer  of  property  to  brothers-in-law  and 
sisters-in-law  of  the  testatrix.  In  re  Stephenson,  48  Ohio  Wkly. 
L.  Bui.  212;  In  re  McDermott,  48  Ohio  Wkly.  L.  Bui.  211. 

Charitable  Institutions. 

Charitable  institutions  are  liable  to  the  tax.  In  re  Bates,  7  Ohio 
N.  P.  625,  5  Ohio  S.  &  C.  P.  Dec.  547;  In  re  Simon,  7  Ohio  N.  P. 
667,  39  Wkly.  L.  Bui.  369. 

Bequest  to  Smithsonian  Institute  Exempt. 

In  an  opinion  by  the  attorney  general  in  1897,  it  was  held  that 
the  collateral  inheritance  tax  law  does  not  apply  in  the  case  of  a 
bequest  of  a  collection  of  specimens  by  a  man  to  the  Smithsonian 


998  STATUTES  ANNOTATED.  [Ohio  St. 

Institution  at  Washington.  The  attorney  general  said  that  on 
the  face  of  the  law  the  law  was  applicable  to  the  bequest,  but  under 
an  older  statute  which  exempts  property  of  the  state  and  of  the 
United  States  and  also  property  used  in  the  work  of  education  from 
taxation  of  all  kinds,  he  holds  that  it  is  exempt  from  the  inher- 
itance act.     In  re  Harris,  38  Ohio  Wkly.  L.  Bui.  281. 

Ohio  St.  1893,  approved  January  27,  1893,  p.  14. 

S.  2.  When  any  person  shall  bequeath  or  devise  any  property  to  or  for  the 
use  of  father,  mother,  husband,  wife,  brother,  sister,  niece,  nephew,  lineal  de- 
scendant, and  adopted  child,  the  lineal  descendant  of  any  adopted  child,  the  wife 
or  widow  of  a  son,  or  the  husband  of  a  daughter  during  life  or  for  a  term  of  years, 
and  the  remainder  to  a  collateral  heir,  or  to  a  stranger  to  the  blood,  the  value  of 
the  prior  estate  shall,  within  sixty  days  after  the  death  of  the  testator,  be  ap- 
praised in  the  manner  hereinafter  provided,  and  deducted,  together  with  the 
sum  of  ten  thousand  dollars,  from  the  appraised  value  of  such  property,  and  the 
tax  on  the  remainder  shall  be  payable  one  year  frcm  the  death  of  said  testator, 
and,  together  with  any  interest  that  may  accrue  on  the  same,  be  and  remain  a 
lien  on  said  property  till  paid  to  the  state. 

Life  Estate. 

Where  the  will  provided  that  the  income  of  certain  securities 
during  the  term  of  the  life  of  the  beneficiary  or  so  long  as  she 
may  remain  unmarried  shall  be  paid  to  her,  she  had  a  life  estate 
interest  in  these  securities  and  this  life  interest  is  an  interest  in 
the  property  taxable  under  Ohio  Revised  Statutes,  section  2731-1. 
The  value  of  the  estate  should  be  determined  by  the  actuaries' 
experience  tables  under  Ohio  Revised  Statutes,  section  2731-12. 
In  re  Wolf,  48  Ohio  Wkly.  L.  Bui.  211. 

When  Interest  is  Contingent. 

Under  Ohio  statute  in  force  in  1897  taxing  of  an  interest  in  a 
contingent  devise  is  deferred  until  the  interest  comes  in.  In  re 
Hooper,  6  Low.  D.  560,  4  Ohio  N.  P.  186. 

The  will  provided  that  the  net  income  of  property  should  be  paid 
the  widow  for  her  life,  and  also  to  pay  her  so  much  of  the  principal 
as  she  may  from  time  to  time  require  or  demand,  and  after  her 
death  certain  other  legacies  are  to  be  paid  to  persons  not  exempt 
irom  the  collateral  inheritance  tax.  The  court  holds  that  as  the 
widow  has  a  right  to  iise  a  part  of  the  principal  of  the  remainder, 
the  value  of  her  estate  in  the  same  is  not  ascertainable,  and  there- 
fore, the  legacies  over  to  the  non-exempt  persons  are  not  taxable 
at  present.     Had  the  devise  to  the  wife  been  simply  a  life  estate 


1894,  p.  166.J  OHIO.  999 

legacies  over  would  be  now  taxable.     In  re  Simon,  7  Ohio  N.  P. 
667,  39  Wkly.  L.  Bui.  369. 

Ohio  St.  1893,  p.  14,  ss.  3-17,  cover  the  assessment,  collection  and  payment 
of  the  tax. 

Penalty. 

Under  the  inheritance  law  a  penalty  of  eight  per  cent  is  collect- 
able in  case  of  non-payment  within  a  year  of  the  death  of  the  testa- 
trix ;  but  the  court  refused  to  impose  a  penalty  on  the  ground  that 
it  was  unjust  where  there  had  been  no  effort  made  to  enforce  the 
law.  As  the  direct  inheritance  tax  was  declared  unconstitutional 
it  was  supposed  that  the  collateral  inheritance  tax  would  meet  the 
same  fate.  When  the  collateral  inheritance  tax  was  finally  de- 
clared valid  the  court  held  that  the  executors  were  not  negligent 
in  failing  to  pay  the  tax  before  the  decision  of  the  court,  and  that 
there  was  no  basis  for  the  imposition  of  a  penalty.  In  re  Bates, 
7  Ohio  N.  P.  625,  5  Ohio  S.  &  C.  P.  Dec.  547. 

The  Void  Direct  Inheritance  Statute  of  1894. 

Ohio  St.  1894,  p.  166.     Approved  April  20,  1894. 

S.  1.  Be  it  enacted  by  the  general  assembly  of  the  state  of  Ohio,  that  all 
property  within  the  jurisdiction  of  this  state,  and  any  interest  therein,  whether 
belonging  to  inhabitants  of  this  state  or  not,  and  whether  tangible  or  intangible, 
including  annuities,  which  shall  pass  by  will  or  by  the  intestate  laws  of  this  state, 
or  by  deed,  grant,  sale,  or  gift  made  or  intended  to  take  effect  in  possession  or 
enjoyment  after  the  death  of  the  grantor,  to  the  use  of  the  father,  mother,  hus- 
band, wife,  brother,  sister,  niece,  nephew,  lineal  descendant,  adopted  child,  or 
person  recognized  as  an  adopted  child  and  made  a  legal  heir  under  the  provisions 
of  section  4182  of  the  Revised  Statutes  of  Ohio,  or  the  lineal  descendant  thereof , 
the  lineal  descendant  of  any  adopted  child,  the  wife  or  widow  of  a  son,  the  hus- 
band of  a  daughter  of  decedent,  or  to  any  one  in  trust  for  such  person  or  persons, 
shall  be  liable  to  a  tax  as  follows,  to  wit:  When  the  value  of  the  entire  property 
of  such  decedent  exceeds  the  sum  of  twenty  thousand  dollars  and  does  not  exceed 
the  sum  of  fifty  thousand  dollars,  one  per  cent;  when  it  exceeds  fifty  thousand 
dollars  and  does  not  exceed  one  hundred  thousand  dollars,  one  and  one-half  per 
cent;  when  it  exceeds  one  hundred  thousand  dollars  and  does  not  exceed  two 
hundred  thousand  dollars,  two  per  cent;  when  it  exceeds  two  hundred  thousand 
dollars  and  does  not  exceed  three  hundred  thousand  dollars,  three  per  cent 
when  it  exceeds  three  hundred  thousand  dollars  and  does  not  exceed  five  hundred 
thousand  dollars,  three  and  one-half  per  cent ;  when  it  exceeds  five  hundred  thou- 
sand dollars  and  does  not  exceed  one  million  dollars,  four  per  cent;  and  when  it 
exceeds  one  million  dollars,  five  per  cent;  seventy-five  per  cent  of  such  tax  to  be 
for  the  use  of  thastate  and  twenty-five  per  cent  for  the  use  of  the  county  wherein 
the  same  is  collected;  and  all  administrators,  executors  and  trustees,  shall  be 
liable  for  all  such  taxes,  with  lawful  interest,  as  hereinafter  provided,  until  the 


1000  STATUTES  ANNOTATED.  [Ohio  St. 

same  shall  have  been  paid  as  hereinafter  directed.  Such  taxes  shall  become  due 
and  payable  immediately  upon  the  death  of  the  decedent,  and  shall  at  once 
become  a  lien  upon  said  property. 

Ss.  2-13  cover  the  assessment,  collection  and  payment  of  the  tax. 

This  was  the  first  progressive  inheritance  tax  passed  in  this 
country. 

Uniformity. 

This  statute  was  not  obnoxious  to  Ohio  Const,  a.  2,  s.  26,  as 
it  was  not  intended  to  guarantee  equal  protection  to  all  the  inhabit- 
ants of  the  state.  State  v.  Ferris,  53  Ohio  St.  314,  41  N.  E.  579, 
30  L.  R.  A.  218,  affirming  9  Ohio  Cir.  Ct.  298. 

Progressive  Feature  Void. 

"The  act  is  clearly  one  for  taxation  and  not  for  regulation,  as 
shown  by  its  provisions  and  title.  The  state  finds  no  warrant  in 
its  constitution  for  saying  that  it  will  make  a  greater  rate  or 
charge  for  the  privilege  of  succeeding  to  large  estates  than  to  smaller 
ones,  but  on  the  contrary  this  is  expressly  prohibited  by  the  require- 
ment that  laws  shall  be  for  the  equal  protection  and  benefit  of  the 
people.  This  requirement  applies  as  well  to  laws  for  regulation 
as  to  laws  for  taxation.'*  Per  Burket,  J.,  in  State  v.  Ferris y  53 
Ohio  St.  314,  340,  41  N.  E.  579,  30  L.  R.  A.  218,  affirming  9  Ohio 
Cir.  Ct.  298. 

This  decision  is  clearly  against  the  weight  of  authority  in  this 
country  and  may  well  be  confined  in  its  effect  to  the  particular 
law  construed.  Other  general  statements  in  the  opinion  as  to 
the  invalidity  of  progressive  taxes  may  well  be  denominated  dicta 
unnecessary  to  the  decision  of  the  case. 

Exemptions  Unequal. 

The  Ohio  bill  of  rights,  s.  2,  provides  as  follows:  "All  political 
power  is  inherent  in  the  people.  Government  is  instituted  for  their 
equal  protection  and  benefit."  The  act  of  1894  is  in  direct  conflict 
with  this  section  of  the  bill  of  rights.  "This  statute  is  in  direct 
conflict  with  this  section  of  the  bill  of  rights.  If  government  is 
instituted  for  the  equal  protection  and  benefit  of  the  people,  it 
follows  that  laws  which  are  passed  under  a  government  so  insti- 
tuted must  likewise  be  for  the  equal  protection  and  benefit  of 
the  people.  This  statute  fails  to  protect  equally  the  people  who 
exercise  the  right  and   privilege  of  receiving  or   succeeding   to 


1894,  p.  166.]  OHIO.  1001 

property.  The  right  to  receive  the  first  twenty  thousand  dollars 
of  an  estate  not  exceeding  that  sum  is  protected  from  taxation, 
while  the  right  to  receive  the  first  twenty  thousand  dollars  of  an 
estate  exceeding  that  sum  is  taxed  the  sum  of  two  hundred  dollars. 
This  is  not  equal  protection.  Again,  the  right  to  receive  fifty 
thousand  dollars*  worth  of  property  of  an  estate  not  exceeding  that 
sum  is  taxed  five  hundred  dollars,  while  the  right  to  receive  fifty 
thousand  dollars  of  an  estate  exceeding  that  sum  is  seven  hundred 
and  fifty  dollars.  This  is  not  equal  protection.  The  same  may 
be  said  of  the  other  gradations  provided  for  in  the  statute. 

"The  right  or  privilege  of  receiving  or  succeeding  to  property 
is  valuable  in  'proportion  to  the  value  of  the  property  received. 
It  cannot  be  consistently  said  that  the  right  to  receive  twenty 
thousand  dollars  is  of  no  value,  and  that  the  right  to  receive 
twenty  thousand  and  one  dollars  is  of  the  value  of  two  hundred 
dollars  and  one  cent. 

"Again,  he  who  uses  the  right  or  privilege  of  receiving  property 
of  the  value  of  twenty  thousand  and  one  dollars,  and  pays  therefor 
a  tax  of  two  hundred  dollars  and  one  cent,  is  not  equally  benefited 
for  the  tax  paid,  as  he  who  uses  the  same  right  or  privilege  of 
receiving  property  of  the  value  of  twenty  thousand  dollars,  without 
paying  any  tax  whatever  for  the  use  of  such  right.  The  exemption 
of  twenty  thousand  dollars,  and  the  increase  of  the  per  cent  as  the 
value  of  the  estate  increases,  renders  this  statute  unconstitutional. 

"Our  constitution  requires  equality  in  our  tax  laws,  and  also 
equality  in  their  execution  as  near  as  may  be.  The  only  exemp- 
tion allowed,  as  to  taxation  of  property,  is  personal  property  to 
the  amount  of  two  hundred  dollars  to  each  individual,  and  certain 
other  property  devoted  to  public  or  charitable  uses.  Two  hundred 
dollars  in  value  to  each  individual  is  the  extent  to  which  the  legis- 
lature has  the  power  to  exempt  personal  property  from  taxation. 
The  constitution  must  be  regarded  as  consistent  with  itself  through- 
out, and  as  section  2  of  article  12  permits  an  exemption  from 
taxation  of  personal  property  not  exceeding  two  hundred  dollars, 
a  construction  of  section  2  of  the  bill  of  rights  is  thereby  evinced 
to  the  effect  that  in  taxation  of  subjects  other  than  property,  an 
exemption  up  to  two  hundred  dollars  in  value  would  be  regarded 
as  for  the  equal  protection  and  benefit  of  the  people.  The  exemp- 
tion must  be  equally  for  all,  and  the  rate  per  cent  must  be  the 
same  on  all  estates.  There  can  be  no  discrimination  in  favor  of 
the  rich  or  poor.     All  stand  upon  an  equality  under  the  provisions 


1002  STATUTES  ANNOTATED.  [Ohio  St. 

of  the  constitution,  and  it  is  this  equality  that  is  the  pride  and 
safeguard  of  us  all."  Per  Burket,  J.,  in  State  v.  Ferris,  53  Ohio 
St.  314,  41  N.  E.  579,  30  L.  R.  A.  218.  The  court  emphasizes 
the  inequalities  resulting  from  the  particular  mode  of  exemption 
and  progression,  rather  than  the  inequality  of  progressive  taxa- 
tion. If  the  first  $20,000  of  every  estate  had  been  exempt,  if  the 
next  $30,000  had  always  been  subjected  to  the  lowest  rate,  if  the 
next  higher  rate  had  been  applied  only  to  the  excess  above  $50,000, 
and  so  on  throughout  the  scale,  the  court  might  well  have  held 
the  statute  valid. 

Ohio  St.  1896,  p.  374,  approved  April  27, 1896,  provided  for  refunding  of  money 
paid  in  on  account  of  the  direct  inheritance  tax  of  1894. 

Amendments  to  the  Collateral  Inheritance  Tax. 

Ohio  St.  1894,  p.  169,  approved  April  20,  1894,  amended  Ohio  St.  1893,  p.  14, 
sections  1,  2,  4,  9,  14,  15 

Discriminations  among  collateral  kindred  in  the  Ohio  St. 
1894,  p.  169,  are  upheld.  **The  discrimination  is  based  upon,  and 
justified  by,  the  fact  that  there  are  degrees  in  collateral  kinship." 
Hagerty  v.  State,  55  Ohio  St.  613,  45  N.  E.  1046,  affirming  12 
C.  C.  R.  606,  5  Ohio  Cir.  Dec.  701. 

The  exemption  of  kindred  direct  or  collateral  made  in  the  Ohio 
statute  is  not  obnoxious  to  the  constitution  as  rendering  the  law 
unequal  in  its  application  and  operation.  "The  exemptions  seem 
to  be  made  in  favor  of  those  who  may  have  contributed,  directly 
or  indirectly,  to  the  accumulation  of  the  estate,  the  succession  to 
which  is  taxed  as  father  and  mother,  brother  and  sister,  and  their 
immediate  descendants,  nephew  and  niece,  if  the  estate  be  ances- 
tral ;  also  husband  and  wife  and  lineal  descendants,  if  it  be  the  joint 
accumulation  of  a  family,  and  an  adopted  child,  wife  or  widow  of 
a  son  and  husband  of  a  daughter  are  rightfully  included  in  the  same 
category.  This  would  seem  to  be  a  better  distinction,  supported 
upon  stronger  moral  grounds,  than  if  made  only  between  direct 
descendants  and  collaterals."  Dyer  v,  Hagerty  (1896),  5  Ohio 
Cir.  Dec.  701,  12  Ohio  Cir.  Ct.  606. 

Sales. 

^  The  act  provided  that  all  property  "which  shall  pass  by  will 
.  .  .  sale  or  gift"  shall  be  subject  to  tax;  and  it  was  claimed  that 
this  right  invaded  the  owner's  right  to  sell  and  convey  property. 
But  the  meaning  of  the  word  "sale"  as  used  in  the  statute  includes 


1904,  p.  398.]  OHIO.  1003 

only  transactions  which  though  in  form  sales  are  in  fact  gifts. 
Since  the  act  is  within  the  legislative  power  granted  and  not  within 
the  letter  or  .spirit  of  any  limitation  thereof,  it  is  valid.  Hagerty 
V.  State,  55  Ohio  St.  613,  626,  45  N.  E.  1046,  affirming  12  C.  C.  R. 
606. 

Ohio  St.  1900,  p.  101,  approved  April  6,  1900,  amends  Ohio  St.  1893,  s.  1,  by 
exempting  from  taxation  property  passing  to  the  state  or  any  municipal  corpora- 
tion in  Ohio  or  to  public  institutions  of  learning  or  other  institutions  of  charitable 
or  exclusively  public  purposes. 

Charitable  corporations  organized  under  the  laws  of  other 
states  are  not  included  in  this  exemption  although  they  have 
agencies  in  Ohio.  Humphreys  v.  State,  70  Ohio  St.  67,  101  Am. 
St.  888,  70  N.  E.  957,  65  L.  R.  A.  776,  affirming  13  Low.  D.  168, 
1  C.  C.  N.  S.  1,  14  Cir.  D.  238. 

An  exemption  of  foreign  charitable  corporations  is  not 

obnoxious  to  the  provisions  of  the  fourteenth  amendment  to  the 
federal  constitution,  s.  1,  "that  no  state  shall  deny  to  any  person 
within  its  jurisdiction  the  equal  protection  of  the  laws,"  as  it  is 
settled  that  a  corporation  is  not  a  citizen  within  the  meaning  of 
this  clause  of  the  federal  constitution.  Furthermore,  the  legis- 
lature has  the  right  in  laying  taxes  to  classify  corporations  as  has 
been  done  in  this  state  in  recent  years,  and  can  classify  resident 
corporations  in  one  class  and  foreign  corporations  in  another. 
Humphreys  v.  State,  70  Ohio  St.  67,  87,  101  Am.  St.  888,  70  N.  E. 
957,  65  L.  R.  A.  776,  affirming  13  Low.  D.  168,  1  C.  C.  N.  S.  1, 
14  Cir.  D.  238. 

An  exemption  of  domestic  corporations  and  not  foreign 
corporations  is  not  obnoxious  to  Ohio  constitution  or  bill  of  rights, 
s.  2,  which  forbids  conferring  privileges  and  immunities  beyond  the 
power  of  the  general  assembly  to  alter,  revoke  or  repeal.  The  con- 
stitution was  adopted  by  the  people  of  Ohio  as  their  charter  of 
rights  of  restraint  and  it  is  not  charged  with  the  care  of  non- 
resident persons  or  corporations.  Humphreys  v.  State,  70  Ohio 
St.  67,  85,  101  Am.  St.  888,  70  N.  E.  957,  65  L.  R.  A.  776,  affirming 
13  Low  D.  168,  1  C.  C.  N.  S.  1,  14  Cir.  D.  238. 

The  Direct  Inheritance  Act  of  1904. 

Ohio  St.  1904,  p.  398,  approved  April  25,  1904. 

S.  1.  The  right  to  succeed  to  or  inherit  property  within  the  jurisdiction  of 
this  state,  and  any  interest  therein,  whether  belonging  to  inhabitants  of  this 


1004  STATUTES  ANNOTATED.  [Ohio  St. 

state  or  not,  and  whether  tangible  or  intangible,  including  annuities,  which 
shall  pass  by  will  or  by  the  inheritance  laws  of  this  state,  or  by  deed,  grant,  sale 
or  gift  made  or  intended  to  take  effect  in  possession  or  enjoyment  after  the 
death  of  the  grantor,  to  the  use  of  the  father,  mother,  husband,  wife,  brother, 
sister,  niece,  nephew,  lineal  descendant,  adopted  child,  or  person  recognized  as  an 
adopted  child  and  made  a  legal  heir  under  the  provisions  of  section  4182  of  the 
Revised  Statutes  of  Ohio,  of  the  lineal  descendant  thereof,  the  lineal  descendant 
of  any  adopted  child,  the  wife  or  widow  of  a  son,  the  husband  of  a  daughter  of  a 
descendant,  or  to  any  one  in  trust  for  such  person  or  persons,  shall  be  taxed  as 
follows,  to  wit:  Upon  the  value  of  the  property  exceeding  three  thousand  dollars, 
succeeded  to  or  inherited  by  any  person,  two  per  centum  on  such  excess;  such 
tax  to  be  borne  by  the  person  so  succeeding  to  or  inheriting  the  same  in  the 
manner  herein  provided.  And  all  administrators,  executors  and  trustees,  shall 
be  liable  for  all  such  taxes,  with  interest,  as  hereinafter  provided,  until  the  same 
shall  have  been  fully  paid.  Such  taxes  shall  become  due  and  payable  immediately 
upon  the  death  of  the  decedent,  and  shall  at  once  become  a  lien  upon  said 
property. 

Not  Retroactive. 

This  act  is  not  retroactive  and  applies  only  to  rights  arising  on 
the  death  occurring  on  or  subsequently  to  the  date  of  its  approval. 
So  where  the  death  occurred  before  the  act  was  passed,  but  the  prop- 
erty was  left  to  a  life  tenant  who  died  after  the  passage  of  the 
statute,  and  where  the  remainder  was  contingent  and  the  persons 
who  would  take  could  not  be  ascertained  until  the  death  of  the 
life  tenant,  it  was  claimed  that  the  succession  was  not  complete 
until  the  property  was  distributed  and  that  the  succession  is  sub- 
ject to  the  tax  in  force  at  the  time  of  distribution.  The  court, 
however,  finds  that  the  right  to  inherit  is  what  is  taxed,  that 
various  provisions  of  the  statute  show  that  the  statute  was  intended 
to  have  only  a  prospective  operation,  as,  for  instance,  that  the  tax 
becomes  due  and  payable  immediately  upon  the  death  of  the 
decedent.    Eury  v.  State,  72  Ohio  St.  448,  454,  74  N.  E.  650. 

Where  the  will  provides  that  the  estate  shall  be  held  in  trust 
and  after  the  death  of  the  life  tenant  on  the  final  settlement  of 
the  estate  the  residue  shall  be  paid  to  the  persons  who  shall  then 
be  the  heirs-at-law  of  the  testator,  the  Ohio  statute  of  1904  covers 
the  gift  to  the  heirs  where  the  testator  died  prior  to  its  enactment, 
but  his  estate  was  still  for  the  most  part  undistributed  at  the  date  of 
the  passage  of  the  statute.     Hostetter  v.  State,  26  Ohio  Cir.  Ct.  702. 

Provisions  for  Notice  on  Appraisal  Valid. 

This  act  is  not  unconstitutional  because  section  9  gives  the  pro- 
bate court  power  to  order  an  appraisement  without  notice,  as 


1904,  p.  398.]  OHIO.  1005 

sections  8  and  11  provide  for  a  review  of  all  matters  before  the 
probate  court  and  for  appeal,  and  these  provisions  give  ample 
remedy  and  provide  "a  day  in  court"  for  all  who  may  consider 
themselves  aggrieved.     Hosteller  v.  Slate,  26  Ohio  Cir.  Ct.  702. 

Validity  of  Exemptions. 

The  exemptions  in  this  act  are  not  in  conflict  with  the  Ohio 
constitution  or  bill  of  rights.  State  v.  Guilbert,  70  Ohio  St.  229, 
255,  71  N.  E.  636. 

''An  excise  tax  which  operates  uniformly  throughout  the  state 
and  bears  eq,ually  upon  all  persons  standing  in  the  same  category 
does  not  deprive  any  of  equal  protection  of  the  laws."  Per  Spear, 
C.  J.,  in  Stale  v.  Guilbert,  70  Ohio  St.  229,  255,  71  N.  E.  636. 

Ohio  St.  1904,  being  a  tax  upon  the  right  to  inherit  or  succeed 
to  property  and  not  a  tax  upon  property,  is  not  affected  by  the 
limitations  of  Ohio  constitution,  article  12,  section  2.  "Such 
right  is  derived  from  and  regulated  by  municipal  law;  it  arises 
from  the  relation  of  the  individual  to  the  state,  and  is  not  an 
inherent  or  constitutional  right.  It  follows  that  in  assessing  a 
tax  upon  such  right  or  privilege,  the  state  may  lawfully  measure 
or  fix  the  amount  of  the  tax  by  referring  to  the  value  of  the  prop- 
erty passing,  and  is  not  precluded  from  this  power  by  the  provision 
of  the  constitution  requiring  uniformity  and  equality  of  taxation." 

The  only  question  which  the  court  felt  was  open  to  it  related  to 
the  matter  of  exemptions.  It  was  contended  that  the  act  was 
not  uniform  in  that  it  exempts  from  its  operation  all  inheritances 
which  do  not  exceed  $3,000  in  value  and  imposes  a  burden  on  such 
as  are  above  that  sum.  The  court  says,  "We  think  there  are  two 
answers  to  this  objection.  The  person  who  inherits  six  thousand 
dollars  has  three  thousand  exempt;  the  person  who  inherits  three 
thousand  dollars  has  three  thousand  dollars  exempt.  They  are  on  a 
perfect  equality  in  that  regard.  The  same  reasoning  applies  where 
it  happens  that  the  smaller  inheritance  falls  below  three  thousand 
dollars.  As  well  might  it  be  urged  that  the  law  which  exempts 
from  execution  homesteads  of  the  heads  of  families  of  one  thousand 
dollars  in  value  is  mvalid  on  the  ground  of  inequality  of  privilege 
because  one  debtor's  homestead  may  not  reach  one  thousand  dollars 
in  value  while  that  of  another  may.  It  is  to  be  borne  in  mind  that 
tha  act  does  not  create  a  classification  of  persons  for  the  purpose 
of  imposing  a  tax  on  that  class.  It  is  not  a  tax  on  persons  at  all. 
If  it  is  felt  more  by  some  than  by  others,  this  is  owing  merely  to 


1006  STATUTES  ANNOTATED.  [Ohio  St. 

the  fact  of  the  differing  circumstances  which  surround  the  different 
persons.  No  person,  nor  no  set  of  persons,  is  selected  arbitrarily 
or  otherwise  for  the  imposition  of  burdens  or  for  relieving  of 
burdens." 

Furthermore,  the  court  holds  that  as  the  tax  is  an  excise  tax  and 
the  authority  to  impose  the  tax  is  conferred  by  the  general  grant 
of  legislative  power,  that  the  selection  of  the  subjects  on  which 
the  tax  will  be  imposed  must  be  within  the  legislative  competency. 

To  say  that  the  mere  fact  of  inclusion  in  the  one  case  and  exclu- 
sion in  the  other  constitutes  a  reason  for  holding  the  law  invalid, 
is  to  say  that  no  excise  tax  can  be  lawfully  levied  upon  any  privi- 
lege until  all  privileges  on  which  it  would  be  possible  to  lay  such 
tax  have  been  included  within  its  terms.  If  this  proposition  were 
established  it  is  difficult  to  say  why  it  would  not  invalidate  all  the 
excise  laws  of  the  state,  many  of  which  have  been  subjected  to 
judicial  scrutiny  and  have  been  sustained.  State  v.  Guilbert,  70 
Ohio  St.  229,  250,  71  N.  E.  636. 

The  validity  of  the  Ohio  statute  of  1904  and  the  tax  assessed 
thereunder  was  brought  in  question  by  quo  warranto.  It  was 
suggested  that  the  court  was  without  authority  to  pass  on  the 
constitutional  question  under  these  proceedings.  The  court 
remarks  that  if  it  is  true  that  relief  could  not  be  granted  the  peti- 
tioner in  case  the  act  should  be  held  invalid  because  he  had  chosen 
the  wrong  form  of  action,  still  that  fact  but  affords  another  reason 
for  sustaining  the  demurrer  in  the  case,  since  the  court  has  full 
original  jurisdiction  in  quo  warranto  and  therefore  jurisdiction  to 
entertain  and  act  upon  the  petition.  State  v.  Guilberty  70  Ohio  St. 
229,  255,  71  N.  E.  636. 

Repeal  of  the  Act  of  1904. 

Ohio  St.  1906,  c.  229,  98  Ohio  Laws,  p.  229. 

An  Act  to  repeal  an  act  entitled,  "An  Act  to  impose  a  tax  upon  the 

right  to  succeed  to,  or  inherit  property,"  passed  April  25,  1904,  97  Ohio 

Laws  398-400. 

S.  1.  That  the  act  entitled  '  An  act  to  impose  a  tax  upon  the  right  to  succeed 
to,  or  inherit  property,'  passed  April  25,  1904,  97  Ohio  Laws  398-400,  be  and  the 
same  are  hereby  repealed,  except  as  to  estates  in  which  the  inventory  has  already 
been  filed  at  the  date  of  the  passage  of  this  act.     [Passed  April  2,  1906.] 

Valid  in  Part. 

Where  the  Ohio  statute  of  1906  provided  for  the  repeal  of  the  Ohio 
inheritance  law  "except  as  to  estates  in  which  the  inventory  has 


1906,  c.  229.]  OHIO.  1007 

already  been  filed  at  the  date  of  the  passage  of  this  act,"  and 
where  this  exemption  was  void,  the  court  holds  that  the  whole  act 
need  not  be  declared  unconstitutional  as  the  title  of  the  act  does 
not  leave  room  for  even  suspicion  that  the  exception  was  an  induce- 
ment to  the  repeal;  and  the  two  objects  of  the  act  may  well  be 
taken  separately.    Friend  v.  Levy,  76  Ohio  St.  26,  50,  80  N.  E.  1036. 

** Except  as  to  Estates  in  which  the  Inventory  has  Already 
Been  Filed." 

This  act  provides  that  the  statute  of  1904  be  repealed  "except 
as  to  estates  in  which  the  inventory  has  already  been  filed  at  the 
date  of  the  passage  of  this  act."  The  court  holds  that  this  excep- 
tion in  the  statute  is  unequal,  and  therefore  void,  within  the 
decision  in  State  v.  Ferris,  53  Ohio  St.  314.  Friend  v.  Levy,  76  Ohio 
St.  26,  49,  80  N.  E.  1036. 

Effect  of  Repeal. 

Where  the  Ohio  inheritance  law  of  1904  was  repealed  by  the 
statute  of  1906  without  any  saving  clause,  it  is  to  be  considered, 
except  as  to  transactions  passed  and  closed,  as  though  it  had  never 
existed,  and  therefore  no  inheritance  tax  can  be  collected  after 
the  repeal.  Ohio  Revised  Statutes,  s.  79,  which  create  a  general 
saving  clause,  do  not  apply  as  the  exception  in  the  repealing  statute 
clearly  shows  that  the  legislature  intended  that  no  inheritance  tax 
should  be  collected  after  the  repeal.  Friend  v.  Levy,  76  Ohio  St. 
26,  51,  80, N.  E.  1036. 

THE  PRESENT  ACT. 

Ohio  General  Code  of  1910. 

S.  5331.  Transfers  taxable.  All  property  within  the  jurisdiction  of  this 
state,  and  any  interests  therein,  whether  belonging  to  inhabitants  of  this  state  or 
not,  and  whether  tangible  or  intangible,  which  pass  by  will  or  by  the  intestate 
laws  of  this  state,  or  by  deed,  grant,  sale  or  gift,  made  or  intended  to  take  effect 
in  possession  or  enjoyment  after  the  death  of  the  grantor,  to  a  person  in  trust  or 
otherwise,  other  than  to  or  for  the  use  of  the  lather,  mother,  husband,  wife, 
brother,  sister,  niece,  nephew,  lineal  descendant,  adopted  child,  or  person  recog- 
nized as  an  adopted  child  and  made  a  legal  heir  under  the  provisions  of  a 
statute  of  this  state,  or  the  lineal  descendants  thereof,  or  the  lineal  descendants 
of  an  adopted  child,  the  wife  or  widow  of  a  son,  the  husband  of  the  daughter 
of  a  decedent,  shall  be  liable  to  a  tax  of  five  per  cent  of  its  value,  above  the 
sum  of  two  hundred  dollars.  Seventy-five  per  cent  of  such  tax  shall  be  for 
the  use  of  the  state,  and  twenty-five  per  cent  for  the  use  of  the  county  wherein 
it  is  collected.     All  administrators  executors  and  trustees,  and  any  such  grantee 


1008  STATUTES  ANNOTATED.  [Ohio  St. 

under  a  conveyance  made  during  the  grantor's  life,  shall  be  liable  for  all  such 
taxes,  with  lawful  interest  as  hereinafter  provided,  until  they  have  been  paid 
as  hereinafter  directed.  Such  taxes  shall  become  due  and  payable  immediately 
upon  the  death  of  the  decedent  and  shall  at  once  become  a  lien  upon  the 
property,  and  be  and  remain  a  lien  until  paid.  (94  v.  101,  par.  1.) 
[See  notes  to  the  Acts  of  1893  and  1904,  ante,  pp.  996,  1004.] 

Nature. 

This  act  is  not  a  tax  upon  property  but  upon  the  right  to  receive 
property  and  to  have  it  transferred.  The  statute  does  not  impose 
the  tax  upon  property  directly  simply  because  it  provides  that 
administrators,  executors  and  trustees  shall  be  liable  for  all  such 
taxes.  Humphreys  v.  State,  70  Ohio  St.  67,  84,  101  Am.  St.  888, 
70  N.  E.  957,  65  L.  R.  A.  776,  affirming  13  Low.  D.  168, 1  C.  C.  N.  S. 
1,  14  Cir.  D.  238. 

S.  5332.  Exemptions.  The  provisions  of  the  next  preceding  section  shall 
not  apply  to  property,  or  interests  in  property,  transmitted  to  the  state  of  Ohio 
under  the  intestate  laws  of  the  state,  or  embraced  in  a  bequest,  devise,  transfer 
or  conveyance  to,  or  for  the  use  of  the  state  of  Ohio,  or  to  or  for  the  use  of  a  mu- 
nicipal corporation  or  other  political  subdivision  thereof  for  exclusively  public 
purposes,  or  public  institutions  of  learning,  or  to  or  for  the  use  of  an  institution 
in  this  state  for  purpose  only  of  public  charity  or  other  exclusively  public  purposes. 
The  property,  or  interests  in  property  so  transmitted  or  embraced  in  such  devise, 
bequest  transfer  or  conveyance  shall  be  exempt  from  all  inheritance  and  other 
taxes  while  used  exclusively  for  any  of  such  purposes.     (94  v.  101,  par.  1.) 

[See  ante,  pp.  996,  1003. f  * 

S.  5333.  Particular  estates  and  remainders.  When  a  person  bequeaths 
or  devises  property  to  or  for  the  use  of  father,  mother,  husband,  wife,  brother, 
sister,  niece,  nephew,  lineal  descendant,  adopted  child,  the  lineal  descendant  of 
an  adopted  child,  the  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter 
during  life  or  for  a  term  of  years,  and  the  remainder  to  a  collateral  heir,  or  to  a 
stranger  to  the  blood,  the  value  of  the  prior  estate,  shall  be  appraised,  within 
sixty  days  after  the  death  of  the  testator,  in  the  manner  hereinafter  provided, 
and  deducted,  together  with  the  sum  of  two  hundred  dollars,  from  the  appraised 
value  of  such  property.     (91  v.  170,  par.  2.) 

[See  notes  to  the  Act  of  1893,  ante,  p.  998.] 

Annuity  Taxed  as  Received. 

Where  the  will  directed  the  executors  to  purchase  bonds  of  such 
an  amount  that  the  interest  would  be  sufficient  to  pay  the  wife 
eight  thousand  dollars  ($8,000)  a  year  the  court  says  that  this 
Js  not  an  annuity  the  present  value  of  which  can  be  fixed.  Here 
the  legacy  grows  out  of  the  estate  each  quarter  and  on  the  failure 
of  sufficient  interest  part  of  the  principal  may  be  taken  but  even 
that  part  adheres  to  the  estate,  grows  out  of  it  and  cannot  be 
separated  from  it.     The  estate  is  therefore  a  trust  fund  in   the 


Code  of  1910.]  OHIO.  1009 

hands  of  the  executors  for  the  payment  of  the  quarterly  instal- 
ments of  her  legacy.  It  is  the  case  of  trustee  and  beneficiary, 
and  not  debtor  and  creditor. 

It  is  therefore  clear  that  until  received  by  the  widow  each 
quarter  the  legacy  remains  merged  in  the  estate  as  a  part  thereof, 
that  the  taxes  paid  by  the  estate  are  all  that  can  be  lawfully 
exacted,  and  that  she  cannot  be  taxed  on  any  part  of  her  legacy 
until  after  its  receipt  by  her.  Chisholm  v.  Shields,  67  Ohio  St. 
374,  66  N.  E.  93. 

S.  5334.  Qifts  to  executors  and  trustees.  When  a  decedent  appoints 
one  or  more  executors  or  trustees,  and  instead  of  their  lawful  allowance  makes  a 
bequest  or  devise  of  property  to  them  which  would  otherwise  be  liable  to  such 
tax,  or  appoints  them  his  residuary  legatees,  and  said  bequests,  devises,  or 
residuary  legacies  exceed  what  would  be  a  reasonable  compensation  for  their 
services,  such  excess  shall  be  liable  to  such  tax,  and  the  probate  court  having 
jurisdiction  of  their  accounts  shall  fix  such  compensation.     (90  v.  15,  par.  3.) 

S.  5335.  Payment.  —  Interest.  —  Discount.  Taxes  imposed  by  this  sub- 
division of  this  chapter  shall  be  paid  into  the  treasury  of  the  county  in  which  the 
court  having  jurisdiction  of  the  estate  or  accounts  is  situated,  by  the  executors, 
administrators,  trustees,  or  other  persons  charged  with  the  payment  thereof. 
If  such  taxes  are  not  paid  within  one  year  after  the  death  of  the  decedent,  interest 
at  the  rate  of  eight  per  cent  shall  be  thereafter  charged  and  collected  thereon,  and 
if  not  paid  at  the  expiration  of  eighteen  months  after  such  death,  the  prosecuting 
attorney  of  the  county  wherein  said  taxes  remain  unpaid,  shall  institute  the 
necessary  proceedings  to  collect  the  taxes  in  the  court  of  common  pleas  of  the 
county,  after  first  being  notified  in  writing  by  the  probate  judge  of  tne  county 
of  the  non-payment  thereof.  The  probate  judge  shall  give  such  notice  n  writing. 
If  the  taxes  are  paid  before  the  expiration  of  one  year  after  the  death  of  the 
decedent,  a  discount  of  one  per  cent  per  month  for  each  full  month  that  payment 
has  been  made  prior  to  the  expiration  of  the  year,  shall  be  allowed  on  the  amount 
of  such  taxes.     (91  v.  170,  par.  4  ) 

S.  5336.  Tax  to  be  deducted.  An  administrator,  executor,  or  trustee, 
having  in  charge,  or  trust,  property  subject  to  such  law,  shall  deduct  the  tax 
there  rom,  or  collect  the  tax  thereon  from  the  legatee  or  person  entitled  to  the 
property.  He  shall  not  deliver  any  specific  legacy  or  property  subject  to  such 
tax  to  any  person  until  he  has  collected  the  tax  thereon.     (90  v.  15,  par.  5.) 

S.  5337.  Legacy  charged  on  real  estate.  When  a  legacy  subject  to  such 
tax  is  charged  upon  or  payable  out  of  real  estate,  the  heir  or  devisee,  before  pay- 
ing it,  shall  deduct  the  tax  therefrom  and  pay  it  to  the  executor,  administrator, 
or  trustee,  and  the  tax  shall  remain  a  charge  upon  the  real  estate  until  it  is  paid. 
Payment  thereof  shall  be  enforced  by  the  executor,  administrator,  or  trustee,  in 
like  manner  as  the  payment  of  the  legacy  itself  could  be  enforced.  (90  v.  16, 
par.  6.) 


1010  STATUTES  ANNOTATED.  [Ohio  St. 

S.  6338.  Tax  to  be  retained  or  apportioned.  If  such  legacy  is  given  in 
money  to  a  person  for  a  limited  period,  such  administrator,  executor  or  trustee 
shall  retain  the  tax  on  the  whole  amount.  If  it  is  not  in  money,  he  shall  make  an 
application  to  the  court  having  jurisdiction  of  his  accounts  to  make  an  appor- 
tionment, if  the  case  require  it,  of  the  sum  to  be  paid  into  his  hands  by  such 
legatee  on  account  of  the  tax  and  for  such  further  order  as  the  case  may  require. 
(90  V.  16,  par.  7.) 

S.  5339.  Power  of  sale.  Administrators,  executors  and  trustees  may  sell 
so  much  of  the  estate  of  the  deceased  as  will  enable  them  to  pay  said  tax  in  like 
manner  as  they  are  empowered  to  do  for  the  payment  of  his  debts.  (90  v.  16, 
par.  8.) 

S.  6340.  Inventory.  —  Payment.  Within  ten  days  after  the  filing  of  the 
inventory  of  every  such  estate,  any  part  of  which  may  be  subject  to  a  tax  under 
the  provisions  of  this  subdivision  of  this  chapter,  the  judge  of  the  probate  court, 
in  which  such  inventory  is  filed,  shall  make  and  deliver  to  the  county  auditor  of 
such  county  a  copy  of  the  inventory ;  or,  if  it  can  be  conveniently  separated,  a 
copy  of  such  part  of  the  estate,  with  the  appraisal  thereof.  The  auditor  shall 
certify  the  value  of  the  estate,  subject  to  taxation  hereunder  and  the  amount  of 
taxes  due  therefrom,  to  the  county  treasurer,  who  shall  collect  such  taxes,  and 
thereupon  place  twenty-five  per  cent  thereof  to  the  credit  of  the  county  expense 
fund,  and  pay  seventy-five  per  cent  thereof  into  the  state  treasury,  to  the  credit 
of  the  general  revenue  fund,  at  the  time  of  making  his  semi-annual  settlement. 
(91  V,  170,  par.  9.) 

S.  6341.  Information  to  probate  judge.  When  any  of  the  real  estate  of  a 
decedent  passes  to  another  person  so  as  to  become  subject  to  such  tax,  the  execu- 
tor, administrator  or  trustee  of  the  decedent  shall  inform  the  probate  judge 
thereof  within  six  months  after  he  has  assumed  the  duties  of  his  trust,  or  if  the 
fact  is  not  known  to  him  within  that  time,  then  within  one  month  from  the  time 
that  it  does  become  known  to  him.     (90  v.  16,  par.  10.) 

S.  6342.  Refund  to  beneficiary.  When  for  any  reason  the  devisee,  legatee 
or  heir  who  has  paid  such  tax  relinquishes  or  reconveys  a  portion  of  the  property 
on  whi  h  it  was  paid,  or  it  is  judicially  determined  that  the  whole  or  part  of  such 
tax  ought  not  to  have  been  paid,  the  tax,  or  the  due  propt  rtional  part  thereof 
shall  be  repaid  to  him  by  the  executor,  administrator  or  trustee.  (90  v.  16, 
par.  11.) 

S.  6343.  Appraisal.  The  value  of  such  property,  subject  to  said  tax,  shall 
be  its  actual  market  value  as  found  by  the  probate  court.  If  the  state,  through 
the  prosecuting  attorney  of  the  proper  county,  or  any  person  interested  in  the 
succession  to  the  property,  applies  to  the  court,  it  shall  appoint  three  disinter- 
ested persons,  who,  being  first  sworn,  shall  view  and  appraise  such  property  at  its 
acttial  market  value  for  the  purposes  of.  this  tax,  and  make  return  thereof  to  the 
court.  The  return  may  be  accepted  by  the  court  in  a  like  manner  as  the  original 
inventory  of  the  estate  is  accepted,  and  if  so  accepted,  it  shall  be  binding  upon  the 
person  by  whom  this  tax  is  to  be  paid,  and  upon  the  state.  The  fees  of  the 
appraisers  shall  be  fixed  by  the  probate  judge  and  paid  out  of  the  county  treas- 


Code  of  1910.[  OHIO.  1011 

ury  upon  the  warrant  of  the  county  auditor.     In  case  of  an  annuity  or  life  estate, 
the   value  thereof  shall   be  determined  by  the  so-called  actuaries'  combined 
experience  tables  and  five  per  cent  compound  interest.     (90  v.  16,  par.  12.) 
[See  notes  to  the  Act  of  1904,  ante,  p.  1004.] 

Appeal. 

Under  Ohio  Revised  Sts.  s.  2731-33  and  s.  6408,  where  the  probate 
court  fixes  the  inheritance  tax,  either  party  may  appeal  and  the 
state  may  appeal  without  filing  any  security  under  Revised  Sts., 
s.  213,  s.  6411  and  s.  5227.  Humphreys  v.  State,  70  Ohio  St.  67, 
101  Am.  St.  888,  70  N.  E.  957,  65  L.  R.  A.  776,  affirming  13  Low. 
D.  168,  1  C.  C.  N.  S.  1,  14  Cir.  D.  238. 

S.  5344  Jurisdiction  of  probate  court.  The  probate  court,  having  either 
principal  or  auxiliary  jurisdiction  of  the  settlement  of  the  estate  of  the  decedent, 
shall  have  jurisdiction  to  hear  and  determine  all  questions  in  relation  to  such  tax 
that  arises,  affecting  any  devise,  legacy  or  inheritance  under  this  subdivision  of 
this  chapter,  subject  to  appeal  as  in  other  cases,  and  the  prosecuting  attorney 
shall  represent  the  interests  of  the  state  in  such  proceedings.     (90  v.  17,  par.  13.) 

[See  notes  to  the  Act  of  1904,  ante,  p.  1004.] 

S.  5345.  Reports.  Each  probate  judge,  at  least  once  in  six  months,  shall 
render  to  the  county  auditor  a  statement  of  the  property  within  the  jurisdiction 
of  his  court  that  has  become  subject  to  such  tax  during  such  period,  the  number 
and  amount  of  such  taxes  as  will  accrue  during  the  next  six  months,  so  far  as 
they  can  be  determined  from  the  probate  records,  and  the  number  and  amount 
thereof  due  and  unpaid  Each  probate  judge  shall  keep  a  separate  record,  in  a 
book  to  be  provided  for  that  purpose,  of  all  cases  arising  under  the  provisions 
of  this  subdivision  of  this  chapter.     (91  v.  171,  par.  14.) 

S.  5346.'  Fees.  The  fees  of  officers  having  duties  to  perform  under  the  provi- 
sions of  this  subdivision  of  this  chapter,  shall  be  paid  by  the  county  from  the 
county  expense  fund  thereof  and  shall  be  the  same  as  allowed  by  law  for  similar 
services.  In  ascertaining  the  amounts  due  the  state,  seventy-five  per  cent  of 
the  cost  of  collection  and  other  necessary  and  legitimate  expenses  incurred  by  the 
county  in  the  collection  of  such  taxes,  shall  be  charged  to  the  state  and  deducted 
from  the  amount  of  taxes  to  be  paid  into  the  state  treasury.     (91  v.  171,  par.  15.) 

S.  5347.  Settlement  of  account.  A  final  settlement  of  the  account  of  an 
executor,  administrator  or  trustee  shall  not  be  accepted  or  allowed  by  the  pro- 
bate court  unless  it  shows,  and  the  judge  of  that  court  finds,  that  all  taxes  im- 
posed by  the  provisions  of  this  subdivision  of  this  chapter,  upon  any  property  or 
interest  therein,  belonging  to  the  estate  to  be  settled  by  such  account,  have  been 
paid.  The  receipt  of  the  county  treasurer  shall  be  the  proper  voucher  for  such 
payment.     (90  v.  17,  par.  16.) 

S.  5348.  Definition.  The  word  "property"  as  used  in  this  subdivision  of 
this  chapter  includes  real  and  personal  estate,  any  form  of  interest  therein,  and 
annuities.     (90  v.  17,  par.  17.) 


1012  STATUTES  ANNOTATED.  [Okla.  St. 


OKLAHOMA. 


In  General. 

Oklahoma  did  not  wait  long  after  its  admittance  to  the  Union 
before  adopting  an  inheritance  tax  law.  This  law  was  enacted 
at  the  1907-8  session  of  the  Oklahoma  legislature  and  will  not 
disappoint  those  who  have  learned  to  look  to  Oklahoma  for  radical 
and  complicated  legislation.  The  rather  startling,  though  per- 
haps not  wholly  surprising  feature  of  the  law,  in  view  of  what  sup- 
posedly conservative  states  have  done,  is  that  there  is  a  progressive 
feature  which  results  in  the  confiscation  of  all  in  excess  of  certain 
amounts,  and  not  very  large  amounts  at  that.  Exemptions  apply 
to  each  individual  inheritance  and  not  to  the  estate  as  a  whole. 
We  hesitate  to  suggest  that  under  a  literal  reading  of  the  statute 
the  rate  of  tax  continues  to  increase  even  after  100  per  cent  is  reached. 

Oklahoma  taxes  both  stock  and  registered  bonds  of  Oklahoma 
corporations  owned  by  non-residents  and  the  corporation  itself 
is  responsible  for  the  tax  if  it  transfers  securities  before  the  tax  is 
paid. 

This  remarkable  statute  suggests  interesting  possibilities.  Sup- 
pose a  rich  Illinois  resident  shows  his  appreciation  of  his  best 
friend  by  naming  him  his  executor,  and  leaves  him  in  addition  a 
handsome  legacy  of  $2,000,000  worth  of  stock  in  an  Oklahoma 
corporation.  The  executor  is  not  familiar  with  the  gyrations  of 
inheritance  tax  laws,  and  as  he  wishes  to  receive  his  dividends, 
he  sends  along  the  stock  for  transfer.  Someone  has  borrowed 
our  table  of  logarithms  and  our  higher  mathematics  are  a  little 
rusty,  but  under  this  handicap  we  figure  that  $1,951,930  is  a  very 
close  approximation  to  the  Oklahoma  tax  on  this  legacy. 

The  exhilarating  feature  of  the  situation  is  not  that  he  has 
only^  $48,070  of  the  $2,000,000  left  when  Oklahoma  is  through, 
but  is  that  a  tax  of  10  per  cent  is  still  due  on  the  legacy  to  the 
state  of  Illinois,  and  the  executor  is  personally  responsible  for  the 
payment  of  the  entire  amount! 

This  act  has  yet  to  be  passed  upon  by  the  Oklahoma  supreme 
court,  — a  court  which,  it  may  be  noted,  has  already  shown  much 
sanity.  It  is  hard  to  believe  that  the  act  could  be  sustained  even 
under  the  remarkable  constitution  of  this  state. 


1907-8,  c.  81.]  OKLAHOMA.  1013 

List  of  Statutes. 

1907-08.     Statutes  of  Oklahoma,  c.  81,  a.  11,  p.  733. 

1908.  Gen.  Statutes  of  Oklahoma,  a.  2,  p.  1242,  ss.  6044-6082. 

1909.  Oklahoma  Compiled  Laws,  c.  98,  a.  14,  p.  1549. 

Constitutional  Limitations. 
Oklahoma  Constitution,  1907,  a.  10. 

S.  5.  The  power  of  taxation  shall  never  be  surrendered,  suspended,  or  con- 
tracted away.     Taxes  shall  be  uniform  upon  the  same  class  of  subjects. 

S.  12.  The  legislature  shall  have  power  to  provide  for  the  levy  and  collection 
of  license,  franchise,  gross  revenue,  excise,  income,  collateral  and  direct  inher- 
itance, legacy,  and  succes&ion  taxes;  also  graduated  income  taxes,  graduated 
collateral  and  direct  inheritance  taxes,  graduated  legacy  and  succession  taxes; 
also  stamp,  registration,  production,  or  other  specific  taxes. 

THE  PRESENT  ACT. 

Okla.  St.  1907-08,  c.  81,  a.  11.    Approved  May  26,  1908. 

An  Act  providing  for  a  tax  on  gifts,  inheritances,  bequests,  legacies, 
devices  and  successions  in  certain  cases;  and  declaring  an  emergency. 

The  text  of  this  statute  is  printed  below  from  the  Compiled 
Laws  of  1909. 

The  Oklahoma  statute  has  been  passed  upon  recently  by  the 
district  court  of  Oklahoma.  The  state  officials  are  at  present  work- 
ing under  the  interpretation  of  the  law  as  laid  down  by  the  district 
judge,  L.  M.  Poe,  who  sustained  its  constitutionality  and  decided 
certain  disputed  points  as  to  the  method  of  computation.  Judge 
Poe's  opinion  is  not  reported.  It  has  been  filed  for  record  in  the 
office  of  the  state  auditor. 

Oklahoma  Compiled  Laws  of  1909,  Art.  xiv. 

S.  7712.  Tax  on  gifts,  inheritances,  etc.  A  tax  shall  be  and  Is  hereby 
imposed  upon  any  transfer  of  any  property,  real,  personal,  or  mixed,  or  any 
interest  therein,  or  income  therefrom  in  trust  or  otherwise,  to  any  person,  asso- 
ciation, or  corporation,  except  corporations  of  this  state  organized  under  its  laws 
solely  for  religious,  charitable,  or  educational  purposes,  which  shall  use  the  prop- 
erty so  transferred  exclusively  for  the  purposes  of  their  organization  within  this 
state  in  the  following  cases:  When  the  transfer  is  by  will  or  by  the  intestate 
laws  of  this  state  from  any  person  dying  possessed  of  the  property  while  a  resi- 
dent of  the  state.  When  a  transfer  is  by  will  or  intestate  law,  of  property  within 
the  state  or  within  its  jurisdiction  and  the  decedent  was  a  non-resident  of  the 
state  at  the  time  of  his  death.  When  the  transfer  i?  of  property  made  by  a  resi- 
dent or  by  a  non-resident,  when  such  non-resident's  property  is  within  this 
state  or  within  its  jurisdiction,  by  deed,  grant,  bargain,  sale,  or  gift,  made  in 
contemplation  of  the  death  of  the  grantor,  vendor,  or  donor,  or  intended  to  take 


1014  STATUTES  ANNOTATED.  [Okla.  St. 

effect  in  possession  or  enjoyment  at  or  after  such  death.  Such  tax  shall  be 
imposed  when  any  such  person  or  corporation  becomes  beneficially  entitled,  in 
possession  or  expectancy  to  any  property  or  the  income  thereof,  by  any  such 
transfer  whether  made  before  or  after  the  passage  of  this  act;  provided,  that 
property  or  estates  which  have  vested  in  such  persons  or  corporations  before 
this  act  takes  effect  shall  not  be  subject  to  the  tax.  Whenever  any  person  or 
corporation  shall  exercise  a  power  of  appointment  derived  from  any  disposition 
of  property  made  either  before  or  after  the  passage  of  this  act,  such  appoint- 
ment, when  made  shall  be  deemed  a  transfer  taxable  under  the  provisions  of  this 
act  in  the  same  manner  as  though  the  property  to  which  such  appointment 
relates  belonged  absolutely  to  the  donee  of  such  power  and  had  been  bequeathed 
or  devised  by  such  donee  by  will;  and  whenever  any  person,  or  corporation 
possessing  such  power  of  appointment  so  derived  shall  omit  or  fail  to  exercise 
the  same  within  the  time  provided  therefor,  in  whole  or  in  part,  a  transfer  taxable 
under  the  provisions  of  this  act  shall  be  deemed  to  take  place  to  the  extent  of 
such  omission  or  failure,  in  the  same  manner  as  though  the  persons  or  corpora- 
tions thereby  becoming  entitled  to  the  possession  or  enjoyment  of  the  property 
to  which  such  power  related  had  succeeded  thereto  by  a  will  of  the  donee  of  the 
power  faihng  to  exercise  such  power,  taking  effect  at  the  time  of  such  omission 
or  failure.  The  tax  so  imposed  shall  be  upon  the  clear  market  value  of  such 
property  at  the  rates  hereinafter  prescribed,  and  only  upon  the  excess  of  the 
.exemptions  hereinafter  granted.     (L.  1907-8,  p.  733.) 

S.  7713.  Rate  —  primary  —  by  classes.  When  the  property  or  any 
beneficial  interest  therein  passes  by  any  such  transfer,  where  the  amount  of  the 
property  shall  exceed  in  value  the  exemptions  hereinafter  specified,  the  primary 
rates  of  taxation  hereinafter  imposed  shall  apply  as  follows: 

On  the  first  five  thousand  dollars  of  such  excess  in  class  one;  on  first  two 
thousand  dollars  of  such  excess  in  classes  two  and  three;  on  the  first  five  hundred 
dollars  of  such  excess  in  classes  four  and  five  and  shall  be: 

Class  1 :  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  husband,  wife,  lineal  issue,  lineal  ancestors  of  the  decedent 
or  any  child  adopted  as  such  in  conformity  with  the  laws  of  this  state,  or  any 
child  to  whom  such  decedent  for  not  less  than  ten  years  prior  to  such  transfer 
stood  in  the  mutually  acknowledged  relation  of  a  parent;  Provided,  however, 
such  relationship  began  at  or  before  the  child's  fifteenth  birthday,  and  was 
continuous  for  said  ten  years  thereafter,  or  any  lineal  issue  of  such  adopted  or 
mutually  acknowledged  child,  at  the  rate  of  one  per  centum  of  the  clear  value 
of  such  interest  in  such  property. 

Class  2.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in 
such  property  shall  be  the  brother  or  sister  of  a  descendant  of  a  brother  or  sister 
of  the  decedent,  a  wife  or  widow  of  a  son  or  the  husband  of  a  daughter  of  the 
decedent,  at  the  rate  of  one  and  one-half  per  centum  of  the  clear  value  of  such 
interest  in  such  property. 

Class  3:  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in 
suth  property  shall  be  the  brother  or  sister  of  the  father  or  mother,  or  a  descend- 
ant of  a  brother  or  sister  of  the  father  or  mother  of  the  decedent,  at  the  rate  of 
three  per  centum  of  the  clear  value  of  such  interest  in  such  property. 

Class  4:  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in 
such  property  shall  be  the  brother  or  sister  of  the  grandfather  or  grandmother 


1907-8,  c.  81.]  OKLAHOMA.  1015 

or  a  descendant  of  the  brother  or  sister  of  the  grandfather  or  grandmother  of 
the  decedent,  at  the  rate  of  four  per  centum  of  the  clear  value  of  such  interest 
in  such  property. 

Class  5:  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  herein- 
before stated,  or  shall  be  a  stranger  in  blood  to  the  decedent,  or  shall  be  a  body 
politic,  or  corporate,  at  the  rate  of  five  per  centum  of  the  clear  value  of  such 
interest  in  such  property.     (L.  1907-8,  p.  734.) 

S.  7714.  Primary  rate  increased.  The  foregoing  rates  in  section  7713 
are  for  convenience  termed  the  primary  rates.  Upon  all  in  excess  of  five  thou- 
sand dollars  in  class  one,  the  primary  rate  provided  for  herein  shall  be  increased 
one  one-hundred  twenty-fifth  (l/l25)  of  one  per  centum  for  every  one  hundred 
dollars  increase  in  valuation  of  such  excess.  Upon  all  in  excess  of  two  thousand 
dollars  in  classes  two  and  three  the  primary  rate  provided  for  herein  shall  be 
increased  one-fiftieth  of  one  per  centum  for  every  one  hundred  dollars'  increase 
in  valuation  of  such  excess.  Upon  all  in  excess  of  five  hundred  dollars  in  classes 
four  and  five,  the  primary  rate  provided  for  herein  shall  be  increased  one-tenth 
of  one  per  centum  for  every  one  hundred  dollars  increase  in  valuation  for  such 
excess.     (L.  190708,  p.  735.) 

S.  7715.  Exemptions.  The  following  exemptions  from  the  tax  are  hereby 
allowed :  — 

All  property  transferred  to  corporations  of  this  state  organized  under  its 
laws  solely  for  religious,  charitable,  or  educational  purposes  which  shall  use  the 
property  so  transferred  exclusively  for  the  purposes  of  their  organization  with- 
in the  state  shall  be  exempt. 

Property  of  the  clear  value  of  ten  thousand  dollars  transferred  to  the  widow 
of  the  decedent,  and  five  thousand  dollars  transferred  to  each  of  the  other  persons 
described  in  the  first  division  of  section  7713,  shall  be  exempt. 

Property  of  the  clear  value  of  five  hundred  dollars,  transferred  to  each  of  the 
persons  described  in  the  second  subdivision  of  section  7713,  shall  be  exempt. 

Property  of  the  clear  value  of  two  hundred  and  fifty  dollars,  transferred  to 
each  of  the  persons  described  in  the  third  subdivision  of  section  7713,  shall  be 
exempt. 

Property  of  the  clear  value  of  one  hundred  and  fifty  dollars,  transferred  to  each 
of  the  persons  described  in  the  fourth  subdivision  of  section  7713,  shall  be  exempt. 

Property  of  the  clear  value  of  one  hundred  dollars,  transferred  to  each  of  the 
persons  and  corporations  as  described  in  the  fifth  subdivision  of  section  7713, 
shall  be  exempt.     (L.  1907-8,  p.  736.) 

S.  7716.  A  lien — how  paid.  Every  such  tax  shall  be  and  remain  a  lien 
upon  the  property  transferred  until  paid  and  the  person  to  whom  the  property  is 
so  transferred  and  the  administrators,  executors,  and  trustees  of  every  estate 
so  transferred,  shall  be  personally  liable  for  such  tax  until  its  payment.  The 
tax  shall  be  paid  to  the  treasurer  of  the  county  in  which  the  county  court  is 
situated  having  jurisdiction  as  herein  provided:  and  said  treasurer  shall  give 
and  every  executor,  administrator,  or  trustee  shall  take  duplicate  receipts  from 
him  of  such  payments,  one  of  which  he  shall  immediately  send  to  the  state 
auditor,  whose  duty  it  shall  be  to  charge  the  treasurer  so  receiving  the  tax  with 


1016  STATUTES  ANNOTATED.  [Okla.  St. 

the  amount  thereof,  and  to  seal  said  receipt  with  the  seal  of  his  office,  and  counter- 
sign the  same  and  return  it  to  the  executor,  administrator  or  trustee,  whereupon 
it  shall  be  a  proper  voucher  in  the  settlement  of  his  accounts;  but  no  executor, 
administrator  or  trustee  shall  be  entitled  to  a  final  accounting  of  an  estate,  in 
settlement  of  which  a  tax  is  due  under  the  provisions  of  this  act,  unless  he  shall 
produce  a  receipt  so  sealed  and  countersigned  by  the  state  auditor  or  a  copy 
thereof  certified  by  him,  or  unless  a  bond  shall  have  been  filed,  as  prescribed 
by  section  7720.  All  taxes  imposed  by  this  act  shall  be  due  and  payable  at  the 
time  of  the  transfer  except  as  hereinafter  provided.  Taxes  upon  the  transfer 
of  any  estate,  property,  or  interest  therein,  limited,  conditioned,  dependent,  or 
determinable  upon  the  happenings  of  any  contingency  or  future  event,  by  reason 
of  which  the  fair  market  value  thereof  cannot  be  ascertained  at  the  time  of  the 
transfer,  as  herein  provided,  shall  accrue  and  become  due  and  payable  when  the 
beneficiaries  shall  come  into  actual  possession  or  enjoyment  thereof.  (L.  1907-8, 
p.  736.) 

S.  7717.  Discount  or  interest.  If  such  tax  is  paid  within  one  year  from 
the  accruing  thereof,  a  discount  of  five  per  centum  shall  be  allowed  and  deducted 
therefrom.  If  such  tax  is  not  paid  within  eighteen  months  from  the  accruing 
thereof,  interest  shall  be  charged  and  collected  thereon  at  the  rate  of  ten  per 
centum  per  annum  from  the  time  the  tax  accrued ;  unless  by  reason  of  claims  made 
upon  the  estate,  necessary  litigation,  or  other  unavoidable  cause  of  delay,  such 
tax  shall  not  be  determined  and  paid  as  herein  provided,  until  the  cause  of  such 
delay  is  removed,  after  which  ten  per  centum  shall  be  charged.  In  all  cases  where 
a  bond  shall  be  given  under  the  provisions  of  section  7720,  interest  shall  be  charged 
at  the  rate  of  six  per  centum  from  the  accrual  of  the  tax,  until  the  date  of  payment 
thereof.     (L.  1907-8,  p.  737.)  ^ 

S.  7718.  Administrator  may  sell  property  to  pay.  Every  executor, 
administrator,  or  trustee  shall  have  full  power  to  sell  so  much  of  the  property 
of  the  decedent  as  will  enable  him  to  pay  such  tax  in  the  same  manner  as  he 
might  be  entitled  by  law  to  do  for  the  payment  of  the  debts  of  the  testator,  or 
intestate.  Any  such  administrator,  executor,  or  trustee  having  in  charge  or  in 
trust,  any  legacy  or  property  for  distribution,  subject  to  such  tax,  shall  deduct 
the  tax  therefrom ;  and  within  thirty  days  therefrom  shall  pay  over  the  same  to 
the  county  treasurer,  as  herein  provided.  If  such  legacy  or  property  be  not 
in  money,  he  shall  collect  the  tax  thereon  upon  the  appraised  value  thereof, 
from  the  person  entitled  thereto.  He  shall  not  deliver  or  be  compelled  to 
deliver  any  specific  legacy  or  property  subject  to  tax  under  this  act,  to  any  person 
until  he  shall  have  collected  the  tax  thereon.  If  any  such  legacy  shall  be  charged 
upon  or  payable  out  of  real  property,  the  heir,  or  devisee,  shall  deduct  such  tax 
therefrom  and  pay  it  to  the  administrator,  executor,  or  trustee,  and  the  tax  shall 
remain  a  lien  or  charge  on  such  real  property  until  paid,  and  the  payment  thereof 
shall  be  enforced  by  the  executor,  administrator,  or  trustee,  in  the  same  manner 
that  payment  of  the  legacy  might  be  enforced,  or  by  the  county  attorney  under 
section  7730.  If  any  such  legacy  shall  be  given  in  money  to  any  such  person 
for  a  limited  period,  the  administrator,  executor,  or  trustee  shall  retain  the  tax 
upon  the  whole  amount,  but  if  it  be  not  in  money,  he  shall  make  application 
to  the  court  having  jurisdiction  of  an  accounting  by  him  to  make  an  apportion- 


1907-8,  c.  81.]  OKLAHOMA.   -  1017 

ment  if  the  case  require  it,  of  the  sum  to  be  paid  into  his  hands  by  such  legatees, 
and  for  such  further  order  relative  thereto  as  the  case  may  require.  (L.  1907-8, 
p.  737.) 

S.  7719.  When  debt  proved  after  tax  paid.  If  any  debt  shall  be  proved 
against  the  estate  of  the  decedent  after  the  payment  of  any  legacy,  or  distrib- 
utive share  thereof,  from  which  any  such  tax  has  been  deducted,  or  upon  which 
it  has  been  paid  by  the  person  entitled  to  such  legacy  or  distributive  share,  and 
such  person  is  required  by  the  order  of  the  county  court  having  jurisdiction  thereof 
on  notite  to  the  state  auditor  to  refund  the  amount  of  such  debts  or  any  part 
thereof,  an  equitable  proportion  of  the  tax  shall  be  repaid  to  him  by  the  execu- 
tor, administrator  or  trustee,  if  the  tax  has  not  been  paid  to  the  county  treasurer, 
or  repaid  by  such  treasurer,  or  state  treasurer,  if  such  tax  has  been  paid  to  him. 
When  any  amount  of  said  tax  shall  have  been  paid  erroneously  into  the  state 
treasury,  it  shall  be  lawful  for  the  state  auditor,  upon  satisfactory  proofs  pre- 
sented to  him  of  the  facts,  to  require  the  amount  of  such  erroneous  or  illegal 
payment  to  be  refunded  to  the  executor,  administrator,  trustee,  person  or  persons 
who  have  paid  any  such  tax  in  error,  from  the  treasury;  or  the  said  state  auditor 
may  order,  direct  and  allow  the  treasurer  of  any  county  to  refund  the  amount 
of  any  illegal  or  erroneous  payment  of  such  tax  out  of  the  funds  in  his  hands 
or  custody  to  the  credit  of  such  taxes,  and  credit  him  with  the  same  in  his  quarterly 
account  rendered  to  the  state  auditor,  under  this  act.  Provided,  however,  that 
all  applications  for  such  refunding  of  erroneous  taxes  shall  be  made  within  one 
year  from  the  payment  thereof,  or  within  one  year  after  the  reversal  or  modifi- 
cation of  the  order  fixing  such  tax.     (L.  1907-8,  p.  738.) 

S.  7720.  Deferred  payment  of  tax  —  bond  to  secure.  Any  beneficiary 
of  any  property  chargeable  with  a  tax  under  this  act,  and  any  executors,  adminis- 
trators and  trustees  thereof,  may  elect,  within  eighteen  months  from  the  date 
of  the  transfer  thereof  as  herein  provided,  not  to  pay  such  tax  until  the  person 
or  persons,  beneficially  interested  therein  shall  come  into  the  actual  possession 
or  enjoyment  thereof.  The  person  or  persons  so  electing  shall  give  a  bond  to 
the  state  in  a  penalty  of  three  times  the  amount  of  any  such  tax,  with  such 
securities  as  the  county  court  of  the  proper  county  may  approve,  conditioned 
for  the  payment  of  such  tax  and  interest  thereon  at  such  time  or  period  as  the 
person  or  persons  beneficially  interested  therein  may  come  into  the  actual 
possession  or  enjoyment  of  such  property,  which  bond  shall  be  filed  in  the  county 
court.  Such  bond  must  be  executed  and  filed  and  a  full  return  of  such  property 
upon  oath  made  to  the  county  court  within  one  year  from  the  date  of  such  trans- 
fer thereof  as  herein  provided,  and  such  bond  must  be  renewed  when  ordered 
by  the  court.     (L.  1907-8,  p.  739.) 

S.  7721.     Bequest  to  executor  in  lieu  of  commissions  —  taxed  —  when. 

If  a  testator  bequeaths  property  to  one  or  more  executors  or  trustees  in  lieu  of 
their  commissions  or  allowances,  or  makes  them  his  legatees  to  any  amount 
exceeding  the  commission  or  allowance  prescribed  by  law  for  an  executor  or 
trustee,  the  excess  in  value  of  the  property  so  bequeathed,  above  the  amount 
of  commissions  or  allowances  prescribed  by  law  in  similar  cases,  shall  be  taxable 
by  this  act.     (L.  1907-8,  p.  739.) 


1018  STATUTES  ANNOTATED.  [Okla.  St. 

S.  7722.  Foreign  administrator  or  trustee. — Duty.  If  a  foreign  executor, 
administrator  or  trustee  shall  assign  or  transfer  any  stock  or  obligations  in  this 
state  standing  in  the  name  of  a  decedent  or  in  trust  for  a  decedent,  liable  to 
any  such  tax,  the  tax  shall  be  paid  to  the  treasurer  of  the  proper  county  or  the 
state  auditor  on  the  transfer  thereof.  No  safe  deposit  company,  bank  or  other 
institution,  person  or  persons  holding  securities  or  assets  of  a  decedent,  shall 
deliver  or  transfer  the  same  to  the  executors,  administrator,  or  legal  repre- 
sentatives of  said  decedent,  or  upon  their  order  or  request  unless  notice  of  the  time 
and  place  of  such  intended  transfer  be  served  upon  the  state  auditor  at  least  ten 
days  prior  to  the  said  transfer;  nor  shall  any  such  safe  deposit  company,  bank 
or  other  institution,  person  or  persons  deliver  or  transfer  any  securities  or  assets 
of  the  estate  of  a  non-resident  decedent  without  retaining  a  sufficient  portion  or 
amount  thereof  to  pay  any  tax  which  may  thereafter  be  assessed  on  account  of 
the  transfer  of  such  securities  or  assets  under  the  provisions  of  this  act,  unless 
the  state  auditor  consents  thereto  in  writing;  and  it  shall  be  lawful  for  the 
said  county  treasurer  or  state  auditor  personally  or  by  representative  to  examine 
said  securities  or  assets  at  the  time  of  such  delivery  or  transfer.  Failure  to 
serve  such  notice  or  to  allow  such  examination  or  to  retain  a  sufficient  portion 
or  amount  to  pay  such  tax  as  herein  provided,  shall  render  said  safe  deposit  com- 
pany, trust  company,  bank  or  other  institution,  person  or  persons,  liable  to 
the  payment  of  the  tax  due  upon  said  securities  or  assets  in  pursuance  of  the 
provisions  of  this  act.     (L.  1907-8,  p.  739.) 

S.  7723.  County  court's  jurisdiction.  The  county  court  of  every  county 
of  the  state  having  jurisdiction  to  grant  letters  testamentary  or  of  administra- 
tion upon  the  estate  of  a  decedent  whose  property  is  chargeable  with  any  tax 
under  this  act,  or  to  appoint  a  trustee  of  such  estate  or  any  part  thereof,  or 
to  give  ancillary  letters  thereon,  shall  have  jurisdiction  to  hear  and  determine 
all  questions  arising  under  the  provisions  of  this  act,  and  to  do  any  act  in  relation 
thereto  authorized  by  law  to  be  done  by  a  county  court  in  other  matters  or 
proceedings  coming  within  its  probate  jurisdiction.  Every  petition  for  ancil- 
lary letters  testamentary  or  ancillary  letters  of  administration,  made  in  pur- 
suance oi  the  laws  governing  probate  practice  of  a  person  to  be  cited  as  therein 
prescribed,  and  a  true  and  correct  statement  of  all  the  decedent's  property  in 
this  state,  and  the  value  thereof;  and  upon  presentation  thereof  the  county  court 
shall  issue  a  citation  directed  to  such  county  treasurer,  and  upon  the  return  of 
the  citation,  the  county  court  shall  determine  the  amount  of  the  tax  which  may 
be  or  become  due  under  the  provision  of  this  act,  and  his  decree  awarding  the 
letters  may  contain  any  provisions  for  the  payment  of  such  tax  or  the  giving  of 
security  therefor,  which  might  be  made  by  such  county  court  if  the  county 
treasurer  were  a  creditor  of  deceased.     (L.  1907-8,  p.  740.) 

S.  7724.  Appraisement  —  court  to  appoint  appraisers.  The  county 
court  upon  the  application  of  any  interested  party,  including  the  state  auditor, 
county  treasurer,  or  upon  his  own  motion,  shall  as  often  as,  and  whenever  occasion 
may  require,  appoint  a  competent  person  as  appraiser  to  fix  the  fair  market 
value  at  the  time  of  transfer  thereof  of  the  property  of  persons  whose  estates  shall 
be  subject  to  the  payment  of  any  tax  imposed  by  this  act. 

Whenever  a  transfer  of  property  is  made  upon  which  there  is,  or  in  any  con- 
tmgency  there  may  be,  a  tax  imposed,  such  property  shall  be  appraised  at  its 


1907-8,  c.  81.1  OKLAHOMA.  1019 

clear  market  value  immediately  upon  the  transfer  or  as  soon  thereafter  as 
practicable.  The  value  of  every  future  or  limited  estate,  income,  interest  or 
annuity  dependent  upon  life  or  lives  in  being,  shall  be  determined  by  the  rule, 
method  and  standard  of  mortality  and  value  employed  by  the  commissioner 
of  insurance  in  ascertaining  the  value  of  policies  of  life  insurance,  and  annuities 
for  the  determination  of  liabilities  of  life  insurance  companies  except  that  the 
rate  of  interest  for  making  such  computation  shall  be  five  per  centum 
per  annum. 

In  estimating  the  value  of  any  estate,  or  interest  in  property  to  the  beneficial 
enjoyment  or  possession  whereof  there  are  persons  or  corporations  presently 
entitled  thereto,  no  allowance  shall  be  made  in  respect  of  any  contingent  incum- 
brance thereon,  nor  in  respect  of  any  contingency  upon  the  happening  of  which 
the  estate  or  property  or  some  part  thereof,  or  interest  therein,  might  be  abridged, 
defeated  or  diminished;  Provided,  however,  that  in  the  event  of  such  incum- 
brance taking  effect  as  an  actual  burden  upon  the  interest  of  the  beneficiary, 
or  in  the  event  of  the  abridgement,  defeat  or  diminution  of  such  estate  or  prop- 
erty or  interest  therein  as  aforesaid,  a  return  shall  be  made  to  the  person  properly 
entitled  thereto  of  a  proportionate  amount  of  such  tax  in  respect  to  the  amount 
or  value  of  the  incumbrance  when  taking  effect,  or  so  much  as  will  reduce  the 
same  to  the  amount  which  would  have  been  assessed  in  respect  of  the  actual 
duration  or  extent  of  the  estate  or  interest  enjoyed.  Such  return  of  tax  shall  be 
made  in  the  manner  provided  in  section  7719. 

Where  any  property  shall  after  the  passage  of  this  act  be  transferred  subject 
to  any  charge,  estate,  or  interest  determinable  by  the  death  of  any  person,  or 
at  any  period  ascertainable  only  by  reference  to  death,  the  increase  of  benefit 
accruing  to  any  person  or  corporation  upon  extinction  or  determination  of  such 
charge,  estate  or  interest,  shall  be  deemed  a  transfer  of  property  taxable  under 
the  provisions  of  this  act  in  the  same  manner  as  though  the  person  or  corpora- 
tion beneficially  entitled  thereto  had  then  acquired  such  increase  of  benefit  from 
the  person  from  whom  the  title  to  their  respective  estates  or  interests  is  derived. 

When  property  is  transferred  in  trust  or  otherwise,  and  the  rights,  interests 
or  estates  of  the  transferees  are  dependent  upon  contingencies  or  conditions 
whereby  they  may  be  wholly  or  in  part  created,  defeated,  extended  or  abridged, 
a  tax  shall  be  imposed  upon  such  transfer  at  the  highest  rate  which,  on  the  happen- 
ing of  any  of  the  said  contingencies  or  conditions,  would  be  possible  under  the 
provisions  of  this  act,  and  such  tax  so  imposed  shall  be  due  and  payable  forth- 
with out  of  the  property  transferred,  provided,  however,  that  on  the  happening 
of  any  contingency  whereby  the  said  property  or  any  part  thereof  is  transferred 
to  a  person  or  corporation  exempt  from  taxation  under  the  provisions  of  this 
act  or  to  a  person  taxable  at  a  less  rate  than  the  rate  imposed  and  paid,  such 
person  or  corporation  shall  be  entitled  to  a  return  of  so  much  of  the  tax  imposed 
and  paid  as  is  the  difference  between  the  amount  paid  and  the  amount  which 
said  person  or  corporation  should  pay  under  the  provisions  of  this  act  with 
legal  interest  from  the  time  of  payment.  Such  return  of  overpayment  shall 
be  made  in  the  manner  provided  by  section  7719.     . 

Estates  in  expectancy  which  are  contingent  or  defeasible  and  in  which  pro- 
ceedings for  the  determination  of  the  tax  have  not  been  taken  or  where  the  taxa- 
tion thereof  has  been  held  in  abeyance,  shall  be  appraised  at  their  full, 
undiminished,  clear  value  when  the  persons  entitled  thereto  shall  come  into  the 


1020  STATUTES  ANNOTATED.  [Okla.  St. 

beneficial  enjoyment  or  possession  thereof  without  diminution  for  or  on  account 
of  any  valuation  theretofore  made  of  the  particular  estates  for  purposes  of  taxa- 
tion upon  which  said  estates  in  expectancy  may  have  been  limited. 

Where  an  estate  for  life  or  for  years  can  be  divested  by  the  act  or  omission  of 
the  legatee  or  devisee,  it  shall  be  taxed  as  if  there  were  no  possibility  of  such 
divesting.     (L.  1907-8,  p.  741.) 

S.  7725.  Appraiser's  duty  —  pay.  Every  such  appraiser  shall  forthwith 
give  notice  by  mail  to  all  persons  known  to  have  claim  or  interest  in  the  property 
to  be  appraised,  including  the  county  treasurer,  and  to  such  persons  as  the  county 
court  may  by  order  direct,  of  the  time  and  place  when  he  will  appraise  such 
property.  He  shall,  at  such  time  and  place,  appraise  the  same  at  its  fair  market 
value,  as  herein  prescribed,  and  for  that  purpose  the  said  appraiser  is  authorized 
to  issue  subpoenas  and  to  compel  the  attendance  of  witnesses  before  him  and  to 
take  the  evidence  of  such  witnesses  under  oath  concerning  such  property  and 
the  value  thereof;  and  he  shall  make  report  thereof  and  of  such  value  in  writing, 
to  the  said  county  court,  together  with  the  depositions  of  the  witnesses  examined, 
and  such  other  facts  in  relation  thereto  and  to  the  said  matters  as  the  said  county 
court  may  order  or  require.  Every  appraiser  shall  be  paid  on  the  certificate 
of  the  county  court  at  the  rate  of  two  dollars  per  day  for  every  day  actually 
and  necessarily  employed  in  such  appraisal,  and  his  actual  and  necessary  travel- 
ing expenses  and  the  fees  paid  such  witness,  which  fees  shall  be  the  same  as  those 
now  paid  to  witnesses  subpoenaed  to  attend  in  courts  of  record,  by  the  county 
treasurer  out  of  any  funds  he  may  have  on  his  hands  on  account  of  any  tax 
imposed  under  the  provisions  of  this  act.     (L.  1907-8,  p.  743.) 

S.  7726.  Their  report.  The  report  of  the  appraiser  shall  be  made  in  dupli- 
cate, one  of  which  duplicates  shall  be  filed  in  the  office  of  the  county  court  and  the 
other  in  the  office  of  the  state  auditor.  Upon  filing  such  report  in  the  county 
court,  the  county  court  shall  forthwith  give  twenty  days  notice  by  mail  to  all 
persons  known  to  be  interested  in  the  estate,  including  the  county  treasurer,  of 
the  time  and  place  of  the  hearing  in  the  matter  of  such  report  and  the  county 
court  from  such  report  and  other  proofs  relating  to  any  such  estate  shall  forth- 
with at  the  time  so  fixed,  determine  the  cash  value  of  such  estate  and  the  amount 
of  tax  to  which  the  same  is  liable,  or  the  county  court  without  appointing  an 
appraiser  upon  giving  twenty  days  notice  by  mail  to  all  persons  known  to  be 
interested  in  the  estate  including  the  county  treasurer,  of  the  time  and  place  of 
hearing,  may  at  the  time  so  fixed  hear  evidence  and  determine  the  cash  value 
of  such  estate  and  the  amount  of  tax  to  which  the  same  is  liable.  If  the  residence 
or  post-office  address  of  any  person  interested  in  any  estate  is  unknown  to  the 
executor,  administrator,  or  trustee,  notice  of  the  hearing  in  the  matters  of  the 
report  of  the  appraisers  or  notice  that  the  county  court  without  appointing  an 
appraiser  will  determine  the  cash  value  of  an  estate,  shall  be  given  to  all  such 
persons  by  publication  of  such  notice  not  less  than  three  successive  weeks  prior 
to  the  time  fixed  for  such  hearing  or  determination  in  such  newspaper  published 
within  the  county  as  the  court  shall  direct.     (L.  1907-8,  p.  743.) 

S.  7727.  Duty  of  insurance  commissioner.  The  commissioner  of 
msurance  shall  on  application  of  any  county  court  determine  the  value  of  any 
such  future  or  contingent  estates,  income,  or  interests  therein,  limited,  contin- 
gent, dependent  or  determinable  upon  the  life  or  lives  of  the  person  or  persons 


1907-8,  c.  81.]  OKLAHOMA.  1021 

in  being  upon  the  facts  contained  in  such  appraiser's  report  or  upon  the  facts 
contained  in  the  county  court's  finding  and  determination  and  certify  the  same 
to  the  county  court  and  his  certificate  shall  be  presumptive  evidence  that  the 
method  of  computation  adopted  therein  is  correct.     (L.  1907-8,  p.  744.) 

S.  7728.  Of  state  auditor.  The  state  auditor  or  any  person  dissatisfied 
with  the  appraisement  or  assessment  and  determination  of  such  tax,  may  apply 
for  a  rehearing  thereof,  before  the  county  court,  within  sixty  days  from  the 
fixing,  assessing  and  determination  of  the  tax  by  the  county  court  as  herein  pro- 
vided, on  filing  a  written  notice  which  shall  state  the  grounds  of  the  applica- 
tion for  a  rehearing.  The  rehearing  shall  be  upon  the  records,  proceedings,  and 
proofs  had  and  taken  on  the  hearings  as  herein  provided  and  a  new  trial  shall 
not  be  had  or  granted  unless  specially  ordered  by  the  county  court.  (L.  1907-8, 
p.  744.) 

S.  7729.  County  court. — District  Judge.  The  county  court  shall  im- 
mediately give  notice  by  mail  upon  the  determination  by  him  as  to  the  value 
of  any  estate  which  is  taxable  under  this  act  and  of  the  tax  to  which  it  is  liable 
to  all  parties  known  to  be  interested  therein  including  the  state  auditor.  If, 
however,  it  appears  at  this  or  any  stage  of  the  proceedings  that  any  of  such  parties 
known  to  be  interested  in  the  estate  is  an  infant  or  an  incompetent,  the  county 
court  shall  if  the  interest  of  such  infant  or  incompetent  is  presently  involved, 
and  is  adverse  to  that  of  the  other  persons  interested  therein  appoint  a  special 
guardian  of  such  infant,  but  nothing  in  this  provision  shall  affect  the  right  of  an 
infant  over  fourteen  years  of  age  or  of  any  one  on  behalf  of  an  infant  under 
fourteen  years  of  age,  to  nominate  and  apply  for  the  appointment  of  a  special 
guardian  of  such  infant  at  any  stage  of  the  proceedings. 

Within  one  year  after  the  entry  of  an  order  or  decree  of  the  county  court 
determining  the  value  of  an  estate  and  assessing  the  tax  thereon,  the  state  auditor 
may  if  he  believes  that  such  appraisal,  assessment,  or  determination  has  been 
fraudulently,  coUusively,  or  erroneously  made,  make  application  to  the  judge 
of  the  district  court  in  which  the  said  estate  is  administered  on  for  a  reappraisal 
thereof.  The  district  judge  to  whom  such  application  is  made  may  thereupon 
appoint  a  competent  person  to  reappraise  such  estate.  Such  appraiser  shall 
possess  the  powers,  be  subject  to  the  duties,  shall  give  the  notice,  and  receive 
the  compensation  provided  by  sections  7724  and  7725.  Such  compensation 
shall  be  payable  by  the  county  treasurer  out  of  any  funds  he  may  have  on  account 
of  any  tax  imposed  under  the  provisions  of  this  act  upon  the  certificate  of  the 
district  judge  appointing.  The  report  of  such  appraiser  shall  be  filed  in  the 
district  court  for  which  he  was  appointed  and  thereafter  the  same  proceedings 
shall  be  taken  and  had  by  and  before  such  district  court  as  herein  provided  to  be 
taken  and  had  by  and  before  the  county  court. 

The  determination  and  assessment  of  such  district  court  shall  supersede  the 
determination  and  assessment  of  county  court  and  shall  be  filed  by  such  district 
court  in  the  office  of  the  state  auditor  and  a  certified  copy  thereof  transmitted 
to  the  county  court  of  the  proper  county.     (L.  1907-8,  p.  744.) 

S.  7730.  Tax  not  paid. — Procedure.  If  the  treasurer  of  any  county  shall 
have  reason  to  believe  that  any  tax  is  due  and  unpaid  under  this  act  after  the 
refusal  or  neglect  of  any  person  liable  therefor  to  pay  the  same,  he  shall  notify 


1022  STATUTES  ANNOTATED.  [Okla.  St 

the  county  attorney  of  the  county  in  writing  of  such  failure  or  neglect;  and  such 
county  attorney  if  he  have  probable  cause  to  believe  that  such  tax  is  due  and  un- 
paid, shall  apply  to  the  county  court  for  a  citation  citing  the  person  liable  to 
pay  such  tax  to  appear  before  the  court  on  the  day  specified  not  more  than  three 
months  from  the  date  of  such  citation  and  show  cause  why  the  tax  should  not  be 
paid.  The  judge  of  the  county  court,  upon  such  application  and  whenever  it 
shall  appear  to  him  that  any  such  tax,  accruing  under  this  act,  has  not  been 
paid  as  required  by  law,  shall  issue  such  citation,  and  the  service  of  such  cita- 
tion, and  the  time,  manner,  and  proof  thereof,  and  the  hearing  and  determination 
thereof,  shall  conform  as  near  as  may  be  to  the  provisions  of  the  laws  governing 
probate  practice  of  this  state,  and  whenever  it  shall  appear  that  any  such  tax 
is  due  and  payable,  and  the  payment  thereof  cannot  be  enforced  under  the 
provisions  of  this  act  in  said  county  court,  the  person  or  corporation  from  whom 
the  same  is  due  is  hereby  made  liable  to  the  county  of  the  county  court  having 
jurisdiction  over  such  estate  or  property  for  the  amount  of  such  tax,  and  it  shall 
be  the  duty  of  the  county  attorney  of  said  county  in  the  name  of  such  county 
to  sue  for  and  enforce  the  collection  of  such  tax,  and  it  is  made  the  duty  of  said 
county  attorney  to  appear  for  and  act  on  behalf  of  any  county  treasurer,  who 
shall  be  cited  to  appear  before  any  county  court  under  the  provisions  of  this 
act.     (L.  1907-8,  p.  745.) 

S.  7731.  Auditor  to  furnish  books.  The  state  auditor  shall  furnish  to 
each  county  court  a  book  which  shall  be  a  public  record,  and  in  which  he  shall  enter 
the  name  of  every  decendent  (decedent)  whose  estate  is  or  may  become  liable 
for  such  tax,  and  upon  whose  estate  an  application  to  him  has  been  made  for 
the  issue  of  letters  of  administration,  or  letters  testamentary,  or  ancillary  letters, 
the  date  and  place  of  death  of  such  decendent  (decedent)  the  estimated  value, 
of  the  property  of  such  decendent  (decedent),  the  names,  places,  residence  and 
relationship  to  him  of  his  heirs  at  law,  the  names  and  places  of  residence  of  the 
legatees  and  devisees  in  any  will  of  any  such  decedent,  the  amount  of  each 
legacy  and  the  estimated  value  of  any  property  devised  therein  and  to  whom 
devised.  These  entries  shall  be  made  from  the  date  contained  in  the  paper 
filed  on  any  such  application,  or  in  any  proceeding  relating  to  the  estate  of  the 
decendent  (decedent).  The  county  court  shall  also  enter  in  such  book,  the 
amount  of  the  personal  property  of  any  such  decendent  (decedent)  as  shown 
by  the  inventory  thereof,  when  made  and  filed  in  his  office,  and  the  returns  made 
by  any  appraiser  appointed  by  him  under  this  act,  and  the  value  of  annuities, 
life  estates,  terms  of  years,  and  other  property  of  any  such  decedent,  or  given 
by  him  in  his  will  or  otherwise,  as  fixed  by  the  county  court,  and  the  tax  assessed 
thereon,  and  the  amounts  of  any  receipts  for  payment  of  tax  on  the  estate  of 
such  decedent,  under  this  act  filed  with  him.  The  state  auditor  shall  also  furnish 
to  each  county,  forms  for  the  reports  to  be  made  by  such  county  court,  which 
shall  correspond  with  the  entries  to  be  made  in  such  books.     (L.  1907-8,  p.  746.) 

S.  7732.  County  judge  to  report.  Each  judge  of  county  court  shall  on 
Japuary,  April,  July,  and  October  first,  of  each  year,  make  a  report  in  dupli- 
cate, upon  the  forms  furnished  by  the  state  auditor  containing  all  the  data  and 
matters  required  to  be  entered  in  such  books,  one  of  which  shall  be  immediately 
delivered  to  the  county  treasurer  and  the  other  transmitted  to  the  state  auditor. 
(L.  1907-8,  p.  747.) 


1907-8,  c.  81.]  OKLAHOMA.  1023 

S.  7733.  Treasurer  to  report.  Each  county  treasurer  shall  make  a  report, 
under  oath  to  the  state  auditor  on  January,  April,  July  and  October  first,  of  each 
year,  of  all  taxes  received  by  him  under  this  act,  stating  for  what  estate  and  by 
whom  and  when  paid.  The  form  of  such  report  may  be  prescribed  by  the 
state  auditor.  He  shall  at  the  same  time  pay  the  state  treasurer  all  the  taxes 
received  by  him  under  this  act  and  not  previously  paid  into  the  state  treasury, 
and  for  all  such  taxes  collected  by  him  and  not  paid  the  state  treasurer  within 
thirty  days  from  the  times  herein  required  he  shall  pay  interest  at  the  rate  of 
ten  per  centum  per  annum.     (L.  1907-8,  p.  747.) 

S.  7734.  Treasurer  may  agree  on  extension. — When.  The  county 
treasurer,  with  the  consent  of  the  state  auditor  and  the  attorney  general,  ex- 
pressed in  writing,  is  authorized  to  enter  into  an  agreement  with  the  executor, 
administrator  o'r  trustee  of  any  estate  threein  situate  in  which  remainders  or 
expectant  estates  have  been  of  such  a  nature  or  so  disposed  and  circumstanced 
that  the  taxes  therein  were  held  not  presently  payable  or  where  the  interests 
of  the  legatees,  or  devisees  are  not  ascertainable  under  the  provisions  of  this 
act,  and  to  compound  such  taxes  upon  such  terms  as  may  be  deemed  equitable 
and  expedient  and  to  grant  discharges  to  said  executors,  administrators  or 
trustees  upon  the  payment  of  the  taxes,  provided  for  in  such  composition,  pro- 
vided, however,  that  no  such  composition  shall  be  conclusive  in  favor  of  said 
executors,  administrators  or  trustees  as  against  the  interests  of  such  cestui  que 
trust  as  may  possess  either  present  rights  of  enjoyment,  or  fixed,  absolute  or 
indefeasible  rights  of  future  enjoyment,  or  of  such  as  would  possess  such  rights 
in  the  event  of  the  immediate  termination  of  particular  estates,  unless  they  con- 
sent thereto  either  personally,  when  competent,  or  by  guardian.  Composition 
or  settlement  made  or  effected  under  the  provisions  of  this  section  shall  be 
executed  in  triplicate  and  one  copy  shall  be  filed  in  the  office  of  the  state  auditor; 
one  copy  in  the  office  of  the  judge  of  the  county  court  in  which  the  tax  was  paid; 
and  one  copy  to  be  delivered  to  the  executors,  administrators  or  trustees,  who  s-hall 
be  parties  thereto.     (L.  1907-8,  p.  747.) 

S.  7735.  Receipt.  Any  person  shall  upon  the  payment  of  the  sum  of  fifty 
cents,  be  entitled  to  a  receipt  from  the  county  treasurer  of  any  county,  of  the 
state  auditor,  or  at  his  option  to  a  copy  of  a  receipt  that  may  have  been  given 
by  such  treasurer  or  state  auditor  for  the  payment  of  any  tax  under  this  act, 
under  the  official  seal  of  such  treasurer  or  state  auditor,  which  receipt  shall 
designate  upon  what  real  property,  if  any,  of  which  any  decedent  may  have  died 
seized,  such  tax  shall  have  been  paid,  by  whom,  and  whether  in  full  of  such  tax. 
Such  receipt  may  be  recorded  in  the  office  of  the  register  of  deeds  of  the  county 
in  which  such  property  is  situate  in  a  book  to  be  kept  by  him  for  that  purpose, 
which  shall  be  labeled  "transfer  tax."     (L.  1907-8,  p.  748.) 

S.  7736.  Money  paid  to  state.  All  taxes  levied  and  collected  under  this 
act,  less  any  expenses  of  collection,  shall  be  paid  into  the  treasury  of  the  state, 
and  one-half  of  same  shall  be  used  for  the  public  schools  of  this  state  as  other 
available  state  common  school  funds,  and  one-half  shall  be  applicable  to  the 
expenses  of  the  state  government,  and  to  such  other  purposes  as  the  legislature 
may  by  law  direct.     (L.  1907-8,  p.  748.) 


1024  STATUTES  ANNOTATED.  [Okla.  St. 

S.  7737.  Construction.  The  words  "estate"  and  "property"  as  used  in 
this  act  shall  be  taken  to  mean  the  real  and  personal  property  or  interest  therein 
of  the  testator,  intestates,  grantor,  bargainor,  vendor  or  donor  passing  or  trans- 
ferred to  individual  legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees,  vendees, 
or  successors,  and  shall  include  all  personal  property  within  or  without  the 
state.  The  word  "transfer"  as  used  in  this  act  shall  be  taken  to  include  the 
passing  of  property  or  any  interest  therein,  in  possession  or  enjoyment,  present 
or  future,  by  inheritance,  descent,  devise,  succession,  bequest,  grant,  deed, 
bargain,  sale,  gift  or  appointment,  in  the  manner  herein  prescribed.  The  word 
"decedent"  as  used  in  this  act  shall  include  the  testator,  intestate,  grantor,  bar- 
gainer, vendor,  or  donor.  The  words  "county  treasurer"  and  "county  attor- 
ney" as  used  in  this  act  shall  be  taken  to  mean  the  treasurer  and  county  attorney 
of  the  county  of  the  county  court  having  jurisdiction  as  provided  in  section 
7723  of  this  act.     (L.  1907-8,  p.  748.) 


Ore.  St.]  OREGON.  1025 


OREGON, 


In  General. 

Oregon  enacted  its  inheritance  tax  in  1903,  using  the  Illinois 
statute  of  1895  as  a  model.  It  has  since  been  substantially  amended. 
Stock  in  an  Oregon  corporation  owned  by  a  non-resident  is  not 
taxed  unless  the  certificate  is  physically  within  the  state,  but 
stock  in  any  corporation  owned  by  a  non-resident  is  taxable  if  the 
certificate  is  kept  within  the  state.  A  corporation  is  responsible 
if  it  transfers  any  taxable  securities  for  a  non-resident  before  the 
tax  is  paid.     Every  estate  is  required  to  file  a  complete  inventory. 

List  of  Statutes. 

1903.  Statutes  of  Oregon,  p.  49. 
1905.    "    "   "   c.  178,  309. 
1909.    "    *'   '    p.  60,  c.  15 
1909.    "    *'   '    p.  306,  c.  211. 

Constitutional  Limitations. 

Oregon  Constitution,  1857,  a.  1. 

S.  32.  No  tax  or  duty  shall  be  imposed  without  the  consent  of  the  people  or 
their  representatives  in  the  legislative  assembly,  and  all  taxation  shall  be  equal 
and  uniform. 

The  Oregon  Constitution  of  1857,  a.  1,  s.  32,  has  no  counterpart 
except  in  the  South  Dakota  Constitution,  a.  6,  c.  100,  s.  17.  In  re 
McKennan,  25  South  Dakota  369,  126  N.  W.  611,  618. 

Oregon  Constitution,  1857,  a.  9. 

S  1.  The  legislative  assembly  shall  provide  by  law  for  a  uniform  and  equal 
rate  of  assessment  and  taxation,  and  shall  prescribe  such  regulations  as  shall 
secure  a  just  valuation  for  taxation  of  all  property,  both  real  and  personal, 
excepting  such  only  for  municipal,  educational,  literary,  scientific,  religious, 
or  charitable  purposes  as  may  be  specially  exempted  by  law. 

S.  3.  No  tax  shall  be  levied,  except  in  pursuance  of  law,  and  every  law  impos- 
ing a  tax  shall  state  distinctly  the  object  of  the  same,  to  which  only  it  shall  be 
applied. 

S  4  No  money  shall  be  drawn  from  the  treasury  but  in  pursuance  of  appro- 
priations made  by  law. 


1026  STATUTES  ANNOTATED.  [Ore.  St. 

STATUTES. 

Oregon  St.  1903,  p.  49.     Approved  February  16,  1903. 

An  Act  to  tax  gifts,  legacies,  and  inheritances,  and  to  provide  for 
the  collection  of  the  same 
S.  1.  Subject  to  tax.  All  property  within  the  juiisdiction  of  this  state, 
and  any  interest  therein  whether  belonging  to  the  inhabitants  of  this  state  or 
not,  and  whether  tangible  or  intangible,  which  shall  pass  by  will  or  by  statuted 
of  inheritance  of  this  or  any  other  state,  or  by  deed,  grant,  bargain,  sale,  or  gift 
made  in  contemplation  of  the  death  of  the  grantor,  or  bargainor,  or  intended  to 
take  effect  in  possession  or  enjoyment  after  the  death  of  the  grantor,  bargainor 
or  donor,  to  any  person  or  persons,  or  to  any  body  or  bodies  politic  or  corporate, 
in  trust  or  otherwise,  or  by  reason  whereof  any  person,  or  body  politic  or  corpor- 
ate, shall  become  beneficially  entitled,  in  possession  or  expectation,  to  any  prop- 
erty or  income  thereof,  shall  be  and  is  subject  to  a  tax  at  the  rate  hereinafter, 
specified  in  section  2  of  this  act,  to  be  paid  to  the  treasurer  of  the  state  for  the  use 
of  the  state;  and  all  heirs,  egatees  and  devisees,  administrators,  executors,  and 
trustees,  and  any  such  grantee  under  a  conveyance ,  and  any  such  donee  under  a 
gift,  made  during  the  grantor  or  donor's  life,  shall  be  respectively  liable  for  any 
and  all  such  taxe  ,  with  interest  thereon  until  the  same  shall  have  been  paid, 
as  hereinafter  provided:  Provided,  however,  that  devises,  bequests,  legacies,  and 
gifts  to  benevolent  and  charitable  institutions  incorporated  within  this  state 
and  actually  engaged  in  this  state  in  carrying  out  the  objects  and  purposes 
for  which  so  incorporated,  shall  be  exempt  from  any  taxation  under  the  pro- 
visions of  this  act. 

S.  2.  Rates  of  tax.  When  such  inheritance,  devise,  bequest,  legacy,  gift, 
or  beneficial  interest  to  any  property  or  income  therefrom  shall  pass  to  or  for  the 
use  or  benefit  of  any  father,  mother,  husband,  wife,  child,  brother,  sister,  wife  or 
widow  of  a  son,  or  the  husband  of  a  daughter,  or  any  child  or  children  adopted 
as  such  in  conformity  with  the  laws  of  the  state  of  Oregon,  or  to  any  person  to 
whom  the  decedent  for  not  less  than  ten  years  prior  to  death  stood  in  the  acknow- 
ledged relation  of  a  parent,  or  to  any  lineal  descendant  born  in  lawful  wedlock, 
in  every  such  case  the  tax  shall  be  at  the  rate  of  one  per  centum  upon  the  ap- 
praised value  thereof  received  by  each  person:  Provided,  that  any  estate  which 
may  be  valued  at  a  less  sum  than  $10,000  shall  not  be  subject  to  any  such  duty 
or  tax,  and  the  tax  is  to  be  levied  in  above  cases  only  upon  the  excess  of  $5,000 
received  by  each  person.  When  such  inheritance,  devise,  bequest,  legacy,  gift, 
or  the  beneficial  interests  to  any  property  or  income  therefrom  shall  pass  to  or  for 
the  use  or  benefit  of  any  uncle,  aunt,  niece,  nephew,  or  any  lineal  descendant  of  the 
same,  in  every  such  case  the  tax  shall  be  at  the  rate  of  two  per  centum  upon 
the  appraised  value  thereof  received  by  each  person  on  the  excess  of  $2,000  so 
received  by  each  person.  In  all  other  cases  the  tax  shall  be  at  the  rate  of  three  per 
centum  upon  the  appraised  value  thereof  received  by  each  person,  body  politic 
or  corporate  on  all  amounts  over  $500  and  not  exceeding  $10,000;  four  per  cen- 
tum on  all  amounts  over  $10,000  aftd  not  exceeding  $20,000;  five  per  centum 
on  all  amounts  over  $20,000  and  not  exceeding  $50,000;  six  per  centum  on  all 
amounts  over  $50,000. 

Ss.  3-42  provide  for  the  assessment  and  collection  of  a  tax. 


1905,  c.  178]  OREGON.  1027 

Oregon  St.  1905,  c.  178,  p.  309,  approved  February  21,  1905,  amends  Ore- 
gon St.  1903»  s.  1,  making  its  proviso  read  as  follows:  — 

Provided,  however,  that  devisees,  bequests,  legacies,  and  gifts  to  benevolent, 
charitable  or  educational  institutions  incorporated  within  this  state  and  actually 
engaged  in  this  state  in  carrying  out  the  objects  and  purposes  for  which  so  incor- 
porated, or  to  any  person  or  persons  to  be  held  in  trust  for  any  such  institution 
in  lieu  thereof,  shall  be  exempt  from  any  taxation  under  the  provisions  of  this 
act. 

Oregon  St.  1909,  c.  15,  filed  February  5,  1909,  amends  Oregon  St.  1903,  ss.  2 
and  16. 

Oregon  St.  1909,  c.  211,  p.  306,  provides  a  special  exemption  of  inheritance  tax 
from  a  certain  estate  of  "The  Reed  Institute,"  filed  February  23,  1909. 

The  Oregon,  statute  had  not  received  any  construction  by  the 
courts  of  Oregon  up  to  1910.  In  re  McKennan,  25  South  Dakota 
369,  126  N.  W.  611,  616. 

THE  PRESENT  ACT. 

Oregon  St.  1905,  c.  178,  p.  309. 

To  TAX  GIFTS,  LEGACIES,  AND  INHERITANCES,  and  to  provide  for  the  col- 
lection of  the  same. 

Subject  to  Tax. 

S.  1.  All  property  within  the  jurisdiction  of  the  state,  and  any  interest  therein, 
whether  belonging  to  the  inhabitants  of  this  state  or  not,  and  whether  tangible 
or  intangible,  which  shall  pass  by  will  or  by  statutes  of  inheritance  of  this  or  any 
other  state,  or  by  deed,  grant,  bargain,  sale,  or  gift,  made  in  contemplation  of 
the  death  of  the  grantor,  or  bargainor,  or  intended  to  take  effect  in  possession 
or  enjoyment  after  the  death  of  the  grantor,  bargainor,  or  donor,  to  any  person  or 
persons,  or  to  any  body  or  bodies,  politic  or  corporate,  in  trust  or  otherwise,  or 
by  reason  whereof  any  person,  or  body  politic  or  corporate,  shall  become  bene- 
ficially entitled,  in  possession  or  expectation,  to  any  property  or  income  thereof, 
shall  be  and  is  subject  to  a  tax  at  the  rate  hereinafter  specified  in  section  2  of  this 
act,  to  be  paid  to  the  treasurer  of  the  state  for  the  use  of  the  state;  and  all  heirs, 
legatees,  and  devisees,  administrators,  executors,  and  trustees,  and  any  such 
grantee  under  a  conveyance,  and  any  such  donee  under  a  gift,  made  during  the 
grantor  or  donor's  life,  shall  be  respectively  liable  for  any  and  all  such  taxes, 
with  interest  thereon,  until  the  same  shall  have  been  paid,  as  hereinafter  provided; 
provided,  however,  that  devises,  bequests,  legacies,  and  gifts  to  benevolent,  charit- 
able or  educational  institutions  incorporated  within  this  state,  and  actually 
engaged  in  this  state  in  carrying  out  the  objects  and  purposes  for  which  so  incor- 
porated, or  to  any  person  or  persons  to  be  held  in  trust  for  any  such  institution  in 
lieu  thereof,  shall  be  exempt  from  any  taxation  under  the  provisions  of  this  act. 
[L    1905,  p.  309.] 

Rates  of  Tax. 

S.  2.  When  such  inheritance,  devise,  bequest,  legacy,  gift,  or  beneficial  inter- 
est to  any  property  or  income  therefrom  shall  pass  to  or  for  the  use  or  benefit  of 


1028  STATUTES  ANNOTATED.  [Ore.  St. 

any  grandfather,  grandmother,  father,  mother,  husband,  wife,  child,  brother, 
sister,  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter,  or  any  child  or  chil- 
dren adopted  as  such  in  conformity  with  the  laws  ot  the  state  of  Oregon,  or  to  any 
person  to  whom  the  decedent  for  not  less  than  ten  years  prior  to  death  stood  in  the 
acknowledged  relation  of  a  parent,  or  to  any  lineal  descendant  born  in  lawful 
wedlock,  and  in  every  such  case  the  tax  shall  be  at  the  rate  of  one  per  centum 
on  the  appraised  value  thereof  received  by  each  person;  provided,  that  in  the  above 
cases  any  estate  which  may  be  valued  at  a  less  sum  than  $10,000  shall  not  be 
subject  to  any  such  duty  or  tax,  and  the  tax  is  to  be  levied  in  the  above  cases  only 
on  the  excess  of  $5,000  received  by  each  person. 

When  such  inheritance,  devise,  bequest,  legacy,  gift,  or  the  beneficial  interest 
to  any  property  or  income  therefrom  shall  pass  to  or  for  the  use  or  benefit  of  any 
uncle,  aunt,  niece,  nephew,  or  any  lineal  descendant  of  the  same,  in  every  such 
case  the  tax  shall  be  at  the  rate  of  two  per  centum  on  the  appraised  value  thereof 
received  by  each  person;  provided,  that  in  the  above  cases  any  estate  which  may 
be  valued  at  a  less  sum  than  $5,000  shall  not  be  subject  to  any  such  duty  or  tax 
and  the  tax  is  to  be  levied  in  the  above  cases  only  on  the  excess  of  $2,000  received 
by  each  person.  In  all  other  cases  the  tax  shall  be  at  the  rate  of  three  per  centum 
on  the  appraised  value  thereof  received  by  each  person,  body  politic  or  corporate, 
on  the  whole  of  all  amounts  received  not  exceeding  $10,000;  four  per  centum  on 
the  whole  of  all  amounts  received  over  $10,000,  and  not  exceeding  $20,000; 
five  per  centum  on  the  whole  of  all  amounts  received  over  $20,000  and  not  exceed- 
ing $50,000;  six  per  centum  on  the  whole  of  all  amounts  received  over  $50,000; 
provided,  that  in  the  above  cases  any  estate  which  may  be  valued  at  a  less  sum 
than  $500  shall  not  be  subject  to  any  such  duty  or  tax,  and  the  tax  is  to  be  levied 
in  the  above  cases  only  when  the  amount  received  by  a  person,  body  politic  or 
corporate  amounts  to  $500  or  more.     [L.  1909,  p.  60.] 

Tax,  When  it  Accrues  and  is  Payable. 

S.  3.  All  taxes  imposed  by  this  act  shall  take  effect  at  and  accrue  upon  the 
death  of  the  decedent,  or  donor,  and  shall  be  due  and  payable  at  the  expiration  of 
eight  months  from  such  death,  except  as  otherwise  provided  in  this  act;  provided, 
however,  that  taxes  upon  any  devise,  bequest,  legacy,  or  gift,  limited,  conditioned, 
dependent,  or  determinable  upon  the  happening  of  any  contingency  or  future 
event,  by  reason  of  which  the  full  and  true  value  thereof  can  not  be  ascertained  at 
or  before  the  time  when  the  taxes  become  due  and  payable  as  aforesaid,  shall 
accrue  and  become  due  and  payable  when  the  person  or  corporation  beneficially 
entitled  thereto  shall  come  into  actual  possession  or  enjoyment  thereof. 
Payment,  When  Made. 

S  4.  Any  administrator,  executor,  or  trustee  having  in  charge,  or  in  trust, 
any  property  for  distribution,  embraced  in  or  belonging  to  any  inheritance,  devise, 
bequest,  legacy,  or  gift,  subject  to  the  tax  thereon  as  imposed  by  this  act,  shall 
deduct  the  tax  therefrom,  and  within  thirty  days  thereafter  he  shall  pay  over 
the  same  to  the  state  treasurer,  as  herein  provided.  If  such  property  be  not 
in  money,  he  shall  collect  the  tax  on  such  inheritance,  devise,  bequest,  legacy,  or 
gift,  upon  the  appraised  value  thereof  from  the  person  entitled  thereto.  He  shall 
not  deliver,  or  be  compelled  to  deliver,  any  property  embraced  in  any  inheritance, 
devise,  bequest,  legacy,  or  gift,  subject  to  tax  under  this  act,  to  any  person  until 
he  shall  have  collected  the  tax  thereon. 


1905,  c.  178.]  OREGON.  1029 

Tax,  to  whom  Paid;     Duplicate  Receipts. 

S.  5.  The  tax  imposed  by  this  act  upon  inheritances,  devises,  bequests,  or 
legacies,  shall  be  payable  to  the  state  treasurer,  and  the  treasurer  shall  give  the 
executor,  administrator,  trustee,  or  person  paying  such  tax,  a  receipt,  as  provided 
by  paragraph  4,  section  2410,  Bellinger  and  Cotton's  Annotated  Codes  and 
Statutes  of  Oregon,  whereupon  it  shall  be  a  proper  voucher  in  the  settlement  of 
his  accounts.  No  executor,  administrator,  or  trustee  shall  be  entitled  to  a  final 
account  ng  of  an  estate  in  the  settlement  of  which  a  tax  may  become  due  under 
the  provisions  of  this  act,  unless  he  shall  produce  a  receipt  so  sealed  and  counter- 
signed, or  a  copy  thereof,  certified  by  the  said  treasurer,  or  unless  a  bond  shall 
have  been  filed,  as  prescribed  by  section  13  of  this  act.  All  taxes  paid  into  the 
state  treasury  under  the  provisions  of  this  act  shall  belong  to  and  be  a  part  of 
the  inheritance  tax  fund  of  the  state;  provided,  whenever  the  amount  of  money  in 
this  fund  exceeds  $10,000,  then  all  moneys  in  excess  of  $5,000  shall  be  transferred 
to  the  general  fund. 

Tax  a  Lien. 

S.  6.  Every  tax  imposed  by  this  act  shall  be  a  lien  upon  the  property  embraced 
in  any  inheritance,  devise,  bequest,  legacy,  or  gift,  until  paid,  and  the  person  to 
whom  such  property  is  transferred,  and  the  administrators,  executors,  and  trus- 
tees of  every  estate  embracing  such  property  shall  be  personally  liable  for  such 
tax  until  its  payment,  to  the  extent  of  the  value  of  such  property;  and  provided, 
further,  that  all  inheritance  taxes  shall  be  sued  for  within  five  years  after  they  are 
due  and  legally  demandable,  otherwise  they  shall  be  conclusively  presumed  to 
be  paid  and  cease  to  be  a  lien  as  against  the  estate,  or  any  part  thereof,  of  the 
decedent. 

Discount,  Interest,  and  Penalty. 

S.  7.  If  such  tax  is  paid  within  eight  months  from  the  accruing  thereof,  a 
discount  of  five  per  centum  shall  be  allowed  and  deducted  therefrom.  If  such 
tax  is  not  paid  within  eight  months  from  the  accruing  thereof,  interest  shall  be 
charged  and  collected  thereon  at  the  rate  of  eight  per  centum  per  annum  from 
the  time  the  tax  is  due  and  payable,  unless  by  reason  of  claims  upon  the  estate, 
necessary  litigation,  or  other  unavoidable  delay,  such  tax  can  not  be  determined 
and  paid  as  herein  provided,  in  which  case  interest  at  the  rate  of  six  per  centum 
per  annum  shall  be  charged  upon  such  tax  from  the  time  from  the  accruing  thereo  , 
until  the  cause  of  such  delay  is  removed,  after  which  eight  per  centum  shall  be 
charged.  In  all  cases  when  a  bond  shall  be  given,  under  the  provisions  of  sec- 
tion 13  of  this  act,  interest  shall  be  charged  at  the  rate  of  six  per  centum  from 
the  accrual  of  the  tax  until  the  date  of  the  payment  thereof. 

Power  to  Sell. 

S.  8.  Every  executor,  administrator,  or  trustee  shall  have  full  power  to  se'i 
so  much  of  the  property  embraced  in  any  inheritance,. devise,  bequest,  or  legacy 
as  will  enable  him  to  pay  the  tax  imposed  by  this  act,  in  the  same  manner  as  he 
might  be  entitled  by  law  to  do  for  the  payment  of  the  debts  of  a  testator  or 
intestate. 


1030  STATUTES  ANNOTATED.  [Ore.  St. 

Duty  of  Heir  or  Devisee  when  Legacy  Payable  out  of  Property;  Legacy  for 
Limited  Period;  Duty  of  Administrator. 

.  S.  9.  If  any  bequest  or  legacy  shall  be  charged  upon  or  payable  out  of  any 
property,  the  heir  or  devisee  shall  deduct  such  tax  therefrom  and  pay  such  tax 
to  the  administrator,  executor,  or  trustee,  and  the  tax  shall  remain  a  lien  or  charge 
on  such  property  until  paid;  and  the  payment  thereof  shall  be  enforced  by  the 
executor,  administrator,  or  trustee  in  the  same  manner  that  payment  of  the 
bequest  or  legacy  might  be  enforced;  or  by  the  prosecuting  attorney  under  sec- 
tion 27  of  this  act.  If  any  bequest  or  legacy  shall  be  given  in  money  for  a  limited 
period,  the  administrator,  executor,  or  trustee  shall  retain  the  tax  upon  the  whole 
amount;  but,  if  it  be  not  in  money,  he  shall  make  application  to  the  court  hav- 
ing jurisdiction  of  an  accounting  by  him  to  make  an  appointment  [apportion- 
ment], if  the  case  requires,  of  the  sum  to  be  paid  into  his  hands  by  such  legatee 
or  beneficiary,  and  for  such  further  order  relative  thereto  as  the  case  may  require. 

Refund  of  Tax  Erroneously  Paid. 

S.  10.  When  any  tax  imposed  by  this  act  shall  have  been  erroneously  paid, 
wholly  or  in  part,  the  person  paying  the  same  shall  be  entitled  to  a  refundment  of 
the  amount  so  erroneously  paid,  and  the  secretary  of  state  shall,  upon  satisfactory 
proofs  presented  to  him  of  the  facts  relating  thereto,  draw  his  warrant  upon  the 
state  treasurer  for  the  amonnt  thereof  in  favor  of  the  person  entitled  thereto, 
payable  from  the  inheritance  tax  fund;  provided,  however,  that  all  applications 
for  such  refunding  of  erroneous  taxes  shall  be  made  within  three  years  from  the 
payment  thereof. 

Tax  When  Foreign  Executor  Assigns  Stock,  etc. 

S.  11.  If  a  foreign  executor,  administrator,  or  trustee  shall  assign  or  transfer 
any  stock  or- obligations  in  this  state  standing  in  the  name  of  the  decedent,  or 
in  trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the  state 
treasurer  on  or  before  the  transfer  thereof,  and  no  such  assignment  or  transfer 
shall  be  valid  unless  such  tax  is  paid. 

Depositaries  of  Securities  not  to  Deliver  Same  until  Notice  Given  to  State 
Treasurer;   Penalty. 

S.  12.  No  safe  deposit  company,  trust  company,  bank,  corporation,  or  other 
institution,  person  or  persons,  holding  securities  or  assets  of  a  decedent,  or  cor- 
poration in  which  said  decedent,  at  the  time  of  his  death,  owned  any  stock,  shall 
deliver  or  transfer  the  same  to  the  executors,  adiminstrators,  or  legal  representa- 
tives of  said  decedent,  or  upon  their  order  or  request,  unless  notice  of  the  said 
time  and  place  of  such  intended  transfer  be  served  upon  the  state  treasurer  in 
writing  at  least  five  days  prior  to  the  said  transfer;  and  it  shall  be  lawful  for  the 
said  state  treasurer,  personally  or  by  representative,  to  examine  said  securities 
prior  to  the  time  of  such  delivery  or  transfer.  If  upon  such  examination  the  state 
treasurer,  or  his  said  representative,  shall,  for  any  cause,  deem  it  advisable  that 
•^  such  securities  or  assets  should  not  be  immediately  delivered  or  transferred,  he 
may  forthwith  notify,  in  writing,  such  company,  bank,  institution,  or  person  to 
defer  delivery  or  transfer  thereof  for  a  period  not  to  exceed  ten  days  from  the  date 
of  such  notice,  and  thereupon  it  shall  be  the  duty  of  the  party  notified  to  defer 
such  delivery  until  the  time  stated  in  such  notice,  or  until  the  revocation  thereof 


1905,  c.  178.]  OREGON.  1031 

within  such  ten  days;  failure  to  serve  the  notice  first  above-mentioned  or  allow 
such  examination,  or  to  defer  the  delivery  of  such  securities  or  assets  for  the  time 
stated  in  the  second  of  said  notices,  shall  render  said  safe  deposit  company,  trust 
company,  corporation,  bank,  or  other  institution,  person  or  persons,  liable  to 
the  payment  of  the  tax  due  on  said  securities  or  assets,  pursuant  to  the  provi- 
sions of  this  act. 

Deferred  Payment;   Bond. 

S.  13.  Any  person  or  corporation  beneficially  interested  In  any  property  charge- 
able with  a  tax  under  this  act,  and  executors,  administrators,  and  trustees  thereof, 
may  elect,  within  six  months  from  the  death  of  the  decedent,  not  to  pay  such  tax 
until  the  person  or  persons  beneficially  interested  there  n  shall  come  into  actual 
possession  or  enjoyment  thereof.  If  it  be  personal  property,  the  person  or  per- 
sons so  electing  shall  give  a  bond  to  the  state  in  the  penalty  of  three  times  the 
amount  of  such  tax,  with  such  sureties  as  the  county  judge  of  the  proper  county 
may  approve,  conditioned  for  the  payment  of  such  tax  and  interest  thereon, 
at  such  time  and  period  as  the  person  or  persons  beneficially  interested  therein 
may  come  into  actual  possession  or  enjoyment  of  such  property,  which  bond 
shall  be  executed  and  filed,  and  a  full  return  of  such  property  upon  oath  made 
to  the  county  court  within  six  months  from  the  date  of  transfer,  thereof,  as  herein 
provided,  and  such  bond  must  be  renewed  every  five  years. 

Taxes  upon  Devises  and  Bequests  in  Lieu  of  Commissions. 

S.  14.  Whenever  a  decedent  appoints  one  or  more  executors  or  trustees,  and, 
in  lieu  of  their  allowance  or  commission,  makes  a  bequest  or  devise  of  property 
to  them,  which  would  otherwise  be  liable  to  said  tax,  or  appoints  them  his  residu- 
ary legatees,  and  said  bequests,  devises,  or  residuary  legacies  exceed  what  would 
be  a  reasonable  compensation  for  their  services,  such  excess  shall  be  liable  to 
such  tax,  and  the  court  having  jurisdiction  of  their  accounts,  upon  its  own  motion, 
or  on  the  application  of  the  state  treasurer,  shall  fix  such  compensation. 

Jurisdiction  of  the  County  Court. 

S.  15.  The  county  court  of  every  county  in  this  state  having  jurisdiction  to 
grant  letters  testamentary  or  of  administration  upon  the  estate  of  a  decedent 
whose  property  is  chargeable  with  any  tax  under  this  act,  or  to  give  ancillary 
letters  thereon,  or  to  appoint  a  trustee  of  such  estate,  or  any  part  thereof,  shall 
have  jurisdiction  to  hear  and  determine  all  questions  arising  under  the  provisions 
of  this  act,  and  to  do  any  act  in  relation  thereto  authorized  by  law  to  be  done 
by  such  court  in  other  matters  or  proceedings  coming  within  his  jurisdiction; 
and  if  two  or  more  county  courts  shall  be  entitled  to  exercise  any  such  jurisdic- 
tion, the  county  court  first  acquiring  jurisdiction  hereunder  shall  retain  the 
same  to  the  exclusion  o  every  other  county  court. 

Duty  of  County  Judge;  Notice  to  State  Treasurer. 

S.  16.  The  judge  of  the  county  court  having  jurisdiction  of  the  estate  of  any 
decedent  shall,  within  ten  days  after  the  filing  of  a  willpr  the  application  for  letters 
of  administration,  or  the  granting  of  letters  testamentary  or  of  letters  of  admin- 
istration, if  in  his  opinion  said  estate  is  subject  to  a  tax  under  any  of  the  provi- 
sions of  this  act,  cause  the  county  clerk  to  send  to  the  treasurer  of  the  state  a 


1032  STATUTES  ANNOTATED.  [Ore.  St 

certificate  of  the  filing  of  such  will  or  application,  or  the  granting  of  such  letters 
of  administration.  The  court  shall  thereupon,  and  as  soon  as  practicable  after 
the  granting  of  any  such  letters,  proceed  to  ascertain  and  determine  the  value  of 
every  inheritance,  devise,  bequest,  or  legacy  embraced  in  or  payable  out  of  the 
estate  in  which  such  letters  are  granted,  and  the  tax  due  thereon.  The  state 
treasurer  shall  have  the  same  right  to  apply  for  letters  of  administration  as  that 
conferred  by  law  upon  creditors.     [L.  1909,  p.  61.] 

Duty  of  Executors,  etc.;  Filing  Inventory  and  Appraisement. 

S.  17.  It  shall  be  the  duty  of  the  executor,  administrator,  or  trustee  of  every 
estate,  within  one  month  from  the  date  of  his  appointment,  or,  if  a  trustee,  from 
the  acceptance  of  this  trust,  or,  if  necessary,  such  further  time  as  the  county  cleric 
or  judge  may  allow,  make  an  inventory,  verified  by  his  own  oath,  of  all  the  real 
and  personal  property  of  the  deceased  which  shall  come  to  his  possession  or 
knowledge,  any  will  or  directions  of  the  decedent  to  the  contrary  notwithstand- 
ing, and  to  cause  the  same  to  be  appraised,  as  by  law  required,  and  filed  with 
the  clerk  of  the  court  having  jurisdiction  of  said  estate. 

Extension  of  Time  to  File  Appraisement. 

S.  18.  Whenever,  by  reason  of  the  complicated  nature  of  an  estate,  or  by  rea- 
son of  the  confused  condition  of  the  decedent's  affairs,  it  is  impracticable  for  the 
executor,  administrator,  trustee,  or  beneficiary  of  said  estate  to  file  with  the  clerk 
of  the  court  a  full,  complete,  and  itemized  inventory  of  the  personal  assets 
belonging  to  the  estate  within  the  time  required  by  statute  for  filing  invento  ies 
of  estates  of  decedents,  the  court  may,  upon  the  application  of  such  representa- 
tive or  parties  in  interest,  extend  the  time  for  filing  the  appraisement  for  a 
period  not  to  exceed  three^  months  beyond  the  time  fixed  by  law,  or  such 
further  time  as  may  be  necessary  upon  good  cause  shown. 

Duty  of  Administrator,  etc.,  to  Send  Inventory  and  Appraisement  to 
State  Treasurer. 

S.  19.  Every  executor  or  administrator,  or  trustee  of  any  estate  subject  to 
the  tax  herein  provided,  shall,  at  least  ten  days  prior  to  the  first  appraisement 
thereof,  as  provided  by  law,  notify  the  state  treasurer  in  writing  of  the  time  and 
place  of  such  appraisement,  and  shall  file  due  proof  of  such  notice  with  a  copy 
thereof  with  the  clerk  of  the  court  having  jurisdiction  of  such  estate  or  trust. 
Every  executor,  administrator,  or  trustee,  within  ten  days  after  such  appraise- 
ment, or  appraisement  of  any  beneficial  interest  or  reappraisement  thereof,  and 
before  payment  and  distribution  to  the  legatees  or  any  parties  entitled  to  benefi- 
ciary interest  therein,  shall  make  and  render  to  the  said  state  treasurer  a  copy  of 
the  said  inventory  and  appraisement,  duly  certified  as  such  by  the  clerk  of  the 
court  having  jurisdiction  of  said  estate,  and  shall  also  make  and  file  with  the 
said  state  treasurer  a  schedule,  list,  or  statement,  in  duplicate,  of  the  amount  of 
such  legacy  or  distributive  share,  together  with  the  amount  of  tax  which  has 
accrued  or  will  accrue  thereon,  verified  by  his  oath  or  affirmation,  to  be  adminis- 
tered and  certified  thereon  by  some  magistrate  or  officer  having  lawful  power  to 
administer  such  oaths,  in  such  form  and  manner  as  may  be  prescribed  by  the  state 
treasurer,  which  schedule,  list,  or  statement  shall  contain  the  name  of  each  and 
every  person  entitled  to  any  beneficiary  interest  therein,  together  with  the  clear 


1905,  c.  178.1  OREGON.  1033 

value  of  such  interest,  as  found  and  determined  by  the  court  having  jurisdiction 
of  said  estate.  One  of  said  schedules  shall  be  kept  and  retained  by  the  state 
treasurer,  and  the  other  delivered  by  him  to  the  secretary  of  state. 

Court  May  Act  on  First  Inventory. 

S.  20.  In  ascertaining  and  determining  the  value  of  any  inheritance,  devise, 
bequest,  or  legacy  embraced  in  or  payable  out  of  any  estate  or  trust,  and  the 
tax  due  thereon,  the  court  may  act  upon  the  inventory  and  appraisement  of  such 
estate  as  prepared  and  filed  by  the  executor,  administrator,  or  trustee  thereof, 
pursuant  to  law,  or  it  may  require  an  appraisement  or  reappraisement  as  herein 
provided,  of  the  true  and  full  value  of  the  property  embraced  in  any  inheritance, 
devise,  bequest,  or  legacy,  subject  to  the  payment  of  any  tax  imposed  by  this  act. 

Appointment  of  Appraisers. 

S.  21.  The  county  court  may,  in  any  matter  mentioned  in  sections  16,  17, 
and  18,  or  if  no  inventory  or  appraisement  has  been  made,  or  if  it  deem  it  for  any 
cause  insufficient  or  inadequate,  either  upon  its  own  motion  or  upon  the  appli- 
cation of  any  interested  party,  including  the  state  treasurer,  and  as  often  and 
when  occasion  required,  appoint  one  or  more  persons  as  appraisers  to  appraise 
the  true  and  full  value  of  the  property  embraced  in  any  inheritance,  devise, 
bequest,  or  legacy  subject  to  the  payment  of  any  tax  imposed  by  this  act. 

Immediate  Appraisal,  when. 

S.  22.  Every  inheritance,  devise,  bequest,  legacy,  or  gift,  upon  which  a  tax 
is  imposed  under  this  title,  shall  be  appraised  at  its  full  and  true  value  immedi- 
ately upon  the  death  of  the  decedent,  or  as  soon  thereafter  as  may  be  practicable; 
provided,  however,  that  when  such  devise,  bequest,  legacy,  or  gift  shall  be  of  such 
a  nature  that  its  full  and  true  value  can  not  be  ascertained  at  such  time,  it  shall 
be  appraised  in  like  manner  at  the  time  when  such  value  first  becomes  ascertain- 
able. The  value  of  every  future  or  contingent  or  limited  estate,  income,  interest, 
or  annuity  dependent  upon  any  life  or  lives  in  being  shall  be  determined  by  the 
rules  or  standard  of  mortality,  and  of  value  commonly  used  by  actuaries'  com- 
bined experience  tables,  except  that  the  rates  of  interest  on  computing  the  present 
value  of  all  future  and  contingent  interest  or  estates  shall  be  four  per  centum 
per  annum  interest. 

County  Court  to  Fix  Time  and  Place  of  Appraisement,  and  Clerk  to 
Give  Notice  to  Witnesses. 

S.  23.  The  county  court  shall  by  order  fix  the  time  and  place  when  the 
appraisers  appointed  under  the  provisions  of  section  20  of  this  act  shall  make 
said  appraisement.  The  county  clerk  shall  forthwith  give  notice  to  the  state 
treasurer,  and  to  all  persons  known  to  have  a  claim  or  interest  in  the  property, 
inheritance,  devise,  bequest,  legacy,  or  gift  to  be  appraised,  and  to  such  persons 
as  the  probate  court  may  by  order  direct,  of  the  time  and  place  when  said  ap- 
praisers will  make  such  appraisal.  Such  notice  shall  be  given  by  mail.  They 
shall,  at  such  time  and  place,  appraise  the  same  at  its  full  and  true  value,  as  herein 
prescribed,  and  for  that  purpose  the  said  appraisers  are  authorized  to  issue 
subpoenas  and  -to  compel  the  attendance  of  witnesses  before  them,  and  to  take 
evidence  of  such  witnesses  under  oath  concerning  such  property  and  the  value 


1034  STATUTES  ANNOTATED.  [Ore.  St. 

thereof,  and  they  shall  make  report  thereof,  and  of  such  value  in  writing  to  the 
said  county  court,  together  with  the  testimony  of  the  witnesses  examined,  and 
such  other  facts  in  relation  thereto,  and  to  the  said  matter  as  said  county  court 
may  order  or  require.  Every  appraiser  shall  be  entitled  to  compensation  at  the 
rate  of  $3  per  day  for  each  day  actually  and  necessarily  employed  in  such  appraisal, 
and  his  actual  and  necessary  traveling  expenses,  and  such  witnesses,  and  the 
officer  or  person  serving  any  such  subpoena,  shall  be  entitled  to  the  same  fees 
as  those  allowed  witnesses  or  sheriffs  for  similar  services  in  courts  of  record. 
The  compensation  and  fees  claimed  by  any  person  for  services  performed  under 
this  act  shall  be  approved  by  the  county  judge,  who  shall  certify  the  amount 
thereof,  as  so  approved,  to  the  secretary  of  state,  who  shall  examine  the  same, 
and,  if  found  correct,  he  shall  draw  his  warrant  upon  the  state  treasurer  for  the 
amount  thereof  in  favor  of  the  person  entitled  thereto,  payable  from  the  inherit- 
ance tax  fund. 

Report  of  Appraisers  to  be  Filed  w?th  County  Court. 

S.  24.  The  report  of  the  appraisers  shall  be  filed  with  the  county  court  and 
from  such  report,  and  other  proof  relating  to  any  such  estate  before  the  county 
court,  the  court  shall  forthwith,  as  of  course,  determine  the  full  and  true  value 
of  all  such  estates  and  the  amount  of  the  tax  to  which  the  same  are  liable;  or 
the  county  court  may  so  determine  the  full  and  true  value  of  all  such  estates,  and 
the  amount  of  tax  to  which  the  same  are  liable,  withou ;  appointing  appraisers, 
as  herein  provided. 

County  Court  to  Give  Notice;  When. 

S.  25.  The  county  court  shall  immediately  give  notice  upon  the  determina- 
tion of  the  value  of  any  inheritance,  devise,  bequest,  legacy,  or  gift,  which  is 
taxable  under  this  act  and  of  the  tax  to  which  it  is  liable,  to  all  parties  known 
to  be  interested  therein,  including  the  secretary  of  state  and  the  state  treasurer. 
Such  notices  shall  be  given  by  mail. 

Reappraisement;  When. 

S.  26.  Within  thirty  days  after  the  assessment  and  determination  by  the 
county  court  of  any  tax  imposed  by  this  act,  the  state  treasurer,  or  any  person 
interested  therein,  may  file  with  the  said  court  objections  thereto  in  writing,  and 
praying  for  a  reassessment  and  redetermination  of  such  tax.  Upon  any  objec- 
tion being  so  filed,  the  county  court  shall  appoint  a  time  for  the  hearing  thereof, 
and  cause  notice  of  such  hearing  to  be  given  by  mail  to  the  state  treasurer,  and 
all  parties  interested,  at  least  ten  days  before  the  hearing  thereof;  at  the  time 
appointed  in  such  notice,  the  court  shall  proceed  to  hear  such  objection,  and  any 
evidence  which  may  be  offered  in  support  thereof  or  opposition  thereto;  and  if, 
after  such  hearing,  the  said  court  finds  the  amount  at  which  the  property  is 
appraised  is  its  market  value,  and  the  appraisement  was  made  fairiy  and  in  good 
faith.  It  shall  approve  such  appraisement;  but  if  it  finds  that  the  appraisement 
was  made  at  a  greater  or  less  sum  than  the  market  value  of  the  property,  or  that 
the  same  was  not  made  fairiy  or  in  good  faith,  it  shall,  by  order,  set  aside  the 
appraisement  and  determine  such  value.  The  state  treasurer,  or  any  one  inter- 
ested in  the  property  appraised  may  appeal  to  the  circuit  court  from  the  judg- 
ment order  and  decree  of  the  county  court  in  the  premises,  and  may  appeal  to 


1905,  c.  178.]  OREGON.  1035 

the  supreme  court  from  the  order,  judgment,  or  decree  of  the  circuit  court  in  the 
same  manner  as  is  provided  by  law  for  appeals  from  judgments  and  orders  of 
the  county  court  and  circuit  court.  All  evidence  heard  on  such  reappraisement 
shall  be  reduced  to  writing  and  filed  with  the  clerk  of  the  court.  All  appeals 
taken  from  the  judgment  or  decree  of  the  court  shall  be  had  and  tried  on  appeal 
in  the  same  manner  and  with  like  effect  as  appeals  in  suits  in  equity  are  now 
heard  and  tried. 

Tax  Due  and  Unpaid;    Duty  of  Treasurer. 

S.  27.  If  the  state  treasurer  shall  have  reason  to  believe  that  any  tax  is  due 
and  unpaid  under  this  act,  after  the  refusal  or  neglect  of  the  persons  liable 
therefor  to  pay  the  same,  he  shall  notify  the  prosecuting  attorney  of  the  county 
in  writing  of  such  failure  or  neglect,  and  such  prosecuting  attorney,  if  he  have 
probable  cause  to  believe  that  such  tax  is  due  and  unpaid,  shall  apply  to  the  county 
court  for  a  citation  citing  the  persons  liable  to  pay  such  tax  to  appear  before  the 
court  on  the  day  specified,  not  more  than  thirty  days  from  the  date  of  such 
citation,  unless  the  court,  for  good  cause  shown,  grants  a  longer  time,  and  show 
cause  why  the  tax  should  not  be  paid.  The  county  court,  upon  such  application, 
and  whenever  it  shall  appear  to  him  that  any  such  tax  accruing  under  this  act 
has  not  been  paid  as  required  by  law,  shall  issue  such  citation,  and  a  service  of 
such  citation,  and  the  time,  manner,  and  proof  thereof,  and  the  hearing  and 
determination  thereon,  shall  conform  as  near  as  may  be  to  the  provisions  of  the 
probate  practice;  provided,  that  where  no  provision  is  made  for  manner  of  such 
service  or  proof  of  same,  the  court  or  judge,  at  the  time  such  order  or  citation 
is  issued,  shall  direct  the  manner  of  giving  notice  and  proof  of  the  same;  and 
whenever  it  shall  appear  that  any  such  tax  is  due  and  payable  and  the  payment 
thereof  cannot  be  enforced  under  the  provisions  of  this  act  in  said  county  court, 
the  person  or  corporation  from  whom  the  same  is  due  is  hereby  made  liable  to 
the  state  for  the  amount  of  such  tax,  and  it  shall  be  the  duty  of  the  prosecuting 
attorney  of  the  proper  county  to  sue  for,  in  the  name  of  the  state,  and  enforce 
the  collection  of  such  tax;  and  all  taxes  so  collected  shall  be  forthwith  paid  into 
the  inheritance  tax  fund  of  the  state.  It  shall  be  the  duty  of  said  prosecuting 
attorney  to  appear  for  and  represent  the  state  treasurer  on  the  hearing  of  such 
citation,  or  of  any  other  hearing.  Whenever  the  county  judge  shall  certify  that 
there  was  probable  cause  for  issuing  a  citation  and  taking  the  proceeding  speci- 
fied in  this  section,  the  state  treasurer  shall  file  with  the  secretary  of  state  a  duly 
verified  itemized  account  of  all  expenses  incurred  for  the  service  of  the  citation, 
and  other  lawful  disbursements  not  otherwise  paid,  and  the  secretary  of  state 
shall  thereupon  draw  his  warrant  upon  the  state  treasurer  for  the  payment  thereof, 
and  in  favor  of  said  treasurer  payable  from  the  inheritance  tax  fund. 

Secretary  of  State  to  Furnish  Books  and  Forms  of  Reports;   Entries  by 
Courts. 

S.  28.  The  secretary  of  state  shall  furnish  to  each  county  court  a  book,  which 
shall  be  a  public  record,  and  in  which  shall  be  entered  by  the  judge  or  clerk  of 
said  court,  under  the  direction  of  said  judge,  the  name  of  every  decedent  upon 
whose  estate  an  application  has  been  made  for  the  issue  of  letters  of  administra- 
tion or  letters  testamentary,  or  ancillary  letters;  the  date  and  place  of  death  of 
such  decedent;  the  estimated  value  of  the  property  of  such  decedent;  names  and 


1036  STATUTES  ANNOTATED.  [Ore.  St- 

places  of  residence  and  relationship  to  decedent  of  the  heirs  at  law  of  such  dece- 
dent ;  the  names  and  places  of  residence  of  the  legatees,  devisees,  and  other 
beneficiaries  in  any  will  of  such  decedent;  the  amount  of  each  legacy,  and  the 
estimated  value  of  any  property  devised  therein,  and  to  whom  devised.  These 
entries  shall  be  made  from  data  contained  in  the  papers  filed  on  any  such  appli- 
cation, or  in  any  proceeding  relating  to  the  estate  of  the  deceased.  The  county 
judge,  or  the  clerk  of  the  court  under  his  direction,  shall  also  enter  in  such  book 
the  amount  of  the  property  of  any  such  decedent,  as  shown  by  the  inventory 
thereof,  when  made  and  filed  in  his  office,  and  the  returns  made  by  any  appraisers 
appointed  by  him  under  this  act,  and  the  value  of  all  inheritances,  devises, 
bequests,  legacies,  and  gifts  inherited  from  such  decedent,  or  given  by  such 
decedent  in  his  will,  or  otherwise,  as  fixed  by  the  probate  court;  and  the  tax 
assessed  thereon,  and  the  amounts  of  any  receipts  for  payment  thereof  filed  in 
said  court.  The  secretary  of  state  shall  also  furnish  to  each  county  court  forms 
for  the  reports  to  be  made  by  such  county  judge,  which  shall  correspond  with 
the  entry  to  be  made  in  such  book.  He  shall  also  furnish,  for  the  use  of  the  courts 
and  appraisers  throughout  the  state,  tables  showing  the  average  expectancy  of 
life,  and  the  value  of  annuities  of  life  and  term  estates,  and  the  present  worth 
or  value  of  remainders  and  reversions,  as  prescribed  in  section  20  of  this  act. 
The  taxable  value  of  life  or  term,  deferred  or  future  estates,  shall  be  computed 
at  the  rate  of  four  per  cent  per  annum  interest. 

Reports  by  County  Judges  and  Custodian  of  Deeds  and  Records. 

S.  29.  Each  county  judge  shall  on  the  first  day  of  January,  April,  July,  and 
October  of  each  year,  under  the  seal  of  the  court,  make  a  report,  in  duplicate, 
upon  the  forms  furnished  by  the  secretary  of  state,  containing  all  the  data  and 
matters  required  to  be  entefed  in  such  book,  one  of  which  shall  be  immediately 
transmitted  to  the  state  treasurer,  and  the  other  to  the  secretary  of  state.  The 
county  clerk,  or  recorder  of  conveyances,  of  each  county  having  custody  of 
records  of  deeds,  shall,  at  the  same  time,  make  reports,  in  duplicate,  containing 
a  statement  of  any  conveyance  filed  or  recorded  in  his  office  of  any  property 
which  appears  to  have  been  made  or  intended  to  take  effect  in  possession  or 
enjoyment  after  the  death  of  the  grantor  or  vendor,  with  the  name  and  place 
of  residence  of  the  vendor  and  vendee,  and  a  description  of  the  property 
transferred,  as  shown  by  such  instrument,  one  of  which  duplicates  shall  be 
immediately  transmitted  to  the  state  treasurer,  and  the  other  to  the  secretary 
of  state. 

Duplicate  Receipts  to  be  Furnished  by  the  State  Treasurer. 

S.  30.  It  shall  be  the  duty  of  the  state  treasurer,  upon  the  payment  of  the 
sum  of  twenty-five  cents,  to  issue  to  any  person  demanding  the  same,  a  copy 
of  a  receipt  that  may  have  been  given  by  such  treasurer  for  the  payment  of  any 
tax  under  this  act,  which  receipt  shall  designate  upon  what  real  property,  if  any, 
pf  which  any  decedent  may  have  died  seized,  such  tax  shall  have  been  paid, 
by  whom  paid,  and  whether  in  full  of  such  tax.  Such  receipts  may  be  recorded 
m  the  office  of  the  officers  having  control  and  charge  of  the  deed  records  of  the 
county  in  which  such  property  is  situated,  in  a  book  to  be  kept  by  him  for  that 
purpose,  which  shall  be  labeled"transfer  tax." 


1905,  c.  178.]  OREGON.  1037 

Recording  Receipts  by  County  OflScer. 

S.  31.  The  county  commissioners  of  each  county  shall  provide  a  book  for 
the  recording  of  said  receipts.  The  officer  of  each  county  having  control  and 
charge  of  the  deed  records  of  each  county  shali  charge  and  collect,  at  the  time 
said  receipt  is  presented  for  record,  for  the  use  of  the  county,  the  sum  of  twenty- 
five  cents  for  recording  each  receipt.  The  sum  paid  to  the  state  treasurer  for 
copies  of  receipts  shall  be  paid  by  him  into  the  inheritance  tax  fund. 

Compromise  of  Amount  of  Tax  Due. 

S.  32.  Whenever  an  estate  charged,  or  sought  to  be  charged  with  the  inherit- 
ance tax,  is  of  such  a  nature  or  is  so  disposed  that  the  liability  of  the  estate  is 
doubtful,  or  the  value  thereof  cannot  with  reasonable  certainty  be  ascertained 
under  the  provisions  of  law,  the  state  treasurer  may,  with  the  written  approval 
of  the  attorney  general,  which  approval  shall  set  forth  the  reasons  therefor, 
compromise  with  the  beneficiaries  or  representatives  of  such  estates,  and  com- 
pound the  tax  thereon;  but  said  settlement  must  be  approved  by  the  county 
court  having  jurisdiction  of  the  estate,  and  after  such  approval  the  payment 
of  the  amount  of  the  taxes  so  agreed  upon  shall  discharge  the  lien  against  the 
property  of  the  estate. 

Administrators,  etc.,  to  Furnish  Additional  Reports,  When. 

S.  33.  Administrators,  executors,  or  trustees  of  the  estates  subject  to  the 
inheritance  tax  shall,  when  demanded  by  the  state  treasurer,  send  to  such 
treasurer  certified  copies  of  such  parts  of  their  reports  as  may  be  demanded  by 
him,  and,  upon  refusal  of  said  parties  to  comply  with  the  treasurer's  demand, 
it  is  the  duty  of  the  clerk  of  the  court  to  comply  with  such  demand,  and  the 
expense  of  making  siich  copies  and  transcripts  shall  be  charged  against  the 
estate,  as  are  other  costs  in  probate. 

Appeals. 

S.  34.  Appeals  may  be  taken  to  the  circuit  court  from  all  final  orders,  judg- 
ments, and  decrees,  entered  under  the  provisions  of  this  act,  in  the  same  manner 
and  with  the  same  effect  as  other  appeals  are  taken  from  final  orders  and  judg- 
ments made  or  rendered  by  the  county  court.  All  such  appeals  shall  be  had 
and  tried  in  the  same  manner  and  with  like  effect  as  appeals  in  suits  in  equity 
are  now  heard  and  tried. 

Penalty  for  Secreting  or  Willful  Failure  to  Produce  Will. 

S.  35.  Any  person  who  shall  willfully  sequester  or  secrete  any  last  will  or 
testament  of  a  person  then  deceased,  or  who,  having  the  custody  of  any  such 
will  and  testament,  shall  willfully  fail  or  neglect  to  produce  and  deliver  the  same 
to  the  judge  of  the  county  court  having  jurisdiction  of  its  probate,  or  to  any 
executor  named  therein,  within  a  reasonable  time  after  the  death  of  the  testator 
thereof,  with  intention  to  injure  or  defraud  any  person  interested  therein,  shall 
be  punished  by  imprisonment  in  the  county  jail  not  more  than  one  year  or  by 
fine  not  exceeding  $500. 


1038  STATUTES  ANNOTATED.  [Ore.  St. 

Penalty  for  Administering  Personal  Estate  without  Proving  Will. 

S.  36.  Every  person  who  shall  administer  the  personal  estate  of  any  person 
dying  after  the  passage  of  this  act,  or  any  part  thereof,  without  proving  the  will 
of  the  deceased  or  taking  out  letters  of  administration  of  such  personal  estate 
within  six  calendar  months  after  the  death  of  the  person  so  dying,  shall  be  pun- 
ished by  imprisonment  in  the  county  jail  not  more  than  one  year  or  by  a  fine 
not  exceeding  $500. 

Duty  of  Administrators,  etc.,  to  Notify  State  Treasurer  of  Trust  Estate, 
Wlien. 

S.  37.  Whenever  any  of  the  real  estate  of  which  any  decedent  may  die  seized 
shall  pass  to  any  body  politic  or  corporate,  or  to  any  person  or  persons,  or  in 
trust  for  them,  or  tome  of  them,  it  shall  be  the  duty  of  the  executor,  adminis- 
trator, or  trustee  of  such  decedent  to  give  information  thereof  in  writing  to  the 
state  treasurer  within  three  months  after  they  undertake  the  execution  of  their 
expected  duties,  or,  if  the  fact  be  not  known  to  them  within  that  period,  then 
within  one  month  after  the  same  shall  have  come  to  their  knowledge. 

Property  Outside  of  tlie  State. 

S.  38.  Except  as  to  real  property  located  outside  of  the  state  passing  in  fee 
from  the  decedent  owner,  the  tax  imposed  under  section  2  shall  hereafter  be 
assessed  against  and  be  collected  from  property  of  every  kind,  which,  at  the  death 
of  the  decedent  owner,  is  subject  to,  or  thereafter,  for  the  purpose  of  distribution, 
is  brought  into  this  state  and  becomes  subject  to  the  jurisdicion  of  the  courts 
of  this  state  for  distributive  purposes,  or  which  was  owned  by  any  decedent 
domiciled  within  the  state  at^the  time  of  the  death  of  such  decedent,  even  though 
the  property  pf  said  decedent  so  domiciled  was  situated  outside  of  the  state. 

Taxes  on  Foreign  Estate  where  Part  of  Property  is  in  State. 

S.  39.  In  case  of  any  property  belonging  to  a  foreign  estate,  which  estate  in 
whole  or  in  part  is  liable  to  pay  an  inheritance  tax  in  this  state,  the  said  tax  shall 
be  assessed  upon  the  market  value  of  said  property  remaining  after  the  payment 
of  such  debts  and  expenses  as  are  chargeable  to  the  property  under  the  laws  of 
this  state.  In  the  event  that  the  executor,  administrator,  or  trustee  of  such 
foreign  estates  files  with  the  clerk  of  the  court  having  ancillary  jurisdiction, 
and  with  the  state  treasurer,  duly  certified  statements  exhibiting  the  true  market 
value  of  the  entire  estate  of  he  decedent  owner,  and  the  indebtedness  for  which 
the  said  estate  has  been  adjudged  liable,  which  statements  shall  be  duly  attested 
by  the  judge  of  the  court  having  original  jurisdiction,  the  beneficiaries  of  said 
estate  shall  then  be  entitled  to  have  deducted  such  proportion  of  the  said  indebted- 
ness of  the  decedent  from  the  value  of  the  property  as  the  value  of  the  property 
within  this  state  bears  to  the  value  of  the  entire  estate. 

"^Gompensation  of  Ofl&cers. 

S.  40.  Except  as  otherwise  provided  in  this  act,  no  officer  shall  receive  any 
additional  compensation  to  that  now  allowed  him  by  law,  by  reason  of  any  duties 
imposed  upon  him  by  the  provisions  of  this  act. 


1905,  c.  178.]  OREGON.  1039 

Payment  of  Disbursements  by  State  Treasurer. 

S.  41.  The  state  treasurer  shall  file  with  the  secretary  of  state  a  duly  verified 
itemized  account  of  all  expenses  incurred  and  disbursements  made  by  him  in 
examining  or  having  examined  any  securities  under  section  12  of  this  act,  or  any 
other  expense  actually  incurred  by  him  in  enforcing  or  carrying  out  the  pro- 
visions of  this  act,  and  the  secretary  of  state  shall  thereupon  draw  his  warrant 
upon  the  state  treasurer  for  the  payment  thereof  and  in  favor  of  said  treasurer, 
payable  from  the  inheritance  tax  fund. 

Penalty  for  Appraisers  Taking  Fee  or  Reward. 

S.  42.  Any  appraiser  appointed  by  this  act  who  shall  take  any  fee  or  reward 
from  any  executor,  administrator,  trustee,  legatee,  next  of  kin,  or  heir  of  any 
decedent,  or  from  any  other  person  liable  to  pay  said  tax  or  any  portion  thereof, 
shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  in  any  court  having  juris- 
diction of  misdemeanors,  he  shall  be  fined  not  less  than  $250  nor  more  than  $500, 
and  imprisoned  not  exceeding  ninety  days,  and,  in  addition  thereto,  the  county 
judge  shall  dismiss  him  from  such  service. 

Repeal. 

S.  43.  All  laws  or  parts  of  laws  inconsistent  herewith  be  and  the  same  are 
hereby  repealed. 


1040 


STATUTES  ANNOTATED.  [Pa.  St. 


PENNSYLVANIA. 


In  General. 

Pennsylvania,  the  first  state  to  enact  an  inheritance  tax  law, 
is  one  of  the  few  states  that  has  shown  sanity  in  legislation  and 
interpretation.  Direct  inheritances  and  the  personal  property 
of  non-residents  are  very  properly  let  alone,  and  the  law  has  been 
so  construed  as  to  avoid  double  taxation. 

The  original  law  was  enacted  in  Pennsylvania  in  1826  and,  with 
very  few  changes,  it  is  the  law  today.  The  law  was  codified  in 
1887  and  slightly  amended  since.  Collateral  inheritances  only 
are  taxed.  The  rate  is  uniformly  five  per  cent  and  the  exemption 
is  $250.  The  inheritances  not  taxed  are  those  to  father,  mother, 
husband,  wife,  child,  inheritances  between  illegitimate  child  and 
its  mother,  the  children  of  a  former  husband  or  wife,  adopted 
children,  step-child,  lineal^descendant  and  daughter-in-law.  It  has 
been  held  that  inheritances  to  a  grandparent,  and  a  son's  widow 
who  has  remarried,  are  taxable. 

No  attempt  is  made  to  tax  stock  in  Pennsylvania  corporations 
owned  by  a  non-resident,  and  securities  kept  in  the  state  by  a 
non-resident  are  not  subject  to  the  tax.  This  has  been  an  im- 
portant factor  in  the  great  growth  of  the  safe  deposit  business  of 
the  Philadelphia  trust  companies.  There  was  a  case  where  a 
non-resident  had  an  agent  in  Pennsylvania  with  very  broad  powers 
to  buy  and  sell  securities,  in  which  it  was  held  that  the  securities 
held  by  the  agent  were  taxable  in  Pennsylvania  (Lewis's  Estate, 
203  Pa.  St.  211).  It  was  later  pointed  out  that  this  case  must  rest 
on  its  own  peculiar  facts  and  does  not  affect  the  general  Pennsyl- 
vania doctrine  that  securities  of  a  non-resident,  though  physically 
within  the  state,  are  not  subject  to  the  inheritance  tax  {Shoen- 
b^rger's  Estate,  221  Pa.  St.  112).  This  does  not  apply  to  tangible 
personal  property  within  the  state  {SmalVs  Appeal,  151  Pa.  St.  l). 
It  is  refreshing  to  find  the  courts  in  at  least  one  state  insisting 
that  if  personal  property  of  residents  held  outside  of  the  state  is 


1824-1894.] 


PENNSYLVANIA. 


1041 


to  be  taxed  on  the  theory  that  personal  property  follows  the 
domicile  of  the  owner,  the  logical  consequence  of  the  theory  is 
that  personal  property  of  non-residents  within  the  state  is  not 
taxable  (C/.  Coleman' s  Estate,  159  Pa.  St.  231). 

A  direct  inheritance  tax  law  passed  in  1897,  and  imposing  a 
uniform  tax  of  two  per  cent  on  personal  property  only,  was 
held  unconstitutional  {Cope's  Estate,  191  Pa.  1).  A  bill  for  a 
direct  inheritance  tax  introduced  in  the  legislature  of  1911  was 
defeated. 

List  of  Statutes. 

1824-26.     Statutes  of  Pennsylvania,  c.  72,  p.  227  (Apr.  7,  1826). 


1829-30. 

<              <<                      a 

No,  98,  c.  157,  s.  5  (Apr.  6,  1830). 

1831-32. 

'              "                     " 

No.  80,  par.  36. 

1833-34. 

'              "                     " 

No.  52,  pars.  62-69. 

1834. 

i              It                     li 

p.  537,  s.  648. 

1834. 

i                  ,1                            n 

c.    52  (Feb.  24,  1834),  pars.  62,  66. 

1841. 

t              li                      11 

c.    49,  p.    99  (Mar.  22,  1841). 

1844. 

1              11                     II 

c.  369,  p.  564  (May  6,  1844). 

1846. 

I             II                     It 

c.  268,  p.  330  (Apr.  14,  1846). 

1846. 

1              11                     II 

c.  300,  p.  358  (Apr.  16,  1846). 

1846. 

1              11                     11 

c.  388,  p.  484,  s.  4  (Apr.  22,  1846). 

1846. 

1              II                     (( 

c.  390,  p.  486,  s.  14  (Apr.  22,  1846). 

1849. 

1              II                     II 

c.  369,  ss.  10-16  (Apr.  10  1849). 

1850. 

1              II                     II 

c.      7,  p.      7  (Jan.  23,  1850). 

1850. 

1              II                     ,1 

c.  147,  p.  170  (Mar.  11,  1850). 

1855. 

1              II                     II 

c.    47,  p.    44. 

1855. 

1             It                     11 

c.  450,  p.  425  (May  4,  1855). 

1874. 

I             11                     II 

c.    60. 

1878.        .        ' 

1              II                     II 

c.  227,  pars.  8,  13. 

1878. 

1             II                     II 

c.  236,  p.  206  (June  12,  1878). 

1887. 

1             II                     II 

c.    37,  p.    79  (May  6,  1887). 

1891. 

1             II                     II 

No.  50,  p.  59. 

1895. 

I             It                    n 

c.  243,  p.  325  (June  26,  1895). 

1897. 

1             11                    ti 

No.  47,  p.  56. 

1901. 

1             11                    It 

c.    25,  p.    59  (Mar.  25,  1901). 

1903. 

1             II                    It 

c.    13,  p.  12  (Mar.  5,  1903). 

1905. 

1             It                    It 

c.     11,  pp.  258  to  260. 

1911. 

1             It                    tt 

p.    112. 

1700-1853.     P 

urdon's  Digest,  p. 

138,  ss.  1-24. 

1700-1861. 

"        p. 

148,  ss.  1-28. 

1873-1878. 

Annual  Digest,  p.  2096,  s.  1. 

1700-1872.     B 

rightley's  Purdon 

s  Digest,  p.  214,  ss.  1-29. 

1700-1883. 

<<                          n 

p.  259,  ss.  1-30. 

1858-1887. 

It                         II 

(Supplement),  ss.  1-25,  p.  2148. 

1893-1903.      - 

II                         It 

p.  113,  ss.  1-4. 

1700-1894. 

It                         11 

p.  305,  ss.  1-26. 

1042  STATUTES  ANNOTATED.  [Pa.  St. 

Constitutional  Limitations. 
Pennsylvania  Constitution,  1873,  a.  9. 

S.  1.  All  taxes  shall  be  uniform,  upon  the  same  class  of  subjects,  within  the 
territorial  limits  of  the  authority  levying  the  tax,  and  shall  be  levied  and  col- 
lected under  general  laws;  but  the  general  assembly  may,  by  general  laws, 
exempt  from  taxation  public  property  used  for  public  purposes,  actual  places  of 
religious  worship,  places  of  burial  not  used  or  held  for  private  or  corporate  profit, 
and  institutions  of  purely  public  charity. 

S.  2.  All  laws  exempting  property  from  taxation,  other  than  the  property 
above  enumerated,  shall  be  void. 

Individual  Exemptions. 

Before  the  constitution  of  1873  uniformity  of  taxation  was  not 
required  by  the  constitution,  and  hence  the  legislature  would  have 
the  power  to  impose  and  could  exempt  individuals  from  liability 
for  the  inheritance  tax.  Commonwealth  v.  Henderson,  172  Pa.  St. 
135. 

Uniformity. — Progressive  Rate. 

"The  language  of  section  1,  as  to  what  the  rule  of  uniformity 
shall  embrace,  is  as  broad  and  comprehensive  as  it  could  possibly 
have  been  made.  The  words,  'all  taxes,*  must  necessarily  be 
construed  to  include  property  tax,  inheritance  tax,  succession  tax 
and  all  other  kinds  of  tax,  the  subjects  of  which  are  susceptible  of 
just  and  proper  classification.  By  necessary  implication,  the  first 
clause  of  that  section  recognizes  the  authority  of  the  legislature 
to  justly  and  fairly,  but  never  arbitrarily,  classify  those  subjects 
of  taxation  with  the  view  of  effecting  relative  equality  of  burdens. 
A  pretended  classification  that  is  based  solely  on  a  difference  in 
quantity  of  precisely  the  same  kind  of  property  is  necessarily 
unjust,  arbitrary  and  illegal.  For  example,  a  division  of  personal 
property  into  three  classes  with  the  view  of  imposing  a  different 
tax  rate  on  each,  —  class  1  consisting  of  personal  property  exceed- 
ing in  value  the  sum  of  one  hundred  thousand  dollars  ($100,000), 
class  2  consisting  of  personal  property  exceeding  in  value  twenty 
thousand  dollars  ($20,000),  and  not  exceeding  one  hundred  thou- 
sand dollars  ($100,000),  and  class  3  consisting  of  personal  property 
not  exceeding  in  value  twenty  thousand  dollars  ($20,000),  — would 
'be  so  manifestly  arbitrary  and  illegal  that  no  one  would  attempt 
to  justify  it. 

The  next  clause  of  section  1  expressly  authorizes  the  legislature 
to  exempt  from  taxation  four  specified  classes  or  kinds  of  property. 


1826,  c.  72.]  PENNSYLVANIA.  1043 

This  specific  delegation  of  authority  to  exempt  impliedly  pro- 
hibits express  exemption  from  taxation  of  any  other  property,  but 
to  place  this  matter  beyond  the  reach  of  doubt,  it  is  expressly 
ordained,  in  section  2,  that  'all  laws  exempting  property  from 
taxation  other  than  the  property  above  enumerated  shall  be  void.* 
"These  limitations  on  the  power  of  the  legislature  mean  some- 
thing. They  are  plainly  intended  to  secure,  as  far  as  possible, 
uniformity  and  relative  equality  of  taxation,  by  prohibiting  gener- 
ally the  exemption  of  a  certain  part  of  any  recognized  class  of 
property,  and  subjecting  the  residue  to  a  tax  that  should  be  borne 
uniformly  by  the  entire  class,  and  by  guarding  against  any  other 
device  that  necessarily  or  intentionally  infringes  on  the  estab- 
lished rules  of  uniformity  and  relative  equality  which,  as  we  have 
seen,  underlie  every  just  system  of  taxation.  In  any  view  that 
can  reasonably  be  taken  of  these  limitations,  it  must  be  manifest 
to  any  reflecting  mind  that  the  act  in  question  (St.  1897,  c.  47) 
offends  against  them  by  undertaking  to  wholly  exempt  from  taxa- 
tion the  personal  property  of  a  very  large  percentage  of  decedents' 
estates,  and  impose  increased  and  unequal  burdens  on  the  residue 
of  the  same  class  of  property."  Per  Sterrett,  C.  J.,  in  In  re  Cope, 
191  Pa.  St.  1,  21,  43  A.  79,  29  Pittsb.  Leg.  J.  N.  S.  379,  45  L.  R.  A. 
316,  71  Am.  St.  Rep.  749,  44  Wkly.  Notes  Cas.  89.  [It  should  be 
noted  that  this  decision  is  based  on  the  peculiar  Pennsylvania 
doctrine,  that  an  inheritance  tax  is  a  property  tax,  and  it  is  not  law 
elsewhere. — Ed.] 

History  of  Pennsylvania  Act. 

'The  collateral  inheritance  tax  was  originally  a  legislative 
invention;  was  raised  to  five  per  cent  at  a  period  of  great  em- 
barrassment in  the  financial  history  of  the  state;  has  contributed 
very  essentially  to  the  firm  establishment  of  the  public  credit;  and 
has  been  so  long  approved  by  the  people,  that  it  is  not  likely  ever 
to  be  given  up;  but  resting  entirely  upon  statutory  rules,  it  must 
be  administered  according  to  the  very  spirit  and  letter  of  the 
statutes."  Per  Woodward,  C.  J.,  in  Commonwealth  v.  Coleman, 
52  Pa.  St.  (2  P.  F.  Smith)  468. 

THE  EARLY  STATUTES. 

Pa.  St.  1826,  c.  72,  p.  227.     Approved  April  7,  1826. 

S.  1.  From  and  after  the  first  day  of  May  next,  all  estates,  real,  personal  and 
mixed,  of  every  kind  whatsoever,  passing  from  any  person  who  may  die  seized 
or  possessed  of  such  estate,  being  within  this  commonwealth,  either  by  will 


1044  STATUTES  ANNOTATED,  [Pa.  St. 

or  under  the  intestate  laws  thereof,  or  any  part  of  such  estate,  or  estates,  or  inter- 
est therein,  transferred  by  deed,  grant,  bargain,  or  sale,  made  or  intended  to  take 
effect,  in  possession  or  enjoyment  after  the  death  of  the  grantor,  or  bargainor  to 
any  person  or  persons,  or  to  bodies  politic  or  corporate,  in  trust  or  otherwise, 
other  than  to,  or  for  the  use  of  father,  mother,  husband,  wife,  children,  and 
lineal  descendants  born  in  lawful  wedlock,  shall  be,  and  they  are  hereby  made 
subject  to  a  tax  or  duty  of  two  dollars  and  fifty  cents  on  every  hundred  dollars 
of  the  clear  value  of  such  estate  or  estates,  and  at  and  after  the  same  rate  for  any 
less  amount,  to  be  paid  to  the  use  of  the  commonwealth,  and  all  executors  and 
administrators,  and  their  sureties  shall  only  be  discharged  from  liability  for  the 
amount  of  any  and  all  such  duties  on  estates,  the  settlement  of  which  they  may 
be  charged  with  by  having  paid  the  same  over  for  the  use  aforesaid,  as  herein 
directed;  Provided,  no  estate  which  may  be  valued  at  a  less  sum  than  $250, 
shall  be  subject  to  the  duty  or  tax. 

This  is  the  first  inheritance  tax  enacted  in  this  country,  apart 
from  the  early  federal  probate  fees,  and  has  subsisted  with  little 
change  for  nearly  a  century  to  the  present  time. 

Remainders  Included. 

The  terms  of  the  statute  were  comprehensive  enough  to  include 
every  interest  which  could  pass  whether  in  possession  or  remainder. 
Commonwealth  v.  Smith,  20  Pa.  St.  (8  Harris)  100. 

Grandmother  not  Exempt. 

The  only  persons  exempted  are  carefully  enumerated  and  do 
not  include  a  grandmother,  who  is  therefore  liable  to  pay  the  tax 
although  the  act  is  called  a  collateral  inheritance  law.  McDowell 
V.  Addams,  45  Pa.  St.  (9  Wright)  430. 

Exemption  Refers  to  Whole  Estate. 

"  No  estate  which  may  be  valued  at  a  less  sum  than  $250  shall  be 
subject  to  the  duty  or  tax.''  The  court  holds  by  reference  to  the 
language  of  the  rest  of  the  section  that  the  word  "estate"  refers 
to  the  estate  left  by  the  decedent  and  does  not  mean  the  legacy 
or  estate  which  passes  by  will  or  otherwise  to  the  collateral  heir 
or  person  taking  the  same.  Commonwealth  v.  Boyle ,  2  Del.  Co. 
Rep.  (Pa.)  335. 

S.  2  provides  for  the  duties  of  executors,  administrators  and  registers. 
^S.  3  provides  that  the  county  commissioners  shall  take  an  account  of  real 
estate  which  may  have  passed  from  the  persons  dying  seized  thereof. 
S.  4  provides  that  the  tax  shall  be  a  lien  until  paid. 
S.  5  provides  for  the  oath  of  parties. 
S.  6  requires  the  county  treasurer  to  receive  and  pay  over  the  tax. 


1841,  c.  49.]  PENNSYLVANIA.  1045 

Commission  of  County  Treasurers. 

Pa.  St.  1829-30,  c.  98,  approved  April  2,  1830,  provides  for  the  commission 
allowed  county  treasurers  on  inheritance  taxes  collected  of  five  (5)  per  cent  up 
to  one  thousand  ($1,000)  dollars,  and  one  (1)  per  cent  above  that;  and  in  no  case 
shall  the  commission  on  any  one  estate  exceed  one  hundred  ($100)  dollars. 

Probate  Fee. 

Pa.  St.  1829-30,  c.  157,  s.  5,  approved  April  6,  1830,  provides  a  fee  for  probate 
and  letters  of  administration  of  fifty  (50)  cents. 

Pa.  St.  1832,  c.  80,  pp.  36,  37,  provides  a  very  small  probate  and  administration 
fee  to  be  collected  by  the  register  of  probate. 

Executors  to  Retain  Tax.  —  Notice  as  to  Real  Estate. 

Pa.  St.  1834,  c.  52,  ss.  62-66,  approved  February  24,  1834,  provides  thac  the 
executors  or  administrators  shall  retain  in  their  hands  the  money  for  payment 
of  the  inheritance  tax;  and  provides  also  for  notice  by  them  to  the  county  com- 
missioners of  real  estate  subject  to  the  tax. 

Payments  to  State  Treasurer.  —  Commissions. 

Pa.  St.  1834,  p.  537,  s.  648,  provides  for  the  payment  of  all  sums  exceeding 
five  hundred  ($500)  dollars  by  the  county  treasurers  to  the  state  treasurer;  and 
provides  that  the  commission  allowed  county  treasurers  in  any  one  state  shall 
not  exceed  one  hundred  ($100)  dollars. 

Collection.  —  Citation. 

Pa.  St.  1841,  c.  49,  approved  March  22,  1841,  provides  for  a  more  convenient 
collection  of  the  tax  on  collateral  inheritances  by  authorizing  a  citation  to  execu- 
tors or  administrators  failing  to  pay  the  tax;  and  by  transferring,  collecting  and 
paying  over  the  tax  to  the  registers. 

Citation. 

Pa.  St.  1841,  c.  49.     Approved  March  22, 1841. 

S.  1.  That  henceforward  it  shall  be  the  duty  of  the  registers  for  the  probate 
of  v/ills  and  granting  letters  of  administration  in  the  various  counties  of  this 
commonwealth,  whenever  any  executor  or  administrator  of  a  decedent,  whose 
estate  is  subject  to  the  collateral  inheritance  tax,  shall  have  neglected  or  omitted 
to  file  an  account  for  the  space  of  one  year  from  the  period  now  required  by  law, 
to  issue  a  citation  commanding  the  said  executor  or  administrator  to  file  and  settle 
said  account,  the  said  citation  to  be  served  by  the  sheriff  of  the  county,  for 
which  service  he  is  to  receive  the  same  compensation  now  allowed  by  law  for 
similar  service. 

The  official  bond  of  the  register  of  wills  does  not  bind  him 
to  turn  over  collateral  inheritance  taxes  collected,  as  under  the 
statute  of  1841,  c.  49,  imposing  collection  of  the  inheritance  taxes 
on  the  register,  the  legislature  did  not  rely  on  his  general  official 


1046  STATUTES  ANNOTATED.  [Pa.  St. 

bond  as  a  security  for  the  performance  of  this  new  duty,  but  required 
a  special  bond  for  this  purpose.  Commonwealth  v.  Toms,  45  Pa.  St. 
(9  Wright)  408. 

Receipts. 

Pa.  St.  1844,  c.  369,  p.  564,  s.  3,  approved  May  6,  1844,  provides  that  on  pay- 
ment of  the  inheritance  tax  duplicate  receipts  shall  be  given,  one  of  which  is  to 
be  sent  to  the  auditor  general  to  charge  the  register  with  the  amount  received. 

Special  Refund. 

Pa.  St.  1846,  c.  268,  p.  330,  provides  for  a  special  refunding  of  a  certain  over- 
payment made  by  the  administrator  of  $18.43. 

Appraisal. 

Pa.  St.  1846,  c.  300,  p.  358,  passed  April  16,  1846,  makes  it  the  duty  of  the 
local  assessors  to  appraise  property  liable  to  the  collateral  inheritance  tax. 

Accounts  of  Registers. 

Pa.  St.  1846,  c.  388,  p.  483,  passed  April  22,  1846,  provides  for  the  publica- 
tion of  the  accounts  of  the  registers  for  the  collateral  inheritance  tax. 

Rate  Made  Five  Per  Cent. 

Pa..  St.  1846,  c.  390.     Approved  April  22,  1846. 

S.  14.  That  all  estates,  real,  personal  and  mixed,  of  any  kind  whatsoever, 
subject  to  collateral  inheritanqe  tax,  by  the  provisions  of  the  first  section  of  the 
act  of  the  seventh  of  April,  one  thousand  eight  hundred  and  twenty-six,  entitled, 
"An  act  relating  to  collateral  inheritances,"  passing  from  any  person  who  may 
die  seized  or  possessed  of  such  estate  after  the  first  day  of  May  next,  shall  there- 
after be  made  subject  to  a  tax  or  duty  for  the  use  of  the  commonwealth,  of  $5 
on  each  and  every  hundred  dollars  of  the  clear  value  of  such  estate  or  estates, 
and  at  the  same  rate  for  any  less  sum,  to  be  assessed  and  collected,  as  now  pro- 
vided by  law. 

Not  Retroactive. 

The  Pennsylvania  act  of  April  22,  1846,  applied  only  to  estates 
of  persons  dying  after  May  1,  1846.  Commonwealth  v.  Smith, 
20  Pa.  St.  (8  Harris)  100. 

Application  of  Revenues. 

Pa.  St.  1849,  c.  369,  ratified  April  10,  1849,  s.  1,  provides  that  the  revenues 
accruing  under  the  act  shall  be  applied  for  the  purchase  of  the  state  debt. 

The  object  of  the  Pennsylvania  statute  of  1849  was  only  to 
give  a  mode  of  making  the  appraisement  and  fix  the  penalty  for 
default.     Appeal  of  James,  2  Del.  Co.  Rep.  (Pa.)  164. 


1849,  c.  369.]  PENNSYLVANIA.  1047 

Administrative  Features  Strengthened. 

S.  10  provides  that  the  inheritance  tax  shall  be  paid  on  transfer  of  the  stock 
and  that  any  corporation  permitting  a  transfer  without  payment  of  the  tax  shall 
be  liable  for  the  tax. 

Wife  or  Widow  of  a  Son  Exempted. 

S.  11  added  to  the  exemptions  the  wife  or  widow  of  a  son  of  the  decedent. 

Appraisal. 

S.  12  provides  for  the  valuation  of  such  property  subject  to  the  collateral 
inheritance  tax  giving  a  right  of  appeal  from  the  appraisal  to  the  register's  court. 

Appraisal  in  which  County. 

Under  this  section  appraisers  must  be  appointed  by  the  register 
of  the  county  in  which  letters  testamentary  are  issued ;  and  in  that 
county  all  of  the  proceedings  should  be  had  to  enforce  the  payment 
of  the  tax  assessed  and  so  real  estate  in  another  county  may  be 
assessed  under  these  proceedings.  Stinger  v.  CommonweaUh  (2d), 
26  Pa.  St.  (2  Casey)  429,  431. 

Appraisal  Does  Not  Determine  Liability. 

An  appraisal  under  this  section  has  for  its  object  simply  to  ascer- 
tain the  value  of  the  estate  and  not  to  determine  whether  the  estate 
is  subject  to  the  tax.  Where  the  estate  is  not  subject  to  be  assessed 
with  the  tax  the  entire  proceeding  is  a  nullity,  for  it  is  only  upon 
estates  "that  are  or  shall  be  subject  to  the  payment  of  a  collateral 
inheritance  tax"  that  the  register  has  any  power  for  the  purposes 
of  assessment.  Therefore  the  appraisal,  although  not  appealed 
from,  is  not  final  on  the  question  of  the  liability  to  tax.  Stinger 
V.  Commonwealth,  26  Pa.  St.  (2  Casey)  422,  426. 

Increase  in  Value  after  Death  of  Testator  not  Included. 

The  value  should  be  reckoned  as  of  the  death  of  the  testator, 
not  including  later  increase  at  the  death  of  the  life  tenant.  Cowen 
V.  Smith,  20  Pa.  St.  (8  Harris)  100. 

Appeal. 

The  administrator  can  appeal   from   the  appraisement  of   the 
real  estate  only  and  the  heirs  only  have  a  right  of  appeal  from  the 
;      appraisal  of  the  real  estate.     Cowen  v.  Coleman,  52  Pa.  St.  468. 

Payment  of  Tax  on  Remainder. 

S.  1 3  provides  after  the  deduction  of  the  life  estate  the  tax  on  remainder  shall 
be  paid  to  the  register  of  wills. 


1048  STATUTES  ANNOTATED.  [Pa.  St. 

Interest. 

S.  14  requires  interest  at  twelve  (12)  per  cent  unless  the  tax  is  paid  within 
nine  (9)  months  from  the  passage  of  the  act. 

Interest  where  Estate  Involved  in  Litigation. 

It  was  the  duty  of  the  executors  to  estimate  the  amount  of 
personal  estate  involved  in  litigation  difficulties  which  could  not 
be  settled  and  pay  the  collateral  inheritance  tax  on  the  balance. 
For  failure  to  do  so  they  are  chargeable  with  interest  at  the  rate 
of  twelve  per  cent  per  annum  from  a  year  after  the  death  of  the 
testator.     Appeal  of  Commonwealth,  34  Pa.  St.  (10  Casey)  204. 

Retroactive. 

The  testator  died  in  1833,  and  this  statute  which  provided  that 
twelve  per  cent  interest,  to  be  counted  from  the  death  of  the  dece- 
dent, should  be  charged  on  all  taxes  due  from  the  estates  of  persons 
then  dead  more  than  one  year,  unless  the  tax  was  paid  within  nine 
months  of  the  passage  of  the  act,  applies  to  the  estate  in  question. 
The  legislature  had  a  right  to  demand  payment  of  the  tax  due  to 
the  commonwealth  within  a  limited  time,  and  it  prescribed  a 
penalty  for  neglect  or  refusal  to  comply.  Commonwealth  v.  Smith, 
20  Pa.  St.  (8  Harris)  100. 

Duties  of  Register. 

S.  15  authorizes  the  register  of  wills  to  issue  citations  or  give  notice  by  publi- 
cation to  executors  for  the  collection  of  the  tax  and  provides  that  he  shall  keep 
returns  of  the  taxes  collected. 

The  words  "proper  prothonotary's  office"  in  this  section 
refer  to  the  office  in  the  county  where  assessment  and  appraise- 
ment is  made,  and  where  the  register  granting  letters  testamentary 
and  of  administration  has  jurisdiction.  Stinger  v.  Commonwealth 
(2d),  26  Pa.  St.  (2  Casey)  429,  431. 

Pa.  St.  1850,  c.  7,  approved  January  23, 1850,  extends  the  time  for  the  payment 
of  the  inheritance  tax. 

Remainder  Interests. 

Pa.  St.  1850,  c.  147.     Approved  March  11,  1850. 

•^  S.  1.     That  in  all  cases  where  there  has  been,  or  shall  be  a  devise,  descent  or 

bequest  to  collateral  relatives  or  strangers  liable  to  the  collateral  inheritance 

tax,  to  take  effect  in  possession,  or  to  come  into  actual  enjoyment  after  the 

expiration  of  one  or  more  life  estates,  or  a  period  of  years,  it  shall  and  may  be 

lawful  for  the  parties  so  circumstanced,  liable  for  such  tax,  to  elect  to  await  their 


I 


1850,  c.  147.1  PENNSYLVANIA.  1049 

coming  into  the  actual  possession  of  the  estates  or  property  subject  to  the  said 
tax;  and  in  such  case  shall  give  security  to  the  register  of  the  proper  county  for 
the  payment  thereof  on  the  personal  estate,  at  such  period  as  they  or  their  repre- 
sentatives may  come  into  the  possession,  together  with  six  per  cent  per  annum 
interest  on  the  amount  of  the  tax  from  the  time  the  same  accrued  until  paid: 
Provided  that  such  persons  shall  make  a  full  return  of  such  property  within  one 
year  from  the  date  thereof,  or  within  one  year  of  the  death  of  the  decedent,  and 
within  that  period  enter  into  such  security  to  the  satisfaction  of  the  register;  and 
the  tax  on  real  estate  shall  remain  a  lien  on  the  real  estate  on  which  the  same  is 
chargeable  until  paid,  bearing  lawful  interest  as  aforesaid;  and  no  law  heretofore 
passed  shall  be  taken  or  construed  to  make  any  collateral  inheritance  tax  a  lien 
on  any  other  property  or  estate  than  those  chargeable  with  such  collateral  inherit- 
ance tax. 

Retrospective. 

The  Pennsylvania  statute  of  1826  was  enlarged  by  the  statute  of 
March  11,  1850,  which  declared  that  "the  words  'being  within  this 
commonwealth'  shall  be  so  construed  as  to  relate  to  all  persons 
who  have  been  at  the  time  of  their  decease,  or  now  may  be,  domi- 
ciled within  this  commonwealth,  as  well  as  to  estates:  and  this  is 
declared  to  be  the  true  intent  and  meaning  of  said  act." 

The  court  remarks  that  more  pointed  words  to  make  the  act 
retrospective  could  not  have  been  chosen  and  that  no  clause  of  the 
constitution  forbids  the  legislature  to  extend  a  tax  already  laid 
or  to  tax  estates  not  taxed  before.  This  act  is  plainly  retro- 
spective and  applies  to  the  estate  of  a  person  domiciled  in  Penn- 
sylvania who  died  before  the  passage  of  the  act.  In  re  Short, 
16  Pa.  St.  (4  Harris)  63. 

The  cQurt  affirms  Appeal  of  Short,  16  Pa.  St.  63,  to  the  effect  that 
the  statute  of  1850  is  retrospective  and  prospective,  and  says  that 
it  applies  to  a  decedent  who  was  a  resident  of  Pennsylvania  only 
since  1860.  In  re  Lines,  155  Pa.  St.  378,  380,  26  A.  728,  32  Wkly. 
Notes  Cas.  376. 

The  testator  died  before  the  passage  of  the  St.  1850,  leaving  his 
property  to  non-resident  collateral  relations,  some  of  the  property 
being  within  the  state  and  some  without  the  state.  The  supreme 
court  holds  that  the  retroactive  effect  of  the  St.  1850  does  not 
render  it  an  ex  post  facto  law  within  the  words  of  the  federal  con- 
stitution, which  apply  to  criminal  cases  only.  Carpenter  v.  Penn- 
sylvaniay  17  How.  456. 
When  Tax  on  Remainders  Accrues.  —  Lien.  —  Limitations. 

This  statute  [of  1850]  made  important  changes  in  the  interests  of 
remaindermen.     The  duration  of  the  lien  is  no  longer  unlimiced  and 


1050  STATUTES  ANNOTATED.  [Pa.  St. 

under  the  third  section  of  the  supplement  all  collateral  inheritance 
taxes  not  sued  for  within  twenty  years  after  they  accrue  are  pre- 
sumed to  have  been  paid.  These  statutes,  however,  do  not  change 
the  time  when  the  inheritance  tax  accrued,  but  leave  that  time  as 
the  death  of  the  testator.  Appeal  of  Mellon,  114  Pa.  St.  564,  570, 
8  A.  183.     See  Appeal  of  James,  2  Del.  Co.  Rep.  (Pa.)  164. 

The  collateral  inheritance  tax  under  the  statute  of  1850  cannot 
be  demanded  until  the  time  for  enjoyment  arrives.  In  re  Wharton 
(1881),  14  Phila.  (Pa.)  279. 

Penalties.  —  Interest. 

This  statute  provided  that  taxes  on  remaindermen  which  were 
payable  before  the  passage  of  the  statute  at  the  death  of  the  dece- 
dent might  be  postponed  until  they  come  into  actual  possession 
and  relieved  them  from  the  penalty,  but  not  from  the  interest. 
The  Penn.  St.  1855,  P.  L.  425,  also  released  specifically  from  the 
penalties.  Appeal  of  Commonwealth,  127  Pa.  St.  435,  438,  17  A. 
1094. 

Appraisal  Final. 

Penn.  St.  1849,  c.  369,  s.  12,  as  amended  by  Penn.  St.  1850, 
c.  147,  p.  170,  requires  the  register  to  appoint  an  appraiser  to 
appraise  the  estate,  and  any  party  has  a  right  of  appeal  to  the 
register's  court.  This  assessment  of  the  appraiser  is  final  and 
it  does  not  admit  of  opening  to  take  any  additions  to  the  clear 
value  of  property  once  assessed.  That  property  is  vested  in  the 
heir  or  devisee  and  cannot  be  reassessed  for  the  purpose  either 
of  increasing  or  diminishing  the  value  assessed  by  the  appraiser. 
Commonwealth  v.  Freedley^  21  Pa.  St.  (9  Harris)  33. 

Special  Exemption. 

Pa.  St.  1855,  c.  47,  approved  February  21,  1855,  specially  exempts  a  certain 
legacy  to  an  orphan  asylum  from  the  payment  of  the  inheritance  tax. 

Penalties. 

Pa.  St.  1855,  c.  450.    Approved  May  4,  1855. 

S.  1.  That  the  penalty  of  twelve  and  a  half  per  cent  per  annum  imposed  for 
the  non-payment  of  the  collateral  inheritance  tax,  shall  not  be  carried  back  to  a 
f)eriod  antecedent  to  the  time  when  there  should  by  law  have  been  a  settlement 
of  the  estate,  or  such  part  thereof  as  such  tax  is  chai  geable  upon;  but  where  from 
claims  made  upon  the  estate,  litigation,  or  other  unavoidable  cause  of  delay,  the 
estate  of  any  decedent  or  a  part  thereof  cannot  be  settled  up  at  the  end  of  a  year 
from  his  or  her  decease,  six  per  cent  per  annum  shall  be  charged  upon  the  collateral 


1855,  c.  450.]  PENN^SYLVANIA.  1051 

inheritance  tax,  from  the  end  of  such  year  until  there  be  default  as  aforesaid,  and 
paid  with  the  tax:  Provided,  that  where  the  estate  real  or  person  withheld  in 
the  manner  aforesaid  from  the  parties  entitled  thereto,  subject  to  such  tax,  has 
not  been,  or  shall  not  be  productive  to  the  extent  of  six  per  centum  per  annum, 
they  shall  not  be  compelled  to  pay  a  greater  amount  as  interest  to  the  common- 
wealth than  they  may  have  realized,  or  shall  realize  from  such  estate  during  the 
time  the  same  has  been  or  shall  be  withheld  as  aforesaid:  And  provided,  further, 
that  said  penalty  shall  not  be  charged  on  any  collateral  tax  on  any  legacy  or 
demise,  to  come  hereafter  into  actual  possession  and  enjoyment  after  the  expira- 
tion of  a  previous  life  estate,  or  term  of  years  therein,  until  the  same  shall  come 
into  actual  possession  and  enjoyment,  whether  by  limitation  or  power  of  appoint- 
ment ;  and  if  such  legatees  or  devisees  shall  elect  to  pay  said  tax  in  anticipation 
of  the  same  coming  into  actual  possession  and  enjoyment,  the  same  shall  be 
received  at  the  then  valuation  of  the  legacy  or  devise,  deducting  the  value  of  the 
liffe  estate  or  term  of  years. 

S.  2  provides  that  the  appraisers  are  to  receive  no  fee  from  the  executor. 

S.  3  provides  for  returns  by  registers  of  wills. 

The  statute  of  1855  postpones  the  penalty  of  double  interest 
imposed  by  the  act  of  April  10,  1849,  until  after  the  period  provided 
by  law  for  the  settlenient  of  the  estate,  which  is  one  year  from 
the  date  of  the  letters  testamentary.    In  re  Banks,  5  Pa.  Co.  Ct.  614. 

Where  the  testator  died  in  1835,  leaving  a  life  estate  and  a 
vested  remainder,  the  remainder  was  then  liable  to  a  collateral 
inheritance  tax  upon  its  clear  value,  after  deducting  all  previous 
estates.  After  the  acts  of  1850  and  1855,  the  tax  could  not  be 
collected  by  the  state  until  the  actual  enjoyment  of  the  estate, 
but  it  continued  a  lien  and  should  now  be  appraised  at  its  value 
in  1835,  first  deducting  the  value  of  the  life  estate.  Interest  at 
the  rate  of  six  per  cent  is  chargeable  upon  the  appraised  value 
from  1835  to  the  vesting  of  the  estate  in  possession,  and  must  be 
paid  by  the  persons  now  entitled  to  the  estate.  Appeal  of  James, 
2  Del.  Co.  Rep.  (Pa.)  164. 

Where  the  testator  died  in  1837,  and  the  life  tenant  died  in  1875, 
the  commonwealth  could  not  compel  payment  of  the  tax  until  the 
death  of  the  life  tenant;  and  therefore  the  twenty  years*  limita- 
tion did  not  begin  to  run  until  the  death  of  the  life  tenant.  This 
twenty  years'  limitation  is  only  in  favor  of  purchasers.  Appeal  of 
James,  2  Del.  Co.  Rep.  (Pa.)  164.  See  Appeal  of  Commonwealth, 
127  Pa.  St.  435,  438,  17  A.  1094. 

Special  Exemption. 

The  Peimsylvania  statute  of  1873,  Public  Laws  290,  was  a 
special  exemption  to  one  Henderson  from  taxes  on  the  estate  of 


1052  STATUTES  ANNOTATED.  [Pa.  St 

his  adoptive  father.  The  court  sustains  this  special  exemption, 
as  at  the  time  when  the  statute  was  passed  the  Pennsylvania  con- 
stitution did  not  require  uniformity  of  taxation.  Commonwealth 
V.  Henderson,  172  Pa.  St.  135. 

Duties  of  State  Treasurer.  —  Sinking  Fund. 

Pa.  St.  1874,  c.  60,  approved  May  9,  1874,  provides  for  the  duties  of  the  state 
treasurer  and  the  management  of  the  sinking  fund. 

Returns. 

Pa.  St.  1876,  c.  15,  approved  March  31,  1876,  s.  9,  provides  for  monthly  re- 
turns of  receipts  for  inheritance  taxes. 

Fees  of  Registers. 

Pa.  St.  1878,  c.  227,  s.  8,  covers  the  fees  of  registers  of  wills. 

Repeal. 

Pa.  St.  1878,  c.  227,  s.  13,  repeals  inconsistent  acts. 

Refund. 

Pa.  St.  1878,  c.  236,  approved  June  12,  1878,  authorizes  the  state  treasurer 
to  return  amount  of  inheritance  taxes  paid  under  mistake. 

THE  CODIFYING  ACT  OF  1887. 

Pa.  St.  1887,  c.  37.     Approved  May  6,  1887. 

S.  1.  Be  it  enacted,  etc..  That  all  estates,  real,  personal  and  mixed,  of  every 
kind  whatsoever,  situated  within  this  state,  whether  the  person  or  persons  dying 
seised  thereof  be  domiciled  within  or  out  of  this  state,  and  all  such  estates  situ- 
ated in  another  state,  territory,  or  country,  when  the  person,  or  persons,  dying 
seised  thereof,  shall  have  their  domicile  within  this  commonwealth,  passing  from 
any  person,  who  may  die  seized  or  possessed  of  such  estates,  either  by  will,  or 
under  the  intestate  laws  of  thi^  state,  or  any  part  of  such  estate,  or  estates,  or 
interest  therein,  transferred  by  deed,  grant,  bargain  or  sale,  made  or  intended 
to  take  effect,  in  possession  or  enjoyment  after  the  death  of  the  grantor  or  bar- 
gainor, to  any  person  or  persons,  or  to  bodies  corporate  or  politic,  in  trust  or 
otherwise,  other  than  to  or  for  the  use  of  father,  mother,  husband,  wife,  chil- 
dren and  lineal  descendants  born  in  lawful  wedlock,  or  the  wife,  or  widow  of  the 
son  of  the  person  dying  seized  or  possessed  thereof,  shall  be  and  they  are  hereby 
made  subject  to  a  tax  of  five  dollars  on  every  hundred  dollars  of  the  clear  value 
of  such  estate  or  estates,  and  at  and  after  the  same  rate  for  any  less  amount, 
to  be  paid  to  the  use  of  the  commonwealth;  and  all  owners  of  such  estates,  and 
all  executors  and  administrators  and  their  sureties,  shall  only  be  discharged  from 
liability  for  the  amount  of  such  taxes  or  duties,  the  settlement  of  which  they 
may  be  charged  with,  by  having  paid  the  same  over  for  the  use  aforesaid, 
as  hereinafter  directed:  Provided,  That  no  estate  which  may  be  valued  at  a  less 
sum  than  two  hundred  and  fifty  dollars  shall  be  subject  to  the  duty  or  tax. 

[See  notes  to  the  present  act,  post,  p.  1058.] 


St.  1887,  c.  37.]  PENNSYLVANIA.  1053 

Codifies  Existing  Law. 

The  statute  of  1887  is  chiefly  a  compilation  and  re-enactment  of 
all  previous  laws  in  force  on  the  subject  of  inheritance  tax.  This 
statute  simply  provides  for  the  better  collection  of  the  collateral 
inheritance  tax.  It  does  not  subject  any  other  or  different  estates 
to  the  tax  as  provided  in  the  previous  statute ;  if  it  did  it  would  be 
unconstitutional.     Cooper  v.  Commonwealth,  5  Pa.  Co.  Ct.  271. 

The  statute  of  1887  is  a  mere  codification  of  existing  law  and 
was  not  intended  to  introduce  a  new  subject  of  taxation.  In  re 
Del  Busto,  6  Pa.  Co.  Ct.  289;  In  re  Stanton  (Orph.  Ct.),  3  Pa. 
Dist.  371,  34  Wkly.  Notes  Cas.  391.  Appeal  of  Commonwealth, 
127  Pa.  St. '435,  441. 

Statutes  Codified,  —  Changes  in  Existing  Law. 

A  comparison  of  these  acts  with  the  act  of  May  6,  1887,  P.  L. 
79,  will  show  that  the  latter  is  a  re-enactment  of  them  as  follows: 

Section  1.— Acts  of  April  7,  1826,  s.  1;  April  22,  1846,  s.  14;  April 
10,  1849,  ss.  11,  13;  and  March  11,  1850,  s.  3. 

Section  2.— Act  of  April  10,  1849,  part  of  s.  13. 

Section  3.— Acts  of  April  10,  1849,  s.  13;  March  11,  1850,  s.  1; 
May  4,  1855,  s.  1. 

Section  4.— Acts  of  April  10,  1849,  s.  14;  May  4,  1855. 

Section  5.— Acts  of  February  24,  1834,  s.  62,  etc.;  April  7,  1826, 
s.  11. 

Section  6.— Act  of  February  24,  1834,  s.  63. 

Section  7.^Act  of  February  24,  1834,  part  of  s.  62. 

Section  8.— Acts  of  February  24,  1834,  s.  65;  March  22,  1841; 
March  17,  1842. 

Section  9.— Acts  of  March  22,  1841;  and  May  6,  1844. 

Section  10.— Act  of  April  10,  1849,  s.  10. 

Section  11.— Act  of  February  24,  1834,  s.  69. 

Section  12.— Acts  of  April  10,  1849,  s.  12;  March  11,  1850. 

Section  13.— Act  of  May  4,  1855,  s.  2. 

Section  14.— April  10,  1849;  March  11,  1850,  s.  4;  May  4, 
1855,  s.  3. 

Section  15.— Act  of  April  10, 1849,  s.  15;  March  22,  1841,  ss.  1,  2. 

Section  16.— Act  of  April  10,  1849,  s.  16. 

Section  17.— Act  of  March  22,  1841,  s.  4. 

Section  18.— Act  of  March  22,  1841. 

Section  19.— Act  of  March  11,  1850,  s.  4. 

Section  20.— Act  of  February  24,  1834,  s.  62;  March  11,  1850, 
s.  1;  May  4,  1855,  s.  3. 


1054  STATUTES  ANNOTATED.  IPa.  St. 

"The  changes  are:  ins.  3,  providing  that  interest  upon  a  tax 
shall  not  begin  to  run  against  persons  entitled  to  estates  in  remainder 
until  the  right  of  possession  accrues  (see  Mellon's  Ap.,  4  Am.  564) ; 
section  12,  giving  the  right  to  appeal  from  the  appraisement  of  the 
state  appraiser  to  the  orphans'  court,  instead  of  the  register's 
court,  with  a  further  right  of  appeal  to  the  supreme  court;   section 

13,  increasing  the  punishment  for  taking  fees  by  appraisers ;   section 

14,  making  the  proceedings  for  collection  of  unpaid  taxes  take 
place  in  the  orphans'  court  instead  of  the  common  pleas ;  section 
19,  requiring  the  register's  returns  to  be  on  the  first  Mondays  of 
April,  July,  October,  and  January,  instead  of  the  first  days  of 
March,  June,  September,  and  December;  and  section  20,  reducing 
the  period  of  lien  to  five  years,  instead  of  twenty  years."  Per 
Penrose,  J.,  in  DelBusto,  6  Pa.  Co.  Ct.  289. 

Pa.  St.  1887,  c.  37,  s.  2,  provides  for  a  tax  on  gifts  to  executors  above  a  fair 
commission. 

Remainders. 

S.  3.  In  all  cases  where  there  has  been  or  shall  be  a  devise,  descent  or  bequest 
to  collateral  relatives  or  strangers,  liable  to  the  collateral  inheritance  tax,  to  take 
effect  in  possession,  or  come  into  actual  enjoyment  after  the  expiration  of  one  or 
more  life  estates,  or  a  period  of  years,  the  tax  on  such  estate  shall  not  be  payable 
nor  interest  begin  to  run  thereon,  until  the  person  or  persons  liable  for  the  same 
shall  come  into  actual  possession  of  such  estate,  by  the  termination  of  the  estates 
for  life  or  years,  and  the  tax  shall  be  assessed  upon  the  value  of  the  estate  at  the 
time  the  right  of  possession  accrues  to  the  owner  as  aforesaid:  Provided,  That 
the  owner  shall  have  the  right  to  pay  the  tax  at  any  time  prior  to  his  coming  into 
possession,  and,  in  such  cases,  the  tax  shall  be  assessed  on  the  value  of  the  estate 
at  the  time  of  the  payment  of  the  tax,  after  deducting  the  value  of  the  life  estate 
or  estates  for  years:  And  provided  further,  That  the  tax  on  real  estate  shall 
remain  a  lien  on  the  real  estate  on  which  the  same  is  chargeable  until  paid.  And 
theowner  of  any  personal  estate  shall  make  a  full  return  of  the  same  to  the  register 
of  wills  of  the  proper  county  within  one  year  from  the  death  of  the  decedent,  and 
within  that  time  enter  into  security  for  the  payment  of  the  tax  to  the  satisfaction 
of  such  register;  and  in  case  of  failure  so  to  do,  the  tax  shall  be  immediately 
payable  and  collectible. 

[See  notes  to  the  Act  of  1850,  ante  p.  1049.] 

Discount.  —  Interest.  —  Penalties. 

S.  4.  If  the  collateral  inheritance  tax  shall  be  paid  within  three  months  after 
the  death  of  the  decedent,  a  discount  of  five  per  centum  shall  be  made  and  allowed ; 
and  if  the  said  tax  is  not  paid  dt  the  endof  one  year  from  the  death  of  the  decedent, 
interest  shall  then  be  charged  at  the  rate  of  twelve  per  centum  per  annum  on 
such  tax;  but  where  from  claims  made  upon  the  estate,  litigation,  or  other  un- 
avoidable cause  of  delay,  the  estate  of  any  decedent  or  a  part  thereof  cannot  be 


1897,  c.  47.]  PENNSYLVANIA.  1055 

settled  up  at  the  end  of  the  year  from  his  or  her  decease,  six  per  eentum  per 
annum  shall  be  charged  upon  the  collateral  inheritance  tax,  arising  from  the 
unsettled  part  thereof,  from  the  end  of  such  year  until  there  be  default;  Pro- 
vided, further.  That  where  real  or  personal  estate  withheld  by  reason  of  litigation 
or  other  cause  of  delay  in  manner  aforesaid  from  the  parties  entitled  thereto, 
subject  to  said  tax,  has  not  been,  or  shall  not  be  productive  to  the  extent  of  six 
per  centum  per  annum,  they  shall  not  be  compelled  to  pay  a  greater  amount  as 
interest  to  the  commonwealth  than  they  may  have  realized,  or  shall  realize 
from  such  estate  during  the  time  the  same  has  been  or  shall  be  withheld  as 
aforesaid. 

Ss.  5  to  20  cover  the  assessment  and  collection  of  the  tax. 


LATER  AMENDMENTS. 

Compensation  of  Registers. 

Pa.  St.  1891,  c.  50,  approved  May  14,  1891,  provides  definitely  for  the  com- 
pensation to  the  registers  of  wills  for  services  in  collecting  the  inheritance  tax, 
amending  Pa.  St.  1887,  c.  37,  s.  16. 

Appraisers. 

Pa.  St.  1895,  c.  243,  approved  June  23, 1895,  fixes  the  compensation  of  appraisers 
and  provides  for  expert  appraisers  when  necessary. 

THE  INVALID  ACT  OF  1897. 

Pa.  St.  1897,  c.  47,  p.  56. 

An  Act  taxing  gifts,  legacies  and  inheritances  in  certain  cases    and 
providing  for  the  collection  thereof. 

S.  1.  Be  it  enacted,  etc.,  That  from  and  after  the  passage  of  this  act  all  per- 
sonal property  of  whatsoever  kind  and  nature  which  shall  pass  by  will,  or  by  the 
intestate  laws  of  this  state,  from  any  person  who  may  die  seized  or  possessed  of 
the  same  while  a  resident  of  this  state,  whether  the  person  or  persons  dying  seized 
thereof  be  domiciled  within  or  out  of  the  state,  or  if  the  decedent  was  not  a 
resident  of  this  state  at  the  time  of  his  death,  such  property,  or  any  part  thereof, 
within  this  state,  or  any  interest  therein  or  income  therefrom,  which  shall  be 
transferred  by  deed,  grant,  sale  or  gift  made  in  contemplation  of  the  death  of  the 
grantor,  bargainor,  donor  or  assignor,  or  intended  to  take  effect  in  possession  or 
enjoyment  after  such  death,  to  any  person  or  persons,  or  to  bodies  corporate 
or  politic,  in  trust  or  otherwise,  or  by  reason  whereof  any  person  or  body  politic 
or  corporate  shall  become  beneficially  entitled,  in  possession  or  expectancy,  to 
any  property,  or  the  income  thereof,  shall  be  and  is  hereby  made  subject  to  a  tax 
of  two  dollars  on  every  one  hundred  dollars  of  the  clear  value  of  such  personal 
property,  after  deducting  the  debts  of  decedent  and  costs  of  administration,  and 
at  and  after  the  same  rate  for  any  less  amount,  to  be  paid  for  the  use  of  the 
commonwealth;  and  all  heirs,  legatees,  devisees,  administrators,  executors  and 
trustees  shall  only  be  discharged  from  liability  for  the  amount  of  such  taxes,  the 
settlement  of  which  they  may  be  charged  with,  by  paying  the  same  for  the  use 


1056  STATUTES  ANNOTATED.  [Pa.  St. 

aforesaid  as  hereinafter  directed;  Provided,  That  personal  property  to  the 
amount  of  five  thousand  dollars  shall  be  exempt  from  the  payment  of  this  tax 
in  all  estates:  And  provided  further,  That  so  much  of  the  estates  of  persons  here- 
tofore deceased  as  has  not  been  actually  distributed  and  paid  to  persons  entitled 
thereto  prior  to  the  passage  of  this  act  shall  be  liable  to  the  tax  imposed  by  this 
law,  as  well  as  the  estates  of  persons  who  die  hereafter. 
[See  notes  to  the  Constitution  of  1873,  ante,  p.  1042.] 

Nature  of  Statute. 

This  is  an  act  imposing  taxes  on  personal  property  and  has  none 
of  the  features  of  the  intestate  law  or  of  an  act  regulating  the  dis- 
position of  property  by  will.  In  re  Cope,  191  Pa.  St.  1,  20,  43 
A.  79,  29  Pittsb.  Leg.  J.  N.  S.  379,  45  L.  R.  A.  316,  71  Am.  St.  Rep. 
749,  44  Wkly.  Notes  Cas.  89 

Uniformity. 

This  statute  is  unconstitutional  as  not  being  uniform  and  equal  in 
operation,  as  it  exempts  from  the  tax  property  not  exceeding  five 
thousand  dollars  in  value.  In  re  Cope,  191  Pa.  St.  1,  43  A.  79, 
29  Pittsb.  Leg.  J.  N.  S.  379,  45  L.  R.  A.  316,  71  Am.  St.  Rep.  749, 
44  Wkly.  Notes  Cas.  89. 

(This  decision  is  wholly  without  authority  in  other  states, 
because  it  was  based  upon  the  Pennsylvania  constitution's  pro- 
hibition of  exemptions," and  upon  the  discredited  theory  that  an 
inheritance  tax  is  a  tax  on  property. — Ed.) 

Pa.  St.  1897,  c.  47,  ss.  2-16,  provide  for  the  collection  and  payment  of  the  tax. 

Refunding. 

Pa.  St.  1899,  c.  15,  approved  March  22,  1899,  provides  for  the  refunding  of  the 
inheritance  tax  after  payment  where  it  appears  that  the  tax  was  not  due  on 
account  of  lineal  heirs  being  subsequently  discovered. 

Refund. 

Pa.  St.  1901,  c.  25,  amends  Pa.  St.  of  June  12, 1878,  which  provided  for  a  refund 
of  taxes  erroneously  paid  on  application  within  two  years  by  extending  the  time 
within  which  applications  shall  be  made  as  follows:  "except  when  the  estate, 
upon  which  such  tax  shall  have  been  so  erroneously  paid,  shall  have  consisted 
m  whole  or  in  part  of  a  partnership,  or  other  interest  of  uncertain  value,  or  shall 
have  been  involved  in  litigation,  by  reason  whereof  there  shall  have  been  an 
pver-valuation  of  that  portion  of  the  estate  on  which  the  tax  has  been  assessed 
and  paid,  which  over-valuation  could  not  have  been  ascertained  within  said 
period  of  two  years;  then,  and  in  such  case,  the  application  for  repayment  may 
be  made  to  the  state  treasurer  within  one  year  from  the  termination  of  such  liti- 
gation, or  ascertainment  of  such  over-valuation,  or  if  that  period  has  already 


I 


1911,  c.  105.]  PENNSYLVANIA.  1057 

expired  at  the  time  of  the  passage  of  this  act,  then  within  six  months  after  the 
passage  of  this  act,  notwithstanding  any  limitation  contained  in  any  previous 
act  of  assembly. 

Illegitimates. 

Pa  St.  1901,  c.  325,  s.  2:  The  mother  of  an  illegitimate  child,  her  heirs  and 
legal  representatives,  and  said  illegitimate  child  or  children,  its  or  their  heirs 
and  legal  representatives,  shall  have  capacity  to  take  or  inherit  from  or  through 
each  other  personal  estate,  as  next  of  kin,  and  real  estate  as  heirs  in  fee  simple, 
or  otherwise,  under  the  intestate  laws  of  this  commonwealth,  in  the  same  manner 
and  to  the  same  extent,  subject  to  the  distinction  of  half  bloods,  as  if  said  child 
or  children  had  been  born  in  lawful  wedlock. 

This  section  has  the  effect  of  legitimating  an  illegitimate  child 
as  to  its  mother,  and  conferring  upon  such  child  every  right  and 
privilege  enjoyed  by  a  child  born  to  wedded  parents.  Therefore 
an  illegitimate  child  need  not  pay  a  collateral  inheritance  tax  on 
the  property  he  takes  as  devisee  of  his  mother.  The  court  quotes 
Commonwealth  v.  Stump,  53  Pa.  St.  132,  where  the  legitimating 
act  was  ineffective  simply  because  it  was  passed  after  the  death 
of  the  testator.  Commonwealth  v.  Mackey,  222  Pa.  St.  613,  72  A. 
250. 

Care  of  Burial  Lot. 

Pa.  St.  1903,  c.  13,  approved  March  5,  1903,  to  go  into  effect  January  1,  1904, 
exempts  from  the  inheritance  tax  bequests,  and  devises  in  trust  for  the  purpose  of 
applying  the  entire  interest  or  income  thereof,  to  the  care  and  preservation  of  the 
family  burial  lot  or  lots  of  the  donor  in  good  order  and  repair  perpetually. 

Children  of  Former  Husband  or  Wife  Exempted. 

Pa.  St.  1905,  c.  181,  approved  April  22,  1905,  extends  the  exempt  classes  to 
include  the  "children  of  a  former  husband  or  wife." 

Adopted  Children  Exempted. 

Pa.  St.  1911,  c.  105.     Approved  May  5,  1911. 

S.  1.  Be  it  enacted,  etc.,  That  all  estates,  real,  personal  and  mixed,  of  every 
kind  whatsoever,  situated  within  this  state,  whether  the  person  or  persons  dying 
seized  thereof  be  domiciled  within  or  out  of  this  state;  and  all  such  estates  situ- 
ated in.  another  state,  territory,  or  country,  when  the  person  or  persons  dying 
seized  thereof  shall  have  their  domicile  within  this  commonwealth ;  passing  from 
any  adopting  parent,  who  may  die  seized  or  possessed  of  such  estates,  either  by 
will  or  under  the  intestate  laws  of  this  state,  or  any  part  of  such  estate  or  estates, 
or  interest  therein,  transferred  by  deed,  grant,  bargain,  or  sale,  made  or  intended 
to  take  effect  in  possession  or  enjoyment  after  the  death  of  the  grantor  or  bargainor, 
to  or  for  the  use  of  any  legally  adopted  child  or  any  legally  adopted  children, — 
shall  not  be  subject  to  the  collateral  inheritance  tax  of  five  dollars  on  every  hun- 
dred dollars  of  the  clear  value  of  such  estate  or  estates,  to  the  use  of  the 
commonwealth. 


1058  STATUTES  ANNOTATED.  [Pa.  St. 

THE  PRESENT  ACT. 

Taxable  Transfers. 
Pa.  St.  1887,  c.  37. 

S.  1.  Be  it  enacted,  etc.,  That  all  estates,  real,  personal  and  mixed,  of  every 
kind  whatsoever,  situated  within  this  state,  whether  the  person  or  persons  dying 
seised  thereof  be  domiciled  within  or  out  of  this  state,  and  all  such  estates  situ- 
ated in  another  state,  territory  or  country,  when  the  person,  or  persons,  dying 
seised  thereof,  shall  have  their  domicile  within  this  commonwealth,  passing  from 
any  person,  who  may  die  seized  or  possessed  of  such  estates,  either  by  will,  or 
under  the  intestate  laws  of  this  state,  or  any  part  of  such  estate,  or  estates,  or 
interest  therein,  transferred  by  deed,  grant,  bargain,  or  sale,  made  or  intended  to 
take  effect,  in  possession  or  enjoyment  after  the  death  of  the  grantor,  or  bargainor 
to  any  person  or  persons,  or  to  bodies  corporate  or  politic,  in  trust  or  otherwise, 
other  than  to  or  for  the  use  of  father,  mother,  husband,  wife,  children  and  lineal 
descendants  born  in  lawful  wedlock,  or  the  wife,  or  widow  of  the  son  of  the  per- 
son dying  seised  or  possessed  thereof,  shall  be  and  they  are  hereby  made  subject 
to  a  tax  of  five  dollars  on  every  hundred  dollars  of  the  clear  value  of  such  estate 
or  estates,  and  at  and  after  the  same  rate  for  any  less  amount,  to  be  paid  to  the 
use  of  the  commonwealth ;  and  all  owners  of  such  estates,  and  all  executors  and 
administrators  and  their  sureties,  shall  only  be  discharged  from  liability  for  the 
amount  of  such  taxes  or  duties,  the  settlement  of  which  they  may  be  charged 
with,  by  having  paid  the  same  over  for  the  use  aforesaid,  as  hereinafter  directed: 
Provided,  That  no  estate  which  may  be  valued  at  a  less  sum  than  two  hundred 
and  fifty  dollars  shall  be  subject  to  the  duty  or  tax. 

This  section  has  been  amended  or  affected  by  the  following 
statutes:  St.  1901,  c.  ^25,  s.  2,  ante,  p.  1057,  as  to  illegitimate  chil- 
dren; St.  1903,  c.  13,  ante,  p.  1057,  exempting  bequests  for  the  care 
of  the  family  burial  lot;  St.  1905,  c.  181,  ante,  p.  1057,  exempting 
the  children  of  a  former  husband  or  wife;  St.  1911,  c.  105,  ante,  p. 
1057,  exempting  estates  passing  to  adopted  children.  See  notes 
to  the  act  of  1826,  ante,  p.  1044. 

Title. 

The  Pennsylvania  statute  of  1887,  P.  L.  79,  is  entitled,  "An 
act  to  provide  for  the  better  collection  of  collateral  inheritance 
taxes."  The  court  does  not  pass  on  whether  this  is  a  sufficient 
title  as  to  cover  new  taxes  imposed  by  the  statute,  but  intimates  that 
it  is  not.     In  re  Bittinger,  129  Pa.  St.  338. 

The  act  of  1887  simply  provides  for  the  better  collection  of  taxes, 
and  cannot  change  the  estates  liable.     Appeal  of  Commonwealth, 
.  127  Pa.  St.  435,  441. 

Validity. 

This  five  per  cent  tax  is  one  of  the  conditions  of  administra- 
tion, and  to  deny  the  right  of  the  state  to  impose  it  is  to  deny 


1887,  c.  37.]  PENNSYLVANIA.  1059 

the  right  of  the  state  to  regulate  the  adminstration  of  decedents' 
goods.  .  .  .  The  act  operates  on  the  residue  of  the  estate  after 
paying  debts  and  charges,  and  theoretically,  that  residue  is  always 
a  balance  in  money.  The  administration  account  always  exhibits 
a  balance  in  cash,  not  in  specific  goods,  whether  bonds  or  horses; 
and  though  an  heir  may  take  bonds  or  horses  as  cash,  the  account 
must  show,  and  always  does  show,  a  cash  balance.  That  is  the 
fund  taxed  by  this  law,  and  not  the  bond  or  other  chattels  which 
may  have  produced  the  fund.  Strode  v.  Commonwealth^  52  Pa. 
St.  181. 

Nature  of  Tax. 

The  collateral  inheritance  tax  levied  under  this  actjs  not  a  tax 
within  the  meaning  of  the  statute  exempting  charities  from  taxa- 
tion. It  is  not  a  tax  upon  specific  property  of  a  legatee  after  it 
is  vested  in  possession,  but  is  a  charge  or  tax  upon  the  right  to  have 
the  property  by  way  of  succession.  It  is  not  a  tax  upon  the  prop- 
erty or  money  bequeathed,  but  a  diminution  of  the  amount  that 
otherwise  would  pass  under  the  will,  and  hence  what  the  legatee 
really  receives  is  not  taxed  at  all.  It  is  that  which  is  left  after  the 
tax  has  been  taken  off.  It  is  only  imposed  once,  and  that  is  before 
the  legacy  has  reached  the  legatee,  and  before  it  has  become  his 
property.     In  re  Finnen,  196  Pa.  St.  72,  46  A.  269. 

A  Property  Tax. 

The  collateral  inheritance  tax  imposed  by  the  act  of  1887  upon 
real  estate'  is  a  tax  upon  the  property  itself,  as  appears  clearly 
from  the  second  proviso  in  the  third  section  of  the  act.  In  re 
Bittinger,  129  Pa.  St.  338,  345,  18  A.  132.  (It  should  be  noted  that 
this  decision,  though  still  law  in  Pennsylvania,  is  opposed  to  the 
current  of  authority  in  this  country.     See  anie^  p.  4.) 

As  of  Death  of  Testator. 

The  Pennsylvania  statute  of  1887  imposes  the  tax  upon  the  death 
of  the  testator  and  not  as  of  the  time  when  the  legatees  actually 
receive  the  property.  In  re  Lines,  155  Pa.  St.  378,  385,  26  A.  728, 
32  Wkly.  Notes  Cas.  376. 

Where  the  brother  of  the  intestate  died  two  weeks  before  the 
intestate  who  inherited  property  from  the  brother,  the  court 
holds  that  the  law  cast  upon  the  intestate  her  share  in  the  brother's 
estate  at  the  moment  of  the  brother's  death,  and  it  is  wholly  im- 


1060  STATUTES  ANNOTATED.  [Pa.  St. 

material  that  the  net  amount  is  not  yet  fixed  and  could  not  be  until 
the  final  settlement  of  the  administration.  In  this  case  the  brother 
was  domiciled  in  the  state  of  New  York  and  the  sister  was  domiciled 
in  Pennsylvania,  and  the  court  holds  that  the  sister's  share  in  her 
brother's  estate  is  subject  to  the  collateral  inheritane  tax  imposed 
by  the  laws  of  Pennsylvania.  The  tax  here  was  imposed  upon 
the  property  of  a  resident  which  was  in  her  constructive  possession 
and  so  remained  until  her  death.  In  re  MilUken,  206  Pa.  St.  149, 
55  A.  853. 

What  Law  Governs. 

Where  the  testator  died  in  1828,  leaving  a  life  tenant  who  died 
in  1864,  the  whole  estate  passed  in  1828,  and  the  tax  on  the  remainder 
interest  is  payable,  at  the  rate  under  the  statute  in  force  in  1828, 
of  two  and  one-half  per  cent,  and  not  under  the  higher  rate  in 
force  on  the  death  of  the  life  tenant.  Commonwealth  v.  Eckhert, 
53  Pa.  St.  (3  P.  F.  Smith)  102. 

"All  Estates,  Real,  Personal  or  Mixed/' 
Conversion. 

Where  a  non-resident  testator  directed  her  executors  to  sell  and 
convey  real  estate  in  Pennsylvania,  and  apply  the  proceeds  toward 
the  payment  of  certain  legacies  given  to  collaterals,  this  is  con- 
verted into  personal  property  and  is  not  within  the  jurisdiction 
of  Pennsylvania,  and  therefore  not  subject  to  the  Pennsylvania 
collateral  inheritance  tax.  In  re  Coleman,  159  Pa.  St.  231,  232,  28 
A.  137. 

Where  the  testator  domiciled  in  New  York  directed  all  his  real 
estate  to  be  sold,  this  rendered  real  estate  personal  property,  or 
gave  it  a  situs  at  the  place  of  his  domicile;  and  therefore  the 
fund  realized  from  it  was  not  subject  to  an  inheritance  tax  in 
Pennsylvania,  although  the  testator  appointed  executors  in  Penn- 
sylvania as  to  all  of  his  estate  not  situated  in  New  York.  And  the 
Pennsylvania  executors  improperly  paid  the  collateral  tax  on  the 
real  estate  situated  in  Pennsylvania.  In  re  Schoenberger,  221  Pa. 
St.  112,  118,  70  A.  579,  19  L.  R.  A.  (N.  S.)  290;  In  re  Lamberton, 
40  Pa.  Super.  Ct.  548. 

The  land  of  a  Pennsylvania  testator  lying  in  other  states  which  he 
directed  his  executors  to  sell,  and  the  proceeds  from  which  he 
gave  to  persons  and  objects  in  this  state,  are  converted  by  the 
direction  to  sell,  as  the  fund  being  distributed  here  is  subject  to  the 


1887,  c.  37.1  PENNSYLVANIA.  1061 

collateral  inheritance  tax  under  the  rules  stated  in  Miller  v.  Com- 
monwealth,  111  Pa.  St.  321.  In  re  Williamson,  153  Pa.  St.  508, 
521,  26  A.  246,  32  Wkly.  Notes  Cas.  93.  In  re  Dalrymple, 
215  Pa.  St.  367,  372,  64  A.  554.  Miller  v.  Commonwealth, 
111  Pa.  St.  321,  2  A.  492.  The  court  distinguishes  Appeal  of 
Drayton,  61  Pa.  St.  172,  as  in  that  case  there  was  a  discretion 
to  sell. 

Sale  at  Death  of  Life  Tenant  and  Investment  outside  State. 

The  will  of  a  resident  of  Pennsylvania  directed  that  real  estate 
situated  outside  of  Pennsylvania  should  be  sold  on  the  death  of 
the  wife,  who  was  made  life  tenant,  and  the  proceeds  invested  in 
mortgages  in  the  state  where  the  land  lay.  The  court  intimates 
that  the  fact  that  the  sale  was  postponed  till  the  death  of  the 
life  tenant  prevents  the  land  from  being  regarded  as  personalty 
at  the  death  of  the  testator,  and  therefore  subject  to  the  inherit- 
ance tax.  But  however  this  may  be,  the  court  finds  that  the 
direction  to  invest  the  proceeds  out  of  the  state  prevents 
them  from  being  brought  within  the  state  of  Pennsylvania 
and  there  distributed;  and  that  therefore  the  fund  never 
came  within  the  jurisdiction  of  Pennsylvania  and  so  is  not 
subject  to  an  inheritance  tax.  In  re  Hale,  161  Pa.  St.  181, 
183,  28  A.  1071. 

Where  the  testator  gives  the  executors  only  a  discretion  to  sell  certain 
land,  and  the  testator's  scheme  of  distributing  the  estate  did  not 
necessarily  require  a  sale  of  this  land,  which  was  to  be  held  by  the 
trustees  for' a  certain  period,  and  where  the  trustees  could  convey 
the  lands  to  the  beneficiaries  and  meet  the  requirements  of  the  will, 
the  lands  were  not  converted  into  personal  property  so  as  to 
become  subject  to  the  collateral  inheritance  tax. 

The  argument  that  it  was  necessary  to  sell  the  lands  to  pay 
debts  is  not  convincing  where  it  did  not  appear  that  at  the  date 
of  the  will  the  decedent  conceived  such  a  necessity  to  exist.  That 
the  real  estate  in  other  states  is  not  now  of  sufficient  value  to  pay 
his  debts  is  by  no  means  conclusive  that  he  did  not  regard  it  as 
sufficient  for  that  purpose  when  he  executed  his  will;  and  that 
therefore  he  intended  that  his  Wisconsin  lands  should  not  be 
delivered  to  the  beneficiaries  as  real  estate.  Besides,  he  owned 
several  mining  locations  in  Canada  which  he;  like  most  men  who 
invest  in  such  -property,  regarded  as  of  great  value.  In  re  Dal- 
rymple, 215  Pa.  St.  367,  374,  64  A.  554.  Drayton's  Appeal,  61 
Pa.  St.  172. 


10^2  STATUTES  ANNOTATED.  [Pa.  St. 

Sale  Postponed. 

In  re  Hale,  161  Pa.  St.  181,  is  quoted  as  a  direct  authority  for 
the  proposition  that  where  the  conversion  of  real  estate  is  post- 
poned it  does  not  become  personal  property  for  the  purpose  of 
taxation,  so  where  the  testator  directs  real  estate  to  be  sold  twenty 
years  after  his  death,  there  is  no  conversion  when  the  tax  accrued. 
In  re  Handley,  181  Pa.  St.  339,  346,  37  A.  587  reversing  judgment, 
3  Lack.  Leg.  N.  9. 
Power  to  Sell  if  Necessary. 

Where  the  Pennsylvania  testator  gave  his  executors  full  power 
to  sell  real  estate  if  necessary  for  any  purpose  of  his  estate,  and 
it  became  necessary  to  sell  to  pay  legacies,  and  sale  was  made, 
the  real  estate  situated  in  other  states  should  be  charged  with 
the  collateral  inheritance  tax.  The  power  to  sell  if  necessary  to 
make  distribution  became,  under  the  manifest  intent  of  the  testator, 
a  direction  to  sell.  The  pecuniary  legacies  are  to  be  paid  before 
the  residue.  The  testator  intended  them  to  be  paid  ir  cash.  He 
must  therefore  have  foreseen  the  necessity  for  the  sale  of  his 
real  estate,  where  the  pecuniary  legacies  aggregate  very  much 
more  than  the  amount  of  the  personal  estate.  In  re  Vanuxem, 
212  Pa.  St.  315,  61  A.  876,  1  L.  R.  A.  N.  S.  400. 

Lien  of  Tax. 

Where  there  is  a  conversion  of  land  situated  in  Pennsylvania 
into  personal  property  the  lien  of  the  tax  should  be  transferred 
from  the  land  to  the  fund  which  it  produced.  In  re  Brown,  5  Pa. 
Dist.  R.  286. 

The  English  doctrine  of  conversion  as  applied  to  the  collateral 
inheritance  tax  on  land  is  discussed  in  In  re  Handley,  181  Pa.  St. 
339,  37  A.  587,  reversing  judgment,  3  Lack.  Leg.  N.  9. 

The  weight  of  authority  in  this  country  seems  to  be  against  the 
Pennsylvania  doctrine  of  conversion.  See  ante,  p.  139.  See  also 
Curtis  Estate,  142  N.  Y.  219,  36  N.  E.  887. 

United  States  Bonds. 

The  Pennsylvania  collateral  inheritance  tax  is  applicable  to  that 
part  of  the  decedent's  estate  which  consisted  of  bonds  of  the  United 
States  that  are  by  federal  law  exempted  from  state  taxation. 
"The  mistake  of  the  learned  counsel  for  the  plaintiff  in  error  con- 
sists, we  conceive,  in  treating  this  as  a  tax  of  the  government 
bonds,  when  it  is  really  a  tax  upon  a  decedent's  estate,  dying  with- 


1887,  c.  37.]  PENNSYLVANIA.  1063 

out  lineal  heirs.  And  it  does  not  help  the  argument  that  the  bulk 
of  the  estate  is  made  up  of  these  bonds;  for  that  estate  passed 
into  the  hands  of  the  executor  for  administration,  and  is  taxed  in 
his  hands  as  an  estate.  The  law  takes  every  decedent's  estate  into 
custody,  and  administers  it  for  the  benefit  of  creditors,  legatees, 
devisees  and  heirs,  and  delivers  the  residue  that  remains,  after 
discharging  all  obligations,  to  the  distributees  entitled  to  receive 
it.  One  of  the  legal  obligations  to  which  every  estate  that  is  to 
go  to  collateral  kindred  is  subject,  is  this  five  per  cent  duty  to 
the  commonwealth. 

"And  it  is  ^  not  until  this  work  of  administration  is  performed 
that  the  right  of  succession  attaches.  The  distributees  may, 
indeed,  consent  to  accept  certain  goods  and  chattels  in  specie  with- 
out conversion,  as  is  frequently  done  in  settlement  of  estates, 
but  such  arrangement  in  no  case  affects  the  theory  of  the  law  that 
the  estate  is  first  to  be  administered  and  then  enjoyed. 

"Now  this  five  per  cent  tax  is  one  of  the  conditions  of  adminis- 
tration, and  to  deny  the  right  of  the  state  to  impose  it  is  to  deny 
the  right  of  the  state  to  regulate  the  administration  of  decedents* 
goods.  If  aTi  estate  consist  wholly  of  federal  bonds  and  is  indebted, 
conversion  of  them  into  money  is  necessary  to  pay  the  debts,  and 
nobody  would  doubt  that  the  sum  that  remained  after  payment 
of  debts  would  be  subject  to  a  deduction  of  five  per  cent  for  the 
use  of  the  state.  But  suppose  the  federal  bonds  be  used  to  pay 
the  only  indebtedness  that  exists,  and  a  residue  of  estate  remains 
for  distributees,  is  it  not  to  pay  the  collateral  inheritance  tax? 
Clearly  it  must,  though  it  may  be  less  than  the  aggregate  of  the 
bonds.  The  act  operates  on  the  residue  of  the  estate  after  paying 
debts  and  charges,  and,  theoretically,  that  residue  is  always  a 
balance  in  money.  The  administration-account  always  exhibits 
a  balance  in  cash  not  in  specific  goods,  whether  bonds  or  horses; 
and  though  an  heir  may  take  bonds  or  horses  as  cash,  the  account 
must  show  and  always  does  show  a  cash  balance.  That  is  the 
fund  taxed  by  this  law  and  not  the  bonds  or  other  chattels  which 
may  have  produced  the  fund.  Therefore  neither  the  prohibitory 
clause  of  the  Act  of  Congress  of  1862,  nor  any  of  the  principles 
of  decision  against  state  authority  to  tax  that  which  federal 
authority  has  exempted  from  taxation,  have  any  application  here. 
The  federal  government  has  not  prohibited  the  states  from  pre- 
scribing rules  of  inheritance  and  succession  to  estates  of 
decedents,  and  it  would    be    a    grievous    mistake  of  legislative 


1Q64  STATUTES  ANNOTATED.  [Pa.  St. 

and  judicial  authority  to  apply  it  with  such  effect."  Per 
Woodward,  C.  J.,  in  Strode  v.  Commonwealth,  52  Pa.  St.  181  (2 
P.  F.  Smith). 

From  What  Fund  Payable. 

The  collateral  inheritance  tax  is  payable  out  of  the  legacy  or 
devise  unless  the  testator  otherwise  directs.  In  re  Thomson, 
12  Phila.  (Pa.)  36.     (1878.) 

Direction  in  Will  as  to  Payment  of  Tax. 

The  direction  in  a  will,  "after  deducting  any  and  all  necessary 
expenses  to  divide  the  said  net  income  in  equal  shares  among" 
certain  persons,  results  in  deducting  the  inheritance  taxes  from 
the  gross  income,  after  which  the  net  income  is  to  be  divided  in 
equal  shares  among  the  life  tenants.  Each  legatee  of  income 
should  pay  the  tax  from  his  share  unless  otherwise  expressly 
directed.     In  re  Brown,  208  Pa.  St.  161,  57  A.  360. 

The  provision  in  a  will  that  the  collateral  inheritance  tax  shall 
be  paid  out  of  the  residue,  but  not  out  of  the  pecuniary  legacies, 
is  not  restricted  to  the  legacies  then  given,  but  includes  legacies 
given  in  a  subsequent  codicil.     In  re  Cummings,  12  Pa.  Co.  Ct.  45. 

The  will  directed  that  the  income  of  the  testator's  estate  for  the 
first  year  after  his  death  should  be  added  to  the  principal,  then 
both  principal  and  interest  applied  indiscriminately  to  the  pay- 
ment of  expenses,  debts  and  legacies.  The  result  is  that  the  corpus 
of  the  estate  has  been  preserved  to  the  extent  of  the  first  year's 
income,  upon  which  sum  no  collateral  inheritance  tax  was  paid. 
The  court  holds  that  the  direction  of  the  testator  resulted  in  allow- 
ing so  much  more  of  the  principal  to  pass  to  the  collateral  heirs  and 
that  therefore  so  much  more  is  liable  to  the  tax.  In  re  William- 
son, 11  Pa.  Co.  Ct.  235. 

Federal  Inheritance  Tax. 

Where  the  testator's  will  was  drawn  in  1895,  and  she  died  in 
1900  and  directed  the  "collateral  inheritance  tax"  to  be  paid  by 
the  executor  out  of  the  corpus  of  the  estate,  this  did  not  charge 
the  estate  with  the  federal  inheritance  tax  of  1898.  There 
Was  a  clear  disposition  to  charge  the  corpus  of  the  estate 
with  the  collateral  inheritance  tax  only,  which  was  at  that 
time  the  only  legacy  tax  in  existence.  In  re  Baker,  21  Pa. 
Super.  Ct.  536. 


1887,  c.  37.]  PENNSYLVANIA.  1065 

Payment  from  Share  not  Charged  with  Tax. 

Where  a  collateral  inheritance  tax  is  improperly  paid  on  land 
in  Pennsylvania  which  the  testator  directed  to  be  sold,  the  percent- 
age of  the  tax  cannot  be  deducted  from  the  last  legacy  to  be  paid 
as  such  legacy's  proportion  of  the  collateral  inheritance  tax  paid 
to  the  state,  simply  because  the  executors  were  appointed  in 
Pennsylvania  and  the  legatee  came  by  counsel  before  the  court  and 
asked  for  payment  in  full,  as  happened  in  In  re  Lewis,  203  Pa.  St. 
211.  The  residuary  legatees  having  permitted  the  tax  to  be  paid, 
they  cannot  now  ask  that  a  portion  of  it  be  deducted  from  the 
legacy  to  their  relief.  They  ought  to  have  protected  themselves 
at  the  proper  time.  In  re  Schoenberger,  221  Pa.  St.  112,  114, 
118,  70  A.  679,  19  L.  R.  A.  (N.  S.)  290. 

Where  the  executor  pays  the  tax  upon  the  life  interest  out  of 
the  capital  of  the  fund,  the  tax  should  be  refunded  to  the  executor 
out  of  the  income  of  the  life  estate.  This  is  so  although  the  legacy 
was  intended  for  the  maintenance  of  the  life  tenant  who  had  and 
has  no  other  nreans  of  support;  and  although  the  tax  was  paid  by 
the  executor  before  he  transferred  the  fund  to  the  trustee.  In  re 
Christian,  2  Pa.  Co.  Ct.  91,  18  Wkly.  Notes  Cas.  88. 

**SiTUATED  Within  This  State." 

Interest  of  Non-resident  in  Pennsylvania  Partnership. 

Where  a  partnership  was  composed  of  two  residents  of  Pennsyl- 
vania and  one  of  Maryland,  and  its  property  was  largely  situated  in 
Pennsylvania,  the  interest  of  the  Maryland  partner  who  devised  his 
share  in  the  partnership  to  the  other  two  partners  is  property 
within  the  state  of  Pennsylvania  and  subject  to  a  collateral  in- 
heritance tax  there.  This  interest  was  tangible  personal  property 
having  an  actual  situs  within  the  state  receiving  the  benefit  and 
protection  of  its  laws  during  the  testator's  lifetime,  and  therefore 
subject  to  payment  of  the  collateral  inheritance  tax.  In  re  Small, 
151  Pa.  St.  1,  15,  25  A.  23,  30  Wkly.  Notes  Cas.  521,  affirming 
llPa.  Co.  Ct.  1. 

Where  the  testator  died  domiciled  in  Cuba,  leaving  legacies  of 
property  in  Cuba  to  residents  of  Pennsylvania,  no  inheritance  tax  in 
Pennsylvania  can  be  collected.     In  re  Hood,  21  Pa.  St.  (9  Harris)  106. 

Pennsylvania  statute  of  April  7,  1826,  taxes  not  the  person,  but 
the  estate  within  this  commonwealth.  The  statute  of  April  22, 
1846,  increases  the  collateral  inheritance  tax  to  five  per  cent. 


1066  STATUTES  ANNOTATED.  [Pa.  St. 

The  statute  is  laid  on  the  amount  of  the  estate  being  within  the 
commonwealth  and  the  domicile  has  nothing  to  do  with  the  ques- 
tion, so  the  tax  should  be  collected  where  one  domiciled  in  France 
bequeathed  a  legacy  to  a  citizen  of  France  out  of  personal  property 
situated  in  Pennsylvania.  •  Commonwealth  v.  Smith,  5  Pa.  St. 
(5  Barr)  142. 

Situs  of  Government  Bonds. 

United  States  bonds  are  simply  evidence  of  indebtedness  and 
have  the  same  situs  as  the  domicile  of  the  owner.  So  where  the 
bonds  were  deposited  with  a  safety  deposit  company  they  were, 
constructively  at  least,  in  the  possession  of  the  testator.  Where 
the  testator,  a  citizen  of  New  Jersey,  died  having  certain  United 
States  bonds  on  deposit  with  a  Pennsylvania  company,  the  bonds 
being  due  for  redemption,  there  is  no  tax  in  Pennsylvania  on  the 
fund  produced  by  the  bonds.  It  is  clear  that  estates  not  passing 
by  will  that  is  operative  within  the  state  or  under  the  intestate 
laws  thereof  are  not  within  the  purview  of  the  act.  The  act  was 
never  intended  to  apply  to  government  bonds,  but  was  intended 
only  to  embrace  personal  property  of  a  tangible  nature  actually 
situated  or  used  for  business  purposes  within  the  commonwealth, 
and  not  to  mere  certificates  of  indebtedness  whose  situs  necessarily 
follows  the  owner's  domhcile.     Appeal  of  Orcutt,  97  Pa.  St.  179,  186. 

Resident's  Personalty    in  Another    State    where  he  Owes 
Debts. 

The  personal  estate  in  another  state  of  a  Pennsylvania  decedent 
is  not  subject  to  be  taxed  because  his  debts  there  exceeded  its 
amount,  and  his  real  estate  there  was  not  subject  to  the  tax  because 
beyond  the  jurisdiction  of  Pennsylvania,  in  1866.  Commonwealth 
v.  Coleman,  52  Pa.  St.  468,  473. 

Pennsylvania  Personalty  of  Non-resident. 

Where  the  testator  was  not  a  resident  of  Pennsylvania  and  died 
in  1898,  leaving  property  in  Pennsylvania  which  had  for  a  long 
while  been  in  Pennsylvania  in  the  hands  of  an  agent  for  purposes 
of  investment  and  reinvestment,  this  personal  property  is  within 
the  state  of  Pennsylvania,  and  where  by  agreement  of  the  parties 
the  property  was  distributed  by  an  administrator  appointed  in 
Pennsylvania,  the  court  holds  that  the  Pennsylvania  tax  should 
be  levied.     In  re  Lewis,  203  Pa.  St.  211,  214,  52  A.  205. 


1887,  c.  37.]  PENNSYLVANIA.  1067 

In  re  Lewis,  203  Pa.  St.  211,  was  said  not  to  be  a  convincing 
authority  —  one  which  was  decided  upon  its  own  peculiar  facts, 
and  is  not  to  be  stretched  and  does  not  alter  the  Pennsylvania 
doctrine,  that  securities  of  a  non-resident,  though  physically 
within  the  state  are  not  subject  to  tax.  In  re  Schoenberger,  221 
Pa.  St.  112,  119,  70  A.  579,  19  L.  R.  A.  (N.  S.)  290. 

Where  the  intestate  who  lived  in  Oklahoma  died  immediately 
after  his  sister  who  lived  in  Pennsylvania,  and  no  administration 
was  taken  out  in  Oklahoma,  but  administration  was  taken  out  in 
Pennsylvania  where  the  only  known  creditor  was,  and  where  the 
fund  was  paid  by  the  administrator  of  the  sister  directly  to  the 
administrator  o'f  the  intestate  in  Pennsylvania,  the  fund  was  never 
out  of  the  state,  and  had  a  situs  in  Pennsylvania  and  not  at  the 
domicile  of  the  decedent,  and  is  therefore  subject  to  the  Pennsyl- 
vania collateral  inheritance  tax.  In  re  Weaver  (Orph.  Ct.),  4  Pa. 
Dist.  R.  260. 

Intangible  Property  in  Pennsylvania  of  a  Non-resident. 

Intangible  property  has  no  situs  other  than  the  owner's  domicile, 
and  hence  bonds  cannot  be  taxed  in  Pennsylvania  simply  because 
they  were  kept  there  by  a  non-resident  owner.  In  re  Orcutt,  97 
Pa.  St.  179. 

The  choses  in  action  of  non-residents  consisting  of  stocks  and 
bonds  of  Pennsylvania  corporations,  and  cash  awarded  on  the 
settlement  of  the  account  of  the  administrators  of  the  decedent's 
deceased  husband,  are  not  subject  to  tax  under  the  statute  of  1887". 
The  court  speaks  of  the  practical  difficulty  of  enforcing  the  tax, 
as  it  could  not  be  known  in  the  jurisdiction  of  the  ancillary  admin- 
istration whether  the  estate  would  be  solvent  or  not.  In  re  Del 
Busto,  6  Pa.  Co.  Ct.  289. 

Under  the  Pennsylvania  statute  of  1826,  as  construed  by  the 
act  of  1850,  the  choses  in  action  of  a  decedent  not  domiciled  at  his 
death  in  Pennsylvania  passing  to  collateral  heirs  or  legatees  are 
not  subject  to  tax  simply  because  they  are  rights  in  action  against 
the  state  or  its  corporations  or  against  the  inhabitants  of  the  state. 
Kintzing  v.  Hutchinson,  Fed..Cas.  7834. 

The  executors  of  the  will  of  a  citizen  of  New  Jersey  sued  a  Phila- 
delphia savings  bank  to  recover  the  amount  of  the  deposit  of  the 
deceased,  and  the  only  defence  was  that  the  money  was  subject 
to  the  collateral  inheritance  tax  under  the  Pennsylvania  statute. 

The  court  holds  that  this  statute  has  no  application  to  the 
choses  in  action  belonging  to  one  domiciled  in  another  state  at  the 


1068  STATUTES  ANNOTATED.  [Pa.  St. 

time  of  his  death,  though  his  representatives  may  have  to  come 
here  to  reduce  them  to  possession. 

The  court  further  holds  that  the  result  would  be  the  same  if 
the  law  were  otherwise,  as  the  state  and  not  the  savings  bank  is 
the  proper  party  to  set  up  this  defence.  Allen  v.  Philadelphia  Sav. 
Fund  Soc.  14  Phila.  408,  Fed.  Cas.  No.  234.  As  to  the  first  point, 
the  court  cites  and  ioWows  Kintzing  v.  Hutchinson,  Fed.  Cas* 
No.  7834. 

Securities  of  a  non-resident  actually  situated  in  Pennsylvania  at 
his  death  were  taxed  in  In  re  Alexander  (1845),  3  Clark  87  (4  Pa. 
L.  J.).     Commonwealth  v.  Smith,  5  Pa.  St.  142. 

Real  Estate  outside  State. 

While  it  is  conceded  that  the  powers  of  the  state  for  taxing 
purposes  are  very  great,  they  are  necessarily  limited  to  either 
property  or  persons  within  her  borders,  and  the  state  cannot  im- 
pose a  tax  on  real  estate  situated  in  Maryland  and  charge  it  with 
a  lien  for  such  unpaid  taxes,  although  the  devisor  and  the  devisee 
are  both  citizens  of  Pennsylvania. 

All  property  of  the  citizen  within  the  state  may  be  taxed,  and  all 
such  property  outside  the  state  as  is  drawn  to  or  follows  in  law 
the  domicile  or  person  of  the  owner,  such  as  bonds  and  mortgages, 
etc.,  no  matter  where  situated.  But  real  estate  is  not  drawn  to 
the  person  or  domicile'of  the  owner  for  taxation  or  any  other  pur- 
pose, and  hence  cannot  be  taxed  outside  of  the  jurisdiction  where 
it  is  situated.  The  taxation  of  property  involves  the  reciprocal 
duty  of  protection  on  the  part  of  the  state  levying  such  tax.  In  re 
Bittinger,  129  Pa.  St.  338,  345.  To  the  same  effect  see  Common- 
wealth V.  Coleman,  52  Pa.  St.  468. 

"Persons  Dying  Seised  Thereof.*' 

The  collateral  inheritance  tax  is  assessed  only  on  property  which 
was  the  absolute  property  of  the  testator  and  not  on  that  of  which 
she  only  held  the  power  of  appointment.  In  re  Lisle,  22  Pa. 
Super.  Ct.  262  (1903). 

Where  the  testator  sells  a  promissory  note  of  doubtful  value  on 
condition  the  buyer  will  pay  him  interest  as  long  as  the  testator 
lives,  this  is  not  subject  to  the  inheritance  tax.  In  re  Carman,  3 
Pa.  Co.  Ct.  550. 

The  state  must  show  not  only  that  the  persons  against  whom 
it  claims  are  not  of  the  exempted  class,  but  that  the  estate  out 
of  which  the  tax  is  alleged  to  be  payable  passed  to  those  persons 


1887,  c.  37.]  PENNSYLVANIA.  1069 

from  one  who  died  seized  or  possessed  of  the  same.  Under  the 
Pennsylvania  act  actual  seisin  and  actual  possession  is  necessary 
and  a  person  cannot  be  seised  of  an  estate  which  is  limited  to  take 
effect  only  after  his  death.     In  re  Swann,  12  Pa.  Co.  Ct.  135. 

Beneficiary  Societies'  Payments. 

The  decedent  died  in  1885,  being  at  his  death  a  member  of  two 
beneficial  societies.  Provision  was  made  for  the  payment  of  sums 
of  money  on  the  death  of  the  decedent  to  his  widow  and  children, 
and  the  court  holds  that  this  money  never  formed  part  of  his  estate 
and  is  therefore  not  subject  to  the  inheritance  tax.  The  court 
holds  that  this  scheme  which  is  intended  to  benefit  the  family  of 
a  person  cannot  be  construed  as  a  conspiracy  to  evade  the  law 
relating  to  the  collateral  inheritance  tax,  although  money  was  to 
be  paid  on  the  death  of  the  contributor.  In  re  Vogel,  1  Pa.  Co. 
Ct.  352,  18  Wkly.  Notes  Cas.  242. 

Income  after  Death. 

Where  the  income  of  testator's  estate  for  the  first  year  after 
his  death  was  by  the  direction  of  his  will  added  to  the  principal, 
and  both  principal  and  income  applied  indiscriminately  and  without 
distinction  to  the  payment  of  expenses,  debts  and  legacies,  this 
does  not  subject  the  income  for  the  first  year  to  the  collateral 
w  inheritance  tax.  This  tax  fastens  upon  so  much  of  the  estate  as 
passes  to  collaterals  as  it  stands  at  the  death  of  the  testator." 
Income  accruing  subsequently  comes  not  from  the  testator  but 
from  the  property  held  by  or  for  the  use  of  the  legatee.  In  re 
Williamson,  153  Pa.  St.  508,  521,  26  A.  246,  32  Wkly.  Notes  Cas.  93. 

Property  Invested  in  Name  of  Another. 

Where  a  large  part  of  the  estate  in  Iowa  is  invested  in  the  name 
of  a  nephew  of  the  testator,  the  court  holds  that  this  money  is 
taxable  under  the  law  of  Pennsylvania  in  accordance  with  In  re 
Williamson,  153  Pa.  St.  508,  26  A.  246,  32  Wkly.  Notes  Cas.  93. 
In  re  Miller,  182  Pa.  St.  157,  162,  37  A.  1000. 

Domiciled. 

The  court  upholds  a  finding  as  to  domicile  in  Pittsfield,  where 
it  appears  that  it  was  the  only  place  where  the  testator  ever  voted 
or  paid  a  personal  tax,  and  that  he  continued  to  return  there  to 
his  home  with  a  friend  to  the  very  time  of  his  death,  and  died  there, 


1070  STATUTES  ANNOTATED.  [Pa.  St. 

that  he  declared  that  to  be  his  home  and  made  it  a  point  to  return 
there  and  vote  at  the  presidential  elections  when  his  business  inter- 
ests would  permit.  In  re  Dalrymple,  215  Pa.  St.  367,  371,  64  A.  554. 
Where  the  grantor,  after  making  a  deed  in  trust  to  assign  the 
property  in  accordance  with  her  will,  moved  from  Pennsylvania, 
where  the  trustee  resided,  to  New  York,  where  she  died,  the  court 
holds  that  the  change  in  the  domicile  of  the  grantor  did  not  affect 
the  right  of  the  state  to  collect  the  tax :  that  the  statute  grasped 
the  estate  when  one  citizen  created  the  trust  with  the  features 
described  and  made  this  the  domicile  or  situs  of  the  estate.  As 
the  grantor  could  not  take  the  property  out  of  its  jurisdiction  by 
any  act  of  hers,  so  she  could  not  make  it  follow  her  or  affect  it  with 
any  incidents  of  the  new  domicile  when  she  removed.  Common- 
wealth V.  Kuhn,  2  Pa.  Co.  Ct.  248. 

Double  Taxation. 

The  fact  that  the  state  of  New  York,  where  the  testator  was 
domiciled,  had  already  levied  an  inheritance  tax,  did  not  prevent 
the  state  of  Pennsylvania  from  laying  a  tax  on  the  same  property 
where  it  was  in  Pennsylvania  in  the  hands  of  agents  there  for 
investment  and  reinvestment,  and  where  it  was  distributed  by  the 
Pennsylvania  court.     In  re  Lewis,  203  Pa.  St.  211,  217,  52  A.  205. 

"Other  than  To  or  For  the  Use  Of." 

A  gift  by  a  testator  to  a  creditor  with  interest  falls  neither  within 
the  letter  or  spirit  of  the  collateral  inheritance  act.  What  is  paid 
to  the  creditor  forms  no  part  of  the  "clear  value"  of  the  estate  of 
the  debtor,  nor  can  it  be  said  to  pass  to  him  under  the  will.  In  re 
Quin  (1880),  13  Phila.  (Pa.)  340. 

Where  an  estate  is  given  to  a  widow  on  condition  she  pay  legacies 
to  collateral  relatives,  the  gift  to  the  collateral  relatives  is  direct 
and  is  subject  to  the  inheritance  tax.  Appeal  of  Lauman,  131  Pa. 
St.  346,  351,  18  A.  900. 

Exempting  stepchildren  from  the  collateral  inheritance  tax 
together  with  other  lineal  descendants  is  not  void  as  improper 
classification.  The  court  remarks  that  it  has  nothing  to  do  with 
the  wisdom  of  legislation.  Commonwealth  v.  Randall,  225  Pa.  St. 
197,  73  A.  1109. 

Dower. 

The  court  holds  that  where  a  widow  elects  to  take  against  her 
husband's  will,  and  subsequently  accepts  less  than  she  is  entitled 


1887,  c  37.]  PENNSYLVANIA.  1071 

to  by  statute,  this  fact  cannot  affect  the  inheritance  tax  which  is 
computed  upon  the  property  which  vested  in  her  by  descent,  and 
the  tax  should  therefore  be  computed  upon  the  amount  to  which 
she  was  entitled.     In  re  Small,  11  Pa.  Co.  Ct.  1. 

Where  the  widow  released  her  claim  under  the  intestate  law  and 
the  property  was  given  directly  to  the  legatees,  it  was  all  subject 
to  the  tax.  The  entire  interest  specifically  bequeathed  to  the 
legatees  was  received  and  for  all  that  appears  is  still  held  by  them. 
In  re  Small,  151  Pa.  St.  1,  16,  25  A.  23,  30  Wkly.  Notes  Cas.  521. 

Dower  Right  Exercised. 

When  a  widow  refused  the  provisions  of  the  will  for  her  and 
exercised  her  dower  right  and  took  property  bequeathed  to  the 
collateral  heirs,  the  collateral  inheritance  tax  does  not  apply  to 
this  sum.  The  court  will  not  regard  the  money  paid  her  as  a 
payment  out  of  the  fund  passed  by  will  to  the  beneficiaries  under  it. 
The  fact  that  the  widow  took  less  than  the  law  allowed  her  makes 
no  difference,  as  she  still  took  her  dower  rights.  The  court  must 
look  at  the  true  character  of  the  transaction  and  in  doing  so  cannot 
permit  it  to  be  submerged  in  mere  form.  Appeal  of  Commonwealth ^ 
34  Pa.  St.  (10  Casey)  204. 

Sums  Paid  in  Compromise. 

Where  the  legatees,  who  are  all  collateral  relatives  of  the  testator, 
made  a  compromise  with  a  son  whereby  they  paid  him  a  certain 
sum  in  settlement,  and  in  consideration  thereof  he  withdrew  his 
contest  and  the  will  was  admitted  to  probate,  the  collateral  legatees 
are  not  liable  to  pay  the  collateral  inheritance  tax  on  money  paid 
to  the  son.  The  reason  is  that  the  amount  paid  the  son  "was 
never  received  by  them  as  legatees,  and  under  the  act  it  is  only 
so  much  of  the  estate  which  actually  passes  to  them  by  virtue  of 
the  will  that  is  liable  to  the  tax."  In  re  Pepper,  159  Pa.  St.  508, 
28  A.  353,  reversing  4  Pa.  Dist.  R.  101. 

The  same  result  as  In  re  Pepper,  159  Pa.  St.  508,  28  A.  353,  was 
reached  where  a  settlement  was  made  by  a  devisee  with  contest- 
ants claiming  title  adversely  to  the  decedent  as  this  property 
thus  surrendered  never  formed  a  part  of  the  devisee's  estate  and 
was  not  liable  as  such  to  the  collateral  inheritance  tax.  The 
allowance  or  compromise  of  the  claims  of  third  persons  simply 
reduces  the- estate  afterwards  passing  to  volunteers  with  the  same 
effect  as  if  the  reduction  had  been  caused  by  the  payment  of  debts 


1072  STATUTES  ANNOTATED.  [Pa.  St. 

or  as  if  the  payment  or  surrender  had  been  the  result  of  a  suit 
terminating  in  favor  of  the  claimant.  In  re  Kerr,  159  Pa.  St. 
512,  513,  28  A.  354,  2  Pa.  Dist.  R.  535. 

Where  legatees  claim  that  the  writing  was  a  valid  will  and  the 
provision  for  their  benefit  was  in  discharge  of  an  obligation  and 
the  heirs  denied  the  validity  of  the  writing  as  a  will,  because  of 
the  want  of  testamentary  capacity,  and  a  settlement  was  made  in 
which  the  employes  were  treated  as  creditors  and  allowed  a  part 
of  their  demands,  this  was  clearly  a  compromise  of  a  doubtful 
right  to  avoid  litigation,  by  which  the  heirs  parted  with  a  portion 
of  the  estate  for  the  purchase  of  peace.  The  employes  took 
nothing  under  the  will,  and  the  money  paid  them  was  not  subject 
to  tax  unless  the  whole  arrangement  was  collusive. 

The  claim  of  the  commonwealth  was  not  affected  by  the  fact 
that  the  annuities  provided  for  the  sisters  of  the  decedent  were 
secured  to  them  without  abatement.  The  contest  was  as  to  the 
whole  writing  and  not  as  to  a  part.  If  it  was  invalid,  their  claims 
as  annuitants  fail  with  the  others. 

The  will  was  refused  probate,  and  the  money  paid  to  the  legatees 
was  not  subject  to  the  collateral  tax.  So  payments  made  to  other 
legatees  who  had  no  demand  against  the  estate  were  also  relieved 
from  the  tax.     In  re  Hawley,  214  Pa.  St.  525,  63  A.  1021. 

Where  a  compromise  of  the  validity  of  the  will  was  made  under 
which  the  wilt  was  disallowed,  and  the  balance,  after  paying  certain 
legacies,  given  to  the  contestant,  the  court  holds  that  this  balance 
was  a  part  of  the  decedent's  estate  and  subject  to  tax. 

The  court  suggests  that  if  an  absolute  sum  had  been  fixed  as  the 
price  of  the  consent  of  the  contestant  to  the  compromise  she 
might  perhaps  claim  the  amount  as  a  debt  from  the  other  parties 
in  interest.     In  re  Rubincam  (1881),  14  Phila.  (Pa.)  306. 

Where  a  will  gives  collateral  relatives  a  life  interest  which  they  had 
already  bought  and  paid  for,  there  is  no  inheritance  tax.  It  seemed 
that  the  provisions  were  due  to  the  anxiety  of  the  testator  that 
his  sisters  should  not  be  disturbed  in  the  occupancy  of  the  home 
he  granted  to  them.  In  re  Morris  (Orph.  Ct.),  1  Pa.  Dist.  R.  818 
(1891). 

C^re  of  Burial  Lots. 

A  legacy  in  trust,  the  interest  of  which  is  to  be  devoted  to  the 
care  of  two  cemetery  lots,  is  subject  to  the  inheritance  tax.  Under 
the  statute  of  1887  all  bequests  are  subject  to  the  tax  unless  they 
fall  within  some  of  the  classes  explicitly  exempted. 


1887,  c.  37.]  PENNSYLVANIA.  1073 

It  was  contended  that  this  bequest  was  to  be  considered  as  in 
the  nature  of  funeral  expenses,  but  the  manifest  intention  of  the 
testator  was  to  provide  a  fund  the  income  of  which  should  be 
devoted  to  caring  for  the  last  resting  place  of  all  her  relatives, 
and  that  this  involved  caring  for  her  grave  was  a  mere  incident  of 
the  general  purpose.  In  re  Long,  22  Pa.  Super.  Ct.  370.  (Bequests 
for  the  care  of  burial  lots  are  now  exempt  under  St.  1903,  c.  13.) 

Advancements  Subject  to  Tax. 

Long  prior  to  the  death  of  the  testator,  he  advanced  to  the 
beneficiaries,  on  account  of  their  legacy  at  different  times,  sums 
which  aggregated  four  thousand  dollars  and  took  from  them 
their  bonds  in  corresponding  amounts  conditioned  for  the  pay- 
ment during  his  life  of  an  annuity  or  yearly  sum  equal  to  the 
interest  at  six  per  cent  on  the  advancements.  The  court  holds  that 
this  was  really  a  device  to  evade  the  tax  and  its  meaning;  that  the 
testator  should  receive  a  life  incortie  from  his  legacy,  and  that  full 
enjoyment  of  the  principal  should  be  hiad  by  the  legatee  only  after 
the  testator's  death.  In  re  Conwell,  5  Pa.  Co.  Ct.  368,  22  Wkly. 
Notes  Cas.  183. 

Effect  of  Release  by  Legatee. 

The  intestate  died  leaving  as  his  only  heirs  his  widow  and  one 
sister.  Sixteen  months  later  the  sister  released  all  her  interest  to 
the  widow.  But  the  court  holds  that  this  did  not  relieve  the 
property  from  the  collateral  inheritance  tax,  as  the  title  was 
vested  in  "the  sister  immediately  on  the  death  of  the  intestate. 
In  re  Frank,  9  Pa.  Co.  Ct.  662. 

**Widow  of  the  Son." 

A  former  wife  of  a  son  who  has  married  again  is  not  a  "widow" 
within  the  terms  of  the  statute,  and  therefore  the  collateral  inheri- 
tance tax  must  be  assessed  on  such  widow.  Commonwealth  v. 
Powell,  51  Pa.  St.  (1  P.  F.  Smith)  438. 

"Children  and  Lineal   Descendents  Born  in  Lawful 

Wedlock." 
Special  Adoption  Statutes. 

Pennsylvania  statute.  May  4, 1855,  gave  an  adopted  son  the  right 
to  inherit,  but  did  not  change  the  collateral  inheritance  tax  law; 


1074  STATUTES  ANNOTATED.  [Pa.  St. 

and  as  regards  that  law,  he  is  not  to  be  taken  as  a  son  in  fact,  but 
he  is  a  collateral  relative.  Commonwealth  v.  Nancrede,  32  Pa.  St. 
(8  Casey)  389. 

Where  a  special  act  provided  for  the  adoption  of  a  certain  illegiti- 
mate child  investing  her  with  all  the  rights  of  a  legitimate  daughter 
and  heir,  this  does  not  bind  the  commonwealth  and  make 
her  any  the  less  subject  to  the  collateral  inheritance  tax.  The 
court  follows  Commonwealth  v.  Nancrede ^  32  Pa.  St.  8  Casey  (Pa.) 
389.     In  re  Wayne,  2  Pa.  Co.  Ct.  93,   18  Wkly.  Notes  Cas.  10. 

An  act  of  the  legislature,  declaring  an  illegitimate  son  to  be 
the  lawful  heir  and  adopted  son  of  his  father,  is  an  act  of  adop- 
tion and  not  of  legitimation,  and  does  not  exempt  the  estate  passing 
from  the  father  to  such  adopted  son  from  the  collateral  inheritance 
tax.     In  re  Prinvince  (Orph.  Ct.),  4  Pa.  Dist.  R.  591. 

A  statute  giving  one  "the  rights,  powers  and  privileges"  of  a 
son  clearly  exempted  him  from  the  payment  of  a  collateral  inherit- 
ance tax,  especially  where  the  Statute  further  expressly  provides 
that  the  adopted  son  shall  be  subject  only  to  such  tax  as  would 
be  payable  if  he  were  the  son  of  the  adopting  father. 

The  court  distinguishes  this  case  from  Commonwealth  v.  Nan- 
crede,  32  Pa.  St.  389,  where  the  mere  fact  of  adoption  was  said  not 
to  make  the  adopted  son  a  son  in  fact,  as  in  this  case  there  was  a 
necessary  implication  of  exemption,  and  therefore  the  son  took 
the  estate  exempt  from  the  payment  of  a  collateral  inheritance 
tax.  Commonwealth  v.  Henderson,  172  Pa.  St.  135,  33  A.  368, 
37  Wkly.  Notes  Cas.  344. 

Where  a  statute  was  passed  decreeing  that  a  certain  child  should 
be  capable  of  inheriting  as  if  born  in  lawful  wedlock,  and  was  not 
related  to  the  adopting  parents,  his  estate  was  subject  to  a  col- 
lateral inheritance  tax.  Tharp  v.  Commonwealth,  58  Pa.  St.  (8  P.  F. 
Smith)  500,  following  Commonwealth  v.  Nancrede,  32  Pa.  St. 
(8  Casey)  389.  Commonwealth  v.  Stump  (53  Pa.  St.  132,  3  P.  F. 
Smith,)  is  only  a  dictum. 

Where  a  statute  was  passed  authorizing  one  to  adopt  his  illegiti- 
mate child  to  make  him  his  heir,  the  court  holds  that  this  is  simply 
an  act  of  adoption  and  not  an  act  of  legitimation.  "That  a  legacy 
given  to  an  adopted  child  who  stands  in  the  place  of  an  heir  would 
*be  subject  to  this  tax  is  too  plain  for  argument.  The  reason  is 
that  he  is  not  a  lineal  descendent  born  in  lawful  wedlock.  He 
has  not  the  blood."  Per  curiam,  in  Commonwealth  v.  Ferguson, 
137  Pa.  St.  595,  601,  20  A.  870,  10  L.  R.  A.  240  n. 


1887,  c.  37.1  PENNSYLVANIA.  1075 

Illegitimates. 

Where  the  intestate  died,  leaving  only  collateral  relatives  and  an 
illegitimate  son  who  was  legitimatized  by  the  legislature  after  the 
death  of  the  intestate,  the  estate  descended  and  vested  in  the 
collateral  heirs,  and  the  state  was  entitled  to  collect  the  tax.  The 
moment  a  man  dies  leaving  heirs,  lineal  or  collateral,  his  estate 
vests  and  is  beyond  the  constitutional  power  of  the  legislature. 
Galbraith  v.  Commonwealth,  14  Pa.  St.  (2  Harris)  258. 

The  court  does  not  decide  whether  an  estate  descended  to  a 
bastard  who  has  been  legitimated  by  an  act  of  assembly  is  subject 
to  the  collateral  inheritance  tax.  Commonwealth  v.  Ferguson, 
137  Pa.  St.  595,  601,  20  A.  870,  10  L.  R.  A.  240  n. 

The  court  holds,  on  a  careful  consideration  of  the  statute  of  1887 
and  of  the  whole  subject,  that  children  born  prior  to  marriage  who 
have  been  legitimated  by  the  subsequent  marriage  of  their  parents 
are  not  liable  to  the  tax.  Commonwealth  v.  Gilkerson,  18  Pa. 
Super.  Ct.  516. 

Where  a  legacy  is  given  to  the  husband  of  the  daughter  evidently 
as  trustee  for  the  use  of  his  children,  it  is  not  liable  to  a  collateral 
inheritance  tax.     In  re  Morris  (Orph.  Ct.),  1  Pa.  Dist.  R.  818. 

To  Religious  Society  on  Condition. 

An  annuity  to  a  church  on  condition  that  a  bell  be  rung  at  cer- 
tain specified  times  is  subject  to  the  inheritance  tax.  It  was 
claimed  that  this  is  a  legacy  to  be  enjoyed  only  on  a  condition 
or  for  a.  consideration.  But  the  court  holds  that  this  makes  no 
difference.  Commonwealth  v.  Gilpin  (Com.  PL),  3  Pa.  Dist.  R.  711, 
14  Pa.  Co.  Ct.  122. 

Where  a  will  gave  to  the  church  two  thousand  dollars,  and  in 
consideration  of  the  bequest  the  testator  desired  that  it  shall  keep 
in  order  and  perpetuity  his  family  burial  lot,  the  legacy  is  subject 
to  the  payment  of  the  collateral  inheritance  tax.  This  obligation 
does  not  exempt  the  legacy.  The  fact  that  the  legacy  is  not  a  pure 
gratuity  is  not  material.  The  court  follows  In  re  Seibert,  18  Wkly. 
Notes  Cas.  276.     In  re  Walter,  3  Pa.  Co.  Ct.  447. 

Power.  —  Donees  Classified  as  Relatives  of  Original  Testator. 

Where  property  is  left  to  a  daughter  of  a  testator  for  life  with 
power  of  appointment  on  her  death,  and  she  appoints  to  her  brothers 
and  sisters,  "the  state  is  not  entitled  to  collect  a  collateral  inherit- 
ance tax  on  her  appointment,  as  the  property  has  gone  only  to 


1076  STATUTES  ANNOTATED.  [Pa.  St. 

lineal   descendants   of   the   original    testator.     Commonwealth   v. 
Williams,  13  Pa.  St.  (1  Harris)  29. 

Where  a  life  tenant  exercised  the  power  of  appointment  in  favor 
of  those  who  are  collateral  relatives  of  the  life  tenant,  but  lineal 
descendants  of  the  original  testator,  the  collateral  inheritance  tax 
cannot  be  levied.  Where,  however,  the  power  of  appointment  is 
exercised  improperly,  the  estate  passes  as  the  estate  of  the  donee 
to  collaterals  of  the  donee.  Commonwealth  v.  Sharpless,  2  Chest.  Co. 
Rep.  (Pa.)  246. 

Power  under  Will  of  Non-resident. 

Where  a  citizen  of  Maryland  created  a  life  estate  with  a  power  of 
appointment  to  a  citizen  of  Pennsylvania,  and  the  life  tenant 
exercised  the  power  by  will,  the  state  was  not  entitled  to  an  inherit- 
ance tax  upon  the  exercise  of  the  power. 

The  fund  was  in  Maryland  at  the  testator's  death,  the  interest 
made  by  it  was  received  by  the  appointor  to  her  own  use  during  her 
lifetime  and  the  appointee  asks  no  more  than  to  be  permitted  to 
receive  the  principal  from  the  executors  free  from  encumbrances 
or  deduction  as  her  successor.  This  is  a  plain  case  of  a  foreign 
legacy  received  abroad  which  is  not  taxable  in  Pennsylvania. 
Commonwealth V.  Duffield,  12  Pa.  St.  (2  Jones)  277,  Brightly  N.  P.  469. 

How  Tax  on  Annuity  Paid. 

Where  a  residue  estate  was  given  in  trust  to  pay  an  annuity  the 
court  holds  that  the  intention  was  that  the  annuitant  should  receive 
a  clear  annual  sum  named  in  the  annuity,  and  therefore  the  tax 
must  fall  upon  the  residue.     In  re  Bispham,  6  Pa.  Co.  Ct.  459. 

Where  the  will  gives  an  annuity  of  three  hundred  ($300)  dollars 
to  be  paid  out  of  the  income  or  out  of  the  principal,  if  necessary, 
the  inheritance  tax  should  not  be  assessed  upon  the  whole  sum  as 
the  bequest  is  contingent  upon  the  legatee  living  long  enough  to 
exhaust  it  all.  Therefore  the  tax  is  to  be  assessed  only  upon  the 
annual  payments  as  they  fall  due.  In  re  Crompton,  10  Pa.  Co. 
Ct.  443,  48  Leg.  Int.  452,  29  Wkly.  Notes  Cas.  36. 

Where  the  will  provides  that  all  bequests  of  "money"  shall  be 
paid  without  deduction  for  the  inheritance  tax,  this  included  an 
annuity  payable  by  a  devisee  out  of  the  rents  of  the  land. 
^  Pa.  St.  1887  c.  7,  does  not  apply  to  this  case,  but  this  section 
simply  provides  a  method  of  collection,  and  as  the  annuity  is  a 
bequest  in  money  not  subject  to  a  deduction  for  the  tax,  the  burden 


1887,  c.  37.]  PENNSYLVANIA.  1077 

falls  on  the  residuary  estate,  even  though  the  bequest  were  payable 
out  of  rents  coming  from  a  particular  source.  In  re  Lea,  194  Pa. 
St.  524,  45  A.  337.  A  direction  in  a  will  that  an  annuitant  "is  to 
receive  not  less  than  $1,500  a  year"  is  not  of  itself  enough  to  show 
an  intention  to  place  the  burden  of  the  tax  on  the  general  estate 
and  relieve  the  annuitant  from  the  inheritance  tax.  In  re  Hol- 
brook,  3  Pa.  Co.  Ct.  265,  20  Wkly.  Notes  Cas.  69. 

Annuity  Payable  out  of  Future  Profits  of  Land. 

Where  a  devise  is  made  to  a  lineal  descendant  with  the  direc- 
tion to  her  to  pay  two  thousand  dollars  a  year  out  of  the  rents 
and  profits -of  the  land  devised,  the  words  of  the  act  of  1887 
are  sufficient  to  cover  this  bequest,  although  payable  by  the 
devisee  of  the  land  out  of  its  future  rent.  In  re  Lea,  194  Pa.  St. 
524,  45  A.  337. 

In  Contemplation  of  Death. 

Where  a  decedent  makes  a  deed  in  contemplation  of  death,  his 
executors  should  be  made  to  pay  the  tax.  Appeal  of  Wright^ 
38  Pa.  St.  (2  Wright)  507. 

Where  the  decedent  made  an  absolute  deed  of  land  and  took  a 
bond  back  from  the  grantee  to  pay  the  income  to  the  grantor  for 
his  life  —  this  is  a  conveyance  in  contemplation  of  death  within 
the  terms  of  the  Pennsylvania  inheritance  tax  of  1826,  especially 
where  it  was  made  during  the  last  sickness  of  the  grantor. 

"It  is  true  the  obligation  of  the  bond  was  not  inserted  as  a 
condition  or  reservation  in  the  deed ;  it  was  in  form  a  mere  personal 
obligation;  but  this  contention  does  not  involve  a  technical  ques- 
tion of  title  nor  of  lien ;  the  whole  matter  depends  upon  the  single 
fact  whether  or  not  the  transfer  was  made  or  intended  to  take 
effect  in  enjoyment  at  the  death  of  the  grantor.  The  policy  of 
the  law  will  not  permit  the  owner  of  an  estate  to  defeat  the  plain 
provisions  of  the  collateral  inheritance  law  by  any  devise  which 
secures  to  him,  for  life,  the  income,  profits  and  enjoyment  thereof; 
it  must  be  by  such  a  conveyance  as  parts  with  the  possession,  the 
title  and  the  enjoyment  on  the  grantor's  lifetime."  Per  Clark,  J., 
in  Reish  v.  Commonwealth,  106  Pa.  St.  521,  526. 

A  will  devised  land  to  James  and  John,  two  brothers,  and  pro- 
vided that  if  James  should  not  build  on  his  land  he  might  sell  it 
to  his  brother  John  at  two  thousand  dollars  besides  what  he  was 
to  pay  out -of  it.  James  sold  to  John  his  share  for  thirty-five 
hundred  dollars,  and  John  sold  part  of  this  for  fifteen  hundred 


1078  STATUTES  ANNOTATED.  [Pa.  St. 

dollars.  Later,  at  the  request  of  John,  James  released  him  from  all 
claims  under  his  father's  will  on  condition  that  John  should  convey 
all  the  land  to  James's  children,  they  to  take  possession  at  John's 
death  and  give  him  an  obligation  for  the  two  thousand  dollars 
payable  after  his  death. 

John  died  unmarried  and  without  issue,  and  it  was  held  that  the 
share  of  the  land  which  had  belonged  to  John  originally  is  subject 
to  the  tax,  but  the  portion  of  James  is  not  subject  to  tax.  Sub- 
stantially it  was  agreed  that  the  children  of  James  should  pur- 
chase back  that  share  after  John's  death  by  refunding  to  his  estate 
what  he  had  paid  their  father  for  it.  Their  notes  for  two  thousand 
dollars  have  gone  into  the  inventory  of  the  present  estate,  which 
is,  of  course,  to  pay  the  tax.  Part  of  the  consideration  was  that 
John  should  convey  the  entire  estate  to  his  nephews  and  nieces. 
But  it  cannot  be  said  that  this  share  was  John's  at  the  time  of  his 
death,  or  that  it  was  within  the  spirit  of  the  proviso  in  the  will. 
It  is  not  found  or  pretended  that  the  object  was  to  evade  the  tax 
and  the  note  given  for  the  transfer  excludes  such  a  pretension. 
Had  James  continued  the  owner  under  his  father's  will,  it  would  have 
passed  to  the  children  on  his  death  and  there  would  have  been 
no  claim  upon  it  by  the  state  for  the  tax  on  the  estate  of  John. 
Appeal  of  Waugh,  78  Pa.  St.  (28  P.  F.  Smith)  436. 

Where  the  decedent  had- assigned  stocks  in  trust  to  pay  the  dece- 
dent income  for  life,  and  after  that  certain  sums  in  annuities  to 
persons  who  might  survive  him,  and  reserved  the  right  to  revoke 
any  of  the  trusts  or  grants,  this  was  intended  to  take  effect  in 
possession  after  his  death.  It  took  effect  neither  in  right  nor 
possession  until  his  death  because  none  were  to  take  who  did  not 
survive  him,  and  because  he  might  revoke  the  whole.  Appeal  of 
Wright,  38  Pa.  St.  (2  Wright)  507. 

Trust  Deeds. 

The  testator  made  his  will  December  1,  1881,  bequeathing  his 
estate  to  certain  collateral  relatives  and  for  religious  and  charit- 
able purposes.  August  14,  1882,  he  executed  a  deed,  assigning 
all  his  property  to  trustees  for  their  own  use  and  benefit  during 
his  life,  and  at  his  death  to  hold  the  same  for  the  uses  and  purposes 
of  .^his  will. 

The  court  holds  that  the  property  is  subject  to  a  collateral 
inheritance  tax  as  the  deed  was  not  to  take  effect  in  enjoyment 
until  after  the  death  of  the  testator.  Appeal  of  Seibert,  110  Pa. 
St.  329,  1  A.  346. 


1887,  c.  37.]  PENNSYLVANIA.  1079 

Where  the  testator,  a  resident  of  Pennsylvania,  conveyed  to  a 
New  York  trust  company  all  his  property  in  trust  to  collect  the 
profits  and  pay  them  to  the  decedent  during  his  life,  and  on  his 
death  to  certain  beneficiaries  named,  reserving  in  the  decedent  the 
power  to  alter  the  deed  of  trust  at  any  time,  the  property  is  liable 
to  the  Pennsylvania  collateral  inheritance  tax.  The  decedent  was 
not  only  the  beneficial  owner  of  the  securities,  but  under  the  reserve 
power  of  modification  or  revocation  he  had  absolute  control  of  the 
disposition  to  be  made  of  the  securities  upon  his  decease.  The  court 
quotes  with  approval  Du  Bois's  Appeal,  121  Pa.  St.  386.  In  re 
Line,  155  Pa.  St.  378,  393,  26  A.  728,  32  Wkly.  Notes  Cas.  376. 

A  deed  by  the  decedent  to  another  in  trust  to  pay  the  income 
to  the  grantor  for  life  and  on  his  death  to  pay  certain  pecuniary 
bequests  to  persons  mentioned  is  subject  to  the  collateral  inherit- 
ance tax.     In  re  Maris,  14  Pa.  Co.  Ct.  171,  3  Pa.  Dist.  33  (1893). 

Where  a  non-resident  executed  a  deed  of  trust  to  a  Pennsylvania 
corporation,  preserving  to  herself  a  life  estate  with  remainder  over, 
and  the  fund  was  kept  in  Pennsylvania,  the  court  holds  that  the 
fund  is  liable  to  a  tax  following  In  re  Lewis,  203  Pa.  St.  211. 
Singer  v.  Guarantee  Trust  &f  Safe  Deposit  Co.,  24  Pa.  Super.  Ct.  270. 

The  testator  conveyed  property  in  trust  to  assign  the  property 
as  the  grantor  might  by  last  will  appoint,  and  for  want  of  such 
appointment,  to  her  heirs,  reserving  no  right  of  revocation  in  the 
deed.  The  deed  was  signed  in  1857  in  Pennsylvania  and  subse- 
quently the  grantor  moved  to  New  York  where  she  lived  until  her 
death  in  1885.  The  court  holds  that  this  is  a  deed  intended  to 
take  effect  after  the  death  of  the  grantor  within  the  meaning  of 
the  statute  of  1826.     Commonwealth  v.  Kuhn,  2  Pa.  Co.  Ct.  248. 

Unrecorded  Deed. 

Where  the  decedent  conveyed  a  farm  to  his  nephew  for  a  good 
consideration  and  where  the  deed  was  never  placed  on  record  until 
after  the  grantor's  death,  the  transfer  is  not  subject  to  an  inherit- 
ance tax  in  the  absence  of  evidence  of  intent  to  convey.  In  re 
McCormick,  15  Pa.  Co.  Ct.  621,  3  Pa.  DIst.  838,  25  Pittsb.  Leg. 
Int.  N.  S.  91  (1894). 

Delivery  of  Deed. 

Where  the  beneficial  owner  of  land  for  whom  another  is  holding 
the  legal  title  as  bailee  directs  the  holder  of  the  legal  title  to  give 
the  property -to  his  son,  and  the  holder  of  the  title  executes  a  deed, 
which  he  gives  to  his  son,  telling  him  to  give  it  to  the  person  named 


1080  STATUTES  ANNOTATED.  [Pa.  St. 

by  the  beneficial  owner  when  he  calls  for  it  —  this  is  a  good  delivery 
of  the  deed,  and  the  land  cannot  be  held  for  an  inheritance  tax  from 
the  estate  of  the  beneficial  owner,  especially  where  the  grantee  under 
the  deed  had  entered  on  the  land  and  made  improvements  on  the 
property.     Stinger  v.  Commonwealth,  26  Pa.  St.  (2  Casey)  422,  428. 

Deed  not  Delivered. 

Where  the  testator  had  given  a  deed  of  the  property  in  question 
to  the  sister,  which  deed  the  court  finds  never  was  delivered  until 
after  the  death  of  the  testator,  the  property  remained  the  property 
of  the  testator  and  subject  to  the  inheritance  tax.  Appeal  of 
Davenport  (Pa.  2,  1888),  14  A.  346. 

Exemption  of  $250  Applies  to  Whole  Estate. 

The  collateral  inheritance  act  of  May  6,  1887,  provides  that  "no 
estate  which  may  be  valued  at  a  less  sum  than  $250  shall  be  sub- 
ject to  tax."  This  exemption  refers  to  the  whole  estate  and  not  to 
distributive  shares  carved  therefrom.  In  re  Mixter  (1891),  28 
Wkly.  Notes  Cas.  (Pa.)  182,  8  Lane.  L.  Rev.  256;  10  Pa.  Co.  Ct. 
409.      [See  notes  to  the  act  of  1826,  ante,  p.  1044.] 

Where  there  were  seven  legacies  of  two  hundred  ($200)  dollars 
each  to  certain  charitable  institutions,  the  tax  should  be  paid  on 
each  legacy,  as  the  two  hundred  and  fifty  ($250)  dollars'  limitation 
applies  only  where  the  net  value  of  the  estate  to  be  distributed  to 
collaterals  does  not  exceed  two  hundred  and  fifty  ($250)  dollars. 
The  liability  to  a  tax  is  to  be  determined  not  by  the  amount  of 
the  legacy,  but  by  the  clear  value  of  the  estate  passing  to  persons 
or  bodies  corporate  not  exempt  from  taxation.  In  re  Howell,  10 
Pa.  Co.  Ct.  232. 

Evasion. 

"No  mere  device  intended  to  evade  the  payment  of  tax  due 
the  commonwealth  can  be  effective.  Courts  look  beyond  the 
form  of  any  arrangement  by  which  the  commonwealth  is  deprived 
of  a  tax  to  its  substance  to  ascertain  its  real  purpose.  An  agree- 
ment to  set  aside  a  will  and  to  make  distribution  in  accordance  with 
its  provisions  will  not  relieve  legacies  passing  to  collaterals  from 
tax.  Such  an  agreement  is  evidently  collusive.  But  money  paid 
m  good  faith  in  compromise  of  threatened  litigation  is  not  subject 
to  tax.  Pepper' s  Estate,  Ib^'Pai.  St.  bO^',  Kerr's  Estate,  159  Fsl.  St, 
512."  Per  Fell,  J.,  in  In  re  Hawley,  214  Pa.  St.  525,  527,  63  A. 
1021. 


1887,  c.  37.]  PENNSYLVANIA.  1081 

Bequest  in  Lieu  of  Commissions. 

S.  2  Where  a  testator  appoints  or  names  one,  or  more  executors,  and  makes  a 
bequest  or  devise  of  property  to  them,  in  lieu  of  their  commissions  or  allowances, 
or  appoints  them  his  residuary  legatees,  and  said  bequests,  devises,  or  residuary 
legacies,  exceed  what  would  be  a  fair  compensation  for  their  services,  such  excess 
shall  be  subject  to  the  payment  of  the  collateral  inheritance  tax;  the  rate  of  com- 
pensation to  be  fixed  by  the  proper  courts  having  jurisdiction  in  the  case. 

Wlien  Tax  Accrues  on  Remainders.  —  Lien.  —  Returns. 

S.  3.  In  all  cases  where  there  has  been  or  shall  be  a  devise,  descent  or  bequest 
to  collateral  relatives  or  strangers,  liable  to  the  collateral  inheritance  tax,  to  take 
effect  in  possession,  or  come  into  actual  enjoyment  after  the  expiration  of  one  or 
more  life  estates,  or  a  period  of  years,  the  tax  on  such  estate  shall  not  be  pay- 
able, nor  interest'  begin  to  run  thereon,  until  the  person  or  persons  liable  for  the 
same  shall  come  into  actual  possession  of  such  estate,  by  the  termination  of  the 
estates  for  life  or  years,  and  the  tax  shall  be  assessed  upon  the  value  of  the  estate 
at  the  time  the  right  of  possession  accrues  to  the  owner  as  aforesaid:  Provided, 
That  the  owner  shall  have  the  right  to  pay  the  tax  at  any  time  prior  to  his 
coming  into  possession,  and  in  such  cases,  the  tax  shall  be  assessed  on  the  value 
of  the  estate  at  the  time  of  the  payment  of  the  tax,  after  deducting  the  value  of 
the  life  estate  or  estates  for  years:  And  provided  further.  That  the  tax  on  real 
estate  shall  remain  a  lien  on  the  real  estate  on  which  the  same  is  chargeable 
until  paid.  And  the  owner  of  any  personal  estate  shall  make  a  full  return  of 
the  same  to  the  register  of  wills  of  the  proper  county  within  one  year  from  the, 
death  of  the  decedent,  and  within  that  time  enter  into  security  for  the  payment 
of  the  tax  to  the  satisfaction  of  such  register;  and  in  case  of  failure  so  to  do 
the  tax  shall  be  immediately  payable  and  collectible. 

[See  notes  to  the  Act  of  1850,  ante,  p.  1049.] 

**The  Tax  .  .  .  shall  not  be  Payable."  —  Increase  in  Value 
of  Estate  after  Death  of  Decedent. 

Tlie  tax  on  the  remainder  after  a  life  estate  is  not  payable  until 
the  termination  of  the  life  estate,  provided  the  security  for  its 
payment  be  given.     In  re  Budd,  12  Pa.  Co.  Ct.  476. 

The  will  directed  the  executor  to  pay  all  the  collateral  inheritance 
taxes  on  all  the  devises,  bequests  and  legacies  "as  soon  after  my 
decease  as  the  same  can  conveniently  be  done."  Under  this  pro- 
vision the  executor  paid  the  tax  on  the  entire  estate  at  its  valuation 
at  that  time.  Subsequently,  the  life  tenant  having  died,  the  state 
claimed  the  tax  on  the  remainders  on  the  ground  that  it  was  not 
due  until  the  remainders  came  into  possession,  and  that  the  value 
of  the  estate  having  increased  in  the  meantime,  the  tax  is  payable 
on  its  present  value.  The  words  "shall  not  be  payable"  mean  only 
"shall  not  be  demandable"  by  the  state,  as  the  right  of  the  re- 
maindermen to  pay  sooner  is  expressly  given  in  the  proviso  to  the 
same  section ;   and  the  tax  having  been  paid  on  the  value  at  the 


1082  STATUTES  ANNOTATED.  [Pa.  St. 

death  of  the  testator,  no  further  tax  can  be  now  collected.     In 
re  De  Borbon,  211  Pa.  St.  623,  61  A.  244. 

"Until   the   Person   Liable  .  .  .  Shall   Come   into    Actual 
Possession." 

Under  this  section  the  tax  on  a  remainder  is  not  payable  until 
"the  person  liable  for  the  same"  shall  come  into  actual  possession. 
"This  cannot  possibly  mean  any  one  but  the  remainderman,  for  he 
is  the  only  one  to  come  into  actual  possession  by  the  termination 
of  the  precedent  estate  for  life  or  years.  The  intent  of  the  statute 
is  to  charge  the  beneficiary  of  the  estate ;  and  whether  the  phrase 
used  is  'person  liable,'  or  'person  who  shall  come  into  actual 
possession,'  or  'owner,'  it  always  means  the  same  person,  the 
remainderman." 

The  executors  and  administrators  "cannot  be  compelled  to  make 
present  payment  of  the  tax  on  estates  in  remainder  for  the  very 
obvious  reasons  that  they  are  not  the  parties  primarily  charged 
with  the  payment,  either  present  or  future;  they  are  not  respon- 
sible for  the  owner's  default  of  return  and  security  which  makes 
the  future  tax  payable  immediately,  and  in  the  present  case  they 
cannot  pay  it  now  without  taking  it  out  of  the  widow's  estate, 
which  is  not  liable  to  the  tax  at  all."  In  re  Coxe,  181  Pa.  St.  369, 
37  A.  517. 

"Tax  .  .  .  Assessed  ...  on  the  Value  of  the  Estate  at  the 
Time  the  Right  of  Possession  Accrues." 

Remaindermen  should  be  taxed  when  they  come  into  possession 
of  real  estate  only  on  the  clear  value  of  the  property  at  the  death 
of  the  testator,  after  deducting  debts  of  the  estate.  Cooper  v. 
Commonwealth,  5  Pa.  Co.  Ct.  271. 

"Provided  that  the  Owner  Shall  Have  the  Right  to  Pay  the 
Tax." 

The  remaindermen  are  entitled  on  the  death  of  the  decedent 
to  pay  the  collateral  inheritance  tax  on  the  residue  of  the  estate 
after  deducting  the  value  of  the  life  interest  or,  on  the  termina- 
tion of  the  life  estate,  pay  the  tax  on  the  entire  valuation.  In  re 
Von  Storch,  7  Pa.  Dist.  R.  204. 

Life  Estate. 

The  court  holds  that  the  will  did  not  create  a  fee  within  the 
rule  in  Shelley's  case  under  the  facts,  therefore  only  a  life  estate 


1887,  c.  37.1  PENNSYLVANIA.  1083 

was  subject  to  the  inheritance  tax.  In  re  Belcher,  2X1  Pa.  St. 
615,  61  A.  252. 

Remainders  contingent  upon  the  devisees  surviving  the  first 
taker  are  subject  to  tax,  although  it  is  not  imperative  that  the  tax 
be  paid  before  the  estates  actually  vest  in  possession.  In  re  Will- 
ing, 11  Phila.  119. 

If  the  remaindermen  are  not  ascertainable,  that  is  no  reason  why 
the  tax  should  be  collected  from  the  life  tenant  who  is  exempt. 
The  only  effect  of  such  condition  would  be  that  the  tax  would  not 
be  presently  collectible  at  all,  and  the  commonwealth  would  have 
to  depend  on  its  lien  on  the  real  estate  and  its  claim  on  the  execu- 
tors when  they  make  distribution.  In  re  Coxe,  181  Pa.  St.  369, 
378,  37  A.  517. 

Remainderman  Liable  for  Whole  Tax  when  Life  Tenant  is 
Exempt. 

Under  the  Pennsylvania  statutes  as  codified  by  the  statute  o^ 
1887,  in  estates  liable  to  the  collateral  inheritance  tax,  the  common- 
wealth is  entitled  to  a  tax  on  the  entire  estate,  and  when  the  primary 
estate  for  life  or  years  is  exempt  from  liability  as  to  a  lineal  descend- 
ant, the  whole  tax  on  the  entire  estate  must  be  paid  by  the  tenant 
in  remainder.  In  such  cases  the  time  of  payment  is  postponed 
until  the  estate  comes  into  actual  possession  of  the  tenant  liable. 
But  nevertheless,  if  such  tenant  elect  in  anticipation  to  pay  at  the 
death  of  the  decedent,  the  tax  is  assessable  on  the  then  valuation 
of  the  entire  estate  less  the  value  of  the  estates  for  life  or  years. 
The  act  of  1887  did  not  change  this  law.  Appeal  of  Commonwealth, 
127  Pa.  St.  435,  439. 

Tax  on  Life  Estate  and  Remainder  Need  not  Total  Five 
Per  Cent. 

The  Pennsylvania  statute  has  never  been  held  to  mean  that  the 
tax  upon  the  life  estate  added  upon  the  estate  in  remainder  should 
exactly  equal  five  per  cent  of  the  principal  of  the  legacy.  In  re 
Christian,  2  Pa.  Co.  Ct.  91,  18  Wkly.  Notes  Cas.  88. 

No  Appeal  by  Executors. 

The  executors  are  not  interested  and  therefore  cannot  appeal 
from  the  decision  of  the  court  on  the  question  as  to  whether  a  tax 
is  now  due  and  payable  or  payable  in  the  future,  as  the  tax  is  pay- 
able by  the  legatees  and  not  by  the  executors.  In  re  Handley, 
181  Pa.  St.  339,  37  A.  587,  reversing  judgment  3  Lack.  Leg.  N.  9. 


1084  STATUTES  ANNOTATED.  [Pa.  St. 

Where  Payment  of  Legacies  Postponed. 

Where  a  title  to  a  certain  farm  vested  in  the  devisee  and  no 
estate  for  Ufe  or  years  intervened,  but  he  was  to  have  the  use  of  the 
farm  for  ten  years  and  at  the  expiration  of  ten  years  to  have  the 
farm  in  fee,  and  where  certain  legacies  with  interest  were  to  be  paid 
to  the  legatees  after  the  expiration  of  ten  years,  the  time  of  the 
payment  of  the  legacies  only  was  postponed;  and  hence  neither 
the  devise  nor  the  bequests  come  within  section  3  of  the  Pennsyl- 
vania statute  of  1887,  so  as  to  postpone  the  payment  of  the  collateral 
inheritance  tax.     In  re  Dalrymple,  215  Pa.  St.  367,  373,  64  A.  554. 

Increase  in  value  after  the  death  of  the  testator  to  the  death  of 
the  life  tenant  should  not  be  included.  Comm.  v.  Smith,  20  Pa.  St. 
(8  Harris)  100. 

Interest.  —  Discount. 

S.  4.  If  the  collateral  inheritance  tax  shall  be  paid  within  three  months  after 
the  death  of  the  decedent,  a  discount  of  five  per  centum  shall  be  made  and  allowed, 
and  if  the  said  tax  is  not  paid  at  the  end  of  one  year  from  the  death  of  the  decedent, 
interest  shall  then  be  charged  at  the  rate  of  twelve  per  centum  per  annum  on  such 
tax;  but  where  from  claims  made  upon  the  estate,  litigation,  or  other  unavoidable 
cause  of  delay,  the  estate  of  any  decedent  or  a  part  thereof  cannot  be  settled  up 
at  the  end  of  the  year  from  his  or  her  decease,  six  per  centum  per  annum  shall 
be  charged  upon  the  collateral  inheritance  tax,  arising  from  the  unsettled  part 
thereof,  from  the  end  of  such  year  until  there  be  default;  Provided  further. 
That  where  real  or  personal  estate  withheld  by  reason  of  litigation  or  other 
cause  of  delay  in  manner  aforesaid  from  the  parties  entitled  thereto,  subject  to 
said  tax,  has  not  been,  or  shall  not  be  productive  to  the  extent  of  six  per  centum 
per  annum,  they  shall  not  be  compelled  to  pay  a  greater  amount  as  interest  to 
the  commonwealth  than  they  may  have  realized,  or  shall  realize  from  such 
estate  during  the  time  the  same  has  been  or  shall  be  withheld  as  aforesaid. 

[See  notes  to  the  Act  of  1850,  ante,  p.  1050.  See  also  notes  to  the  Act  of  1855, 
ante,  p.  1051.] 

"Where  from  Claims  .  .  .  Litigation,  or  Other  Unavoidable 
Cause  of  Delay." 

It  is  plain  that  where  the  estate  is  involved  in  litigation  in  order 
to  collect  its  property  the  penalty  is  not  to  be  recovered  from 
failure  to  pay  the  tax  within  one  year.  In  re  Miller,  182  Pa.  St. 
157,  161,  37  A.  1000. 

"Unavoidable  delay"  may  be  a  misnomer  of  the  trustee  named 
in  the  will  which  was  not  discovered  for  some  time.  In  re  Banks, 
5  Pa.  Co.  Ct.  614. 

"Litigation"  as  set  forth  in  the  statute  of  1887  as  the  cause  of 
delaying  the  penalty  for  non-payment  of  the  inheritance  tax  must  be 


1887,  c.  37.]  PENNSYLVANIA.  1085 

such  that  the  amount  of  tax  due  cannot  be  definitely  ascertained 
until  its  determination  as  between  the  estate  and  adverse  parties. 
In  re  Small,  12  Pa.  Co.  Ct.  226. 

Penalty  Charged  to  Administrator. 

The  penalty  under  the  inheritance  tax  law  for  failure  to  pay  the 
tax  should  be  charged  to  the  administrator.  In  re  Palmer,  2  Del. 
Co.  Rep.  (Pa.)  180. 

An  executor  who  neglects  to  pay  an  award  on  a  collateral  inherit- 
ance tax  is  personally  liable  for  the  penalty  incurred.  In  re  Allen, 
9  Pa.  Co.  Ct.  328. 

Tax  Deducted. 

S.  5.  The  executor,  or  administrator,  or  other  trustee,  paying  any  legacy  or 
share  in  the  distribution  of  any  estate,  subject  to  the  collateral  inheritance  tax, 
shall  deduct  therefrom  at  the  rate  of  five  dollars  in  every  hundred  dollars,  upon 
the  whole  legacy  or  sum  paid ;  or  if  not  money,  he  shall  demand  payment  of  a 
sum,  to  be  computed  at  the  same  rate,  upon  the  appraised  value  thereof,  for  the 
use  of  the  commonwealth;  and  no  executor  or  administrator  shall  be  compelled 
to  pay  or  deliver  any  specific  legacy  or  article  to  be  distributed,  subject  to  tax, 
except  on  the  payment  into  his  hands  of  a  sum  computed  on  its  value  as  afore- 
said; and  in  case  of  neglect  or  refusal  on  the  part  of  said  legatee  to  pay  the 
same,  such  specific  legacy  or  article,  or  so  much  thereof  as  shall  be  necessary, 
shall  be  sold  by  such  executor  or  administrator  at  public  sale,  after  notice  to 
such  legatee,  and  the  balance  that  may  be  left  in  the  hands  of  the  executor  or 
administrator  shall  be  distributed,  as  is  or  may  be  directed  by  law;  and  every 
sum  of  money  retained  by  any  executor  or  administrator,  or  paid  into  his  hands 
on  account  of  any  legacy  or  distributive  share,,  for  the  use  of  the  commonwealth, 
shall  be  paid  by  him  without  delay. 

Conditional  or  Contingent  Estates. 

S.  6.  If  the  legacy  subject  to  collateral  inheritance  tax  be  given  to  any  per- 
son for  life,  or  for  a  term  of  years,  or  for  any  other  limited  period,  upon  a  condi- 
tion or  contingency,  if  the  same  be  money,  the  tax  thereon  shall  be  retained 
upon  the  whole  amount;  but  if  not  money,  application  shall  be  made  to  the 
orphans'  court  having  jurisdiction  of  the  accounts  of  the  executors  or  adminis- 
trators to  make  apportionment,  if  the  case  requires  it,  of  the  sum  to  be  paid  by 
such  legatees,  and  for  such  further  order  relative  thereto  as  equity  shall  require. 

Out  of  Real  Estate. 

S.  7.  Whenever  such  legacy  shall  be  charged  upon  or  payable  out  of  real 
estate,  the  heir  or  devisee,  before  paying  the  same,  shall  deduct  therefrom  at 
the  rate  aforesaid,  and  pay  the  amount  so  deducted  to  the  executor;  and  the  same 
shall  remain  a  charge  upon  such  real  estate  until  paid,  and  the  payment  thereof 
shall  be  enforced  by  the  decree  of  the  orphans'  court,  in  the  same  manner  as  the 
payment  of  such  legacy  may  be  enforced. 


1086  STATUTES  ANNOTATED.  [Pa.  St. 

Information  as  to  Real  Estate. 

S.  8.  Whenever  any  real  estate  of  which  any  decedent  may  die  seized  shall  be 
subject  to  the  collateral  inheritance  tax,  it  shall  be  the  duty  of  executors  and 
administrators  to  give  information  thereof  to  the  register  of  the  county,  where 
administration  has  been  granted,  within  six  months  after  they  undertake  the 
execution  of  their  respective  duties,  or  if  the  fact  be  not  known  to  them  within 
that  period,  within  one  month  after  the  same  shall  have  come  to  their  knowledge, 
and  it  shall  be  the  duty  of  the  owners  of  such  estate,  immediately  upon  the 
vesting  of  the  estate,  to  give  information  thereof  to  the  register  having  juris- 
diction of  the  granting  of  administration. 

Receipts. 

S.  9.  It  shall  be  the  duty  of  any  executor  or  administrator,  on  the  payment 
of  collateral  inheritance  tax,  to  take  duplicate  receipts  from  the  register,  one  of 
which  shall  be  forwarded  forthwith  to  the  auditor  general,  whose  duty  it  shall 
be  to  charge  the  register  receiving  the  money  with  the  amount,  and  seal  with  the 
seal  of  his  office,  and  countersign  the  receipt  and  transmit  it  to  the  executor  or 
administrator,  whereupon  it  shall  be  a  proper  voucher  in  the  settlement  of  the 
estate;  but  in  no  event  shall  an  executor  or  administrator  be  entitled  to  a  credit 
in  his  account  by  the  register,  unless  the  receipt  is  so  sealed  and  countersigned 
by  the  auditor  general. 

Payable  on  Transfer. 

S.  10.  Whenever  any  foreign  executor,  or  administrator,  or  trustee,  shall 
assign  or  transfer  any  stocks  or  loans  in  this  commonwealth,  standing  in 
the  name  of  the  decedent,  or  in  trust  for  a  decedent,  which  shall  be  liable  for  the 
collateral  inheritance  tax,  such  tax  shall  be  paid,  on  the  transfer  thereof,  to 
the  register  of  the  county  where  such  transfer  is  made;  otherwise  the  corpor- 
ation permitting  such  transfer  shall  become  liable  to  pay  such  tax. 

Refund. 

S.  11.  Whenever  debts  shall  be  proven  against  the  estate  of  a  decedent, 
after  distribution  of  legacies  from  which  the  collateral  inheritance  tax  has  been 
deducted,  in  compliance  with  this  act,  and  the  legatee  is  required  to  refund  any 
portion  of  a  legacy,  a  portion  of  the  said  tax  shall  be  repaid  to  him  by  the  executor 
or  administrator,  if  the  said  tax  has  not  been  paid  into  the  state  or  county  treas- 
ury, or  by  the  county  treasurer,  if  it  has  been  so  paid. 

This  section  has  been  affected  by  St.  1899,  c.  15,  approved 
March  22,  1899,  which  provides  for  the  refunding  of  the  inherit- 
ance tax  after  payment  where  it  appears  that  the  tax  was  not  due 
on  account  of  lineal  heirs  being  subsequently  discovered.  This 
section  has  been  further  aflfected  by  St.  1901,  c.  25,  ante,  p.  1056, 
extending  the  time  for  applications  for  a  refund  of  taxes  erroneously 
paid. 


1887,  c.  37.]  PENNSYLVANIA.  1087 

Appraisal. 

S.  12.  It  shall  be  the  duty  of  the  register  of  wills  of  the  county,  in  which 
letters  testamentary,  or  of  administration  are  granted,  to  appoint  an  appraiser 
as  often  as  and  whenever  occasion  may  require,  to  fix  the  valuation  of  estates 
which  are,  or  shall  be,  subject  to  collateral  inher  tance  tax,  and  it  shall  be  the 
duty  of  such  appraiser  to  make  a  fair  and  conscionable  appraisement  of  such 
estates,  and  it  shall  further  be  the  duty  of  such  appraiser  to  assess  and  fix  the  cash 
value  of  all  annuities  and  life  estates  growing  out  of  said  estates,  upon  which 
annuities  and  life  estates  the  collateral  inheritance  tax  shall  be  immediately 
payable  out  of  the  estate  at  the  rate  of  such  valuation:  Provided,  That  any 
person  or  persons  not  satisfied  with  said  appraisement  shall  have  the  right  to 
appeal,  within  thirty  days,  to  the  orphans'  court  of  the  proper  county  or  city, 
on  paying,  or  giving  security  to  pay,  all  costs,  together  with  whatever  tax  shall  be 
fixed  by  said  court,  and  upon  such  appeal  said  courts  shall  have  jurisdiction  to 
determine  all  questions  of  valuation,  and  of  the  liability  of  the  appra  sed  estate 
for  such  tax,  subject  to  the  right  of  appeal  to  the  supreme  court  as  in  other  cases. 

Appraisal  of  Legacy  of  Right  to  Use. 

Where  the  widow  is  given  power  to  appropriate  the  residue  to 
her  own  use  for  life  with  the  remainder  over  of  the  surplus,  the 
amount  of  it  and  the  tax  upon  it  can  only  be  ascertained  after  her 
death.     In  re  Nieman,  131  Pa.  St.  346,  351,  18  A.  900. 

Deduction  of  Debts. 

The  Pennsylvania  statute  of  1826  imposes  a  tax  only  on  what 
remains  for  distribution  after  the  expenses  and  debts  are  paid  and 
provided  for.  It  is  not  on  the  succession  to  the  beneficiaries  and 
not  on  the  securities  in  which  the  estate  was  invested.  Appeal  oj 
Orcutt,  97  Pa.  St.  179. 

The  tax  is  imposed  after  the  expenses  of  administration  and 
debts  are  deducted,  but  this  does  not  include  the  expense  of  counsel 
and  litigation  among  persons  claiming  as  distributees.  In  re  Lines, 
155  Pa.  St.  378,  391,  26  A.  728,  32  Wkly.  Notes  Cas.  376. 

The  tax  is  to  be  assessed  upon  the  clear  value  of  the  property 
which  can  be  ascertained  only  by  allowing  for  all  lawful  charges, 
and  where  the  parties  assent  to  the  correctness  of  the  estimate  of 
expenses  the  register  has  no  discretion  but  to  allow  it  unless  there 
was  ground  for  a  suspicion  of  fraud.     In  re  Cullen,  8  Pa.  Co.  St.  234. 

Where  the  land  of  the  decedent  passes  to  lineal  descendants  for 
life  and  at  their  death  to  collateral  heirs,  although  the  real  estate 
descends  intact  to  the  collateral  heirs,  the  tax  must  be  assessed 
upon  the  valuation  of  the  real  estate  after  deducting  the  debts 
owing  by  the  decedent  at  the  time  of  his  death.  Appeal  of  Common- 
wealth, 127  Pa.  St.  435,  440. 


1088  STATUTES  ANNOTATED.  [Pa.  St. 

Where  the  executor  was  doubtful  whether  seven  thousand  dollars 
would  cover  the  expense  of  final  settlement  of  an  estate,  the  court 
ordered  the  amount  of  seven  thousand  dollars  be  retained  by  the 
executor  for  contingent  expenses  which  may  be  incurred  in  the  final 
settlement  and  that  interest  at  six  per  cent  be  computed  on  five 
per  cent  of  the  balance  from  one  year  after  the  death  of  the  testator 
until  the  date  of  the  decree.  In  re  Miller,  182  Pa.  St.  157,  162, 
37  A.  1000. 

Claims  of  Mortgagors. 

Under  the  Pennsylvania  statute  of  1887,  debts  due  to  a  resident 
of  Pennsylvania  by  persons  living  in  other  states  are  taxable, 
although  payment  is  secured  by  mortgages  on  lands  of  the  debtors 
in  the  states  in  which  they  reside.  In  re  Stanton  (Orph.  Ct.),  3  Pa. 
Dist.  R.  371,  34  Wkly.  Notes  Cas.  391. 

Only  One  Appraisal. 

Where  the  decedent  died  in  1884  and  an  appraiser  was  appointed 
who  by  mistake  omitted  certain  property  out  of  the  estate,  there  is 
no  remedy  for  that  mistake  except  an  appeal;  and  the  second 
appraisal  is  without  authority  under  the  statute  of  1849,  P.  L.  571, 
s.  12.     In  re  Moneypenny,  181  Pa.  St.  309,  37  A.  589. 

Notice.  —  Appeal. 

There  need  be  no  notice  of  the  appointment  of  the  appraiser, 
of  the  time  and  place  of  a  hearing  for  the  parties,  and  of  the  intended 
filing  of  the  appraisement.  These  things  may  be  desirable  but 
they  are  not  essential  as  the  statutes  do  not  require  them.  On 
the  appraisement  the  statute  gives  a  right  of  appeal  which  neces- 
sarily implies  notice,  but  there  is  no  provision  for  a  hearing  except 
in  the  orphans'  court  upon  appeal;  and  hence  an  appeal  within 
thirty  days  of  the  notice  of  the  filing  of  the  appraisement  was  in 
time.     In  re  Belcher,  211  Pa.  St.  615,  619,  61  A.  252. 

Income  after  Death  not  Considered. 

The  collateral  inheritance  tax  is  imposed  only  upon  the  estate 
owned  by  a  decedent  at  the  time  of  his  death  and  not  upon  interest 
or  income  subsequently  arising.  In  re  Miller,  5  Pa.  Co.  Ct.  522, 
22  Wkly.  Notes  Cas.  11. 

The  net  income  arising  from  property  is  to  be  taken  into  considera- 
tion on  the  question  of  its  appraisal.     In  re  Kaas,  5  Pa.  Co.  Ct.  583. 


1887,  c.  37.]  PENNSYLVANIA.  1089 

Apportionment.  —  Expense  of  Audit. 

This  appraisement  should  appraise  each  separate  interest  and 
therefore  there  can  be  no  necessity  for  an  apportionment  of  the 
tax  as  this  should  have  been  done  by  the  appraiser.  Where  the 
appraisal  is  made  by  the  auditor,  the  collateral  heirs  are  properly 
chargeable  with  the  expense  of  the  audit  resorted  to  as  a  substi- 
tute for  the  appraisement  directed  by  law.  In  re  Burkhart,  25 
Pa.  Super.  Ct.  514. 

Life  estates  for  the  purposes  of  the  tax  are  to  be  appraised  at 
their  cash  value  in  the  same  manner  as  annuities.  This  means 
such  a  sum  that  if  invested  and  put  at  interest  it  will,  with  a  pro- 
portionate part  taken  from  the  fund  yearly  to  make  out  the  annuity, 
yield  the  required  amount  of  it  annually,  the  whole  fund  being 
exhausted  during  the  expectancy  of  life  of  the  annuitant.  Citing 
with  approval  the  Case  of  Handley,  3  L.  L.  N.  9,  181  Pa.  St.  339, 
37  A.  587.     In  re  Von  Storch,  7  Pa.  Dist.  R.  204. 

Life  Estate  and  Remainder. 

Where  there  is  a  life  estate  and  remainder  and  the  executors  pay 
the  tax  on  the  whole  estate  on  the  death  of  the  testator,  there  is  no 
requirement  that  the  values  of  the  life  estate  and  remainders  re- 
spectively shall  be  appraised  separately.  In  re  De  Borbon,  211 
Pa.  St.  623,  61  A.  244. 

This  section  has  been  amended  by  St.  1895,  c.  243,  approved 
June  26,  1895,  which  fixes  the  compensation  of  appraisers  at 
$2.00  per  diem  and  traveling  expenses,  and  provides  for  expert 
appraisers  when  necessary. 

This  section  makes  it  the  duty  of  the  register  of  wills  to  appoint 
an  appraiser,  and  the  appraiser  must  be  appointed  by  the  register 
of  the  county  in  which  the  decedent  had  his  residence  at 
the  time  of  his  death,  or  of  the  county  in  which  is  the  princi- 
pal part  of  his  estate.  In  re  Dalrymple,  215  Pa.  St.  367, 
372,  64  A.  554. 

Appraisers  to  Take  no  Fees. 

S.  13.  It  shall  be  a  misdemeanor  in  any  appraiser,  appointed  by  the  register 
to  make  any  appraisement  in  behalf  of  the  commonwealth,  to  take  any  fee  or 
reward  from  any  executor  or  administrator,  legatee,  next  of  kin,  or  heir  of  any 
decedent,  and  for  any  such  offense  the  register  shall  dismiss  him  from  such  ser- 
vice, and  upon  conviction  in  the  quarter  sessions,  he  shall  be  fined  not  exceeding 
five  hundred  dollars,  and  imprisoned  not  exceeding  one  year,  or  both,  or  either 
at  the  discretion  of  the  court. 


1090  STATUTES  ANNOTATED.  fPa.  St. 

Records. 

S.  14.  It  shall  be  the  duty  of  the  register  of  wills  to  enter  in  a  book,  to  be  pro- 
vided at  the  expense  of  the  commonwealth,  to  be  kept  for  that  purpose,  and 
which  shall  be  a  public  record,  the  returns  made  by  all  appraisers  under  this  act, 
opening  an  account  in  favor  of  the  commonwealth  against  the  decedent's  estate, 
and  the  register  may  give  certificate  of  payment  of  such  tax  from  said  record; 
and  it  shall  be  the  duty  of  the  register  to  transmit  to  the  auditor  general,  on  the 
first  day  of  each  month,  a  statement  of  all  returns  made  by  appraisers  during  the 
preceding  month,  upon  which  the  taxes  remain  unpaid  which  statement  shall  be 
entered  by  the  auditor  general  in  a  book  to  be  kept  by  him  for  that  purpose. 
And  whenever  any  such  tax  shall  have  remained  due  and  unpaid  for  one  year, 
tt  shall  be  lawful  for  the  register  to  apply  to  the  orphans'  court,  by  bill  or  petition, 
to  enforce  the  payment  of  the  same;  whereupon  said  court,  having  caused  due 
notice  to  be  given  to  the  owner  of  the  real  estate  charged  with  the  tax,  and  to 
such  other  persons  as  may  be  interested,  shall  proceed,  according  to  equity,  to 
make  such  decrees,  or  orders,  for  the  payment  of  the  said  tax,  out  of  such  real 
estate,  as  shall  be  just  and  proper. 

Citation. 

S.  15.  If  the  register  shall  discover  that  any  collateral  inheritance  tax  has 
not  been  paid  over,  according  to  law,  the  orphans'  court  shall  be  authorized  to 
cite  the  executors  or  administrators  of  the  decedent,  whose  estate  is  subject  to 
the  tax,  to  file  an  account  or  to  issue  a  citation  to  the  executors,  administrators, 
or  heirs,  citing  them  to  appear  on  a  certain  day  and  show  cause  why  the  said  tax 
should  not  be  paid;  and  when  personal  service  cannot  be  had,  notice  shall  be  given 
for  four  weeks,  once  a  week,  in  at  least  one  newspaper  published  in  said  county; 
and  if  the  said  tax  shall  be  fojind  to  be  due  and  unpaid,  the  said  delinquent  shall 
pay  said  tax  and  costs.  And  it  shall  be  the  duty  of  the  register,  or  the  auditor 
general,  to  employ  an  attorney,  of  the  proper  county,  to  sue  for  the  recovery 
and  amount  of  such  tax,  and  the  auditor  general  is  authorized  and  empowered, 
in  settlement  of  accounts  of  any  register,  to  allow  him  costs  of  advertising  and 
other  reasonable  fees  and  expenses  incurred  in  the  collection  of  tax. 

The  orphans*  court  has  jurisdiction  under  this  section  to  compel 
the  parties  to  furnish  the  appraiser  with  information  necessary  to 
assess  the  tax.     In  re  Maris,  14  Pa.  Co.  Cto  171,  3  Pa.  Dist.  33. 

Commissions  for  Collection. 

S.  16.  The  registers  of  wills,  of  the  several  counties  of  this  commonwealth, 
upon  their  filing  with  the  auditor  general  the  bond  hereinafter  required  shall  be 
the  agents  of  the  commonwealth  for  the  collection  of  the  collateral  inheritance 
tax;  and  for  services  rendered  in  collecting  and  paying  over  the  same,  the  said 
agents  shall  be  allowed  to  retain,  for  their  own  use,  such  percentage  as  may  be 
allowed  by  the  auditor  general,  not  exceeding  five  per  centum  on  all  taxes  paid 
a;id  accounted  for:  Provided,  That  this  section  shall  noi  apply  to  the  fees  of 
registers  elected  prior  to  the  passage  of  this  act. 

This  section  has  been  amended  by  St.  1891,  c.  50,  approved 
May  14,  1891.  which  provides  definitely  for  the  compensation  to 


1887,  c.  37.]  PENNSYLVANIA.  1091 

the  registers  of  wills  for  services  in  collecting  the  inheritance  tax 
at  5  per  cent,  amending  Pa.  St.  1887,  c.  37,  s.  16. 

Under  Pa.  St.  1876,  P.  L.  c.  13,  s.  9,  registers  of  wills  of  certain 
counties  were  required  to  pay  into  the  county  treasurer  all  com- 
missions received  by  them  from  the  state  for  the  collection  of 
collateral  inheritance  taxes.  The  court,  however,  finds  that  Pa. 
St.  1887,  P.  L.  79,  s.  16,  was  intended  to  apply  to  all  the  counties 
of  a  state  and  cannot  be  construed  in  harmony  with  the  provisions 
of  the  statute  of  1876,  and  therefore  repeals  it. 

The  first  act  imposing  upon  the  register  of  wills  the  duty  of  col- 
lecting the  collateral  inheritance  tax  was  the  statute  of  1841,  P.  L. 
c.  99,  s.  1.  This  statute  of  1841  left  it  optional  with  the  register 
of  wills  whether  he  should  collect  the  inheritance  taxes  or  not, 
but  this  duty  was  definitely  imposed  upon  him  by  Pa.  St.  1849, 
P.  L.  c.  570. 

Pa.  St.  1876,  P.  L.  c.  13,  s.  9,  was  repealed  by  Pa.  St.  1887, 
P.  L.  c.  37,  s.  16,  which  re-enacted  the  provisions  of  the  act  of 
1841.    Allegheny  County  v.  Stengel,  213  Pa.  St.  493,  63  A.  58. 

Bond  of  Register. 

S.  17.  The  said  register  shall  give  bond  to  the  commonwealth  in  such  penal 
sum  as  the  orphans'  court  of  the  county  may  direct  with  two  or  more  sufficient 
sureties  for  the  faithful  performance  of  the  duties  hereby  imposed,  and  for  the 
regular  accounting  and  paying  over  of  the  amounts  to  be  collected  and  received, 
and  said  bond,  on  its  execution  and  approval,  by  the  said  orphans'  court,  to  be 
forwarded  to  the  auditor  general. 

Collection  by  County  Treasurer. 

S.  18.  Until  bond  and  security  be  given,  as  required  by  the  preceding  section, 
the  said  collateral  inheritance  tax  shall  be  received  and  collected  by  the  county 
treasurer  as  heretofore,  and  in  such  cases  all  the  provisions  of  this  act,  relating 
to  collection  and  payment  by  registers,  shall  apply  to  the  county  treasurer. 

Returns  by  Register. 

S.  19.  It  shall  be  the  duty  of  the  register  of  wills,  of  each  county,  to  make 
returns  and  payment  to  the  state  treasurer  of  all  the  collateral  inheritance  taxes 
he  shall  have  received,  stating  for  what  estate  paid,  on  the  first  Mondays  of 
April,  July,  October  and  January,  in  each  year;  and  for  all  taxes  collected  by  him 
and  not  paid  over  within  one  month,  after  his  quarterly  return  of  the  same,  he 
shall  pay  interest  at  the  rate  of  twelve  per  centum  per  annum  until  paid. 

Lien. — Limitations. 

S.  20.  The  lien  of  the  collateral  inheritance  tax  shall  continue  until  the  said 
tax  is  settled  and  satisfied:  Provided,  That  the  said  lien  shall  be  limited  to  the 
property  chargeable  therewith:  And  provided  further.  That  all  collateral  inherit- 
ance taxes  shall  be  sued  for  within  five  years  after  they  are  due  and  legally  demand- 


1092  STATUTES  ANNOTATED.  [Pa.  St. 

able,  otherwise  they  shall  be  presumed  to  have  been  paid,  and  cease  to  be  a  lien 
as  against  any  purchasers  of  real  estate:  And  provided  further.  That  all  taxes 
due  and  legally  demandable  at  the  date  of  the  passage  of  this  act,  the  collection 
of  which  would  be  barred  by  the  provisions  hereof,  shall  not  be  barred  if  suit 
shall  be  brought  therefor  within  one  year  from  the  date  of  the  passage  of  this  act. 

Judicial  Sale  on  Lien. 

The  intestate  died  leaving  real  estate  which  was  apportioned 
among  his  collateral  heirs  after  his  death.  Subsequently  the  share 
of  one  of  the  heirs  was  sold  by  judicial  sale  to  satisfy  debts  and 
liens  against  the  heir ;  and  the  court  holds  that  the  lien  of  the  whole 
of  the  collateral  inheritance  tax  on  the  whole  of  the  land  was 
satisfied  and  discharged  by  this  sale,  inasmuch  as  the  money 
realized  from  the  sale  was  more  than  sufficient  to  have  paid  the  tax 
lien,  and  should  have  been  so  applied.  The  fact  that  the  amount 
of  the  lien  had  not  been  ascertained  cannot  affect  the  result.  Appeal 
of  Mellon,  114  Pa.  St.  564,  574,  8  A.  183. 

Where  the  decedent  owned  an  undivided  third  of  an  entire  tract  of 
land,  partition  of  his  interest  could  not  have  the  effect  of  appor- 
tioning the  lien  and  fixing  a  part  thereof  exclusively  on  any  one 
portion  of  the  land.     Appeal  of  Mellon,  114  Pa.  St.  564,  574,  8  A.  138. 

Protection  of  Bona  Fide  Purchasers  after  Lapse  of  Time. 

Where  the  state  fails  to  collect  the  collateral  inheritance  tax  for 
a  period  of  twenty  years  from  the  death  of  the  decedent,  a  pre- 
sumption of  payment  arises  as  to  bona  fide  purchasers  from  those 
to  whom  the  remainder  in  fee  descended.  Appeal  of  Mellon,  114 
Pa.  St.  564,  573,  8  A.  183. 

Personal  Liability  of  Executors  not  Barred. 

The  provision  of  the  statute  of  1887,  section  20,  that  all  col- 
lateral inheritance  taxes  should  be  sued  for  within  five  years  after 
they  are  due,  otherwise  they  shall  be  presumed  to  have  been  paid, 
does  not  imply  that  the  personal  liability  of  the  executors  shall  not 
continue,  and  the  state  is  not  barred  from  collecting  the  tax  by 
reason  of  the  lapse  of  more  than  five  years  from  the  death  of  the 
decedent  before  proceeding  to  enforce  payment.  In  re  Cullen, 
8  Pa.  Co.  Ct.  234. 

Repeal. 

S.  21.  All  laws,  or  parts  of  laws,  heretofore  approved,  relating  to  the  collec- 
tion of  the  collateral  inheritance  tax,  and  inconsistent  herewith,  be  and  the  same 
are  hereby  repealed. 


1902.]  PHILIPPINE  ISLANDS.— PORTO  RICO.  1093 

PHILIPPINE  ISLANDS. 


U.  S.  St.  July  1,  1902,  providing  for  a  civil  government  for  the 
Philippine  Islands,  does  not  appear  to  contain  any  specific  provi- 
sion as  to  inheritance  taxes.  It  does  provide,  in  section  5,  "that 
the  rule  of  taxation  in  said  islands  shall  be  uniform."  See  Thorpe, 
Vol.  v,  p.  3168. 

PORTO  RICO. 


In  General. 

1901.  Statutes  of  Porto  Rico,  Title  3,  pp.  43,  94,  ss.  94-111. 

1902.  Revised  Statutes  &  Codes.     Political  Code,  chapter  3,  ss.  368-383. 

The  Enabling  Act. 

The  Porto  Rican  Act  for  the  civil  government  of  Porto  Rico 
of  April  12,  1900,  seems  to  contain  no  provision  for  uniformity  of 
taxation  or  as  to  inheritance  tax. 

Statutes. 

Porto  Rico  St.  1901,  approved  January  1,  1901,  entitled  "An  act  to  provide 
revenue  for  the  people  of  Porto  Rico  and  for  other  purposes,'  p.  94,  s.  94,  provides 
taxes  imposed  under  the  revised  statutes  of  1902,  s.  94,  et  seq. 

Porto  Rico  Revised  St.  and  Codes  of  1902,  c.  3,  s.  368,  provides  that  ail  real 
property  within  Porto  Rico  whether  belonging  to  inhabitants  of  Porto  Rico  or 
not  and  all  personal  property  belonging  to  inhabitants  ol  Porto  Rico  passing  by 
will  or  inheritance  or  by  grant  intended*  to  take  effect  in  possession  or  enjoy- 
ment after  the  death  of  the  grantors,  other  than  to  or  for  the  use  of  the  wife, 
child,  grandchild,  or  adopted  child  is  subject  to  tax  with  an  exemption  where 
the  property  passing  to  any  one  person  is  valued  at  $200  or  less.  And  provided 
further  that  when  the  value  of  such  property  exceeds  $200  that  amount  shall  be 
deducted  ia  estimating  the  taxes  thereon. 

Porto  Rico  Revised  Statutes  and  Codes  of  1902,  c.  3,  s.  369,  imposes  taxes  at 
the  following  rates.  Where  the  inheritance  does  not  exceed  $5,000  the  husband 
or  lineal  descendants  pay  one  per  cent  and  all  other  relatives  and  other  persons 
pay  three  per  cent  Where  the  gift  exceeds  $5,000  but  does  not  exceed  $20,000 
there  shall  be  paid  on  the  excess  over  $5,000  one  and  one  half  times  the  primary 
rates.  Where  the  gift  exceeds  $20,000  but  does  not  exceed  $50,000  there  shall  be 
paid  on  the  excess  over  $20,000  twice  the  primary  rates.  Where  the  gift  exceeds 
$50,000,  three  times  the  primary  rates  is  levied  on  the  excess. 

Porto  Rico  Revised  Statutes  and  Codes  of  1902,  c.  3,  ss.  370-383,  cover  the 
assessment  and  collection  of  the  tax. 


1094  STATUTES  ANNOTATED.  [S.  C.  St. 


RHODE  ISLAND. 


In  General. 

Rhode  Island  has  no  inheritance  tax  of  any  kind,  although 
attempts  were  made  in  1910  and  1911  to  enact  one. 

Constitutional  Limitations. 
Rhode  Island  Constitution,  1842,  a.  4,  s.  15. 

The  general  assembly  shall,  from  time  to  time,  provide  for  making  new  valua- 
tions of  property,  for  the  assessment  of  taxes,  in  such  manner  as  they  may  deem 
best.  A  new  estimate  of  such  property  shall  be  taken  before  the  first  direct 
state  tax,  after  the  adoption  of  this  constitution,  shall  be  assessed. 


SOUTH  CAROLINA, 


South  Carolina  has  no^  inheritance  tax  and  never  had  one. 

Constitutional  Limitations. 
South  Carolina  Constitution,  1895,  a.  10,  s.  1. 

The  general  assembly  shall  provide  by  law  for  a  uniform  and  equal  rate  of 
assessment  and  taxation,  and  shall  prescribe  regulations  to  secure  a  just  valuation 
for  taxation  of  all  property,  real,  personal  and  possessory,  except  mines  and  mining 
claims,  the  products  of  which  alone  shall  be  taxed ;  and  also  excepting  such  prop- 
erty as  may  be  exempted  by  law  for  municipal,  educational,  literary,  scientific, 
religious  or  charitable  purposes;  Provided,  however.  That  the  general  assembly 
may  impose  a  capitation  tax  upon  such  domestic  animals,  as  from  their  nature 
and  habits  are  destructive  of  other  property:  And  provided,  further.  That  the 
general  assembly  may  provide  for  a  graduated  tax  on  in  comes,  and  for  a  graduated 
license  on  occupations  and  business. 


S.  D.  StJ  SOUTH  DAKOTA.  1095 

SOUTH  DAKOTA. 


List  of  Statutes. 

1905.     Statutes  of  South  Dakota,  c.  54. 

1910.     Compiled  Laws  of  South  Dakota,  Vol.  1,  pp.  549-553. 

In  General. 

South  Dakota  had  no  inheritance  tax  until  the  progressive  statute 
of  1905,  which  has  recently  been  upheld  on  rehearing,  though 
at  first  declared  void  on  the  ground  that  its  progressive  feature 
affects  the  rate  on  the  whole  legacy  and  not  merely  on  the  ex- 
cess above  the  minimum. 

The  exemptions  apply  to  individual  shares,  not  to  the  estate  as 
a  whole. 

A  tax  is  not  claimed  on  stock  of  South  Dakota  corporations 
owned  by  a  non-resident  and  kept  outside  the  state,  though 
there  is  the  usual  provision  holding  the  corporation  responsible 
for  the  tax.  It  is  not  the  practice  to  require  an  inventory  of  the 
estate  of  a  non-resident. 

Constitutional  Limitations. 
South  Dakota  Constitution,  1889,  a.  11,  s.  2. 

All  taxes  to  be  raised  in  this  state  shall  be  uniform  on  all  real  and  personal 
property,  according  to  its  value  in  money,  to  be  ascertained  by  such  rules  of 
appraisement  and  assessment  as  may  be  prescribed  by  the  legislature  by  general 
law,  so  that  every  person  and  corporation  shall  pay  a  tax  in  proportion  to  the 
value  of  his,  her  or  its  property.  And  the  legislature  shall  provide  by  general  law 
for  the  assessing  and  levying  of  taxes  on  all  corporation  property  as  near  as  may 
be  by  the  same  methods  as  are  provided  for  assessing  and  levying  of  taxes  on 
individual   property. 

A.  6,  s  17,  further  provides  that  "no  tax  or  duty  shall  be  imposed  without  the 
consent  of  the  people  or  their  representatives  in  the  legislature,  and  all  taxation 
shall  be  equal  and  uniform." 

This  latter  provision  is  contained  in  the  constitution  of  no  other 
state  except  in  the  revenue  article  of  the  Oregon  constitution  1857, 
section  33.  In  re  McKennan  25  S.  D.  369.  126  N.  W.  611,  618. 
(reversed  on  rehearing,  130  N.  W.  33), 


1096  STATUTES  ANNOTATED.  [S.  D.  St. 

South  Dakota  Constitution,  1889,  a.  11,  s.  8. 

No  tax  shall  be  levied  except  in  pursuance  of  a  law,  which  shall  distinctly  state 
the  object  of  the  same,  to  which  the  tax  only  shall  be  applied. 

The  statute  of  1905  was  entitled  "An  act  to  tax  gifts,  legacies  and 
inheritances  in  certain  cases  and  to  provide  for  the  collection  of 
the  same,  and  fixing  penalties." 

The  court  holds  that  article  11  of  the  constitution  has  no  bearing 
upon  tax  legislation  of  the  nature  under  consideration.  There  is 
certainly  inherent  in  this  method  of  raising  revenue  good  reason 
why  the  law  should  not  apply  for  the  application  of  such  revenue 
as  this  source  of  revenue  must  necessarily  be  one  uncertain  as  to 
its  returns. 

But  apart  from  this  the  court  is  satisfied  that  article  11,  section  8, 
clearly  refers  to  the  ordinary  property  tax  which  at  the  time  it 
is  levied  can  be  levied  with  knowledge  as  to  the  probable  amount 
of  revenue  that  will  be  derived  therefrom  and  can  thus  be  well 
rendered  to  meet  the  uses  to  which  the  same  shall  be  applied.  In 
re  McKennan,  25  S.  D.  369,  126  N.  W.  611  (reversed  on  rehear- 
ing, 130  N.  W.  33),  citing  with  approval  Matter  of  McPherson, 
104  N.  Y.  315,  10  N.  E.  685. 

THE   STATUTE  OF   1905. 

South  Dakota  St.  1905,  c.  54.    Approved  March  6,  1905.  " 

An  Act  to  tax  gifts,  legacies  and  inheritances  in  certain  cases, 
and  to  provide  for  the  collection  of  the  same,  and  fixing  penalties. 

S.  1.  Transfers  Taxable.  —  Rates.  That  all  property,  real,  personal  and 
mixed,  which  shall  pass  by  will  or  by  the  intestate  laws  of  this  state,  or  accord- 
ing to  the  provision  of  any  statute  in  this  state,  from  any  person  who  may  die 
seized  or  possessed  of  the  same  while  a  resident  of  this  state,  or  if  decedent  was 
not  a  resident  of  this  state  at  the  time  of  his  death,  which  property,  or  any  part 
thereof,  shall  be  within  this  state,  or  any  interest  therein  or  income  therefrom 
which  shall  be  transferred  by  deed,  grant,  sale  or  gift  made  in  contemplation  of  the 
death  of  the  grantor,  or  bargainor  or  giver,  or  intended  to  take  effect  in  posses- 
sion or  enjoyment  after  such  death,  to  any  person  or  persons  or  to  any  body  politic 
or  corporate  in  trust  or  otherwise,  or  by  reason  whereof  any  person  or  any  body 
politic  or  corporate  shall  become  beneficially  entitled,  in  possession  or  expec- 
tancy,.to  any  property  or  income  thereof,  shall  be  and  is  subject  to  a  tax  at  the 
rate  hereinafter  specified,  to  be  paid  to  the  treasurer  of  the  proper  county  for 
the^use  of  the  state,  and  all  heirs,  legatees  and  devisees,  administrators,  executors 
and  trustees  shall  be  liable  for  any  and  all  such  taxes  until  the  same  shall  have 
been  paid  as  hereinafter  directed. 

When  the  beneficial  interests  to  any  property  or  income  therefrom  shall  pass 
to  or  for  the  use  of  any  father,  mother,  husband,  wife,  child,  brother,  sister,  wife 


1905,  c.  54.]  SOUTH  DAKOTA.  1097 

or  widow  of  the  son,  or  husband  of  the  daughter,  or  any  child  or  children  adopted 
as  such  in  conformity  with  the  laws  of  the  state  of  South  Dakota,  or  to  any 
person  to  whom  the  deceased,  for  not  less  than  ten  years  prior  to  death,  stood 
in  the  acknowledged  relation  of  a  parent,  or  to  any  lineal  descendant  born  in  lawful 
wedlock;  in  every  such  case  the  rate  of  tax  shall  be  one  dollar  on  every  one 
hundred  dollars  of  the  clear  market  value  of  such  property  received  by  each 
person,  and  at  and  after  the  same  rate  for  every  less  amount.  Estates  of  the 
clear  market  value  of  twenty  thousand  dollars  or  less  transferred  to  the  widow 
of  the  deceased,  and  five  thousand  dollars  to  each  of  the  other  persons  above 
mentioned,  shall  be  exempt. 

When  the  beneficial  interest  to  any  property  or  income  therefrom  shall  pass  to 
or  for  the  use  of  any  uncle,  aunt,  niece,  nephew  or  any  lineal  descendant  of  the 
same,  in  every  such  case  the  rate  of  such  tax  shall  be  two  dollars  on  every  hundred 
dollars  of  the  clear  market  value  of  such  property  received  by  each  person. 
Estates  of  the  clear  market  value  of  five  hundred  dollars  transferred  to  each  of  the 
persons  last  above  mentioned  shall  be  exempt. 

In  all  other  cases  the  rate  shall  be  as  follows:  On  each  and  every  one  hundred 
dollars  of  the  clear  market  value  of  all  property  and  at  the  same  rate  for  any  less 
amount  on  all  estates  of  ten  thousand  dollars  and  less,  four  dollars;  on  all  estates 
of  over  ten  thousand  dollars,  and  not  exceeding  twenty  thousand  dollars,  six 
dollars;  on  all  estates  over  twenty  thousand  dollars  and  not  exceeding  fifty 
thousand  dollars,  eight  dollars;  and  on  all  estates  over  fifty  thousand  dollars,  ten 
dollars.  Estates  of  the  clear  market  value  of  one  hundred  dollars,  transferred 
to  each  of  the  parties  mentioned  in  the  last  named  class,  shall  be  exempt. 

The  taxes  so  imposed  by  this  act  shall  be  upon  the  clear  market  value  of  such 
property  at  the  rates  above  prescribed  for  each  class  and  only  upon  the  excess 
above  the  exemption  herein  provided. 

Nature  of  Tax. 

This  act  does  not  impose  a  tax  upon  the  right  to  inherit  or  to 
succeed,  nor  upon  the  right  to  transmit,  but  a  tax  upon  the  exercise 
of  such  right  —  upon  the  transmission  of  property.  It  is  clearly 
a  tax,  and  has  nothing  to  do  with  and  is  not  at  all  dependent  for 
its  validity  upon  the  right  to  regulate  the  succession  of  property.  In 
re  McKennan  25  S.  D.  369,  126  N.  W.  611  (reversed  on  rehearing  130 
N.  W.  33),  ciring  Knowlton  v.  Moore,  178  U.  S.  41,  20S.  Ct.  747. 

Nature  of  Right  of  Succession. 

Most  courts  follow  the  old  common  law  doctrine  that  the  so-called 
right  to  transmit  property,  or  to  inherit  or  succeed  to  the  same, 
is  but  a  privilege  granted  by  a  statute.  Only  one  court  that 
of  Wisconsin,  holds  it  to  be  an  inherent  right.  Nunnemacher  v. 
State,  129  Wis.  190,  108  N.  W.  627,  9  L.  R.  A.  N.  S.  121.  (See, 
however,  also,  ilfwo/ v.  Winthrop,  162  Mass.  113,  38  N.  E.  512, 
26  L.  R.  A.  259.)  In  re  McKennan,  25  S.  D.  369,  126  N.  W.  611 
(reversed  on  rehearing  130  N.  W.  33). 


1098  STATUTES  ANNOTATED.  [S.  D.  St. 

Validity  of  Exemptions. 

S.  D.  Constitution,  a.  11,  ss.  5,  6,  7,  provide  exemptions  from 
taxation  of  public  and  charitable  property.  But  the  court  holds 
that  these  exemptions  apply  only  to  a  tax  upon  property  and  do 
not  in  any  sense  control  a  tax  upon  the  transmission  of  property 
like  the  inheritance  tax. 

The  exemption  in  South  Dakota  statute  1905,  c.  54,  to  the  widow 
and  other  heirs,  is  not  contrary  to  South  Dakota  constitution, 
article  11,  section  7,  limiting  exemptions  to  certain  specified  prop- 
erty. In  re  McKennan  25  S.  D.  369,  126  N.  W.  611,  615  (re- 
versed on  rehearing,  130  N.  W.  33). 

Valid  though  no  Provision  for  Enforcement. 

The  South  Dakota  statute  of  1905  is  not  invalid  for  failure 
to  provide  any  method  for  its  enforcement.  Where  section  one  of 
the  act  clearly  creates  a  liability  on  the  part  of  recipients  of  in- 
herited estate  to  pay  the  amount  of  any  tax  to  the  county  treasurer 
for  the  use  of  the  state,  there  is  no  reason  why  the  county  treasurer 
might  not  maintain  an  ordinary  action,  based  upon  the  liability 
that  thus  is  created  to  pay,  against  the  beneficiaries  to  recover  the 
tax  for  the  use  of  the  state,  /w  rg  McKennan  (S.  D.  1911),  130  N.  W. 
33  (reversing  judgment  Qn  rehearing,  25  S.  D.  369,  126  N.  W.  611). 

Progressive  Tax  Upheld. 

The  progressive  tax  under  South  Dakota  statute  of  1905,  where 
the  increased  rate  applies  to  the  whole  legacy  in  a  large  estate,  is 
valid.  The  court  holds  that  this  is  logically,  legally  and  con- 
stitutionally in  the  came  category  as  classification  based  on  the 
net  increased  amount  of  a  higher  over  a  lower  class. 

The  court  in  an  elaborate  opinion  upholds  the  constitutionality 
of  the  South  Dakota  statute  of  1905,  chapter  54,  and  the  court 
quotes  at  length  the  history  of  inheritance  tax  legislation  with 
reference  to  the  requirement  of  uniformity,  and  finds  that  the 
classification  in  the  statute  of  1905  does  not  violate  the  require- 
ment of  equality  and  uniformity.  In  re  McKennan  (S.  D.  1911), 
130  N.  W.  33  (reversing  judgment  on  rehearing,  25  S.  D.  369,  126 
I^.  W.  611). 

The  Original  Opinion  Reversed  on  Rehearing. 

The  court  construes  the  clause  requiring  all  taxation  to  be  equal 
and  uniform  as  meaning  that  the  burden  imposed  shall  fall  alike 


1905,  c.  54.]  SOUTH  DAKOTA.  1099 

on  all  persons  who  are  in  substantially  the  same  situation ;  and  the 
court  finds  that  the  progressive  feature  of  the  South  Dakota 
statute  is  unconstitutional  and  void. 

The  court  notices  the  two  arguments — the  recipient  of  the  large 
amount  is  able  to  pay  a  larger  rate  of  tax,  and  that  it  is  against 
public  policy  to  allow  large  estates  to  be  held  together  by  trans- 
mission after  the  death  of  the  owners — but  it  finds  that  there  are 
two  methods  of  progression  provided  for  in  the  statutes  of  the 
several  states:  one  found  in  South  Dakota  (St.  1905,  c.  54)  wherein 
the  higher  rate  in  the  case  of  transmission  of  a  greater  devise  or 
bequest  is  levied  upon  the  whole  value  of  the  property  transmitted ; 
the  other,  like  that  found  in  the  Wisconsin  statute,  where  the 
increased  rate  applies  only  to  the  excess  in  value  of  property  trans- 
mitted over  the  amount  subject  to  the  next  lower  rate.  The  court 
remarks  that  if  any  difference  is  to  be  made  in  the  rate  of  taxation 
between  a  large  legacy  and  a  small  legacy  on  the  theory  that  the 
increased  ability  to  pay  is  greater  in  the  case  of  the  large  beneficiary 
than  of  the  smaller,  that  it  cannot  be  said  that  the  increased  ability 
to  pay  of  a  devisee  receiving  $20,000  over  that  of  one  receiving 
$10,000  comes  from  the  receipt  of  his  first  $10,000.  The  increased 
ability  to  pay  does  come  solely  from  the  receipt  of  the  second 
$10,000.  "It  is  ridiculous  to  say  that  a  man  who  receives  a  devise 
or  legacy  of  a  thousand  and  one  dollars  is  as  well  able  to  pay  a 
tax  of  $594.06  as  is  a  man  who  receives  ten  thousand  dollars  to 
pay  $396.  We  have  never  discovered  any  method  of  making  one 
dollar  pay  $198.06." 

If  the  progressive  tax  is  based  on  the  theory  that  it  is  against 
public  policy  to  allow  large  estates  to  be  held  together  by  trans- 
mission after  the  death  of  the  owners,  which  is  the  theory  that 
seems  the  more  reasonable  to  the  court,  the  court  replies  that  "if 
one  person  receives  $20,000  and  another  $10,000,  it  was  no  greater 
privilege  for  the  first  to  receive  his  first  $10,000  than  for  the  second. 
The  increased  privilege  is  all  found  in  receiving  of  the  extra  $10,000 
and  it  is  the  exercise  of  this  extra  privilege,  the  transmission  of 
the  extra  $10,000,  that  should  receive  the  extra  burden  of  taxa- 
tion." 

"It  must  be  conceded  that  if  the  legislature  can  fix  rates  of 
taxation  it  can  increase  such  rates,  and  upon  grounds  of  public 
policy  it  might  place  a  limit  in  the  value  above  which  all  trans- 
missions would  go  to  the  state."  Per  Whiting,  P.  J.,  in  /n  re  McKen- 
nan,  25  S.  D.  369,  126  N.  W.  611,  618  (reversed  on  rehearing,  130 
N.  W.  33). 


1100  STATUTES  ANNOTATED.  [S.  D.  St. 

Life  Estates.  —  Remainders. 

S.  2.  When  any  person  shall  bequeath  or  devise  any  property  or  interest 
therein  or  income  therefrom  to  mother,  father,  husband,  wife,  brother,  sister, 
the  widow  of  a  son  or  a  lineal  descendant  during  life  or  for  a  term  of  years,  or 
the  remainder  to  the  collateral  heir  of  the  decedent  or  to  a  stranger  in  blood 
or  body  corporate  at  their  decease,  or  on  the  expiration  of  such  term  the  said 
life  estate  or  estate  for  a  term  of  years  shall  not  be  subject  to  any  tax,  and  the 
property  so  passing  shall  be  appraised  immediately  after  the  death  at  what  was 
the  fair  market  value  thereof  at  the  time  of  the  death  of  the  decedent  in  the 
manner  hereinafter  provided,  and  after  deducting  therefrom  the  value  of  said 
life  estate  or  term  of  years  the  tax  prescribed  by  this  act  on  the  remainder  shall 
be  immediately  due  and  payable  to  the  treasurer  of  the  proper  county,  and 
together  with  the  interest  thereon  shall  be  and  remain  a  lien  on  said  property 
until  paid.  Provided,  that  the  person  or  persons  or  body  politic  or  corporate 
beneficially  interested  in  the  property  chargeable  with  said  tax  may  elect  not 
to  pay  the  same  until  they  shall  come  into  the  actual  possession  or  enjoyment  of 
such  property,  and  in  that  case  said  person  or  persons  or  body  politic  or  corporate 
shall  execute  a  bond  to  the  state  of  South  Dakota  in  a  penalty  three  times  greater 
than  the  amount  of  said  tax,  with  such  surety  as  the  judge  of  the  county  court 
of  the  proper  county  may  approve,  conditioned  for  the  payment  of  said  tax  and 
interest  thereon  at  such  time  or  period  as  they  or  their  representatives  may 
come  into  the  actual  possession  or  enjoyment  of  said  property;  said  bond  shall 
be  filed  in  the  office  of  the  clerk  of  the  county  court  of  the  proper  county.  Pro- 
vided, further,  that  such  person  shall  make  a  full,  verified  return  of  such  property, 
and  file  the  same  in  the  office  of  the  clerk  of  the  county  court  of  the  proper 
county  within  one  year  froni  the  death  of  the  decedent  and  within  that  period 
enter  into  such  security,  and  renew  the  same  every  five  years. 

When  Tax  Accrues.  —  Interest. 

S.  3.  All  taxes  imposed  by  this  act,  unless  otherwise  herein  provided  for, 
shall  be  due  and  payable  at  the  death  of  the  decedent,  and  interest  at  the  rate  of 
six  per  cent  per  annum  shall  be  charged  and  collected  thereon  for  such  times  as 
said  tax  is  not  paid.  Provided,  that  if  said  tax  is  paid  within  twelve  months 
from  the  accruing  thereof,  interest  shall  not  be  charged  or  collected  thereon,  but 
a  discount  of  five  per  cent  shall  be  allowed  and  deducted  from  said  tax,  and 
in  all  cases  where  the  executors,  administrators  or  trustees  do  not  pay  such  tax 
within  one  year  from  the  death  of  the  decedent  they  shall  be  required  to  give 
a  bond  in  the  form  and  to  the  effect  prescribed  in  section  two  of  this  act  for  the 
payment  of  said  tax,  together  with  interest. 

Enforcing  Payment. 

S.  4.  Any  administrator,  executor  or  trustee  having  in  charge  or  trust  any 
legacies  or  property  for  distribution  subject  to  the  said  tax  shall  deduct  the 
tax  therefrom,  or  if  the  legacy  or  property  be  not  money  he  shall  collect  a  tax 
thereon  upon  the  appraised  value  thereof  from  the  legatee  or  person  entitled 
to  ?uch  property,  and  he  shall  not  deliver  or  be  compelled  to  deliver  any  specific 
legacy  or  property  subject  to  tax  to  any  person  until  he  shall  have  collected  the 
tax  thereon,  and  whenever  any  such  legacy  shall  be  charged  upon  or  payable 
out  of  real  estate  the  heir  or  devisee  before  paying  the  same  shall  deduct  said 


1905,  c.  54.]  SOUTH  DAKOTA.  1101 

tax  therefrom  and  pay  the  same  to  the  executor,  administrator  or  trustee,  and  the 
same  shall  remain  a  charge  on  said  real  estate  until  paid,  and  the  payment  thereof 
shall  be  enforced  by  the  executor,  administrator  or  trustee  in  the  same  manner 
that  the  payment  of  such  legacy  might  be  enforced;  if,  however,  such  legacy 
be  given  in  money  to  any  person  for  a  limited  period  he  shall  retain  the  tax 
upon  the  whole  amount,  but  if  it  be  not  in  money  he  shall  make  application  to 
the  court  having  jurisdiction  of  his  accounts  to  make  an  apportionment  if  the 
case  requires  it,  of  the  sum  to  be  paid  into  his  hands  by  said  legatees  and  for 
such  further  order  relative  thereto  as  the  case  may  require. 

Power  of  Sale. 

S.  5.  All  executors,  administrators  and  trustees  shall  have  full  power  to 
sell  so  much  of  the  property  of  the  decedent  as  will  enable  them  to  pay  said  tax 
in  the  same  manner  as  they  may  be  enabled  by  law  to  do  for  the  payment  of 
debts  of  their  testators  and  intestates,  and  the  amount  of  said  tax  shall  be  paid 
as  hereinafter  directed. 

Payment. 

S.  6.  Every  sum  of  money  retained  by  any  executor,  administrator  or  trustee 
or  paid  into  his  hands  for  any  tax  on  any  property  shall  be  paid  by  him  within 
thirty  days  thereafter  to  the  treasurer  of  the  proper  county,  and  said  treasurer 
shall  give,  and  every  executor,  administrator  or  trustee  shall  take,  duplicate 
receipts  from  him  of  such  payment,  one  of  which  receipts  he  shall  immediately 
send  to  the  treasurer  of  state,  whose  duty  ft  shall  be  to  charge  the  treasurer  so 
receiving  said  tax  with  the  amount  thereof,  and  said  treasurer  of  state  shall 
seal  said  receipt  with  the  seal  of  his  office  and  countersign  the  same  and  return 
it  to  said  executor,  administrator  or  trustee,  whereupon  it  shall  be  a  proper  voucher 
in  the  settlement  of  his  accounts,  but  said  executor,  administrator  or  trustee  shall 
not  be  entitled  to  credit  in  his  accounts  or  be  discharged  from  liability  for  such 
tax  unless  he  shall  produce  a  receipt  so  sealed  and  countersigned  by  the  treasurer 
of  state,  or  a  copy  thereof,  duly  certified  by  such  treasurer. 

Nodce  to  County  Treasurer. 

S.  7.  Whenever  any  of  the  real  estate  of  which  any  decedent  may  die  seized 
shall  pass  to  any  body  politic,  corporate  or  to  any  person  or  persons,  or  in  trust 
for  them,  or  some  of  them,  it  shall  be  the  duty  of  the  executor,  administrator  or 
trustee  of  such  decedent  to  gave  information  thereof  in  writing  to  the  treasurer 
of  the  county  where  said  real  estate  is  situate  within  six  months  after  undertaking 
the  execution  of  their  respective  duties,  or  if  the  fact  be  not  known  to  them  within 
that  period,  then  within  one  month  after  the  same  shall  come  to  their  knowledge. 

Refund  on  Proof  of  Debts. 

S.  8.  Whenever  debts  shall  be  proven  against  the  estate  of  the  decedent 
after  the  payment  of  legacies  or  distribution  of  property,  from  which  said  tax  has 
been  deducted,  or  upon  which  it  has  been  paid  and  a  refund  is  made  by  the 
legatee,  devisee,  heir  or  next  of  kin,  a  proportion  of  the  tax  so  paid  shall  be 
repaid  to  him  by  the  executor,  administrator  or  trustee  if  said  tax  has  not  been 
paid  to  the  county  treasurer  or  to  the  treasurer  of  the  state,  and  by  them  if  it 
has  been  so  paid. 


1102  STATUTES  ANNOTATED.  [S.  D.  St. 

Transfer  by  Foreign  Executor. 

S.  9.  Whenever  any  foreign  executor  or  administrator  shall  assign  or  trans- 
fer any  stock  or  loans  in  this  state  standing  in  the  name  of  a  decedent,  or  any 
trustees  for  a  decedent,  which  shall  be  liable  to  said  tax,  said  tax  shall  be  paid  to 
the  treasurer  of  the  proper  county  on  the  transfer  thereof,  otherwise  the  party 
making  or  permitting  such  transfer  shall  become  liable  to  pay  such  tax. 

Refund  of  Tax  Paid  under  a  Mistalce. 

S.  10.  When  any  amo  unt  of  said  tax  shall  have  been  paid  erroneously  to 
the  treasurer  of  said  state,  it  shall  be  lawful  for  him,  on  satisfactory  proof  ren- 
dered to  him  by  the  county  treasurer  of  said  erroneous  payment,  to  refund  and 
pay  to  the  executor,  administrator  or  person  or  persons  who  have  paid  such 
tax  in  error  the  amount  of  such  tax  so  paid.  Provided,  that  all  such  applica- 
tions for  the  repayment  of  such  tax  shall  be  made  within  two  years  from  the 
date  of  said  payment. 

Appraisal. 

S.  11.  In  order  to  fix  the  value  of  property  of  persons  whose  estates  shall  be 
subject  to  the  payment  of  such  tax,  the  county  judge,  on  application  of  any 
interested  party  or  officer,  or  upon  his  own  motion,  shall  appoint  some  com- 
petent person  as  appraiser,  as  often  as  and  whenever  occasion  may  require, 
whose  duty  shall  be  forthwith  to  give  such  notice  by  mail  to  all  persons  known 
to  have  or  claim  an  interest  in  said  property,  and  to  such  persons  as  the  county 
judge  may  by  order  direct,  of  the  time  and  place  at  which  he  will  appraise  such 
property,  and  at  such  time  and  place  to  appraise  the  same  at  a  fair  market  value, 
and  for  that  purpose  the  appraiser  is  authorized,  by  leave  of  the  county  judge, 
to  use  subpoena  for  and  to  compel  the  attendance  of  witnesses  before  him  and 
to  take  the  evidence  of  such  witnesses  under  oath  concerning  such  property 
and  the  value  thereof,  and  he  shall  make  a  report  thereof  and  of  such  value  in 
writing,  together  with  depositions  of  the  witnesses  examined  and  such  other 
facts  in  relation  thereto  and  of  such  matters  as  said  judge  may  by  order  require 
to  be  filed  in  the  office  of  the  clerk  of  the  county  court,  and  from  this  report 
the  said  county  judge  shall  forthwith  assess  and  fix  the  then  cash  value  of  all 
estates,  annuities  and  life  estates  or  term  of  years  growing  out  of  said  estate, 
and  the  tax  to  which  the  same  is  liable,  and  shall  immediately  cause  notice  by 
mail  to  be  given  to  all  parties  known  to  be  interested  therein.  Any  person  or 
persons  dissatisfied  with  the  appraisement  or  assessment  may  appeal  there- 
from, as  provided  for  appeals  from  the  county  court,  within  sixty  days  after 
the  making  and  filing  of  such  appraisement  or  assessment,  upon  giving  approved 
security  for  the  payment  of  all  costs,  together  with  whatever  taxes  shall  be 
ultimately  adjudged.  The  said  appraiser  shall  be  paid  by  the  county  treasurer 
out  of  any  funds  he  may  have  in  his  hands,  upon  the  certificate  of  the  county 
judge  at  the  rate  of  three  dollars  for  every  day  actually  and  necessarily  employed 
on  making  said  appraisement,  with  his  actual  and  necessary  traveling  expenses 
a$  allowed  and  fixed  by  the  judge  of  the  county  court. 

Misconduct  of  Appraisers. 

S.  12.  Any  appraiser  appointed  by  virtue  of  this  act  who  shall  take  any  fee 
or  reward  from  any  executor,  administrator,  trustee,  legatee,  next  of  kin  or  heir 


1905,  c.  54.]  SOUTH  DAKOTA.  1103 

of  any  decedent,  or  from  any  other  person  liable  to  pay  said  tax  or  any  portion 
thereof,  shall  be  guilty  of  a  misdemeanor  and  upon  conviction  thereof  in  any 
court  of  competent  iurisdiction  shall  be  fined  not  less  than  two  hundred  and 
fifty  dollars  or  more  than  five  hundred  dollars  and  imprisoned  not  exceeding 
ninety  days,  and  in  addition  thereto  he  shall  be  dismissed  from  such  service. 

Jurisdiction  of  County  Court. 

S.  13.  The  county  court  in  the  county  in  which  the  real  property  is  situate 
of  a  decedent  who  was  not  a  resident  of  the  state,  or  of  the  county  in  which 
the  decedent  was  a  resident  at  the  time  of  his  death,  shall  have  jurisdiction 
to  hear  and  determine  all  questions  in  relation  to  the  tax  arising  under  the 
provisions  of  this  act. 

Citation. 

S.  14.  If  it  shall  appear  that  any  tax  accruing  under  this  act  has  not  been 
paid  according  to  law,  a  citation  shall  be  issued,  citing  the  person  interested 
in  the  property  liable  to  the  tax  to  appear  before  the  court  on  a  day  certain, 
not  more  than  three  months  after  the  date  of  such  citation,  and  show  cause  why 
such  tax  should  not  be  paid.  The  process,  practice  and  pleading  and  the  hear- 
ing and  determination  thereof  and  the  judgment  in  said  court  in  such  cases 
shall  conform  to  the  practice  in  other  probate  cases,  and  the  fees  and  costs  in 
such  cases  shall  be  the  same  as  in  probate  cases  in  the  county  courts  in  this  state 

Notice  to  State's  Attorney. 

S.  15.  Whenever  the  treasurer  of  any  county  shall  have  reason  to  believe 
that  any  tax  is  due  and  unpaid  under  this  act,  after  the  refusal  of  the  person 
interested  in  the  party  liable  to  said  tax  to  pay  the  same,  he  shall  notify  the  state's 
attorney  of  the  proper  county,  in  writing,  of  failure  to  pay  such  tax,  and  the 
state's  attorney  so  notified,  if  he  have  probable  cause  to  believe  a  tax  is  due  and 
unpaid,  shall  prosecute  the  proceedings  in  the  proper  court  as  provided  in  section 
fourteen  of  this  act  for  the  enforcement  and  collection  of  such  tax,  and  in  such 
case  said  court  shall  allow  as  costs  in  said  case,  to  be  paid  as  said  tax  is  paid, 
such  fees  to  said  attorney  as  he  may  deem  reasonable. 

Statement  of  Property  Taxable. 

S.  16.  The  judge  and  clerk  of  the  county  court  of  each  county  shall,  every 
three  months,  make  a  statement  in  writing  to  the  county  treasurer  of  his  county 
as  to  the  property  from  which  or  the  party  from  whom  he  has  reason  to  believe 
a  tax  under  this  act  is  due  and  unpaid. 

County  Court  Record. 

S.  17.  The  clerk  of  the  county  court  of  each  county  shall  procure  a  book, 
in  which  he  shall  enter  the  returns  made  by  appraisers,  the  cash  values  of  annui- 
ties, life  estates,  and  terms  of  years  and  other  property  as  fixed  by  the  county 
court,  together  with  the  tax  assessed  thereon  and  the  amount  of  any  receipts 
for  payments  thereon  filed  with  him,  which  book  shall  be  a  public  record. 

Receipts. 

S.  18.  Any,  person  or  body  politic  or  corporate  shall,  upon  the  payment  of 
the  sum  of  fifty  cents,  be  entitled  to  a  receipt  from  the  county  treasurer,  or  a 


1104  STATUTES  ANNOTATED.  [S.  D.  St. 

copy  of  the  receipt,  at  his  option,  that  may  have  been  given  by  said  treasurer 
for  the  payment  of  any  tax  under  this  act,  which  receipt  shall  designate  on 
what  real  property,  if  any,  of  which  deceased  may  have  died  seized  said  tax 
has  been  paid,  and  by  whom  paid,  and  whether  or  not  it  is  in  full  of  said  tax,  and 
said  receipt  may  be  recorded  in  the  office  of  the  clerk  of  the  county  court  of 
the  county  in  which  the  property  may  be  situate  in  the  book  provided  for  by 
section  seventeen. 

Lien.  —  Limitations. 

S.  19.  The  lien  of  the  collateral  inheritance  tax  shall  continue  until  the 
said  tax  is  settled  and  satisfied.  Provided,  that  said  lien  shall  be  limited  to  the 
property  chargeable  therewith.  And,  provided  further,  that  all  inheritance 
taxes  shall  be  sued  for  within  six  years  after  they  are  due  and  legally  demand- 
able,  otherwise  they  shall  be  presumed  to  be  paid  and  cease  to  be  a  lien  as 
against  purchasers  of  said  real  estate  only. 

Expenses  of  Summons. 

S.  20.  Whenever  the  county  judge  of  any  county  shall  certify  that  there  was 
probable  cause  for  issuing  a  summons,  and  taking  the  proceedings  specified  in 
sections  fourteen  and  fifteen  of  this  act,  the  state  treasurer  shall  pay  or  allow 
to  the  treasurer  of  any  county  all  expenses  incurred  for  service  of  summons  and 
his  other  lawful  disbursements  that  have  not  yet  been  paid. 

Payment  to  State  Treasurer. 

S.  21.  The  treasurer  of  each  county  shall  collect  and  pay  the  state  treasurer 
all  taxes  that  may  be  due  and  payable  under  this  act,  who  shall  give  him  a 
receipt  therefor,  of  which  collection  and  payment  he  shall  make  a  report  under 
oath  to  the  county  auditor  on  the  first  Monday  in  March  and  September  of  each 
year,  stating  for  what  estate  paid,  and  in  such  form  and  containing  such  particu- 
lars as  the  county  auditor  may  prescribe,  and  for  all  said  taxes  collected  by  him 
and  not  paid  to  the  state  treasurer  by  the  first  day  of  October  and  April  of  each 
year,  he  shall  pay  interest  at  the  rate  of  six  per  cent  per  annum. 

Suggestions  for  New  Statute. 

The  court  suggests  that  an  inheritance  statute,  if  it  is  to  provide 
for  taxation  upon  the  transmission  of  property  in  contemplation  of 
death,  should  clearly  and  distinctly  provide  for  personal  liability 
for  such  taxes  on  the  part  of  the  grantee;  for  a  lien  upon  the 
property  to  secure  such  tax,  such  lien  to  rest  on  the  property  when 
the  same  is  held  by  the  grantee  or  any  other  party,  not  an  innocent 
purchaser  for  value  and  without  notice;  and  for  an  action,  in  a 
court  of  competent  jurisdiction,  to  recover  judgment  and  enforce 
the  lien.  In  re  McKennan,  25"  S.  D.  369,  126  N.  W.  611  (reversed 
on  rehearing,  130  N.  W.  33). 


Tenn.  St.]  TENNESSEE.  1105 


TENNESSEE. 


In  General.  * 

Tennessee  adopted  a  collateral  inheritance  tax  in  1891  and 
extended  the  tax  to  direct  inheritances  in  1909.  The  exemption 
applies  to  the  entire  estate,  not  to  the  individual  shares. 

Tennessee  is  not  attempting  to  collect  a  tax  on  stock  in  a  Ten- 
nessee corporation  owned  by  a  non-resident  when  the  shares  are 
physically  out  of  the  state,  although  there  is  a  clause  holding  the 
corporation  responsible  if  it  transfers  stock  for  a  foreign  executor 
or  administrator  before  the  tax  is  paid,  and  the  language  of  the 
statute  does  not  differ  materially  from  that  in  many  states  which 
tax  such  stock.  The  collateral  inheritance  tax  was  producing 
about  $50,000  annually.  The  addition  of  direct  inheritances 
should  materially  increase  this. 

History  of  Inheritance  Taxes. 

"In  considering  these  grave  questions,  a  short  history  of  succes- 
sion and  inheritance  taxes  may  not  be  inappropriate.  Such  taxes 
were  recognized  by  the  Roman  law;.  1  Gibbons,  Decline  and  Fall 
of  the  Roman  Empire,  pp.  163,  164.  They  were  adopted  in  Eng- 
land in  1780,  and  have  been  much  extended  since  that  date.  Dowell, 
Hist.  Tax'n,  p.  148;  Act  20,  Geo.  III.,  c.  28;  45  Geo.  III.,  c.  28; 
16  &  17  Vict.,  c.  51;  Greeny.  Croft,  2  H.  Bl.  30;  Hill  v.  Atkinson, 
2  Mer.  45.  Such  taxes  are  now  in  force  generally  in  the  countries 
of  Europe.  Review  of  Reviews,  Feb.,  1893.  In  the  United  States 
they  were  enacted  in  Pennsylvania  in  1826;  Maryland,  1844; 
Delaware,  1869;  West  Virginia,  1887;  and  still  more  recently  in 
Connecticut,  New  Jersey,  Ohio,  Maine,  Massachusetts,  in  1891; 
Tennessee,  in  1891  (chapter  25,  now  repealed  by  chapter  174, 
acts  1893).  They  were  adopted  in  North  Carolina  in  1846,  but 
repealed  in  1883;  were  enacted  in  Virginia  in  1844,  repealed  in 
1855,  re-enacted  in  1863,  and  repealed  in  1884.  In  New  Hampshire, 
Wisconsin,  Minnesota  and  Vermont,  such  laws  have  been  passed, 
but  held  unconstitutional  on  various  grounds."  Per  Wilkes,  J., 
in  State  v.  Alston,  94  Tenn.  674,  30  S.  W.  750,  751,  28  L.  R.  A.  178. 


1106-  STATUTES  ANNOTATED.  [Tenn.  St, 

List  of  Statutes. 

1891.  Statutes  of  Tennessee,  c.    25,  s.  6,  extra  session. 

1893.  "        "  "  c.    89,  s.  7. 

1893.  "        "  "  c.  174. 

1897-1903.     Supplement  to  Code,  pp.  107-110. 

1899.  Statutes  of  Tennessee,  c.  213,  p.  457. 

1899.  "        "  "  c.  432,  p.  1010. 

1901.  "        "  "  c.  128. 

1901.  "        "  "  c.  387. 

1903.  "        "  "  c.  257. 

1903.  "        "  "  c.  341. 

1903.  "         "  "  c.  561. 

1909.  "         "  "  c.  479,  s. 

Constitutional  Limitations. 

Tennessee  Constitution  1870,  a.  2,  s.  28. 

...  All  property  shall  be  taxed  according  to  its  value,  that  value  to  be  ascer- 
tained in  such  manner  as  the  legislature  shall  direct,  so  that  taxes  shall  be  equal 
and  uniform  throughout  the  state.  .  .  . 

THE  STATUTE  OF   1891. 

Tenn.  St.  1891,  c.  25.    Approved  September  21,  1891. 

S.  6.  Be  it  further  enacted.  That  all  property  which  shall  pass  by  will,  or 
by  the  intestate  laws  of  this  state,  from  any  person  who  may  die  seized  or  possessed 
of  the  same  while  a  resident-of  this  state,  or  if  such  decedent  was  not  a  resident 
of  this  state  at  the  time  of  his  death,  which  property,  or  any  part  thereof,  shall 
be  transferred  by  de'ed,  grant,  sale,  or  gift,  made  or  intended  to  take  effect  in 
possession  or  enjoyment  after  the  death  of  the  grantor,  or  bargainor,  to  any  per- 
son or  persons,  or  to  any  body  politic  or  corporate,  in  trust  or  otherwise,  or  by 
reason  whereof  any  person  or  body  politic  or  corporate  shall  become  beneficially 
entitled,  in  possession  or  expectancy,  to  any  property,  or  the  income  thereof, 
other  than  to  or  for  the  use  of  his  or  her  father,  mother,  husband,  wife,  child, 
brother,  sister,  the  wife  or  widow  of  a  son,  or  the  husband  of  a. daughter,  or  any 
child  or  children  adopted  as  such  in  conformity  with  the  laws  of  the  state  of 
Tennessee,  by  reason  whereof  any  such  person  or  persons  or  corporation  shall 
become  beneficially  entitled,  in  possession  or  expectancy,  to  any  such  property, 
or  to  the  income,  shall  be  and  is  subject  to  a  tax  of  $5.00  on  every  $100.00  of  the 
clear  market  value  of  such  property,  and  after  the  same  rate  for  any  less  amount, 
in  lieu  of  all  other  taxes  except  ad  valorem,  to  be  paid  to  the  clerk  of  the  county 
court  for  the  use  of  the  state,  which  shall  be  reported  to  the  state  comptroller 
as  other  state  revenue;  and  all  administrators,  guardians,  executors  and  trustees 
shall  be  liable  for  any  and  all  such  taxes  until  the  same  shall  have  been  paid. 

This  is  the  first  inheritance  law  in  Tennessee  and  it  was  repealed 
by  chapter  174  of  the  acts  of  1893.  Zickler  v.  Union  Bank  &  Trust 
Co.,  104  Tenn.  277,  57  S.  W.  341. 


1893,  c.  174.]  TENNESSEE.  .  1107 

THE  INHERITANCE  TAX  ACT  OF  1893. 

Tenn.  St.  1893,  c.  174.     Approved  April  10.  1893. 

S.  1.  Taxable  Transfers.  Be  it  enacted  by  the  general  assembly  of  the 
state  of  Tennessee,  That  all  estates  —  real,  personal  and  mixed  —  of  every  kind 
whatsoever,  situated  within  this  state,  whether  the  person  or  persons  dying 
seized  thereof  be  domiciled  within  or  out  of  this  state,  passing  from  any  person 
who  may  die  seized  or  possessed  of  such  estates,  either  by  will  or  under  the  intes- 
tate laws  of  this  state,  or  any  part  of  such  estate  or  estates,  or  interest  therein, 
transferred  by  deed,  grant,  bargain,  gift,  or  sale,  made  in  contemplation  of  death, 
or  intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of  the 
grantor  or  bargainor  to  any  person  or  persons  or  to  bodies  corporate  or  politic,  in 
trust  or  otherwise,  other  than  to  or  for  the  use  of  the  father,  mother,  husband, 
wife,  children,  and  lineal  descendants  born  in  lawful  wedlock  of  the  person  dying 
seized  and  possessed  thereof,  shall  be  and  they  are  hereby,  made  subject  to  a 
duty  or  tax  of  five  dollars  on  every  hundred  dollars  of  the  clear  value  of  such 
estate  or  estates  so  passing,  and  at  and  after  the  same  rate  for  any  less  amount, 
to  be  paid  to  the  use  of  the  state;  and  all  owners  of  such  estates  and  all  execu- 
tors and  administrators  and  their  sureties  shall  only  be  discharged  from  lia- 
bility for  the  amount  of  such  taxes  or  duties  the  settlement  of  which  they  may 
be  charged  with,  by  having  paid  the  same  over  for  the  use  of  the  state  as  here- 
inafter directed ;  Provided,  That  no  estate  which  may  be  valued  at  a  less  sum 
than  two  hundred  and  fifty  dollars  shall  be  subject  to  this  duty  or  tax;  And 
provided,  further.  That  the  term  children  shall  not  be  construed  to  apply,  to 
adopted  children. 

This  act  is  almost  identical  in  terms  with  the  Pennsylvania  statute. 
English  V.  Crenshaw,  i20  Tenn.  531,  110  S.  W.  210. 

Constitutionality. 

Tennessee  statute  of  1893,  chapter  174,  and  chapter  89,  section  7, 
are  upheld  as  not  restricting  the  devolution  of  property  or  dis- 
criminating between  direct  descendants  and  collaterals* and  as  being 
uniform.  The  right  to  tax  the  succession  or  inheritance  of  prop- 
erty is  a  creature  of  statute  law.  "As  the  right  to  succeed  depends 
upon  the  law  of  the  state,  it  follows  that  the  state  may  regu- 
late that  right  as  public  necessity  or  policy  may  dictate,  and 
may  subject  it  to  such  burdens  and  reasonable  conditions  as  may 
best  subserve  the  purposes  of  the  state."  State  v.  Alston,  94 
Tenn.  674,  30  S.  W.  750. 

Nature  of  Tax. 

The  succession  tax  is  not  a  tax  upon  the  property  but  upon  the 
right  or  privilege  of  acquiring  it  by  succession.  It  is  a  condition 
upon  which  the  person  may  take  the  estate.  "It  is  a  retention  by 
the  state  of  a  part  of  a  deceased  person's  property  which  the  state 


1108  STATUTES  ANNOTATED.  [Tenn.  St. 

may  take  to  meet  its  necessities  and  which,  in  certain  cases,  it  may 
take  in  toto,  as  in  the  cases  of  escheated  property."  Per  Wilkes, 
J.,  in  State  v.  Alston,  94  Tenn.  674,  30  S.  W.  750,  28  L.  R.  A.  178. 

The  right  of  any  person  to  succeed  to  property  of  a  deceased  per- 
son is  a  creature  of  statute  law  and  is  not  a  natural  right.  State  v. 
Alston,  94  Tenn.  674,  30  S.  W.  750,  28  L.  R.  A.  178. 

The  words  ''clear  value''  mean  the  net  value  after  the  payment  of 
all  debts  and  expenses  of  administration  and  in  the  cases  where  the 
will  is  contested  the  expenses  for  attorney's  fees  incurred  by 
the  executor  must  be  treated  as  expenses  of  administration.  It 
is  the  duty  of  the  executor  and  clerk  of  the  county  court  to  make 
an  estimate  of  such  fees  and  expenses  and  to  tentatively  allow  for 
them  and  thus  approximate  the  amount  of  the  tax  to  be  paid, 
and  this  amount  should  be  paid  subject  to  revision  upon  final 
statement  and  settlement  of  account  under  section  11  of  the  act. 
Provision  is  made  for  a  refund  where  the  executor  may  have  paid 
too  much  tax.     Shelton  v.  Campbell,  109  Tenn.  690,  72  S.  W.  112. 

The  clear  net  value  of  the  estate  of  a  citizen  of  Tennessee  is 
subject  to  the  tax.  Att.  Gen.  Op.  in  Tenn.  Tax  Digest  of  1907,  p.  93. 
United  States  bonds  are  not  exempt  from  the  inheritance  tax. 
Att.  Gen.  Op.  in  Tenn.  Tax  Digest  of  1907,  p.  93. 

A  contest  over  the  will  was  compromised  by  an  agreement.  The 
contest  against  the  will  "was  withdrawn  and  the  jury  thereupon 
found  in  favor  of  the  will.  The  contest  was  made  by  the  collateral 
heirs,  and  the  compromise  provided  that  the  widow,  who  was  the 
sole  devisee,  should  deed  one-half  of  the  property  devised  to 
the  collateral  heirs,  and  this  was  done.  The  court  holds  that  the 
collateral  heirs  do  not  derive  their  title  under  the  will  but  from 
the  deed  of  the  widow;  that  they  therefore  do  not  take  by  inherit- 
ance, will,  deed,  grant,  gift  or  otherwise  from  the  testator  and 
hence,  under  the  provisions  of  the  Tennessee  statute,  no  inheritance 
or  succession  tax  attaches  to  the  property  in  transfer. 

The  counsel  suggested  that  by  fraud  and  collusion  the  state 
might  be  entirely  defeated  of  its  tax,  but  the  court  replies  that 
there  is  no  semblance  of  proof  in  the  record  that  this  compromise 
was  not  made  in  the  utmost  good  faith  and  not  as  a  mere  subter- 
fuge to  evade  the  payment  of  the  tax.  English  v.  Crenshaw,  120 
Tienn.  521,  110  S.  W.  210.  The  court  relies  upon  In  re  Kerr, 
159  Pa.  St.  512,  28  A.  354,  and  upon  In  re  Hawley,  214  Pa.  St. 
525,  63  A.  1021,  construing  a  Pennsylvania  statute  almost  identical 
with  that  in  Tennessee. 


1893,  c.  174.]  TENNESSEE.  1109 

**To  any  Person." 

The  intestate  died  a  citizen  of  Kentucky  having  personal  prop- 
erty in  Tennessee.  Under  the  laws  of  Kentucky  his  mother  was 
the  sole  distributee,  while  under  the  laws  of  Tennessee  his  brother 
would  take  one-half  of  the  estate.  Under  Tenn.  St.  1893,  c.  174, 
s.  1,  this  property  is  not  subject  to  tax,  as  it  is  settled  that  if  one 
dies  domiciled  in  a  foreign  state  leaving  personal  property  in  this 
state  the  laws  of  the  domicile  of  the  deceased  will  determine  who  are 
entitled  to  the  surplus  after  the  payment  of  debts.  As  under  the 
law  of  Kentucky  which  governs  the  succession  the  property  goes 
to  the  mother  and  not  to  any  collateral  kindred,  the  statute  does 
not  apply.  Fidelity  &  Deposit  Co.  v.  Crenshaw,  120  Tenn.  606, 
110  S.  W.  1017. 

Deduction  of  Debts. 

Where  a  non-resident  testator  dies  leaving  stock  in  a  Tennessee 
corporation  and  indebtedness  due  creditors  in  the  state  of  Ten- 
nessee, the  Tennessee  indebtedness  cannot  be  deducted  from  the 
valuation  of  the  Tennessee  property  unless  the  executor  can  show 
that  the  debts  due  Tennessee  creditors  were  discharged  with 
Tennessee  assets.  The  court  infers  that  the  individual  indebted- 
ness to  the  Tennessee  creditor  was  paid  with  Mississippi  assets, 
since  the  appraiser  found  that  the  entire  value  of  the  estate  in 
Tennessee  was  $34,000,  and  that  amount  still  remained  intact  for 
distribution  when  the  appraisement  was  made.  Memphis  Trust 
Co.  V.  Speed,  114  Tenn.  677,  88  S.  W.  321. 

Partnership  Debt. 

Where  a  testator  died  owing  debts  in  Tennessee  and  also  having 
liabilities  as  a  member  of  a  partnership,  the  court  has  no  concern 
in  the  matter  of  the  amount  of  the  tax  with  the  partnership  debt 
since  that  was  discharged  with  firm  assets.  Memphis  Trust  Co.  v. 
Speed,  114  Tenn.  677,  88  S.  W.  321. 

Practice  on  Exemptions. 

InEnglishv.  Crenshaw,  120  Tenn.  531,  110  S.  W.  210,  the  question 
of  an  exemption  under  the  inheritance  tax  law  came  up  by  a  suit 
by  the  county  court  clerk  against  the  administrator  for  the  purpose 
of  recovering  the  tax  in  the  circuit  court.. 

The  proceeds  of  a  life  insurance  policy,  payable  to  the 
executors  of  the  insured  and  passing  upon  his  death  to  his  brothers 
and  sisters,  are  subject  to  the  tax.     Att.  Gen.  Op. 


1110  STATUTES  ANNOTATED.  [Tenn.  St 

Eflfect  of  Election  by  Non-resident  Beneficiary. 

Section  1  provides  that  executors  are  only  discharged  from  lia- 
bility by  payment  of  the  taxes.  Section  10  provides  that  the  tax 
shall  be  paid  on  transfer. 

The  testator  died  living  in  Missouri  and  owning  stock  in  a  Ten- 
nessee corporation  and  the  will  gave  the  testator's  wife  one-half  of 
the  residue.  The  widow  elected  under  this  provision  of  the  will  to 
take  the  stock  in  the  Tennessee  corporation  and  the  court  holds 
that  the  executor  had  a  right  upon  the  election  of  the  widow  to 
transfer  to  her  the  stock  in  the  Tennessee  corporation  in  payment 
of  her  one-half  interest,  provided,  of  course,  it  was  taken  at  a  fair 
valuation  as  compared  with  the  balance  of  the  residuary  estate 
wherever  situated,  and  therefore  no  tax  accrued.  It  was  argued 
that  under  this  residuary  clause,  which  in  terms  did  not  confer  any 
right  of  election,  the  wife  had  no  right  to  make  a  selection  of  specific 
property  left  in  the  residuary  estate.  The  court  relies  upon  the 
Matter  of  James,  144  N.  Y.  6,  38  N.  E.  961,  where  the  whole  matter 
was  discussed.  Memphis  Trust  Co,  v.  Speedy  114  Tenn.  677,  88 
S.  W.  321. 

S.  2.  Bequest  to  Executors.  Where  a  testator  names  or  appoints  one 
or  more  executors,  and  makes  a  bequest  or  devise  of  property  to  them  in  lieu 
of  their  commissions  or  allowance,  or  appoints  them  his  residuary  legatees,  and 
said  bequests,  devises,  or  residuary  legacies  exceed  what  would  be  a  fair  com- 
pensation for  their  services,  such  excess  shall  be  subject  to  the  payment  of  the 
collateral  inheritance  tax  or  duty,  the  rate  of  compensation  to  be  fixed  by  the 
proper  officers  or  courts  having  jurisdiction  in  the  case. 

S.  3.  When  tax  on  remainders  accrues.  Be  it  enacted,  That  in  all  cases 
where  there  shall  be  a  devise,  bequest,  or  descent  of  an  estate,  real  or  personal, 
to  collateral  relatives  or  strangers,  liable  to  the  collateral  inheritance  and  suc- 
cession tax,  to  take  effect  in  possession  or  to  come  into  actual  enjoyment  after 
the  expiration  of  one  or  morejife  estates,  or  a  period  of  years,  the  tax  on  such 
estate  shall  not  be  payable,  normt^est  begin  to  run  thereon,  until  the  person  or 
persons  liable  for  the  same  shall  come  into  actual  possession  of  such  estate  by 
the  termination  of  the  estates  for  lifV  or  years;  and  the  tax  shall  be  assessed 
upon  the  value  of  the  estate  at  the  time  the  right  of  possession  accrues  to  the 
owner  as  aforesaid;  provided,  That  the  owner  shall  have  the  right  to  pay  the 
tax  any  time  prior  to  his  coming  into  possession;  and  in  such  cases  the  tax  shall 
be  assessed  on  the  value  of  the  estate  at  the  time  of  the  payment  of  the  tax, 
afler  deducting  the  value  of  the  life  estate  or  estates  for  years;  And  provided 
further,  That  the  tax  on  all  real  estate  shall  be  and  remain  a  lien  on  the  real 
estate  on  which  the  same  is  chargeable  until  paid.  And  the  owner  of  any  per- 
sonal estate  subject  to  the  tax  provided  by  this  act  shall  make  a  full  report  and 
return  of  the  same  to  the  clerk  of  the  county  court  of  the  proper  county  within 


1893,  c.  174.]  TENNESSEE.  HU 

one  year  from  the  death  of  the  decedent,  and  within  that  time  enter  into  security 
for  the  payment  of  the  tax  to  the  satisfaction  of  such  clerk;  and  in  case  of  failure 
so  to  do,  the  tax  shall  be  immediately  payable  and  collectible. 

The  tax  bears  interest  from  the  date  when  it  is  payable,  one  year 
from  the  death  of  the  decedent,  notwithstanding  the  pendency  of 
litigation,  the  scarcity  of  funds  and  other  causes.  Shelton  v. 
Campbell  109  Tenn.  690,  72  S.  W.  112. 

**Until  the  Person  or  Persons  Liable  for  the  Same  shall  Come 
into  Actual  Possession  of  Such  Estate.*' 

The  tax  on  the  remainder  after  the  life  tenancy  does  not  mature 
until  the  death  of  the  life  tenant ;  and  the  tax  on  the  second  remainder 
after  the  death  of  the  second  life  tenant  does  not  mature  until 
the  death  of  the  second  life  tenant.  Bailey  v.  Drane,  96  Tenn. 
(12  Pickle)  16,  33  S.  W.  573. 

This  section  does  not  contemplate  that  persons  holding  contin- 
gent interests  shall  make  the  report  and  give  security  within  the 
year  from  the  death  of  the  decedent.  Harrison  v.  Johnston, 
109  Tenn.  245,  70  S.  W.  414. 

Merger  of  Life  Estate.  Tenn.  St.  1893,  c.  174,  s.  3,  provides  a 
collateral  inheritance  tax  on  certain  remainders.  Two  remainder- 
men after  a  life  interest  to  the  wife  of  the  testator  conveyed  their 
interests  to  the  wife,  but  the  court  holds  that  a  conveyance  by  these 
two  parties  does  not  withdraw  the  estate  from  the  operation  of  the 
inheritance  tax  law  and  defeat  its  collection.  It  was  claimed  that 
by  the  conveyance  the  estate  of  the  wife  became  merged  into  a 
fee  and  that  therefore  there  was  nothing  left  for  the  remainders. 
The  only  question  remaining  is  whether,  in  view  of  the  transfer 
made,  the  period  for  the  collection  of  the  tax  has  been  acceler- 
ated so  as  to  make  it  collectible  at  once,  and  if  so,  from  whom 
shall  it  be  collected  and  upon  what  basis. 

The  statute  provides  that  the  remainder  is  taxable  only  when  it 
comes  into  possession  and  beneficial  enjoyment.  The  court  con- 
cludes that  when  the  life  tenant  became  the  owner  of  the  remainder 
interests  in  the  property,  being  already  the  life  tenant,  the  two 
estates  thereby  merged  into  one  and  the  remainder  vested  in 
possession  to  all  intents  and  purposes  and  for  all  beneficial  uses, 
and  she  might  at  once  dispose  of  the  whole  estate  in  fee.  She 
became  thus  entitled  to  the  possession  as  fee  simple  owner  of  the 
estate  and  to  the  beneficial  use  of  it  as  a  whole  and,  by  virtue  of 
these  transactions,  a  tax  upon  the  remainder  interest  became  at 


1112  STATUTES  ANNOTATED.  [Tenn.  St. 

once  payable  upon  an  assessment  at  its  value  at  that  time. 
The  state,  as  the  effect  of  the  transactions  between  the  parties, 
became  at  once  entitled  to  an  inheritance  tax  upon  the  full  value 
of  the  remainder  interest  as  fixed  by  the  appraisement. 

The  court  was  divided  on  the  question  as  to  who  should  pay 
the  tax.  The  majority  is  of  opinion  that  the  whole  of  it  should  be 
paid  by  the  life  tenant  on  the  ground  that  the  life  tenancy  and 
remainder  by  virtue  of  these  transfers  became  vested  in  the  same 
person,  and  there  was  a  merger  of  the  two  estates  into  one  fee 
simple  estate  in  her,  and  that  she  is  taxable  upon  the  value  of  the 
remainder  which  entered  into  the  merger.  Harrison  v.  Johnston, 
109  Tenn.  245,  70  S.  W.  414,  417. 

S.  4.  Interest.  —  Discount.  Be  it  further  enacted,  That  if  the  collateral 
inheritance  tax  shall  be  paid  within  three  months  after  the  death  of  the  decedent, 
a  discount  of  five  per  centum  on  the  amount  of  the  tax  shall  be  made  and  allowed; 
and,  if  said  tax  is  not  paid  at  the  end  of  one  year  from  the  death  of  the  decedent, 
at  which  time  it  shall  be  due,  interest  shall  then  be  charged  at  the  rate  of  six  per 
centum  per  annum  on  such  tax. 

The  fact  that  proceedings  are  pending  to  test  the  validity  of  the  will 
cannot  postpone  the  maturity  of  the  tax  when  it  appears  that  in 
either  event,  testacy  or  intestacy,  the  tax  will  be  payable  at  the  same 
rate,  as  in  the  present  case,  and  interest  is  chargeable  from  one  year 
after  the  testator's  death.  Shelton  v.  Campbell,  109  Tenn.  690, 
72  S.  W.  112. 

S.  6.  Tax  to  be  deducted.  Be  it  further  enacted,  That  the  executor  or 
administrator  or  other  trustee  paying  any  legacy  or  share  in  the  distribution  of 
any  estate  subject  to  the  collateral  inheritance  tax,  as  provided  by  this  act, 
shall  deduct  therefrom  at  the  rate  of  five  dollars  in  every  hundred  dollars  upon 
the  whole  legacy  or  sum  paid;  or,  if  not  money,  he  shall  demand  payment  of  a 
sum  to  be  computed  at  the  same  rate  upon  the  appraised  value  thereof,  for  the 
use  of  the  state;  and  no  executor  or  administrator  shall  be  compelled  to  pay 
or  deliver  any  specific  legacy  or  article  to  be  distributed,  subject  to  tax,  except 
on  the  payment  into  his  hands  of  a  sum  computed  on  its  value,  as  aforesaid; 
and,  in  case  of  neglect  or  refusal  on  the  part  of  said  legatee  or  distributee  to  pay 
the  same,  such  specific  legacy  or  article,  or  so  much  thereof  as  shall  be  necessary, 
shall  be  sold  by  such  executor  or  administrator  at  public  sale  for  cash,  after 
notice  to  such  legatee  or  distributee,  and  after  ten  days'  advertisement,  as  in 
case  of  ordinary  administrator's  sales;  and  the  balance  that  may  be  left  in  the 
hands  of  the  executor  or  administrator,  after  reserving  the  tax,  shall  be  dis- 
tVibuted  to  the  legatee  or  distributee  as  is  or  may  be  directed  by  law;  and  every 
sum  of  money  retained  by  any  executor  or  administrator,  or  paid  into  his  hands 
on  account  of  any  legacy  or  distributive  share,  for  the  use  of  the  state,  shall  be 
paid  by  him  without  delay  to  the  county  court  clerk  of  the  county  in  which  his 
accounts  are  being  administered. 


1893,  c.  174.]  TENNESSEE.  1113 

S.  6.  Conditional  estates.  If  the  legacy  subject  to  the  collateral  inherit- 
ance tax  be  given  to  any  person  for  life  or  for  a  term  of  years,  or  for  any  other 
limited  period,  upon  a  condition  or  contingency,  if  the  same  be  money,  the  tax 
thereon  shall  be  retained  upon  the  whole  amount;  but,  if  not  money,  application 
shall  be  made  to  the  county  court  having  jurisdiction  of  the  accounts  of  the 
executors  or  administrators  to  make  apportionment,  if  the  case  requires  it,  of 
the  sum  to  be  paid  by  such  legatees,  and  for  such  further  order  relative  thereto 
as  equity  shall  require.  Such  application  shall  be  made  by  the  executor  of  such 
estate  after  at  least  five  days'  notice  to  the  parties  concerned. 

This  section  relates  only  to  legacies  having  each  of  two 
peculiarities,  to  legacies  which  are  for  life,  for  years  or  for 
some  other  limited  period  of  time,  and  which  are  also  dependent 
"upon  a  condition  or  contingency."  Bailey  v.  Drane,  96  Tenn. 
(12  Pickle)  16,  33S.,W.  573. 

S.  7.  Legacy  charged  on  real  estate.  Wherever  a  legacy  subject  to  the 
tax  or  duty  hereby  provided,  shall  be  charged  upon  or  payable  out  of  real  estate, 
the  heir  or  devisee,  before  paying  the  same,  shall  deduct  therefrom  at  the  rate 
aforesaid,  and  pay  the  amount  so  deducted  to  the  executor,  and  the  same  shall 
remain  a  charge  and  lien  upon  such  real  estate  until  paid,  and  the  payment  thereof 
shall  be  enforced  by  decree  of  the  county  court  in  the  same  manner  that  liens  on 
real  estate  are  now  enforced  in  the  chancery  courts  of  this  state,  and  the  clerk 
of  the  county  court  officially  shall  be  the  complainant  in  such  suit. 

S.  8.  Information  as  to  real  estate.  Whenever  any  real  estate  of  which 
any  decedent  may  die  seized  shall  be  subject  to  the  collateral  inheritance  tax,  it 
shall  be  the  duty  of  executors  and  administrators  to  give  information  thereof 
to  the  clerk  of  the  county  court  where  administration  has  been  granted  within 
six  months  after  they  undertake  the  execution  of  their  respective  duties,  or, 
if  the  fact  be  not  known  to  them  within  that  period,  within  one  month  after 
the  same  shall  have  come  to  their  knowledge;  and  it  shall  be  the  duty  of  the 
owner  of  such  estate  immediately  upon  the  vesting  of  the  estate,  to  give  informa- 
tion thereof  to  such  clerk  of  the  court  having  jurisdiction  of  the  granting  of 
administration. 

S.  9.  Payment.  ■ —  Receipts.  It  shall  be  the  duty  of  any  executor  or  adminis- 
trator receiving  or  collecting  collateral  inheritance  tax,  to  pay  the  same  to  the 
clerk  of  the  county  court  granting  the  administration,  and  where  his  accounts 
should  be  administered,  and  to  take  duplicate  receipts  from  such  clerk  for  the 
same,  one  of  which  shall  be  forwarded  forthwith  to  the  comptroller  of  the  treas- 
ury, whose  duty  it  shall  be  to  charge  the  clerk  receiving  the  money,  with  the  amount, 
and  countersign  the  receipt  and  return  it  to  the  executor  or  administrator,  where- 
upon it  shall  be  a  proper  voucher  in  the  settlement  of  the  estate;  but  in  no 
event  shall  an  executor  or  administrator  be  entitled  to  a  credit  in  the  settlement 
of  his  accounts  with  the  county  court  clerk,  or  in  the  chancery  court,  if  his  ac- 
counts be  there  settled,  unless  the  receipt  is  so  countersigned  by  the  comptroller.. 


1114  STATUTES  ANNOTATED.  [Tenn.  St. 

S.  10.  Payment  on  transfer.  Be  it  further  enacted,  That  whenever  any 
foreign  executor  or  administrator  or  trustee,  shall  assign  or  transfer  any  stocks 
or  loans  in  this  state  standing  in  the  name  of  the  decedent  or  in  trust  for  a  decedent 
which  shall  be  liable  for  the  collateral  inheritance  tax,  such  tax  shall  be  paid,  on 
the  transfer  thereof,  to  the  clerk  of  the  county  court  where  such  transfer  is  made, 
otherwise  the  corporation  or  person  permitting  such  transfer  shall  become  liable 
to  pay  such  tax. 

S,  11.  Refund  to  pay  debts.  Whenever  debts  shall  be  proven  against  the 
estate  of  a  decedent  after  distribution  of  shares  or  legacies  from  which  the  col- 
lateral inheritance  tax  has  been  deducted,  in  compliance  with  this  act,  and  the 
legatee  or  distributee  is  required  to  refund  any  portion  of  a  legacy  or  share,  a 
corresponding  portion  of  said  tax  shall  be  repaid  to  him  by  the  executor  or  admin- 
istrator if  the  said  tax  has  not  been  paid  to  the  clerk,  and  if  it  has  been  so  paid 
to  the  clerk,  then  it  shall  be  repaid  out  of  the  state  treasury  upon  the  comp- 
troller's warrant,  to  be  drawn  by  him  in  favor  of  the  person  entitled  thereto, 
upon  the  county  clerk  certifying,  under  his  seal  of  office,  that  the  same  is  justly 
due  on  account  of  the  provisions  of  this  section  of  this  act. 

S.  12.  Appraiser.  It  shall  be  the  duty  of  the  clerk  of  the  county  court  in 
which  letters  testamentary  or  of  administration  are  granted  to  appoint  an  ap- 
praiser as  often  as  and  whenever  occasion  may  require,  to  fix  the  valuation  of 
estates  which  are  or  shall  be  subject  to  collateral  inheritance  tax;  and  it  shall 
be  the  duty  of  such  appraiser  to  make  a  fair  and  conscionable  appraisement  of 
such  estates;  and  it  shall  further  be  the  duty  of  such  appraiser  to  assess  and  fix 
the  cash  value  of  all  annuities  and  life  estate  growing  out  of  said  estates,  upon 
which  annuities  and  life  estates,  the  collateral  inheritance  tax  shall  be  imme- 
diately payable,  out  of  the  estate,  at  the  rate  of  such  valuation,  but  shall  bear 
no  interest  till  the  lapse  of  twelve  months  from  the  death  of  the  decedent ;  and 
in  fixing  the  value  of  such  annuities  and  life  estate  the  computation  shall  be  made 
by  the  Carlyle  Life  Tables,  whenever  the  use  of  life  tables  is  necessary  or  appli- 
cable. Said  appraisements  shall  be  reduced  to  writing,  in  the  nature  of  a  report, 
and  shall  be  by  the  appraiser  filed  with  the  clerk  appointing  him;  Provided, 
That  any  interested  person  not  satisfied  with  said  appraisement  shall  have  the 
right,  at  any  time  within  thirty  days  after  such  appraisement  is  filed  with  the  clerk, 
to  file  exceptions  thereto,  in  writing,  on  giving  security  to  pay  all  costs,  together 
with  whatever  tax  shall  be  fixed  by  the  county  court,  and  thereupon  to  have 
the  county  court  tOL  hear  said  exceptions;  and  upon  such  exceptions  being  filed, 
the  county  court  sKall  have  jurisdiction  to  determine  all  questions  of  valuation 
and  of  the  liability  of  the  appraised  estate  for  such  tax,  subject  to  the  right  of 
appeal  to  the  circuit  court  (or  court  of  like  jurisdiction),  as  in  other  cases.  If  an 
appeal  should  be  prosecuted  to  the  circuit  court,  such  cause  shall  there  be  heard 
de  novo. 

S.  13.  Appraisers  to  accept  no  fees  from  parties.  It  shall  be  a  mis- 
cfemeanor  in  any  appraiser  appointed  by  the  county  clerk  to  make  any  appraise- 
ment in  behalf  of  the  state,  to  take  any  fee  or  reward  from  any  executor, 
administrator,  legatee,  next  of  kin,  or  heir  of  any  decedent;  and  for  any  such 
offense  the  clerk  shall  dismiss  him  from  such  service,  and,  upon  conviction  he 
shall  be  fined  not  exceeding  five  hundred  dollars  and  imprisoned  in  the  county 


1893,  c.  174.]  TENNESSEE.  1115 

jail  not  exceeding  one  year,  one  or  both;  and  the  court  shall  have  the  power 
to  assess  the  imprisonment  if  the  jury  does  not  do  so,  as  well  as  a  fine,  within 
the  limit  of  the  power  of  the  court. 

S.  14.  Records.  Be  it  further  enacted,  That  it  shall  be  the  duty  of  the 
county  court  clerks  to  enter  in  a  book  to  be  provided  at  the  expense  of  the  state, 
to  be  kept  for  that  purpose  and  which  shall  be  a  public  record,  the  returns  made 
by  all  appraisers  under  this  act,  opening  an  account  in  favor  of  the  state  against 
the  decedent's  estate,  and  the  county  court  clerk  may  give  certificate  of  payment 
of  such  tax  from  said  record ;  and  it  shall  be  the  duty  of  said  clerk  to  transmit 
to  the  comptroller,  on  the  first  day  of  each  month,  a  statement  of  all  reports  or 
returns  made  by  appraisers  during  the  preceding  month,  which  statement  shall 
be  entered  by  the  comptroller  in  a  book  to  be  kept  by  him  for  that  purpose;  and 
whenever  any  such  tax  on  real  estate  shall  have  remained  due  and  unpaid  for 
one  year,  it  shall  be  the  duty  of  the  county  clerk,  in  his  official  name  as  clerk, 
to  apply  to  the  county  court,  by  bill  or  petition,  to  enforce  the  payment  of  the 
same,  whereupon,  after  process  is  duly  served  or  notice  duly  given  to  the  owner 
of  the  real  estate  charged  with  the  tax  and  to  such  other  persons  as  may  be 
interested,  after  the  manner  of  the  practice  of  the  chancery  courts,  the  county 
court  shall  proceed,  according  to  equity,  to  make  such  decrees  and  orders  for  the 
enforcement  of  the  lien  and  the  payment  of  said  tax  out  of  such  real  estate  as 
shall  be  just  and  proper,  the  county  court  being  hereby  invested  with  jurisdiction 
for  said  purposes;  and  any  sales  of  real  estate  made  hereunder  shall  be  made  on  a 
credit  of  not  less  than  six  nor  more  than  twenty-four  months,  barring  the  right 
of  redemption  as  in  chancery  sales.  If  no  one  bids  an  amount  at  such  sales  suffi- 
cient to  cover  the  taxes  due  and  costs,  the  clerk  of  the  county  court,  by  himself 
or  agent,  shall  bid  the  land  in  for  the  state,  bidding  an  amount  deemed  sufficient 
to  cover  said  taxes  due  and  costs,  and  in  this  event,  upon  confirmation  of  the 
report  of  sale,  a  writ  of  possession  may  be  issued  to  place  the  state  or  its  agents 
in  possession  of  such  real  estate,  and  so  as  to  any  other  purchaser.  If  the  state 
so  become  the  purchaser  of  real  estate,  the  cost  of  the  cause  shall  be  paid  by  the 
state,  the  comptroller  drawing  his  warrant  therefor  in  favor  of  such  clerk  upon 
the  clerk  certifying  such  cost  bill  to  the  comptroller;  Provided,  however.  That 
if  said  clerk  knows  of  any  good  and  sufficient  reason  why  the  payment  of  such 
tax  has  been  delayed,  he  shall  not  be  compelled  to  file  such  bill  immediately  upon 
said  tax  becoming  due,  but  may,  in  his  discretion,  postpone  the  bringing  of  such 
suit  to  such  time  as  he  deems  proper,  within  the  limits  of  this  act;  Provided 
further.  That  if  the  court  adjudges  such  tax  to  be  due  and  a  charge  upon  the  real 
estate,  it  shall  tax  up,  as  a  part  of  the  costs  a  reasonable  attorney's  fee  for  the 
clerk's  solicitor  or  attorney  in  the  case,  to  be  collected  out  of  the  land  as  the  said 
tax  and  other  costs.  Appeals  from  final  decrees  in  suits  under  this  section  shall 
lie  to  the  circuit  court,  where  an  additional  attorney's  fee  for  services  in  that 
court  shall  be  taxed  up  as  costs  (if  the  said  tax  be  found  due  and  a  lien  on  the 
land)  in  favor  of  the  attorney  general  of  the  circuit,  who  shall  attend  to  such 
suits  in  the  circuit  court,  such  fee  to  be  fixed  by  the  court.  In  the  trial  of  suits 
under  this  seaion  in  the  county  court,  the  proof  may  be  heard  orally  or  by 
deposition,  but  on  appeal  the  cause  shall  be  heard  on  the  record  brought  up. 

Tenn.  St.  1893,  c.  174,  ss.  14-16,  provides  that  the  county  court 
clerk  may  employ  an  attorney  whose  reasonable  fee  shall  be  taxed 


1116  STATUTES  ANNOTATED.  [Tenn.  St. 

Up  as  costs,  and  the  court  holds  that  such  costs  allowed  a  district 
attorney  should  be  turned  into  the  state  treasury,  as  he  can  receive 
no  compensation  apart  from  this  salary  under  Tenn.  St.  1897,  c.  41. 
Harrison  v.  Johnston,  109  Tenn.  245,  70  S.  W.  414. 

S.  15.  Proceedings  for  collection.  Be  it  further  enacted,  That  if  the  clerk 
of  the  county  court  shall  discover  that  any  collateral  inheritance  tax  has  not  been 
paid  over  according  to  law,  he  shall  cause  notice  to  be  served  upon  the  executors, 
administrators,  legatees,  or  distributees,  as  the  case  may  be,  of  the  decedent 
whose  estate  is  subject  to  the  tax,  notifying  them  to  appear  before  the  county 
court  on  a  certain  day,  which  need  not  be  the  first  day  of  the  term,  and  show 
cause  why  the  said  tax  should  not  be  paid;  and,  when  personal  service  cannot 
be  had,  notice  shall  be  given  for  four  weeks,  once  a  week,  in  a  newspaper  published 
or  circulating  in  the  county,  and  the  matter  shall  be  heard  by  said  court,  on  written 
or  oral  testimony;  and.  if  the  tax  should  be  found  due  and  unpaid,  the  said 
delinquent  shall  pay  the  tax  and  cost,  and  the  said  court  shall  enter  such  judg- 
ment and  orders  to  this  end  as  may  be  needful  to  enforce  the  collection  of  the 
tax  and  costs.  Such  notice  shall  be  served  at  least  five  days  before  the  time 
set  therein  for  appearance,  and,  if  by  publication,  the  last  publication  shall  be 
at  least  five  days  before  the  time  of  appearance,  or  the  clerk  may  enforce  the 
collection  of  such  delinquent  tax  by  bill  filed  in  his  name  as  clerk,  in  the  county 
court,  to  be  proceeded  with  after  the  manner  of  chancery  suits,  and  if  he  so 
proceeds  by  bill,  he  may  obtain  writs  of  attachment  against  the  property  of  the 
delinquents,  if  there  be  grounds  for  attachments,  as  now  provided  by  law,  or 
writs  of  injunction,  if  there  be  grounds  for  the  same;  and  the  county  courts  are 
invested  with  full  jurisdiction  to  hear  and  determine  such  suits  as  if  a  court  of 
equity  for  this  purpose.  But  in  such  cases  the  testimony  before  the  county 
court  may  be  either  oral  or  in  writing.  From  final  judgments,  decrees,  or  orders 
in  the  county  courts  in  suits  or  proceedings  provided  by  this  section,  appeals 
shall  lie  to  the  circuit  court,  in  which  court  the  cause  shall  be  heard  de  novo,  if 
commenced  by  notice  in  the  county  court;  but,  if  commenced  by  bill,  it  shall 
be  heard  only  upon  the  record;  provided,  however.  That  if  the  delinquent  be  the 
appellant  he  shall  give  bond  upon  appeal,  not  only  for  the  costs,  but  also  to  pay 
the  tax  due  if  he  is  cast  in  the  suit.  In  said  appeals  the  attorney  general  of  the 
circuit  shall  attend  to  the  suits  for  the  clerk  or  state  in  the  circuit  court;  and  his 
fee  and  that  of  the  clerk's  attorneys  in  the  county  court,  if  the  delinquent  held 
liable,  shall  be  taxed  up  as  costs  by  the  respective  courts  substantially  as  pro- 
vided in  section  fourteen  of  this  act. 

The  chancery  court  in  Tennessee  has  jurisdiction  of  a  suit  to 
recover  an  inheritance  tax  if  there  is  no  demurrer  although  the 
county  court  has  primary  jurisdiction.  Fidelity  &f  Deposit  Co.  v. 
Crenshaw,  120  Tenn.  606,  110  S.  W.  1017. 

S.  16.  Fees  for  collection.  Be  it  further  enacted,  That  the  clerks  of  the 
county  courts  of  the  several  counties  of  the  state  shall  be  the  agents  of  the  state 
for  the  collection  of  the  collateral  inheritance  and  succession  tax,  or  duty  pro- 
vided for  by  this  act,  and  for  their  services  rendered  in  collecting  and  paying  over 


1893,  c.  174.]  TENNESSEE.  1117 

the  same,  they  shall  be  allowed  to  retain  five  percentum  on  all  such  taxes  paid 
over  and  accounted  for;  and  it  shall  be  the  duty  of  said  clerks,  whenever  neces- 
sary, to  employ  an  attorney  to  aid  them  in  collecting,  by  suits,  the  said  collateral 
inheritance  tax,  the  fees  of  such  attorneys  to  be  taxed  up  by  the  court  as  costs 
against  the  delinquent,  if  he  shall  be  held  liable,  such  fees  to  be  reasonable. 
Any  such  suits  are,  on  the  one  side,  to  run  in  the  official  name  of  the  clerk,  and 
may  be  reviewed  in  the  name  of  his  successor  in  office;  but  he  is  not  required  to 
give  any  bonds  for  costs  in  bringing  suits,  or  on  appeals;  and  if  suits  are  decided 
against  him,  judgment  shall  be  given  against  the  state  for  costs,  and  the  state 
shall  pay  the  same,  unless  the  court  should  be  of  the  opinion  that  the  suit  brought, 
or  the  appeal  prosecuted  by  the  said  clerk,  was  malicious  or  frivolous,  in  which 
event  the  court  shall  tax  the  cost  against  the  clerk  individually;  and  when  the 
costs,  expenses,  and  attorneys'  fees  cannot  be  collected  out  of  the  delinquent, 
when  adjudged  against  him,  or  when  the  costs  are  adjudged  against  the  state, 
the  comptroller  is  authorized  and  empowered,  in  settlement  of  accounts  of  such 
clerks,  to  allow  him  to  retain  such  costs  and  reasonable  attorneys*  fees  incurred 
in  the  collection  of  such  taxes.  The  fact  that  the  clerk  is  a  party  to  such  suits, 
shall  not  render  him  incompetent  to  issue  writs,  subpoenas,  notices,  etc.,  in  such 
suits,  and  for  the  same  he  shall  be  entitled  to  receive  the  same  fees  now  allowed 
by  law  for  such  services,  and  also  the  usual  fees  for  making  our  transcripts  on 
appeals. 

The  Tenn.  St.  1893,  c.  174,  makes  it  the  duty  o(  the  county  clerk 
to  collect  the  taxes  and  provides  that  he  may  employ  an  attorney 
whose  fee  shall  be  taxed  as  costs.  Where  the  county  clerk  em- 
ployed the  state  revenue  agent  to  sue  for  the  tax,  action  was 
brought  in  the  chancery  court  and  tried  there  without  objection, 
this  agent  was  entitled  in  his  capacity  as  attorney  to  a  fee  of  five 
per  cent  of  the  tax,  which  was  in  addition  to  his  salary  as  reveriue 
agent.    Shelton  v.  Campbell,  109  Tenn.  690,  72  S.  W.  112. 

The  fact  that  the  original  suit  for  the  settlement  of  an  estate 
is  still  pending  in  the  chancery  court,  and  the  statute  provides  that 
the  inheritance  tax  may  be  collected  in  such  cases  in  such  suits, 
does  not  prevent  jurisdiction  by  the  county  court  under  section  22 
of  the  Tenn.  St.  1893,  c.  174.  Harrison  v.  Johnston,  109  Tenn. 
245.  70  S.  W.  414. 

S.  17.  Clerks  to  give  bonds.  The  clerks  of  the  several  county  courts  of 
the  state  shall,  within  sixty  days  after  the  passage  of  this  act,  enter  into  bonds 
before  their  respective  county  courts,  payable  to  the  state,  with  two  or  more 
sufficient  sureties,  to  be  approved  by  the  said  courts,  for  the  faithful  performance 
of  the  duties  imposed  by  this  act,  and  for  the  regular  accounting  and  paying  over 
of  the  amount  to  be  collected  hereunder  and  said  bonds,  when  executed  and 
approved,  to  be  forwarded  to  the  comptroller,  and  filed  in  his  office.  Such  bonds 
in  counties  of  thirty  thousand  inhabitants  and  over,  by  the  federal  census  of 
1890,  shall  bfe  in  the  penal  sum  of  two  thousand  five  hundred  dollars;  Provided, 
however,  That  when  any  clerk  of  the  county  court  is,  after  the  passage  of  this 


1118  STATUTES  ANNOTATED.  [Tenn.  St. 

act,  inducted  into  office,  the  bond  now  required  by  law  to  be  given  by  him  to 
account  for  all  revenues  collected  by  him  for  the  state  shall  cover  and  be  liable 
for  the  taxes  received  and  collected  by  him  by  virtue  of  this  act;  and  if  that  bond 
be  executed  and  approved,  no  other  or  special  bond  need  be  given  by  him  to 
account  for  revenues  collected  hereunder.  No  clerk  holding  office  at  the  date 
of  the  passage  of  this  act,  shall  receive  or  collect  the  taxes  provided  for  herein, 
until  he  has  entered  into  the  bond  provided  for  by  this  section. 

S.  18.  Returns.  It  shall  be  the  duty  of  the  clerk  of  the  county  court  to 
make  return  and  payment  to  the  treasurer  of  the  state,  in  the  usual  method,  of 
all  the  collateral  inheritance  taxes  he  shall  have  received  for  the  previous  quarter, 
stating  for  what  estates  paid,  on  the  first  day  of  April,  July,  October,  and  January 
in  each  year;  and  for  all  such  taxes  collected  by  him  and  not  paid  over  within 
one  month  after  his  quarterly  returns  of  the  same  is  or  should  be  made,  he  shall 
pay  interest  by  way  of  penalty,  at  the  rate  of  twelve  per  centum  per  annum  until 
paid. 

S.  19.  Lien.  —  Limitations.  The  lien  of  the  collateral  inheritance  tax 
shall  continue  until  the  tax  is  settled  and  satisfied;  Provided,  That  the  said  lien 
shall  be  limited  to  the  property  chargeable  therewith;  And  provided  further,  That 
all  collateral  inheritance  tax  shall  be  sued  for  within  five  years  after  they  are  due 
and  legally  demandable,  otherwise  they  shall  be  presumed  to  have  been  paid, 
and  cease  to  be  a  lien  as  against  any  purchasers  of  real  estate. 

S.  20.  Attorney  general  to  prosecute.  In  suits  arising  under  this  act 
■which  may  be  carried  to  the  supreme  court,  the  attorney  general  of  the  state 
shall  represent  the  clerk  of  the  county  court  and  the  state  in  that  court. 

S.  21.  Bonds.  The  bonds  of  all  executors  and  administrators  qualifying 
after  the  passage  of  this  act,  and  which  are  now  required  to  be  given  by  law,  shall 
be  liable  for  the  faithful  discharge  by  them  of  all  duties  imposed  upon  them 
by  this  act,  including  the  faithful  paying  over  by  them  of  all  collateral  inherit- 
ance taxes  that  may  come  to  their  hands;  and  any  trustee  whose  duties  are 
similar  to  those  of  an  executor,  or  who  has  the  dividing  or  disposing  of  an  estate 
of  a  decedent,  is  included  in  this  act  under  the  term  executor. 

S.  22.  fax  to  be  paid  before  estate  settled.  In  all  cases  where  an  estate 
is  being  wound  up  or  administered  in  a  chancery  court,  it  shall  be  the  duty  of  that 
court  to  see  that  the  collateral  inheritance  tax  is  paid  to  the  clerk  of  the  county 
court,  if  such  estate  be  liable  for  such  tax,  and  to  see  that  such  tax  is  paid  or 
retained  before  a  legacy  or  share  or  an  estate  is  paid  or  turned  over  to  the  owner; 
and  if  any  such  tax  is  received  by  the  clerk  and  master,  it  shall  be  ordered  paid 
by  him  to  the  county  court  clerk;  and  upon  such  payment  being  made  by  a  clerk 
and  master  he  shall  take  duplicate  receipts  from  the  county  court  clerk  and 
transmit  one  of  them  to  the  comptroller,  who  shall  countersign  it  and  return  it, 
arid  it  shall  only  be  a  good  voucher  to  the  clerk  and  master  upon  its  being  so 
countersigned. 

S.  23.  Appraisers'  duties.  The  appraiser  provided  for  by  this  act  shall  be 
sworn  by  the  county  court  clerk  to  faithfully  and  impartially  perform  his  duty. 


1893,  c.  89.]  TENNESSEE.  1119 

and  to  make  due  returns,  In  writing,  of  his  action  in  the  premises,  with  a  written 
statement  appended  of  the  length  of  time  spent  by  him  in  appraising  the  par- 
ticular property,  and  the  necessary  expense,  by  items,  incurred  by  him  traveling 
to  and  from  the  property,  if  there  be  such  expense;  and  for  his  services  the 
appraiser  shall  receive  two  dollars  per  day  for  the  time  necessarily  spent  in  such 
service,  and  his  actual  traveling  expenses  in  addition,  to  be  paid  him  by  said 
clerk  out  of  any  collateral  inheritance  tax  coming  to  his  hands,  and  for  which  the 
clerk  shall  receive  credit;  Provided,  Said  clerk  shall  have  the  right  to  audit  any 
such  cost  bill  of  an  appraiser,  and  to  reduce  the  amount  of  the  same  if  satisfied 
it  is  incorrect,  and  it  shall  be  his  duty  to  do  so. 

S.  24.  Not  retroactive.  This  act  shall  only  apply  to  the  estates  of  persons 
dying  after  its  passage,  and  not  to  the  estate  of  any  person  dying  prior  to  its 
passage. 

S.  25.  Repeal.  Be  it  further  enacted,  That  section  6  of  chapter  25  of  the 
acts  of  the  extraordinary  session  of  1891,  providing  for  an  inheritance  and 
succession  tax  in  certain  cases,  and  all  other  acts  in  conflict  with  this  act,  be, 
and  the  same  are  hereby,  repealed.  And  it  is  provided  that  when  any  tax  may 
have  been  collected,  but  not  paid  into  the  state  treasury  under  said  section 
hereby  specially  repealed,  the  same  shall  be  refunded  to  the  parties  from  whom 
collected,  to  be  used  and  disposed  of  as  if  said  section  had  not  been  enacted. 

THE  REVENUE  STATUTES. 

Tenn.  St.  1893,  c.  89,  s.  7.     Approved  April  10,  1893. 

S.  7.  Be  it  further  enacted.  That  all  property  which  shall  pass  by  will  or  by 
intestate  laws  of  this  state  from  any  person  who  may  die  seized  or  possessed  of  the 
same  while  a  resident  of  this  state,  or  if  such  decedent  was  not  a  resident  of  this 
state  at  the  time  of  his  death,  which  property,  or  any  part  thereof,  shall  be  trans- 
ferred by  deed,  grant,  sale,  or  gift,  made  or  intended  to  take  effect,  in  possession 
of  enjoyment,  after  the  death  of  the  grantor  or  bargainor,  to  any  person  or  person 
or  to  any  body  politic  or  corporate,  in  trust  or  otherwise,  or  by  reason  whereof 
any  person  or  body  politic  or  corporate  shall  become  beneficially  entitled,  in 
possession  or  expectancy,  to  any  property,  or  the  income  thereof,  other  than  to 
or  for  the  use  of  his  or  her  father,  mother,  husband;  wife,  child,  grandchild, 
brother,  sister,  the  wife  or  widow  of  a  son,  or  husband  of  a  daughter,  or  any  child 
or  children  adopted  as  such  in  conformity  with  the  laws  of  the  state  of  Tennessee, 
by  reason  whereof  any  such  person  or  persons  or  corporation  shall  become  benefi- 
cially entitled,  in  possession  or  expectancy,  to  any  such  property  or  to  the  income, 
shall  be  and  is  subject  to  a  tax  of  $5  on  every  $100  on  the  clear  market  value  of 
such  property,  and  after  the  same  rate  for  any  less  amount,  in  lieu  of  ail  other 
taxes,  except  ad  valorem,  to  be  paid  to  the  clerk  of  the  county  court  for  the  use  of 
the  state,  which  shall  be  reported  to  the  state  comptroller,  as  other  state  revenue; 
and  all  administrators,  guardians,  executors,  and  trustees  shall  be  liable  for  any 
and  all  such  taxes  until  the  same  shall  have  been  paid. 

Validity  of  Classification  by  Relationship. 

A  distinction  between  direct  descendants  and  collateral  kindred 
and  strangers  has  abundant  reason  upon  which  to  sustain  it,  for 


1120  STATUTES  ANNOTATED.  [Tenn.  St. 

the  moral  claim  of  collaterals  and  strangers  is  less  than  of  kindred 
in  direct  line  and  the  privilege  is  therefore  greater.  Tenn.  St.  1893, 
c.  89,  s.  7,  is  not  unconstitutional  because  it  discriminates  between 
direct  descendants  and  collateral  kindred  and  strangers.  State 
V.  Alston,  94  Tenn.  674,  30  S.  W.  750,  28  L.  R.  A.  178;  Bailey  y. 
Drane,  96  Tenn  16;  Debardelaben  v.  State,  99  Tenn.  649,  42  S. 
W.  684;  State  v.  Brewing  Co.,  20  Pickle  732,  737. 

Validity  of  Exemptions. 

The  exemption  of  estates  under  $250  in  value  is  not  unconsti- 
tutional as  it  is  within  the  province  of  the  legislature  to  declare 
what  privileges  shall  be  taxed  and  what  exemptions  may  be  allowed ; 
and  the  exemption  of  small  estates  is  neither  arbitrary  nor  devoid 
of  reason  inasmuch  as  the  expenses  of  administration  are  propor- 
tionally much  greater  in  small  than  in  larger  estates.  In  this  case 
an  estate  worth  $249  escapes  taxation,  but  one  of  $250  or  over  is 
subject  to  tax.  State  v.  Alston,  94  Tenn.  674,  30  S.  W.  750,  28 
L.  R.  A.  178. 

Remainders. 

Under  Tenn.  St.  1893,  c.  89,  and  c.  174,  a  remainder  to  collateral 
kindred  whose  propert)^  or  estates  are  declared  to  be  liable  for 
taxes  is  subject  to  taxes  although  the  prior  estate  is  exempt.  Each 
recipient  must  stand  upon  his  or  her  own  relationship  to  the  per- 
son from  whom  the  property  comes  without  reference  to  the 
liability  or  non-liability  of  the  person  taking  the  property 
before  or  after  him.  Bailey  v.  Drane,  96  Tenn.  (12  Pickle)  16, 
33  S.  W.  573. 

Revenue  Statute  Prevails. 

Tenn.  St.  1893,  c.  174,  includes  all  estates  passing  in  certain 
enumerated  modes  except  those  expressly  excluded.  Estates  pass- 
ing to  brothers  of  the  decedent  are  not  excluded;  hence  they  are 
included.  However,  the  Tenn.  St.  1893,  c.  89,  is  shown  by  the  jour- 
nals of  the  house  and  senate  to  have  been  approved  and  taken 
effect  at  a  later  hour  of  the  same  day,  April  10,  1893,  and  expressly 
excepts  estates  received  by  the  brothers  and  sisters  of  a  decedent 
from  liability  for  the  tax.  This  provision  being  subsequent  in 
pomt  of  time  is  the  prevailing  law  and  controlling.  Bailey  v.  Drane, 
96  Tenn.  (12  Pickle)  16,  33  S.  W.  573. 


1893,  c.  89.1  TENNESSEE.  1121 

Not  Repealed  by  Revenue  Law. 

This  act  is  a  special  law  in  the  sense  and  meaning  that  it  is 
intended  to  apply  only  to  the  subject  of  a  collateral  inheritance 
tax  and  no  other  species  or  subject  of  taxation;  and  being  so,  it  is 
not  repealed  by  the  general  revenue  statute  of  1895,  but  is  revived  by 
it.    Zicklerv.  UnionBank  &  Trust  Co.,  104  Tenn.  277, 57  S.  W.  341 ,  344. 

Effect  of  Repeal  of  Revenue  Law. 

The  fact  that  the  general  revenue  law  of  1895  repealed  by  impli- 
cation the  general  revenue  law  of  1893,  c.  89,  s.  7,  as  to  collateral 
inheritances,  did  not  render  inoperative  the  statute  of  1893,  c.  174. 
but  on  the  contrary  revived  it.  Zickler  v.  Union  Bank  &f  Trust  Co.. 
104  Tenn.  277,  57  S.  W.  341. 

The  revenue  acts  have  provided  that  an  inheritance  tax  shall 
be  collected  as  provided  in  St.  1893,  c.  174,  "and  acts  amendatory 
thereof,"  except  that  the  words  "and  acts  amendatory  thereof" 
were  omitted  from  the  act  of  1899.  See  St.  1899,  c.  432,  s.  1 ;  St. 
1901,  c.  128,  s.  1;  St.  1903,  c.  257,  s.  1;  St.  1907,  c.  541,  s.  1;  St. 
1909,  c.  593,  s.  1. 

Effect  of  Revenue  Acts. 

Tenn.  St.  1893,  c.  174,  is  a  complete  system  of  taxation  on  the 
subject  of  inheritance  taxes  and  s.  25  expressly  repeals  the  statute 
of  1891.  On  the  same  day  the  legislature  passed  a  general  revenue 
law,  Tenn.  St.  1893,  c.  89,  s.  7,  imposing  a  collateral  inheritance  tax 
copied  almost  literally  from  the  statute  of  1891,  except  that  the 
word  "grandfather"  is  added  to  the  exception  in  section  7  of  the 
inheritance  act  of  1893.  In  the  general  revenue  acts  of  1895  and 
1897  no  mention  was  made  of  a  collateral  inheritance  tax  and  the 
contention  was  made,  therefore,  that  the  general  revenue  act  of  1895 
repealed  all  the  provisions  of  the  general  revenue  act  of  1893,  c. 
89,  s.  7. 

It  has  become  in  Tennessee  a  legislative  custom  to  re-draft  and 
re-enact  a  new  general  revenue  law  at  each  session  of  the  legislature 
instead  of  amending  the  old  law  embracing  generally  the  entire 
subject  of  privilege  taxation;  so  the  general  revenue  law  of  1895 
is  a  general  law  upon  the  subject  of  privilege  taxation  on  certain 
occupations,  and  it  was  intended  to  take  the  place  of  the  general 
revenue  law  of  1893;  and  whatever  was  omitted  in  the  new  law 
was  intended  to  be  discarded.  This  implied  repeal  of  the  revenue 
act  of  1893 -revives  chapter  174  of  the  statutes  of  1893.  Zickler 
v.  UnionBank  &  Trust  Co.,  104  Tenn.  277,  57  S.  W.  341. 


1122  STATUTES  ANNOTATED.  [Tenn.  St. 

AMENDMENTS. 

Tenn.  St.  1899,  c.  213,  p.  457,  amends  Tenn.  St.  Shannon's  Compiled  Statutes, 
s.  4025,  by  adding  thereto  the  words  "and  if  there  be  no  widow  or  next  of  kin. 
then  such  right  of  action  shall  survive  to  his  personal  representative,  for  the 
benefit  of  his  estate,  to  pay  his  debts,  burial  expenses,  and  the  expenses  of 
administration." 

Tenn.  St.  1899,  c.  432,  p.  1010,  s.  1,  provides  that  there  shall  be  levied  and 
collected  a  collateral  inheritance  tax  as  provided  for  in  the  statute  of  1893,  c.  174. 

Tenn.  St.  1901,  c.  128,  s.  1,  provides  that  there  shall  be  levied  and  collected  a 
collateral  inheritance  tax  as  provided  for  in  the  statute  of  1893,  c.  174,  and 
acts  amendatory  thereof. 

Tenn.  St.  1901,  c.  387,  was  a  special  act  refunding  to  a  certain  administrator 
a  tax  paid  on  a  legacy  from  a  deceased  person  who  died  in  November,  1893, 
when  no  inheritance  tax  was  collectible  in  property  inherited  by  brothers  and 
sisters. 

Tenn.  St.  1903,  c.  257,  s.  1,  provides  that  there  shall  be  levied  and  collected 
a  collateral  inheritance  tax  as  provided  for  in  the  Tenn.  St.  1893,  c.  174,  and 
acts  amendatory  thereof. 

Charities  Exempt, 

Tenn.  St.  1903,  c.  341,  approved  April  15,  1903,  amends  the  statute  of  1893, 
c.  174,  by  adding  to  section  1  of  the  act  the  following:  —  Provided,  that  in  all 
cases  where  suits  have  been  instituted  for  the  collection  of  the  collateral  inheritance 
tax,  the  institution  or  institutions  relieved  of  said  taxes  by  this  act  shall  pay  the 
costs  which  would  have  bee^  a  part  of  the  judgment  of  the  court  trying  the 
case,  if  this  act  had  not  been  passed,  and  provided  further,  that  nothing  in  this 
act  shall  be  so  construed  as  to  interfere  with  the  judgments  of  courts  already 
rendered  with  regard  to  cost,  the  purpose  of  this  act  being  to  exempt  the  insti- 
tutions above  referred  to  from  the  tax  proper,  and  not  from  the  cost  already 
incurred  by  the  state  in  attempting  to  collect  said  taxes. 

Tenn.  St.  1903,  c.  561,  amends  Tenn.  St.  1893,  c.  174,  s.  1:  — 
Be  it  enacted  by  the  general  assembly  of  the  state  of  Tennessee,  That  all 
estates,  real,  personal  and  mixed  of  every  kind  whatsoever,  situated  in  this 
state,  passing  from  any  person  who  may  die  seized  or  possessed  of  such  estates 
either  by  will,  deed,  grant,  bargain,  gift  or  sale  made  in  contemplation  of  death, 
or  intended  to  take  effect  in  possession  or  enjoyment  after  death  of  the  testator, 
grantor  or  bargainor,  to  any  religious,  charitable,  scientific,  literary  or  educa- 
tional institution,  be  and  the  same  are  hereby  exempted  from  the  collateral 
inheritance  tax  now  imposed  by  chapter  174  of  the  act  of  1893,  and  all  sub- 
sequent laws  and  all  bequests  and  devises  to  any  such  institutions  upon  which 
collateral  inheritance  tax  has  not  yet  been  paid,  are  hereby  released  from  said  tax 
and  such  institutions. 

*  Tenn.  St.  1903,  c.  561,. s.  2.  Be  it  further  enacted,  that  all  laws  upon  the 
subject  of  collateral  inheritance  tax  including  the  revenue  and  assessment  bills 
to  be  passed  at  the  present  session  of  the  legislature  in  so  far  as  they  conflict 
with  this  act  be  and  the  same  are  hereby  repealed  and  this  act  take  effect  from 
and  after  its  passage,  the  public  welfare  requiring  it. 


1909,  c.  497.]  TENNESSEE.  1123 

THE  DIRECT  INHERITANCE  ACT  OF  1909. 

Tenn.  St.  1909,  c.  479.     Approved  May  1,  1909. 

S.  20.  Be  it  further  enacted,  That  inheritances  not  taxed  under  the  present 
laws  shall  pay  a  tax  as  follows :  — 

All  inheritances  of  $5,000  and  over,  but  less  than  $20,000,  a  tax  of  one  per 
centum  of  their  value. 

All  inheritances  of  $20,000  and  over,  a  tax  of  one  and  one-fourth  per  centum 
of  their  value,  to  be  collected  by  the  county  court  clerk  of  each  county. 

•'Inheritances." 

It  was  claimed  that  the  word  "inheritances"  is  to  be  limited 
to  cases  of  intestacy.  The  court  observes  that  if  this  were  so  the 
statute  might  be  void  as  class  legislation;  and  that  the  revenue 
statutes  should  receive  a  "fair  construction  to  effect  the  end  for 
which  they  were  intended."  A  succession  tax  is  not  a  burden 
imposed  upon  property,  but  is  a  privilege  tax  upon  the  right  of 
taking  from  another. 

The  court  notes  that  the  civil  law  definition  of  the  word  "inherit- 
ances" is  "the  succession  to  all  rights  of  the  deceased,"  and  is 
of  two  kinds,  by  will  and  by  the  operation  of  law. 

The  court  concludes  that  it  is  inconceivable  that  the  legislature 
intended  by  the  term  "inheritance"  to  confine  this  tax  to  those  tak- 
ing as  heirs  or  next  of  kin.  Knox  v.  Emerson  (Tenn.  1910), 
131  S.  W.  972. 

Proceedings. 

The  court  notices  that  no  specific  mode  is  designated  for  the  col- 
lection of  the  tax  as  the  court  says  that  the  legislature  properly 
assumed  that  the  collection  had  been  covered  elsewhere. 

The  statute  of  1893,  c.  174,  embraced  within  itself  a  complete 
system  of  taxation ;  under  section  15  the  duty  and  method  of  col- 
lecting the  tax  is  provided,  and  this  remedy  is  properly  applied 
under  the  statute  of  1909.  In  a  proceeding  under  the  Tennessee 
statute  of  1909,  which  is  but  a  supplement  of  the  statute  of  1893, 
the  attorney  of  the  county  court  clerk  is  entitled  to  a  fee  to  be  paid 
by  the  taxpayer.     Knox  v.  Emerson,  Tenn.  (1910),  131  S.  W.  972. 

THE  PRESENT  ACT. 

The  inheritance  taxes  have  never  been  codified.  The  existing 
law  is  the  inheritance  tax  act  of  1893  with  the  amendments  noted 
above. 


1124  STATUTES  ANNOTATED.  [Texas  St. 


TEXAS. 


In  General. 

Texas  adopted  a  collateral  inheritance  tax  in  1907.  Inherit- 
ances to  father,  mother,  husband,  wife  and  lineal  descendant 
are  exempt.  The  exemption  applies  to  each  individual  share, 
not  to  the  estate  as  a  whole. 

Texas  is  not  now  claiming  a  tax  on  stock  of  a  Texas  corporation 
owned  by  a  non-resident,  and  there  is  no  provision  for  collecting 
such  a  tax  through  the  corporation,  such  as  is  usually  found.  The 
language  of  the  statute,  however,  does  not  differ  materially  from 
that  of  many  of  the  states  that  claim  such  a  tax. 

Constitutional  Limitations. 

Texas  Constitution,  1876,  a.  8,  s.  1. 

Taxation  shall  be  equal  and  uniform.  All  property  in  this  state,  whether 
owned  by  natural  persons  or  corporations,  other  than  municipal,  shall  be  taxed 
in  proportion  to  its  value,  which  shall  be  ascertained  as  may  be  provided  by 
law.  ... 

THE  PRESENT  ACT. 

Texas  St.  1907,  c.  21,  p.  496.     Approved  May  16,  1907. 
An  Act  to  tax  property  passing  by  will  or  by  descent  or  by 
GRANT  OR  GIFT;  taking  effect  on  the  death  of  the  grantor  or  donor. 

S.  1.  Taxable  transfers.  All  property  within  the  jurisdiction  of  this  state, 
real  or  personal,  corporeal  or  incorporeal,  and  any  interest  therein,  whether 
belonging  to  inhabitants  of  this  state  or  not,  which  shall  pass,  absolutely  or  in 
trust,  by  will,  or  by  the  laws  of  descent  of  this  or  any  other  state,  or  by  deed, 
grant,  sale  or  gift,  made  or  intended  to  take  effect  in  possession  or  enjoyment 
after  the  death  of  the  grantor  or  donor,  shall  upon  passing  to  or  for  the  use  of 
any  person  except  the  father,  mother,  husband,  wife  or  direct  lineal  descendants 
of  the  testator,  intestate,  grantor  or  donor,  or  any  public  corporation  or  charit- 
able, educational  or  religious  organization  within  this  state  when  such  bequest, 
gift  or  devise  is  to  be  used  for  charitable,  educational  or  religious  purposes  within 
this  state,  be  subject  to  a  tax  for  the  benefit  of  the  state,  as  follows:  — 

(1)  If  passing  to  or  for  the  use  of  a  lineal  ascendant  or  a  brother  or  sister, 
or  a  lineal  descendant  of  a  brother  or  sister,  the  tax  shall  be  two  per  cent  on  any 
value  in  excess  of  two  thousand  dollars,  and  not  exceeding  ten  thousand  dollars; 
two  and  one-half  per  cent  of  any  value  in  excess  of  ten  thousand  dollars,  and  not 
exceeding  twenty-five  thousand  dollars;  three  per  cent  on  any  value  in  excess  of 
twenty-five  thousand  dollars,  and  not  exceeding  fifty  thousand  dollars;    three 


1907,  c.  21.]  TEXAS.  1125 

and  one-half  per  cent  on  any  value  in  excess  of  fifty  thousand  dollars,  and  not 
exceeding  one  hundred  thousand  dollars;  four  per  cent  on  any  value  in  excess 
of  one  hundred  thousand  dollars,  and  not  exceeding  five  hundred  thousand  dollars; 
and  five  per  cent  on  any  value  in  excess  of  five  hundred  thousand  dollars. 

(2)  If  passing  to  or  for  use  of  an  uncle  or  aunt,  or  a  lineal  descendant  of  an 
uncle  or  aunt  of  the  decedent,  the  tax  shall  be  three  per  cent  on  any  value  in  excess 
of  one  thousand  dollars,  and  not  exceeding  ten  thousand  dollars;  four  per  cent 
on  any  value  in  excess  of  ten  thousand  dollars,  and  not  exceeding  twenty-five 
thousand  dollars;  five  per  cent  on  any  value  in  excess  of  twenty-five  thousand 
dollars,  and  not  exceeding  fifty  thousand  dollars;  six  per  cent  on  any  value  in 
excess  of  fifty  thousand  dollars  and  not  exceeding  one  hundred  thousand  dollars; 
seven  per  cent  on  any  value  in  excess  of  one  hundred  thousand  dollars,  and  not 
exceeding  five  hundred  thousand  dollars,  and  eight  per  cent  on  any  value  in 
excess  of  five  hundred  thousand  dollars. 

(3)  If  passing  to  or  for  the  use  of  any  other  person,  natural  or  artificial,  the 
tax  shall  be  four  per  cent  of  any  value  in  excess  of  five  hundred  dollars,  and  not 
exceeding  ten  thousand  dollars;  five  and  one-half  per  cent  on  any  value  in  excess 
of  ten  thousand  dollars,  and  not  exceeding  twenty-five  thousand  dollars;  seven 
per  cent  on  any  value  in  excess  of  twenty-five  thousand  dollars  and  not  exceeding 
fifty  thousand  dollars;  eight  and  one-half  per  cent  on  any  value  in  excess  of 
fifty  thousand  dollars,  and  not  exceeding  one  hundred  thousand  dollars;  ten  per 
cent  on  any  value  in  excess  of  one  hundred  thousand  dollars  and  not  exceeding 
five  hundred  thousand  dollars,  and  twelve  per  cent  on  any  value  in  excess  of  five 
hundred  thousand  dollars, 

S.  2.  Particular  estates  and  remainders.  If  the  property  passing  as 
aforesaid  shall  be  divided  into  two  or  more  estates,  as  an  estate  for  years  or  for 
life  and  a  remainder,  the  tax  shall  be  levied  on  each  estate  or  interest  separately 
according  to  the  value  of  the  same  at  the  death  of  the  decedent  The  value  of 
estates  for  years,  estates  for  life,  remainders  and  annuities  shall  be  determined 
by  the  "Actuaries'  Combined  Experience  Tables,"  at  four  per  cent  compound 
interest, 

S.  3.  Bequest  to  executor.  If  a  testator  bequeaths  or  devises  to  his 
executor  or  trustee,  property  in  lieu  of  the  latter's  commission,  the  value  of  such 
property  in  excess  of  reasonable  compensation,  as  determined  by  the  county 
judge  on  his  own  motion,  or  on  the  application  of  any  officer  on  behalf  of  the 
state,  shall  be  subject  to  taxation  under  this  act. 

S.  4.  Inventory.  Every  executor,  administrator  and  trustees  of  the  estate 
of  a  decedent  leaving  property  subject  to  taxation  under  this  act,  whether  such 
property  passes  by  will  or  by  the  laws  of  descent  or  otherwise,  shall,  within  three 
months  after  his  appointment,  make  and  file  an  inventory  thereof  in  the  county 
court  having  jurisdiction  of  the  estate  of  the  decedent.  Any  executor,  adminis- 
trator or  trustee  refusing  or  neglecting  to  comply  with  the  provisions  of  this 
section  shall  be  liable  to  a  penalty  not  exceeding  one  thousand  dollars,  to  be 
recovered  in  an  action  brought  in  behalf  of  the  state  by  the  district  or  county 
attorney  upon  notice  from  the  judge  of  the  county  court. 

S.  5.  Where  application  for  probate  not  made.  If  within  three  months 
after  the  death  of  a  decedent  leaving  property  subject  to  taxation  under  this  act 


1126  STATUTES  ANNOTATED.  [Tex.  St. 

no  application  for  letters  testamentary  or  of  administration  shall  be  made,  it  shall 
be  the  duty  of  the  county  court  to  appoint  an  administrator.  It  shall  be  the  duty 
of  the  county  attorney  to  report  to  the  judge  of  the  county  court  all  such  estates, 
whether  the  property  subject  to  taxation  passes  by  will  or  by  laws  of  descent  or 
otherwise.  For  each  decedent's  estate  thus  reported  the  county  attorney  shall 
receive  a  compensation  of  ten  per  cent  of  the  tax  payable,  but  not  to  exceed  twenty 
dollars  in  any  one  estate.  Such  payment  shall  be  made  by  the  collector  of  taxes 
on  the  certificate  of  the  county  judge,  out  of  the  taxes  paid  him  on  property 
belonging  to  such  estate. 

S.  6.  Appraisal.  Said  tax  shall  be  assessed  upon  the  actual  or  market  value 
of  the  property.  The  judge  of  the  county  court  having  jurisdiction  of  the  estate 
of  the  decedent  shall,  as  often  as  and  whenever  occasion  may  require,  appoint 
two  competent  disinterested  persons  as  appraisers  to  fix  the  value  of  property 
subject  to  said  tax.  The  appraisers,  being  first  sworn,  shall  forthwith  give 
notice  to  all  persons  known  to  have  a  claim  or  interest  in  the  property  to  be  ap- 
praised, including  the  executor,  administrator  or  trustee,  and  the  collector  of 
taxes  on  the  county,  of  the  time  and  place  when  they  will  appraise  the  same. 
At  such  time  and  place  they  shall  appraise  such  property  at  its  actual  or  market 
value  at  the  time  of  the  death  of  the  decedent,  and  shall  thereupon  make  report 
thereof  in  writing  to  said  county  judge,  who  shall  file  such  report.  Each  appraiser 
shall  be  paid,  on  the  certificate  of  the  county  judge,  two  dollars  for  each  day 
employed  in  such  appraisal,  together  with  his  actual  necessary  expenses  incurred 
therein,  which  payments  shall  be  made  by  the  collector  of  taxes  out  of  any  moneys 
in  his  hands  received  under  this  act;  provided,  however  that  upon  the  agree- 
ment of  the  parties  interested  to  dispense  with  the  appointment  of  appraisers  the 
county  judge  shall  himself  appraise  the  property  and  make  and  file  a  report 
thereof.  If  the  same  decedent  shall  leave  property  subject  to  this  tax  to  more 
than  one  person,  a  separate  appraisal  and  report  shall  be  made  for  the  property 
of  each  person. 

S.  7.  Assessment.  —  Lien.  Immediately  upon  the  filing  of  the  report  of 
the  appraisement,  the  county  judge  shall  calculate  and  determine  the  amount 
of  tax  due  on  such  property  under  this  act,  and  shall  in  writing  certify  such  amount 
to  the  collector  of  taxes,  to  the  executor,  administrator  or  trustee,  and  to  the  person 
to  whom  or  for  whose  use  the  property  passes.  Said  tax  shall  be  a  lien  upon  such 
property  from  the  death  of  the  decedent  until  paid,  and  shall  bear  interest  from 
such  death  until  paid,  unless  payment  shall  be  made  within  six  months  after 
such  death,  in  which  case  no  interest  shall  be  charged. 

S.  8.  Deduction  of  tax.  If  such  property  be  in  the  form  of  money, 
the  executor,  administrator  or  trustee  shall  deduct  the  amount  of  the  tax  there- 
from before  paying  it  to  the  party  entitled  thereto;  if  it  be  not  in  the  form  of 
money,  he  shall  withhold  the  property  until  the  payment  by  such  party  of  the 
amount  of  the  tax;  in  any  case  theexecutor,  administrator  or  trustee  shall  be 
Hable  for  the  amount  of  the  tax  and  shall  have  the  right,  in  case  of  neglect  or 
refusal  after  due  notice  of  the  party  entitled  to  the  property  to  pay  such  amount 
to  sell,  at  public  sale,  after  due  notice  to  such  party,  the  property,  or  so  much 
thereof  as  may  be  necessary.     Out  of  the  sum  realized  on  such  sale,  the  executor, 


1907,  c.  21.]  TEXAS.  1127 

administrator  or  trustee  shall  deduct  the  amount  of  the  tax  and  the  expenses 
of  the  sale,  and  shall  pay  the  balance  to  the  party  entitled  thereto. 

S.  9.  Legacy  charged  on  real  estate.  Whenever  any  legacy  subject  to 
said  tax  shall  be  charged  upon  or  payable  out  of  real  estate,  the  heir  or  devisee, 
before  paying  the  legacy,  shall  deduct  the  amount  of  the  tax  therefrom,  and  pay 
the  amount  so  deducted  to  the  executor,  administrator  or  trustee;  the  amount  of 
the  tax  shall  remain  a  charge  on  such  real  estate  until  paid,  and  the  payment 
thereof  shall  be  enforced  by  the  executor  or  trustee  in  the  same  manner  as  the 
payment  of  the  legacy  itself  could  be  enforced. 

S.  10.  Payment.  All  taxes  received  under  this  act  by  any  executor,  adminis- 
trator or  trustee,  shall  be  paid  by  him  within  thirty  days  thereafter  to  the 
collector  of  taxes  of  the  county  whose  county  court  has  jurisdiction  of  the  estate 
of  the  decedent.  Upon  such  payment,  the  collector  shall  make  duplicate  receipts 
thereof;  he  shall  deliver  one  to  the  party  making  payment,  the  other  he  shall 
send  to  the  comptroller  of  public  accounts,  who  shall  charge  the  collector  with 
the  amount  thereof,  and  shall  countersign  and  affix  his  seal  of  office  to  such 
receipt  and  transmit  same  to  the  party  making  payment. 

S.  11.  Action  to  recover.  In  case  such  tax  shall  not  be  paid  to  the  col- 
lector of  taxes  within  six  months  after  the  county  judge  has  notified  the  amount 
thereof  as  hereinbefore  provided,  the  collector  shall  commence  an  action  to 
recover  the  amount  of  such  tax  against  the  executor,  administrator  or  trustee, 
and  the  party  to  whom  or  for  whose  use  the  property  has  passed;  provided,  that 
the  county  judge  may  by  certificate  to  the  collector  extend  such  time  of  payment 
whenever  the  circumstances  of  the  case  require. 

S.  12.  Payment  to  state  treasurer.  The  collector  of  taxes  of  each  county 
shall,  on  or  before  the  fifteenth  day  of  each  month,  pay  to  the  state  treasurer 
all  taxes  received  by  him  under  this  act  before  the  first  day  of  that  month,  deduct- 
ing therefrom  all  lawful  disbursements  made  by  him  under  this  act,  and  also 
his  compensation  at  the  rate  of  one  per  cent  of  all  taxes  collected  under  this  act. 

S.  13.  Deposit  by  state  treasurer.  The  moneys  received  by  the  state 
treasurer  under  this  act  shall  be  deposited  in  the  state  treasury  to  the  credit  of 
the  fund  now  there  existing  and  known  as  the  general  revenue  fund. 

S.  14.  Refund  to  pay  debts.  Whenever  any  debts  shall  be  proven  against 
the  estate  of  a  decedent  after  the  distribution  of  property  on  which  the  tax  has 
been  paid,  and  a  refund  is  made  by  the  distributee,  a  due  proportion  of  the 
tax  so  paid  shall  be  repaid  to  him  by  the  executor,  administrator  or  trustee, 
if  still  in  his  hands,  or  by  the  collector  of  taxes  if  it  has  been  paid  to  him.  The 
collector  shall  pay  such  sums  upon  the  order  of  the  county  judge  out  of  any  money 
in  his  possession  under  this  act;  and  the  comptroller  of  public  accounts  shall 
credit  the  collector  with  all  sums  so  paid  out  by  him. 

S.  15.    Allowance   of  final  account.     No   final  account  of  an  executor, 
administrator  or  trustee  shall  be  allowed  by  the  county  judge  unless  such  account 
;        shows,  and  said  judge  finds,  that  all  taxes  imposed  under  this  act  on  any  property 


1128  STATUTES  ANNOTATED.  [Tex.  St. 

or  interest  passing  through  his  hands  as  such  have  been  paid;  and  the  receipt 
of  the  collector  of  taxes  for  such  taxes  shall  be  the  proper  voucher  for  such 
payment. 

S.  16.  When  administrator  dispensed  with.  If  for  any  reason  adminis- 
tration of  the  estate  of  a  decedent  leaving  property  subject  to  taxation  under 
this  act,  shall  not  be  necessary  in  this  state,  except  in  order  to  carry  out  the 
provisions  of  this  act,  it  shall  be  in  the  discretion  of  the  county  judge  upon  the 
filing  of  a  satisfactory  inventory  of  the  taxable  property  by  the  trustee  or  owner, 
to  dispense  with  the  appointment  of  an  administrator.  Upon  the  filing  of  such 
inventory,  the  appraisement  and  other  proceedings  required  by  this  act  shall  be 
had  as  in  other  cases. 


Utah  St.l  UTAH.  1129 


UTAH. 


In  General. 

Utah  since  1901  has  taxed  all  inheritances  at  the  uniform  rate 
of  five  per  cent  on  the  excess  of  the  entire  estate  over  $10,000. 

The  state  of  Utah  has  officially  notified  the  state  of  Connecticut 
that  it  does  not  tax  stock  of  Utah  corporations  owned  by  non-resi- 
dents if  the  stock  is  kept  outside  the  state;  but  nevertheless  the 
state  of  Utah  is  collecting  the  tax. 

List  of  Statutes. 

1901.  Statutes  of  Utah,  c.    62,  p.    61. 
1903.  "         "      "     c.    93,  p.    77. 

1905.  "         "       "     c.  119,  p.  198. 

1907.  Compiled  Laws  of  Utah,  ss.  1220  x  -  1220  x  31. 

Constitutional  Limitations. 

Utah  Constitution,  1851,  a.  13,  s.  3,  as  amended  in  1900. 

The  legislature  shall  provide  by  law  a  uniform  and  equal  rate  of  assessment  and 
taxation  on  all  property  in  the  state,  according  to  its  value  i  n  money,  and  shall 
prescribe  by  general  law  such  regulations  as  shall  secure  a  just  valuation  for 
taxation  of  all  property,  so  that  every  person  and  corporation  shall  pay  a  tax 
in  proportion  to  the  value  of  his,  her  or  its  property. 

STATUTES. 

Utah  St.  1901,  c.  62.    Approved  March  14,  1901. 

An  Act  to  tax  gifts,  legacies  and  inheritances  in  certain  cases,  and  to 
provide  for  the  collection  of  the  tax. 

This  title  does  not  indicate  as  claimed  that  the  tax  is  imposed 
only  upon  the  separate  portions  of  the  decedent's  estate  exceeding 
ten  thousand  dollars  transmitted  by  gift,  legacy  or  inheritance. 
Dixon  V.  Ricketts,  26  Utah  215,  72  P.  947. 

Utah  St.  1901,  c.  62.    Approved  March  14,  1901. 

S.  1,  All  property  in  excess  of  ten  thousand  dollars  subject  to  inheritance 
tax.  All  property  within  the  jurisdiction  of  this  state  and  any  interest  therein, 
whether  belonging  to  the  inhabitants  of  this  state  or  not,  and  whether  tangible 
or  intangible,  which  shall  pass  by  will  or  by  the  statutes  of  inheritance  of  this 
or  any  other-state,  or  by  deed,  grant,  sale  or  gift  made  or  intended  to  take  effect 
in  possession  or  in  enjoyment  after  the  death  of  the  grantor  or  donor,  to  any 


1130  STATUTES  ANNOTATED.  [Utah 

person  in  trust  or  otherwise,  shall  be  subject  to  a  tax  of  five  per  centum  of  its 
value  above  the  sum  of  ten  thousand  dollars;  after  the  payment  of  all  debts,  for 
the  use  of  the  state;  and  all  administrators,  executors  and  trustees,  and  any 
such  grantee  under  a  conveyance,  and  any  such  donee  under  a  gift  made  during 
the  grantor's  or  donor's  life,  shall  be  respectively  liable  for  all  such  taxes  to  be 
paid  by  them  respectively,  except  as  herein  otherwise  provided,  with  law.ul 
interest  as  hereinafter  set  forth  until  the  same  shall  have  been  paid.  The  tax 
aforesaid  shall  be  and  remain  a  lien  on  such  estate  from  the  death  of  the  decedent 
until  paid. 

Origin. 

Section  1  of  the  inheritance  tax  law  of  1901  is  a  transcript  of  the 
Iowa  statute  and  the  Iowa  construction  must  be  followed.  Dixon 
V.  Ricketts,  26  U.  215,  72  P.  947. 

Constitutional. 

Utah  St.  1901,  c.  62,  is  constitutional  and  is  not  void  under  con- 
stitutional provisions  requiring  uniformity  and  equality  of  taxa- 
tion.   Dixon  V.  Ricketts,  26  Utah  215,  72  P.  947. 

Tax  on  Whole  Estate. 

Utah  St.  1901,  c.  62,  s.  1  and  s.  13,  show  that  it  was  the  Intention 
of  the  legislature  to  impose  the  tax  upon  the  right  of  devolution  and 
succession  in  respect  to  the  whole  estate  of  the  decedent  above  the 
value  of  ten  thousand  dollars ;  and  the  indebtedness  of  the  estate 
transmitted  to  successors  and  not  upon  the  property  itself  or  any 
distributive  share.  It  is  apparent  from  section  1  that  this  was  the 
intention  of  the  act,  for  it  is  not  conceivable  how  the  payment  of 
the  debts,  the  amount  of  which  and  ten  thousand  dollars  fixes  the 
limit  of  the  exemption  from  tax,  can  apply  to  anything  other  than 
the  whole  of  the  decedent's  estate  upon  which  the  indebtedness  is 
a  charge.    Dixon  v.  Ricketts,  26  Utah  215,  72  P.  947. 

Liabilities. 

The  inheritance  tax,  while  not  a  debt  of  the  testator,  was  properly 
charged  to  the  beneficiaries.  In  re  Lotzgesell  (Wash.  1911),  113 
Pac.  1105. 

«Ss.  2-12  cover  the  taxation  of  estates  for  life  or  for  years  and  remainders  and 
the  levying,  collection  and  payment  of  the  tax. 

S.  13.  No  settlement  allowed  until  tax  paid.  No  final  settlement  of  the 
account  of  any  executor,  administrator,  or  trustee  shall  be  accepted  or  allowed 


Comp.  Laws.]  UTAH. 


1131 


unless  It  shall  show,  and  the  court  shall  find,  that  all  taxes  imposed  by  the  pro- 
visions of  this  act  upon  any  property  or  interest  therein  belonging  to  the  estate 
to  be  paid  by  such  executors,  administrators  or  trustees,  and  to  be  settled  by  said 
account,  shall  have  been  paid,  and  the  receipt  of  the  state  treasurer  for  such  tax 
shall  be  the  proper  voucher  for  such  payment. 

Utah  St.  1901,  c.  62,  approved  March  14,  1901,  s.  14,  gives  the  district  court 
jurisdiction  on  all  questions  in  relation  to  the  tax. 

Utah  St.  1903,  c.  93,  approved  March  12,  1903,  amended  Utah  St.  1901,  c.  62, 
ss.  1  and  11. 

Utah  St.  1905,  c.  119,  approved  March  17,  1905,  is  an  entirely  new  act  in 
substitution  for  Utah  St.  1901,  c.  62. 


THE  PRESENT  ACT. 

Compiled  Laws  of  Utah. 

1220x.      All  property  in  excess  of  $10,000  subject  to  inheritance  tax. 

All  property  within  the  jurisdiction  of  this  state  and  any  interest  therein  whether 
belonging  to  the  inhabitants  of  this  state  or  not,  and  whether  tangible  or  intangi- 
ble, which  shall  pass  by  will  or  by  the  statutes  of  inheritance  of  this  or  any  other 
state,  or  by  deed,  grant,  sale,  or  gift  made  or  intended  to  take  effect  in  possession 
or  enjoyment  after  the  death  of  the  grantor  or  donor,  to  any  person  in  trust  or 
otherwise,  shall  be  subject  to  a  tax  of  five  per  cent  of  its  market  value  above  the 
sum  of  $10,000,  after  the  payment  of  all  debts,  for  the  use  of  the  state;  and  all 
administrators,  executors,  and  trustees,  and  any  such  grantee  under  conveyance, 
and  such  donee  under  a  gift  made  during  the  grantor's  or  donor's  life,  shall  be 
respectively  liable  for  all  such  taxes  to  be  paid  by  them  respectively,  except  as 
herein  otherwise  provided,  with  lawful  interest  as  hereinafter  set  forth,  until 
the  same  shall  have  been  paid.  The  tax  aforesaid  shall  be  and  remain  a  lien  on 
such  estate  from  the  death  of  the  decedent  until  paid.  In  determining  the 
amount  of  tax  to  be  paid  under  the  provisions  of  this  section,  after  the  payment 
of  all  debts  the  sum  of  $10,000  shall  be  deducted  from  the  entire  estate  and  the 
tax  shall  be  computed  and  paid  on  the  entire  remainder;  and  the  court  shall 
determine  the  amount  of  tax  to  be  paid  by  the  several  devisees,  legatees,  grantees, 
or  donees  of  the  decedent.  ('01,  p.  61;  '03,  p.  77;  '05,  p.  198.) 
[See  notes  to  the  Act  of  1901,  ante,  p.  1130.] 

1220x1.  Term  "debts'*  defined.  The  term  "debts,"  as  used  in  this 
chapter,  shall  include,  in  addition  to  debts  owing  by  decedent  at  the  time  of 
his  death,  the  local  or  state  taxes  due  from  the  estate  prior  to  his  death,  a  reason- 
able sum  for  funeral  expenses,  the  court  costs,  the  cost  of  appraisement  made 
for  the  purpose  of  assessing  the  inheritance  tax,  the  statutory  fees  of  executors, 
administrators,  or  trustees,  and  no  other  sum;  but  said  debts  shall  not  be 
deducted  unless  the  same  are  approved  and  allowed,  within  fifteen  months  from 
the  death  of  decedent,  as  established  claims  against  the  estate,  unless  otherwise 
ordered  by  the  judge  of  the  proper  county.     ('05,  p.  198.) 

1220x2.  Appraisers  to  be  appointed.  In  each  county  the  court  shall 
annually  appoint  three  competent  residents  and  freeholders  of  said  county,  to 


1132  STATUTES  ANNOTATED.  [Utah 

act  as  appraisers  of  all  property  within  its  jurisdiction,  which  is  charged  or  sought 
to  be  charged  with  an  inheritance  tax.  Said  appraisers  shall  serve  for  one  year, 
until  their  successors  are  appointed  and  qualified.  They  shall  each  take  an 
oath  to  faithfully  and  impartially  perform  the  duties  of  the  office,  but  shall  not 
be  required  to  give  bond.  They  shall  be  subject  to  removal  at  any  time  at  the 
discretion  of  the  court,  and  the  court,  or  judge  thereof  in  vacation,  may  also 
in  its  discretion,  either  before  or  after  the  appointment  of  the  regular  appraisers, 
appoint  other  appraisers  to  act  in  any  given  case.  Vacancies  occurring  otherwise 
than  by  expiration  of  term  shall  be  filled  by  the  appointment  of  the  court,  or  by 
a  judge  in  vacation.  ('05,  p.  198.) 

1220x3.  Appraisers  must  not  take  fee  from  heir,  etc.  Any  appraiser 
appointed  by  this  title  who  shall  take  any  fee  or  reward  from  any  executor,  admin- 
istrator, trustee,  legatee,  next  of  kin  or  heir  of  any  decedent,  or  from  any  other 
person  liable  to  pay  said  tax  or  any  portion  thereof,  shall  be  guilty  of  a  mis- 
demeanor, and,  upon  conviction  in  any  court  having  jurisdiction  of  misdemeanors, 
he  shall  be  fined  not  less  than  $250  nor  more  than  $500,  and  imprisoned  not 
exceeding  ninety  days,  and  in  addition  thereto  the  judge  shall  dismiss  him  from 
such  service.     ('05,  p.  199.) 

1220z  4.  Commission  to  appraisers.  When  an  estate  is  opened  in  which 
there  is  property  which  may  be  subject  to  the  inheritance  tax,  the  clerk  shall 
forthwith  issue  a  commission  to  the  appraisers,  who  shall  fix  a  time  and  place 
for  appraisement.     ('05,  p.  199.) 

1220x5.  Duties  to  appraisers.  It  shall  be  the  duty  of  all  appraisers 
appointed  under  the  provisions  of  this  title  to  forthwith  give  notice  to  the  state 
treasurer  and  other  persons  known  to  be  interested  in  the  property  to  be  ap- 
praised, of  the  time  and  place  at  which  they  will  appraise  such  property,  which 
time  shall  not  be  less  than  ten  days  from  the  date  of  such  notice.  The  notice 
shall  be  served  in  the  same  manner  as  is  prescribed  for  the  commencement  of  civil 
actions,  and  if  not  practicable  to  serve  the  notice  provided  for  by  statute,  they 
shall  apply  to  the  court  or  a  judge  in  vacation  for  an  order  as  to  notice,  and 
upon  service  of  such  notice  and  the  making  of  such  appraisement,  the  said  notice, 
return  thereon,  and  appraisement  shall  be  filed  with  the  clerk,  and  a  copy  of 
such  appraisement  shall  be  filed  by  the  clerk  with  the  state  treasurer.  ('05,  p. 
199.) 

1220x6.  Objections  to  appraisements,  Hearing  on.  The  state  treas- 
urer or  any  person  interested  .in  the  estate  appraised  may,  within  twenty  days 
thereafter,  file  objections  to  said  appraisement,  on  the  hearing  of  wh  ch  as  an 
action  in  equity,  either  party  may  produce  evidence  competent,  or  material  to 
the  matters  therein  involved.  If,  upon  such  hearing,  the  court  finds  the  amount 
at  which  the  property  is  appraised  is  at  its  value  on  the  market  in  the  ordinary 
course  of  trade,  and  the  appraisement  was  fairly  and  in  good  faith  made,  it  shall 
approve  such  appraisement;  but  if  jt  finds  that  the  appraisement  was  made  at 
a  greater  or  less  sum  than  the  value  of  the  property  in  the  ordinary  course  of 
trade,  or  that  the  same  was  not  fairly  or  in  good  faith  made,  it  shall  set  aside 
the  appraisement,  appoint  new  appraisers,  and  so  proceed  until  a  fair  and  good 
appraisement  of  the  property  is  made  at  its  value  in  the  market  in  the  ordinary 


Comp.  Laws.]  UTAH.  1133 

course  of  trade.  The  state  treasurer,  or  any  one  interested  in  the  property 
appraised,  may  appeal  to  the  supreme  court  from  the  order  of  the  district  court 
approving  or  setting  aside  any  appraisement  to  which  exceptions  have  been  filed. 
Notice  of  appeal  shall  be  served  within  thirty  days  from  the  date  of  the  order 
appealed  from,  and  the  appeal  shall  be  perfected  in  the  time  now  provided  for 
appeals  in  equitable  actions.  In  case  of  appeal  the  appellant,  if  he  is  not  the 
state  treasurer,  shall  give  bond  to  be  approved  by  the  clerk  of  the  court,  to  pay 
the  tax,  which  bond  shall  provide  that  the  said  appellant  and  sureties  shall  pay 
the  tax  for  which  the  property  may  be  liable,  with  cost  of  appeal.  If  upon  the 
hearing  of  objections  to  the  appraisement,  the  court  finds  that  the  property  is  not 
subject  to  the  tax,  the  court  shall  upon  expiration  of  time  for  appeal  when  no 
appeal  has  been  taken  order  the  clerk  to  enter  upon  the  lien  book  a  cancella- 
tion of  any  claim  or  lien  for  taxes.  If  at  the  end  of  twenty  days  from  the  filing 
of  the  appraisement  with  the  clerk,  no  objections  are  filed,  the  appraisement  shall 
stand  approved.     ('05,  p.  199.) 

1220x7.  Action  on  cases  now  pending.  In  all  cases  where  the  property 
of  an  estate  has  been  subject  to  or  liable  for  the  payment  of  the  tax  provided  in 
this  title,  or  where  such  property  has  heretofore  been  appraised  and  the  tax  not 
yet  paid,  and  the  notice  required  in  this  title  was  not  given,  it  shall  be  the  duty  of 
the  court,  immediately  upon  the  taking  effect  of  this  title,  to  enforce  such  tax, 
or  to  set  aside  any  appraisement  heretofore  made,  and  order  a  reappraisement 
of  the  same  to  be  made  as  in  this  title  provided,  anything  in  the  law  contrary 
notwithstanding.     ('05,  p.  200.) 

1220x8.  Time  of  appraisement  and  payment  of  tax.  All  the  property 
of  the  decedent  subject  to  such  tax  shall,  except  as  hereinafter  provided,  be 
appraised  within  thirty  days  next  after  the  appointment  of  an  executor,  adminis- 
trator, or  trustee,  at  its  market  value  in  the  ordinary  course  of  trade,  and  the 
tax  thereon,  calculated  upon  the  appraised  market  value  after  deducting  debts 
for  which  the  estate  is  liable,  shall  be  paid  by  the  persons  entitled  to  said  estate 
within  fifteen  months  from  the  death  of  the  testator  or  intestate,  unless  a  longer 
period  is  fixed  by  the  court,  and,  in  default  thereof,  the  court  shall  order  the 
same,  or  so  much  thereof  as  may  be  necessary  to  pay  such  tax,  to  be  sold.  ('01, 
p.  62;   '05,  p.  200.) 

1220x9.  Estates  for  life  or  term  of  years.  Whenever  any  reai  estate 
of  a  decedent  shall  be  subject  to  such  tax,  and  there  be  a  life  estate  or  interest 
for  a  term  of  years  given  to  one  party  or  parties,  and  the  remainder  to  another 
party  or  parties,  the  court  shall  direct  the  interest  of  the  life  estate,  or  term 
of  years,  to  be  appraised  at  its  market  value  in  the  ordinary  course  of  trade,  and, 
upon  the  approval  of  such  appraisement  by  the  court,  the  party  entitled  to 
such  life  estate,  or  term  of  years,  shall,  within  sixty  days  thereafter,  pay  such 
tax,  and  in  default  thereof  the  court  shall  order  such  interest  in  said  estate,  or  so 
much  thereof  as  shall  be  necessary  to  pay  such  tax,  to  be  sold.  Upon  the  deter- 
mination of  such  life  estate,  or  term  of  years,  the  court  shall,  upon  its  own 
motion,  or  upon  the  application  of  the  state  treasurer,  cause  such  estate  to  be 
appraised  at  its  then  market  value  in  the  ordinary  course  of  trade,  from  which 
shall  be  deducted  the  value  of  any  improvements  thereon,  or  betterments  thereto, 
if  any,  made  by  the  remainder  man  during  the  time  of  the  prior  estate,  to  be 


1134  STATUTES  ANNOTATED.  [Utah 

ascertained  and  determined  by  the  appraisers,  and  the  tax  on  the  remainder  shall 
be  paid  by  such  remainder  man  within  sixty  days  from  the  approval  by  the  court 
of  the  appraisers.  If  such  tax  is  not  paid  within  said  time,  the  court  shall  then 
order  said  real  estate,  or  so  much  thereof  as  shall  be  necessary  to  pay  such  tax, 
to  be  sold.  Whenever  any  personal  estate  of  a  decedent  shall  be  subject  to 
such  tax  and  there  be  a  life  estate  or  interest  for  a  term  of  years  given  to  one 
party  or  parties,  and  the  remainder  to  another  party  or  parties,  the  court  shall 
inquire  into  and  determine  the  market  value  in  the  ordinary  course  of  trade, 
of  the  life  estate  or  interest  for  the  term  of  years,  and  order  and  direct  the  amount 
of  the  tax  thereon  to  be  paid  by  the  prior  estate  and  that  to  be  paid  by  the 
remainder  man,  each  of  whom  shall  pay  his  proportion  of  the  tax  within  sixty 
days  from  such  determination,  unless  a  longer  period  is  fixed  by  the  court,  and, 
in  default  thereof,  the  executor,  administrator,  or  trustee  shall  pay  the  same 
out  of  said  property  and  hold  the  same  from  distribution,  and  invest  it  at  interest 
under  the  order  of  the  court  until  said  tax  is  paid,  or  until  the  interest  on  the 
same  equals  the  amount  of  such  tax,  which  shall  thereupon  be  paid.  ('01,  p. 
62;   '05,  p.  200.) 

1220x10.    Where  bequest  is    in  lieu  of    compensation  to  executor. 

Whenever  a  decedent  appoints  one  or  more  executors  or  trustees  and  in  lieu 
of  his  or  their  allowance  or  commission  makes  a  bequest  or  devise  of  property 
to  him  or  them,  which  would  otherwise  be  liable  to  said  tax,  or  appoints  them 
as  residuary  legatees,  and  said  bequests,  devises,  or  residuary  legacies  exceed 
what  would  be  a  reasonable  compensation  for  his  or  their  services,  such  excess 
shall  be  liable  to  such  tax,  and  the  court  having  jurisdiction  of  his  or  their  accounts, 
upon  its  own  motion  or  on  application  of  the  state  treasurer,  shall  fix  such  com- 
pensation.    ('01,  p.  63;   '05,  p.  201.) 

1220x11.  Where  legacy  is  a  charge  upon  real  estate.  Whenever  any 
legacies  subject  to  said  tax  are  charged  upon  or  payable  out  of  any  real  estate, 
the  heir  or  devisee,  before  paying  the  same,  shall  deduct  said  tax  therefrom 
and  pay  it  to  the  executor,  administrator,  trustee,  or  state  treasurer,  and  the 
same  shall  remain  a  charge  and  be  a  lien  upon  said  real  estate  until  it  is  paid; 
and  payment  thereof  shall  be  enforced  by  the  executor,  administrator,  trustee, 
or  state  treasurer  in  his  name  of  office,  in  the  same  manner  as  the  payment  of  the 
legacy  itself  could  be  enforced.     ('01,  p.  63;    '05,  p.  201.) 

1220x12.  Executor,  etc.,  to  collect  tax.  Every  executor,  administrator, 
or  trustee  having  in  charge  or  trust  any  property  subject  to  said  tax,  and  which  is 
made  payable  to  him,  shall  deduct  the  tax  therefrom,  or  shall  collect  the  tax 
thereon  from  the  legatee  or  person  entitled  to  said  property,  and  he  shall  not 
deliver  any  specific  legacy  or  property  subject  to  said  tax  to  any  person  until 
he  has  collected  the  tax  thereon.     ('01,  p.  63;   '05,  p.  202.) 

^  1220x13.    Taxes    payable    to  state  treasurer  within  fifteen  months. 

All  taxes  imposed  by  this  title  shall  be  payable  to  the  state  treasurer,  and  those 
which  are  made  payable  by  executors,  administrators,  or  trustees  shall  be  paid 
within  fifteen  months  from  the  death  of  the  testator  or  intestate,  unless  a  longer 
period  is  fixed  by  the  court,  or  a  judge  thereof  in  vacation.     All  taxes  not  paid 


Comp.  Laws.]  UTAH.  1135 

within  fifteen  months  from  death  of  the  testator  or  intestate  shall  draw  interest 
at  the  rate  of  eight  per  cent  per  annum  until  paid.     ('01,  p.  63;    '05,  p.  202.) 

1220x14.  Executor,  etc.,  to  collect  tax  in  certain  cases,  other  cases 
state  treasurer.  It  is  hereby  made  the  duty  of  all  executors,  administrators, 
or  trustees  charged  with  the  management  or  settlement  of  any  estate  subject 
to  the  tax  provided  for  in  this  title,  to  collect  and  pay  to  the  state  treasurer  the 
amount  of  the  tax  due  from  any  devisee,  legatee,  grantee,  or  donee  of  the  dece- 
dent, except  in  cases  falling  under  the  provisions  of  sections  1220x8,  1220x9, 
in  which  cases  the  state  treasurer  shall  collect  the  same.  Applications  may  be 
made  to  the  district  court  by  such  executor,  administrator,  trustee,  or  state 
treasurer  to  sell  the  real  estate  subject  to  said  tax  in  an  equitable  action,  or,  if 
made  to  the  court  having  charge  of  the  settlement  of  the  estate,  the  proceedings 
shall  conform  as  nearly  as  may  be  to  those  for  the  sale  of  real  estate  of  decedent 
for  the  settlement  of  his  debts.     ('01,  p.  63;   '05,  p.  202.) 

1220x15.  No  settlement  allowed  until  tax  paid.  No  final  settlement 
of  the  account  of  any  executor,  administrator,  or  trustee  shall  be  accepted  or 
allowed  unless  it  shall  show,  and  the  court  shall  find,  that  all  taxes  imposed 
by  the  provisions  of  this  title  upon  any  property  or  interest  therein  belonging 
to  the  estate  to  be  paid  by  such  executors,  administrators,  or  trustees,  and  to 
be  settled  by  said  account,  shall  have  been  paid,  and  the  receipt  of  the  state 
treasurer  for  such  tax  shall  be  the  proper  voucher  for  such  payment.  ('01,  p. 
64;   '05,  p.  202.) 

[See  notes  to  the  Act  of  1901,  ante,  p.  1029.] 

1220x16.  District  court  to  have  jurisdiction.  The  district  court  having 
either  principal  or  ancillary  jurisdiction  of  the  settlement  of  the  estate  of  the 
decedent  shall  have  jurisdiction  to  hear  and  determine  all  questions  in  relation 
to  said  tax  that  may  arise  affecting  any  devise,  legacy  or  inheritance,  orany  grant 
or  gift,  under  this  title,  subject  to  appeal  as  in  other  cases,  and  the  state  treasurer 
shall  in  his  name  of  office  represent  the  interests  of  the  state  in  any  proceedings. 
('01,  p.  64;   '05,  p.  202.) 

1220x17.  State  treasurer  may  demand  information  from  executors, 
etc.  Before  issuing  his  receipt  for  the  tax,  the  state  treasurer  may  demand 
from  executors,  administrators,  or  trustees,  such  information  as  may  be  neces- 
sary to  verify  the  correctness  of  the  amount  of  the  tax  and  interest,  and,  when 
demanded,  they  shall  send  such  treasurer  certified  copies  of  such  parts  of  their 
reports  as  he  may  demand,  and  upon  the  refusal  of  said  parties  to  comply  with 
the  demand  of  the  state  treasurer,  it  is  the  duty  of  the  clerk  of  the  court  to 
comply  with  such  demand,  and  the  expenses  of  making  such  copies  and  trans- 
cripts shall  be  charged  against  the  estate,  as  are  other  costs  in  probate.  ('05,  p. 
203.) 

1220x18.     Inheritance    tax  and  Hen  book   to  be  kept  by  clerk.    The 

clerk  of  the  district  court  in  and  for  each  county,  where  an  inheritance  tax  is 
charged  or  sought  to  be  charged,  shall  provide  and  keep  a  suitable  book,  sub- 
stantially bound  and  suitably  ruled,  to  be  known  as  the  inheritance  tax  and  lien 
book,  in  which  shall  be  kept  a  full  and  accurate  record  of  all  proceedings  in  cases 


1136  STATUTES  ANNOTATED.  [Utah 

where  property  is  charged  or  sought  to  be  charged  with  the  payment  of  an  inherit- 
ance tax  under  the  laws  of  this  state,  to  be  printed  and  ruled  so  as  to  show  upon 
one  page:  — 

1.  The  name,  place  of  residence,  and  date  of  death  of  the  decedent; 

2.  Whether  the  decedent  died  testate,  or  intestate,  and  if  testate,  the  record 
and  page  where  the  will  was  probated  and  recorded; 

3.  The  name  and  postoffice  address  of  the  executor,  administrator,  trustee, 
or  grantee,  with  date  of  appointment  or  transfer; 

4.  The  names,  postoffice  addresses,  and  relationship,  if  known,  of  all  the  heirs, 
devisees,  and  grantees; 

5.  The  appraised  valuation  of  the  personal  property; 

6.  The  amount  of  inheritance  tax  due  upon  said  personal  property; 

7.  A  record  of  payment  with  amount  and  date; 

8.  Date  of  filing  objections  and  names  of  objectors; 

9.  Blank  for  index  and  reference  to  all  proceedings,  and  for  memorandum 
entries  of  the  court  or  judge  in  relation  thereto. 

Upon  the  opposite  page  of  such  record  shall  be  printed :  — 

1.  Real  estate  from  (naming  decedent)  which  is  subject  to  the  lien  prescribed 
by  the  statute  for  inheritance  tax; 

2.  A  full  and  accurate  description  of  such  real  estate,  by  forty-acre  or  fractional 
tracts,  or  by  lots,  or  other  complete  individual  description; 

3.  The  appraised  valuation  as  reported  by  the  appraisers,  with  a  reference 
to  the  record  of  their  report,  as  to  each  piece  of  such  real  estate; 

4.  The  amount  of  inheritance  tax  due  upon  each  such  piece; 

5.  A  record  of  payments,  with  dates  and  amounts; 

6.  Date  of  filing  objections,  and  names  of  objectors; 

7.  Blank  for  index  and  reference  and  to  all  rpoceedings,  and  for  memorandum 
entries  of  court  or  judge  in  relation  thereto.     ('05,  p.  203.) 

1220x19.  Executor,  etc.,  to  report  facts. — Entry  of  real  estate  in  lien 
book.  Upon  the  appointment  and  qualification  of  each  executor,  administrator, 
and  testamentary  trustee,  the  clerk  issuing  the  letters  shall  at  the  same  time 
deliver  to  him  a  blank  form  upon  which  he  shall  be  required  to  make  detailed 
report  of  the  following  facts:  — 

1.  Name  and  last  residence  of  the  decedent; 

2.  Date  of  death; 

3.  Whether  or  not  he  left  a  will; 

4.  Name  and  postoffice  of  executor,  administrator,  or  trustee; 

5.  Name  and  postoffice  of  surviving  wife  or  husband,  if  any; 

6.  If  testate,  name  and  postoffice  of  each  beneficiary  under  the  will; 

7.  Relationship  of  each  beneficiary  to  the  testator; 

8.  If  intestate,  name  and  postoffice  of  each  heir  at  law; 

9.  Relationship  of  each  heir  at  law  to  the  decedent; 

10.  Inventory  of  all  real  estate  of  the  decedent,  giving  amount  and  descrip- 
ticfn  of  each  tract. 

Within  ten  days  after  his  qualification,  each  executor,  administrator,  and  testa- 
mentary trustee  shall  make  and  return  to  the  clerk,  under  oath,  a  full  and  detailed 
report  as  indicated  in  the  preceding  section,  any  will  to  the  contrary  notwith- 


Comp.  Laws.]  UTAH.  1137 

standing,  and  upon  his  failure  to  do  so,  the  clerk  shall  forthwith  report  his  delin- 
quency to  the  district  court  if  in  session,  or  to  a  judge  of  said  court  if  in  vacation, 
for  such  order  as  may  be  necessary  to  enforce  an  observance  of  this  section. 
If  it  appears  from  the  inventory  or  report  so  filed  that  the  real  estate,  or  any  part 
of  it,  is  subject  to  an  inheritance  tax,  it  shall  be  the  duty  of  the  executor  or 
administrator  to  cause  the  lien  of  the  same  to  be  entered  upon  the  lien  book  in 
the  office  of  the  clerk  of  the  court  in  each  county  where  each  particular  tract  of 
said  real  estate  is  situated,  and  no  conveyance  of  said  real  estate  or  interest 
therein,  which  is  subject  to  such  tax  before  or  after  entering  of  said  lien,  shall 
discharge  the  real  estate  so  conveyed  from  the  operation  thereof,  and  no  final 
settlement  of  the  account  of  any  executor,  administrator,  or  trustee  shall  be  ex- 
cepted or  allowed  unless  a  strict  compliance  with  the  provisions  of  this  section 
has  been  had  by  such  person.     ('01,  p.  61;   '05,  p.  204.) 

1220x20.  Extension  of  time  for  appraisement.  Whenever,  by  reason 
of  the  complicated  nature  of  an  estate,  or  by  reason  of  the  confused  condition 
of  the  decedent's  affairs,  it  is  impracticable  for  the  executor,  administrator,  or 
trustee  or  beneficiary  of  said  estate  to  file  with  the  clerk  of  the  court  a  full,  com- 
plete, and  itemized  inventory  of  the  personal  assets  belonging  tothe  estate,  within 
the  time  required  by  statute  for  filing  inventories  of  the  estate,  the  court  may, 
upon  the  application  of  such  representatives  or  parties  in  interest,  extend  the 
time  for  the  making  of  the  inheritance  appraisement  for  a  period  not  to  exceed 
three  months  beyond  the  time  fixed  by  law.     ('05,  p.  205.) 

1220x21.     Clerk  to  enter  in  inheritance  tax  and  lien  book.  —  Index. 

The  clerk  shall  from  time  to  time  enter  upon  the  inheritance  tax  and  lien  books 
the  title  of  all  estates  subject  to  the  inheritance  tax,  as  shown  by  the  inventories 
or  lists  of  heirs  filed  in  his  office,  or  as  reported  to  him  by  the  district  attorney 
or  the  state  treasurer,  and  shall  enter  in  said  book  as  against  each  estate  or  title, 
at  the  appropriate  place,  all  such  information  relating  to  the  situation  and  condi- 
tion of  the  estate  as  he  may  be  able  to  obtain  from  the  papers  filed  in  his  office, 
or  from  the  district  attorney  or  the  state  treasurer,  as  may  be  necessary  to  col- 
lection and  enforcement  of  the  tax.  He  shall  also  immediately  index  all  liens 
entered  upon  the  inheritance  tax  and  lien  book  in  the  book  kept  in  his  office  for 
that  purpose.     ('05,  p.  205.) 

1220x22.  Complete  record  by  clerk.  In  all  cases  entered  upon  the  in- 
heritance tax  and  lien  book,  the  clerk  shall  make  a  complete  record  in  the  proper 
probate  record,  of  all  the  proceedings,  orders,  reports,  inventories,  appraisements 
and  all  other  matters  and  proceedings  therein.     ('05,  p.  205.) 

1220x23.  Duties  of  clerk.  It  shall  be  the  duty  of  each  clerk  of  the  district 
court  to  make  examination  from  time  to  time  of  all  reports  filed  with  him  by 
administrator,  executors,  and  trustees,  pursuant  to  law;  also  to  make  examina- 
tion of  all  foreign  wills  offered  for  probate  or  recorded  within  his  county,  as  well 
as  of  the  record  of  deeds  and  conveyances  in  the  recorder's  office  of  said  county, 
and  if  from  such  examination,  or  from  information  or  knowledge  coming  to  him 
from  any  other  source,  he  finds  or  believes  that  any  property  within  his  county, 
or  within  the-jurisdiction  of  the  district  court  of  said  county,  has,  since  May  14, 
1901,  passed  by  will  or  by  the  intestate  laws  of  this  or  any  other  state,  or  by  deed, 


1138  STATUTES  ANNOTATED.  [Utah 

grant,  sale,  or  gift  made  or  intended  to  take  effect,  in  possession  or  in  enjoyment 
after  the  death  of  the  testator,  donor,  or  grantor,  to  any  person  within  this 
state,  he  shall  make  report  thereof  in  writing  to  the  state  treasurer,  embodying 
in  such  reportthe  name  and  residence  of  the  decedent,  date  of  death,  name  and 
address  of  administrator,  executor,  or  trustee;  the  description  of  any  property 
liable  to  a  tax  and  the  county  in  which  it  is  located,  and  name  and  relationship 
of  all  beneficiaries  or  heirs.  Any  citizen  of  the  state  having  knowledge  of  property 
liable  to  such  tax,  against  which  no  proceeding  for  enforcing  collection  thereof 
is  pending,  may  report  the  same  to  the  clerk,  and  it  shall  be  the  duty  of  such 
officer  to  investigate  the  case,  and  if  he  has  reason  to  believe  the  information 
to  be  true,  he  shall  forthwith  institute  such  proceedings  substantially  as  above 
indicated.     ('05,  p.  205.) 

1220x24.  Duties  of  court  and  district  attorney.  On  the  first  or  second 
day  of  each  regular  term,  the  court  shall  require  the  clerk  to  present  for  its 
inspection,  the  inheritance  tax  and  lien  book  hereinbefore  provided  for,  together 
with  all  reports  of  administrators,  executors,  and  trustees  which  have  been  filed 
pursuant  to  this  title  since  the  last  preceding  term.  The  district  attorney  shall 
also  attend  and  make  report  to  the  court  concerning  the  progress  of  all  cases 
pending  for  the  collection  of  such  taxes,  together  with  any  other  facts  which, 
in  his  judgment,  may  aid  the  court  in  enforcing  the  general  observance  of  the 
inheritance  tax  law.  If  from  information  obtained  from  the  records  or  reports, 
or  from  any  other  source,  the  court  has  reason  to  believe  that  there  is  property 
within  its  jurisdiction  liable  to  the  payment  of  an  inheritance  tax,  against  which 
proceedings  for  collection  are  not  already  pending,  it  shall  enter  an  order  of  record, 
directing  the  district  attorney  to  institute  such  proceedings  forthwith.  Should 
any  estate,  or  the  name  of  any  grantee  or  grantees,  be  placed  upon  the  book 
at  the  suggestion  of  the  district  attorney  or  the  state  treasurer  in  which  the  papers 
already  on  filein  the  clerk's  office  do  not  disclose  that  any  inheritance  tax  is  due 
or  payable,  the  district  attorney  shall  forthwith  give  to  all  parties  in  interest 
such  notice  as  the  court  or  judge  may  prescribe,  requiring  them  to  appear  on  a 
day  to  be  fixed  by  the  said  court  or  judge,  and  show  cause  why  the  property 
should  not  be  appraised  and  subjected  to  said  tax.  If  upon  hearing  at  the  time 
so  fixed,  the  court  is  satisfied  that  any  property  of  the  decedent,  or  any  property 
devised,  granted,  or  donated  by  him,  is  subject  to  the  tax,  the  same  proceedings 
shall  be  had  as  in  other  cases,  so  far  as  applicable.     ('05,  p.  206.) 

1220x25.  Costs,  by  whom  paid.  In  all  cases  where  any  property  so 
passes  as  to  be  liable  to  taxation  under  the  inheritance  law,  all  costs  of  the  pro- 
ceedings had  for  determining  the  amount  of  such  tax  or  for  determining  whether 
the  property  of  the  entire  estate  is  sufficient  in  amount  as  to  render  that  part 
passing  to  heirs  subject  to  the  tax,  shall  be  chargeable  to  such  estate,  and  to 
discharge  the  lien  upon  such  property  all  costs,  as  well  as  the  taxes,  must  be  paid. 
In  all  other  cases  the  costs  are  to  be  paid  as  ordered  by  the  court,  and  when  a 
decision  adverse  to  the  state  has  been  rendered,  with  an  order  that  the  state  pay 
the  costs,  it  is  the  duty  of  the  clerk  of  the  court  in  which  such  action  was  pend- 
iAg  to  certify  the  amount  of  such  costs  to  the  state  treasurer,  who  shall,  if  said 
costs  be  correctly  certified,  and  the  case  has  been  finally  terminated,  present  the 
claim  to  the  state  board  of  examiners,  to  audit,  and  said  claim  being  allowed  by 
said  board,  the  state  auditor  is  directed  to  issue  a  warrant  on  the  state  treasurer 
in  payment  of  such  costs.     ('05,  p.  207.) 


Comp.  Laws.]  UTAH.  1139 

1220x26.  Safe  deposit  company  or  bank  to  give  notice  before  trans- 
fexring  securities.  No  safe  deposit  company,  bank,  or  other  institution, 
person,  or  persons  holding  securities  or  assets  of  the  decedent  shall  deliver  or  trans- 
fer the  same  to  the  executor  or  administrator  or  legal  representative  of  said 
decedent  unless  notice  of  the  time  and  place  of  such  intended  transfer  be  served 
upon  the  state  treasurer  at  least  five  days  prior  to  the  transfer  thereof,  or  unless 
the  tax  for  which  such  securities  or  assets  are  liable  under  this  title  shall  be  first 
paid.  It  shall  be  lawful  for,  and  the  duty  of,  the  state  treasurer  personally,  or 
by  any  person  by  him  duly  authorized,  to  examine  such  securities  or  assets  at 
the  time  of  such  delivery  or  transfer.  Failure  to  serve  such  notice  upon  the  state 
treasurer,  or  to  allow  such  examination  on  the  delivery  of  such  securities  or  assets 
to  such  executor,  administrator,  or  legal  representative  before  said  tax  is  paid 
shall  render  such  safe  deposit  company,  trust  company,  bank,  or  other  institution, 
person,  or  persons  liable  for  the  payment  of  the  taxes  due  upon  such  securities 
or  assets  as  provided  in  this  title.     ('05,  p.  207.) 

1220x27.  In  case  of  foreign  estate.  Whenever  any  property  belonging 
to  a  foreign  estate,  which  estate,  in  whole  or  in  part,  is  liable  to  pay  an  inheritance 
tax  in  this  state,  the  said  tax  shall  be  assessed  upon  the  market  value  of  said 
property  remaining  after  the  payment  of  such  debts  and  expenses  as  are  charge- 
able to  the  property  under  the  laws  of  this  state;  in  the  event  that  the  executor, 
administrator,  or  trustee  of  such  foreign  estate  files  with  the  clerk  of  the  court 
having  ancillary  jurisdiction  and  with  the  state  treasurer,  duly  certified  state- 
ments exhibiting  the  true  market  value  of  the  entire  estate  of  the  decedent  owner, 
and  the  indebtedness  for  which  the  said  estate  has  been  adjudged  liable,  which 
statements  shall  be  duly  attested  by  the  judge  of  the  court  having  original  juris- 
diction, the  beneficiaries  of  said  estate  shall  then  be  entitled  to  have  deducted 
such  proportion  of  the  said  indebtedness  of  the  decedent  from  the  value  of  the 
property  as  the  value  of  the  property  within  this  state  bears  to  the  value  of  the 
entire  estate.     ('05,  p.  207.) 

1220x28.  Id.  Whenever  any  property,  real  or  personal,  within  this  state, 
belongs  to  a  foreign  estate,  said  foreign  estate  passes  in  part  exempt  from  the 
inheritance  tax,  and  in  part  subject  to  said  inheritance  tax,  and  it  is  within  the 
authority  or  discretion  of  the  foreign  executor,  administrator,  or  trustee  adminis- 
tering the  estate  to  dispose  of  the  property  not  specifically  devised  to  direct 
heirs  or  devisees  in  the  payment  of  the  debts  owing  by  the  decedent  at  the  time 
of  his  death  or  in  the  satisfaction  of  legacies,  devisees,  or  trusts  given  to  direct 
and  collateral  legatees  or  devisees,  or  in  payment  of  the  distributive  shares  of 
any  direct  and  collateral  heirs,  then  the  property  within  the  jurisdiction  of  the 
state,  belonging  to  such  foreign  estate,  shall  be  subject  to  the  inheritance  tax 
imposed  by  this  title,  and  the  tax  due  thereon  shall  be  assessed  as  provided  in 
the  next  preceding  section  of  this  title,  and  with  the  same  proviso  respecting  the 
deduction  of  the  proportionate  share  of  the  indebtedness,  as  therein  provided. 
('05,  p.  208.) 

1220x29.  Id.  —  Tax  on  corporate  stock.  If  a  foreign  executor,  administrator 
or  trustee  shall  assign  or  transfer  any  corporate  stock  or  obligations  in  this  state 
standing  in  t-he  name  of  a  decedent,  or  in  trust  for  a  decedent,  liable  to  such  tax, 
the  tax  shall  be  paid  to  the  state  treasurer  on  or  before  the  transfer  thereof; 


1140  STATUTES  ANNOTATED.  [Utah 

otherwise  the  corporation  permitting  its  stock  to  be  so  transferred  shall  be  liable 
to  pay  such  tax,  and  it  is  the  duty  of  the  state  treasurer  to  enforce  the  payment 
thereof.     ('05,  p.  208.) 

1220x30.  State  treasurer  may  compromise  certain  cases.  Whenever 
an  estate  charged,  or  sought  to  be  charged,  with  the  inheritance  tax,  is  of  such 
a  nature  or  is  so  disposed  that  the  liability  of  the  estate  is  doubtful,  or  the  value 
thereof  cannot  with  reasonable  certainty  be  ascertained  under  the  provisions 
of  law,  the  state  treasurer  may,  with  the  approval  of  the  attorney  general,  which 
approval  shall  set  forth  the  reasons  therefor,  compromise  with  the  beneficiaries 
or  representatives  of  such  estates,  and  compound  the  tax  thereon;  but  said 
settlement  must  be  approved  by  the  district  court  or  judge  of  the  proper  court, 
and  after  such  approval,  the  payment  of  the  amount  of  the  taxes  so  agreed  upon 
shall  discharge  the  lien  against  the  property  of  the  estate.     ('05,  p.  208.) 

1220x31.  Title  applies  to  pending  cases.  This  title  shall  apply  to  all 
pending  estates  which  are  not  closed,  and  the  property  subjected  by  this  title 
to  the  said  tax  is  liable  to  the  provisions  incorporated  in  this  title.  ('05,  p. 
208.) 


I 


Vt.  St.I  VERMONT.  1141 


VERMONT. 


List  of  Statutes. 

1862.     Statutes  of  Vermont,  c.  126,  s.  20. 

1866.  "        "          "         No.21,s.  1. 

1874.  "        "          "         No.  80. 

Revised  Laws,  s.  4524. 

1892.  Statutes  of  Vermont,  No.  47. 

1894.  "  '     "          "         s.  5373. 

1896.  "        "          "         No.  46. 

1904.  "        "          "         No.  30. 

1906.  Public  Statutes,  c.  38,  ss.  821-901. 

1906.  "            "         s.  6313 

1906.  "            "         s.  6319  repealing. 
1904,  No.  30,  and  1896,  No.  46. 

1908.  Statutes  of  Vermont,  No.  31,  ss.  1-3,  pp.  27-28. 

1910.  "         "          "         No.  55. 

1910.  "         "          "         No.  56. 


In  General. 

Vermont  has  long  had  a  system  of  probate  fees  but  its  first  collat- 
eral inheritance  tax  was  enacted  in  1896  and  substantially  amended 
in  1904.  (For  constitutionality  see  Hickok's  Estate,  78  Vt.  259.)  Its 
main  features  are  very  similar  to  the  New  Hampshire  statute.  The 
tax  is  on  collateral  inheritances  only,  the  rate  is  uniformly  five  per 
cent,  and  no  amount  is  exempt.  No  tax  is  levied  on  an  inheritance 
to  father,  mother,  husband,  wife,  lineal  descendant,  stepchild, 
adopted  child,  child  of  stepchild  or  of  adopted  child,  wife  or 
widow  of  son,  husband  of  daughter.  Public  Sts.  c.  38,  ss. 
821-901,  as  amended  by  acts  of  1908,  No.  31,  approved  January 
28,  1909. 

A  bill  for  a  graduated  direct  inheritance  tax  passed  the  House 
of  Representatives  during  the  1910-1911  session,  but  it  failed  to 
pass  the  Senate. 

Vermont  taxes  stock  in  a  Vermont  corporation  or  national  bank 
owned  by  a  non-resident  and,  like  New  Hampshire,  taxes  registered 
bonds  as  well.  It  goes  even  a  step  further  and  makes  a  claim  for 
an  inheritance  tax  where  a  deceased  non-resident  owns  stock  in  a 
corporation  not  incorporated  under  the  laws  of  Vermont,  provided 


1142  STATUTES  ANNOTATED.  [Vt.  St- 

such  foreign  corporation  has  its  principal  office  in  Vermont.  Cor- 
porations and  individuals  transferring  or  delivering  securities,  and 
banks  that  pay  deposits  of  non-residents,  are  made  responsible 
for  the  tax. 

It  is  the  practice  of  the  tax  authorities  to  require  an  inventory 
of  the  entire  property  of  the  deceased,  and  a  copy  of  the  will  before 
permitting  a  Vermont  corporation  to  transfer  securities  owned  by 
a  deceased  non-resident. 

If  any  inheritance  tax  has  been  paid  by  either  a  resident  or  non- 
resident to  any  other  state  or  government,  except  the  United  States, 
on  account  of  the  transfer  of  securities,  bank  deposits  or  other  assets, 
the  Vermont  tax  is  limited  to  an  amount  sufficient  to  make  the 
total  tax  five  per  cent. 

Vermont  does  not  tax  the  bank  deposits  of  a  Vermont  resident 
in  another  state  and  this  would  seem  to  apply  to  securities  outside 
the  state  as  well.    Joyslin's  Estate,  76  Vt.  88. 

Constitutional  Limitations. 

Vermont  Constitution,  1793,  as  amended,  seems  to  contain  no 
restriction  on  the  taxing  power  in  regard  to  uniformity  or  as  to 
inheritance  tax. 

See  Thorpe,  American.  Constitutions,  p.  3762  et  seq. 

The  constitution  of  Vermont,  established  July  9,  1793,  was 
amended  by  bill  of  rights,  article  IX,  "That  every  member  of 
society  hath  a  right  to  be  protected  in  the  enjoyment  of  life,  liberty 
and  property,  and  therefore  is  bound  to  contribute  his  proportion 
towards  the  expence  of  that  protection,  and  yield  his  personal  ser- 
vice, when  necessary,  or  an  equivalent  thereto,  but  no  part  of  any 
person's  property  can  be  justly  taken  from  him,  or  applied  to  pub- 
lic uses,  without  his  own  consent,  or  that  of  the  representative 
body  of  freemen." 

See  notes  to  the  Act  of  1896,  post,  p.  1143. 

Probate  Fees. 

Vt.  St.  1862,  c.  126,  s.  20,  imposes  a  fee  for  the  probate  or  admin- 
istration where  the  estates  do  not  exceed  $150,  one  dollar;  in  all 
Other  estates,  two  dollars;  and  other  fees  for  other  pioceedings  in 
probate.  Probate  fees  in  Vermont  are  also  covered  in  Vt.  St.  1866, 
No.  21,  s.  1;  and  Vt.  St.  1874,  No.  80;  and  Revised  Laws,  s.  4524; 
Vt.  St.  1892,  No.  47;  and  Vt.  St.  1894,  s.  5373. 


1896,  c.  46.]  VERMONT.  1143 

THE  COLLATERAL  INHERITANCE  ACT  OF  1896. 

Vt.  St.  1896,  c.  46.     Approved  November  24,  1896. 

S.  1.  All  property  within  the  jurisdiction  of  this  state,  and  any  interest  therein, 
whether  belonging  to  inhabitants  of  this  state  or  not,  and  whether  tangible  or 
intangible,  which  shall  pass  by  will  or  by  the  intestate  laws  of  this  state,  or  by 
deed,  grant,  sale,  or  gift  made  or  intended  to  take  effect  in  possession  or  enjoy- 
ment after  the  death  of  the  grantor,  to  any  person  in  trust  or  otherwise,  other 
than  to  or  for  the  use  of  the  father,  mother,  husband,  wife,  lineal  descendant, 
adopted  child,  the  lineal  descendant  of  any  adopted  child,  the  wife  or  widow  of 
a  son,  or  the  husband  of  the  daughter  of  a  decedent,  or  to  or  for  charitable,  edu- 
cational or  religious  societies  or  institutions,  the  property  of  which  is  exempt  by 
law  from  taxation,  shall  be  subject  to  a  tax  of  five  per  centum  of  its  value,  for  the 
use  of  the  state,  and  all  administrators,  executors,  and  trustees,  and  any  such 
grantee  under  a  conveyance  made  during  the  grantor's  life  shall  be  liable  for  all 
such  taxes,  with  lawful  interest  as  hereinafter  provided,  until  the  same  shall  have 
been  paid  as  hereinafter  directed;  provided,  however,  that  no  estate  shall  be 
subject  to  the  provisions  of  this  act,  unless  the  value  of  the  same,  after  pay- 
ment of  debts  and  expenses  of  administration  including  money  paid  out  under 
order  of  the  probate  court  for  the  purchase  of  burial  stones,  shall  exceed  the  sum 
of  two  thousand  dollars. 

Equality  of  Tax. 

The  Vermont  constitution  provides  that  every  member  of  society 
is  bound  to  contribute  "his  proportion"  towards  the  expense  of  the 
protection  which  the  state  affords  him.  and  it  was  claimed  that  this 
excludes  all  methods  of  taxation  that  are  not  uniform,  equal  and 
proportionate,  and  that  the  collateral  inheritance  tax  lacked  uni- 
formity. The  court  holds,  however,  that  the  question  is  what 
constitutes  equality  of  apportionment  within  the  meaning  of  this 
provision,  and  in  ascertaining  this  the  basis  of  the  act  in  question 
must  be  considered,  and  that  the  statute  is  not  a  tax  upon  property 
but  a  tax  upon  the  transmission  of  property,  which  is  not  a  natural 
right,  but  a  privilege  accorded  by  the  state.  And  the  court  decides 
that  the  constitutional  requirement  of  proportional  contributions 
was  not  intended  to  restrict  the  state  to  methods  of  taxation  that 
operate  equally  upon  all  its  inhabitants,  regardless  of  the  variety 
and  measure  of  the  advantages  derived  from  its  protection  and  regu- 
lation. A  member  of  the  body  politic  has  from  the  state  not  only 
the  protection  of  his  property,  but  the  privilege  of  taking  property 
by  descent  and  by  will.  It  seems  clear  that  privileges  of  this 
character  as  well  as  property  are  to  be  considered  in  determining 
the  just  proportion  of  the  individual.  In  re  Hickok,  78  Vt.  259, 
62  A.  724. 


1144  STATUTES  ANNOTATED.  [Vt.  St. 

Situs  of  Debts.  —  Nature  of  Tax. 

It  was  agreed  that  the  Vermont  statute  of  1896,  c.  46,  is  a  tax 
upon  the  right  to  succeed  to  estate  left  vacant  by  death  and  is 
imposed  by  the  sovereignty  in  virtue  of  its  authority  to  enforce 
contribution  from  those  who  become  vested  with  property  by  its 
grace  and  power.  This  sovereignty  is  clearly  the  one  which  has  the 
right  to  say  who  shall  succeed  and  that  is  the  sovereignty  in  which 
the  assets  are  located,  which  in  the  case  of  debts  is  placed  where 
the  debtor  resides. 

The  testatrix  died  a  resident  of  Vermont,  leaving  debts  due  to 
her  from  non-residents  of  Vermont ;  and  the  court  holds  that  these 
debts  are  not  to  be  included  in  fixing  the  amount  of  the  estate  sub- 
ject to  an  inheritance  tax  under  this  statute. 

The  act  applies  to  "all  property  within  the  jurisdiction  of  this 
state."  The  court  remarks  that  this  must  mean  within  its  pro- 
bate jurisdiction  and  that  therefore  the  debts  were  not  within  the 
jurisdiction,  for  immediately  upon  the  death  of  the  creditor  they 
became  assets  in  the  jurisdiction  where  the  debtor  resided.  This 
is  well  settled  in  Vermont.  Furthermore  the  statute  applies  only 
to  property  which  "passed  by  will  or  by  the  intestate  laws  of  this 
state."  And  the  court  remarks  that  this  property  did  not 
pass  by  virtue  of  the  Vermont  law  at  all,  for  that  law  had 
no  force  in  the  domicile  of  the  debtors ;  it  passed  by  force  and 
virtue  of  the  law  of  those  jurisdictions.  In  re  Joyslin,  76  Vt. 
'88,  56  A.  281. 

The  court  remarks  that  it  is  aware  that  other  courts  have  reached 
an  opposite  conclusion  and  cites  Frothingham  v.  Shaw,  175  Mass.  59, 
State  V.  Dalrymple,  70  Md.  294,  17  A.  82,  3  L.  R.  A.  372,  In  re  Swift, 
137  N.  Y.  77,  64  Hun  639,  32  N.  E.  1096,  18  L.  R.  A.  709,  19  N.  Y. 
Suppl.  292.  (This  decision  stands  as  an  anomaly  in  the  law.  See 
ante,  p.  172.    It  was  avoided  by  the  act  of  1904,  post,  p.  1145.) 

Exemptions.  —  Construction. 

It  is  a  well  established  general  rule  that  exemptions  from  taxation 
are  strictly  construed,  and  that  no  claim  of  exemption  can  be  sus- 
tained unless  within  the  express  letter  or  necessary  scope  of  the 
exempting  clause.    In  re  Hickok,  78  Vt.  259,  62  A.  724. 

Exemptions.  —Validity. 

It  was  suggested  that  the  law  is  invalid  because  of  the  inequality 
arising  from  the  exemption  of  estates  not  exceeding  two  thousand 


1904,  c.  30.]  VERMONT. 


1145 


dollars  in  value,  but  the  Vermont  constitution  does  not  pre- 
vent the  making  of  exemptions.  In  re  Hickok,  78  Vt.  259  265 
62  A.  724. 

Vt.  St.  1896,  c.  46,  ss.  2-16,  cover  the  appraisal  of  the  estate  and  the  determina- 
tion and  collection  of  the  tax. 

THE  AMENDMENT  OF   1904. 

Vt.  St.  1904,  c.  30,  8.  1.  Every  person  other  than  the  father,  mother,  hus 
band,  wife,  lineal  descendant,  adopted  child,  lineal  descendant  of  an  adopted 
child,  the  wife  or  widow  of  a  son,  the  husband  of  the  daughter  of  a  decedent 
or  a  city  or  town  for  cemetery  purposes;  and  every  charitable,  educational  or 
religious  society  or  institution  other  than  such  as  are  created  and  existing  under 
and  by  virtue  of  the  laws  of  this  state  and  having  its  principal  office  herein,  that 
shall  receive  in  trust  or  otherwise  any  legacy  or  distributive  share  comprised  of 
or  arising  from  property  or  any  interest  therein  passing  by  will,  the  law  of  descent 
or  the  decree  of  a  court  in  this  state,  from  any  deceased  person  who  owned  such 
property  at  the  date  of  his  decease  shall,  except  as  herein  otherwise  provided,  be 
subject  to  a  tax  for  the  use  of  the  state  equal  to  five  per  cent  of  the  value  in  money 
of  such  legacy  or  distributive  share. 

"The  Decree  of  a  Court  in  This  State." 

After  the  decision  in  In  re  Joyslin,  76  Vt.  88,  56  A.  281,  the  legis- 
lature passed  Vermont  statute  of  1904,  c.  30,  which  changed  the 
phraseology  of  the  earlier  act,  which  included  only  property  which 
passed  by  will  or  by  the  intestate  laws  of  the  state,  to  include  also 
property  which  shall  pass  by  "the  decree  of  the  court  of  this  state." 

Where  the  record  does  not  show  that  any  administration  was  had 
in  the  foreign  jurisdiction,  and  that  the  several  sums  due  from  for- 
eign debtors  were  collected  by  the  administrator  appointed  in  Ver- 
mont, and  the  proceeds  brought  here,  where  they  formed  a  part 
of  the  assets  which  passed  by  the  final  decree  of  the  probate  court, 
such  assets  are  subject  to  tax. 

It  was  argued  that  in  Vermont  statute  1904,  c.  30,  s.  81  ("shall 
also  apply  to  all  persons  who  deceased  prior  to  the  enactment 
hereof")  the  word  "persons"  had  reference  to  those  who  re- 
ceived the  property,  not  those  from  whom  it  passes.  But  the  court 
refused  the  suggestion,  saying  it  would  lead  to  an  absurd  result. 
In  view  of  the  settled  law  that  the  inheritance  tax  is  not  a  tax  on 
property,  but  on  the  transmission  of  property,  it  can  make  no 
difference  with  the  tax  whether  the  legatee  or  distributee  be  alive 
or  dead.     In  re  Howard,  80  Vt.  489,  495,  68  A.  513 

Vt.  St.  1904,  c.  30,  s.  2.  Every  person  other  than  such  as  are  exempted  in 
the  preceding  section  from  the  payment  of  the  taxes  imposed  by  this  act  who  shall 


1146  STATUTES  ANNOTATED.  [Vt.  St. 

acquire  title  to  real  estate  or  any  interest  therein  by  voluntary  conveyance  or 
deed  of  gift  made  or  intended  to  take  effect  in  possession  or  enjoyment  upon  or 
after  the  death  of  the  grantor,  or  who  shall  by  voluntary  conveyance  or  by  gift 
acquire  title  to  personal  estate  or  any  interest  therein  made  or  intended  to  take 
effect  and  possession  or  enjoyment  upon  or  after  the  death  of  the  grantor  or 
donor,  shall  pay  to  the  state  a  tax  of  five  per  centum  of  the  value  in  money  of 
such  real  or  personal  estate  or  the  interest  therein  conveyed.  Such  tax  shall 
be  a  first  lien  on  the  real  or  personal  estate  thus  conveyed  or  given  until  such 
tax  shall  have  been  paid  in  full. 

Vt.  St.  1904,  c.  30,  ss.  3  and  4,  provide  for  the  deduction  of  taxes  lawfully  paid 
to  other  states. 

Vt.  St.  1904,  c.  30,  s.  5,  exempts  bequests  to  maintain  burial  lots. 

Vt.  St.  1904,  c.  30,  ss.  6-54,  provide  for  the  fixing  of  the  tax  and  its  collection. 

S.  81.  Application  to  estates  in  litigation.  The  first  seventy-nine  sec- 
tions of  this  act  in  so  far  as  they  shall  pertain  to  a  tax  imposed  by  this  act  upon 
a  person,  corporation,  society  or  institution  that  shall  in  any  manner  hereinbefore 
provided  receive  property  or  any  interest  therein  passing  from  a  deceased  person, 
shall  also  apply  to  all  persons  who  deceased  prior  to  the  enactment  hereof  but 
whose  estates  shall  not  have  been  at  the  date  of  such  enactment  decreed  or  dis- 
tributed; provided,  however,  that  if  any  part  of  an  estate  has  been  lawfully  paid 
or  decreed  prior  to  the  enactment  hereof  such  part  so  paid  or  decreed  shall  not 
be  affected  by  this  act,  and  further  provided  that  said  last  named  section  shall 
not  in  any  manner  apply  to  an  act  done  or  performed  prior  to  the  enactment 
hereof  for  which  a  penalty  u  therein  provided. 

Effect  on  Prior  Law. 

The  testator  died  June  1,  1904,  and  Vermont  statute  1904, 
c.  30,  took  effect  December  9,  1904.  It  was  claimed  that  the  estate 
was  not  affected  by  the  statute  of  1904,  but  the  court  says  that  so 
far  as  the  provisions  of  the  two  acts  are  the  same  or  similar,  the 
later  act  is  to  be  construed  as  a  continuance  of  the  other,  and  all 
acts  or  parts  of  acts  inconsistent  with  the  provisions  of  the  later 
act  were  repealed.  But  such  repeal  was  not  to  affect  the  validity 
of  a  tax  accrued  or  accruing  at  the  time  of  the  enactment  thereof. 

But  the  court  says  that  since  the  law  of  1896  did  not  include 
debts  due  from  non-residents,  the  tax  here  in  controversy  was  not 
accrued  nor  was  it  accruing  before  the  provisions  of  the  new  act, 
including  such  debts,  took  effect,  and  therefore  the  estate  was  sub- 
ject to  the  statute  of  1904.    In  re  Howard,  80  Vt.  489,  68  A.  513. 

^       THE  PUBLIC  STATUTES  AND  AMENDMENTS. 

Vt.  Public  St.  of  1906,  c.  38,  codifies  the  existing  law. 
Vt.  Public  St.  1906,  s.  6319,  repealed  Vt.  St.  1896,  No.  46,  and 
1904,  No.  30. 


1906.  c.  38.1  VERMONT.  II47 

Vt.  St.  1908,  No.  31,  approved  January  28,  1909,  amends  Public 
St.  ss.  822,  824,  857. 

Vt.  St.  1908,  No.  31,  s.  4,  provides  that  no  reductions  in  the 
account  of  debts  and  expenses  of  administration  shall  be  made 
except  such  debts  and  expenses  have  been  allowed  by  the  court 
having  jurisdiction  of  the  estate. 

Vt.  St.  1910,  No.  55,  approved  January  28,  1911,  amends  Public 
St.  ss.  822,  876,  878,  879. 

Vt.  St.  1910,  No.  56,  approved  January  27,  1911,  amends  Public 
St.  s.  833. 


THE  PRESENT  ACT. 

Public  Statutes  of  1906,  c.  38,  as  Amended. 

S.  821.  Definitions.  The  word  "legatee,"  when  used  in  this  chapter,  shall 
extend  to  and  include  any  devisee  or  distributee  named  in  a  will;  the  word 
"legacy,"  all  devises  and  bequests;  and  the  words  "share"  or  "distributive  share," 
all  real  or  personal  property  or  any  interest  therein  passing  under  the  laws  of 
descent  or  the  intestate  laws  of  this  state,  or  any  other  state  or  government; 
provided  that  such  construction  shall  not  be  required,  if  the  same  would  thereby 
be  repugnant  to  the  manifest  intention  of  the  general  assembly. 

S.  822.  Taxable  transfers.  Every  person  other  than  the  father,  mother, 
husband,  wife,  lineal  descendant,  the  wife  or  widow  of  a  son,  the  husband  of  a 
daughter,  a  stepchild,  a  child  adopted  as  such  during  his  minority  in  conformity 
with  the  laws  of  this  state,  a  child  of  a  stepchild  or  of  such  adopted  child,  bishop 
in  his  ecclesiastical  capacity  for  religious  uses  within  this  state,  or  a  city  or  town 
for  cemetery  purposes;  and  every  charitable,  educational  or  religious  society 
or  institution  other  than  one  created  and  existing  under  and  by  virtue  of  the 
laws  of  this  state  and  having  its  principal  office  herein,  that  shall  receive  in  trust 
or  otherwise  a  legacy  or  distributive  share  consisting  of  or  arising  from  property 
or  an  interest  therein  passing  by  will,  the  law  of  descent  or  the  decree  of  a  court 
in  this  state,  from  a  deceased  person  who  owned  such  property  at  the  date  of  his 
decease,  shall,  except  as  otherwise  provided  in  this  chapter,  pay  to  the  state  a 
tax  of  five  per  cent  of  the  value  in  money  of  such  legacy  or  distributive  share. 
(As  amended  by  St.  1908,  c.  31,  s.  1,  and  St.  1910,  c.  55,  s.  1.) 

[See  notes  to  the  Acts  of  1896  and  1904,  ante,  pp.  1143,  1145.] 

S.  823.  Transfers  to  take  effect  on  death.  Every  person,  unless  one  of 
a  class  exempted  in  the  preceding  section,  who  acquires  title  to  real  or  personal 
estate  or  any  interest  therein  by  voluntary  conveyance  or  gift  made  or  intended 
to  take  effect  in  possession  or  enjoyment  upon  or  after  the  death  of  the  grantor 
or  donor,  shall  pay  to  the  state  a  tax  of  five  per  cent  of  the  value  in  money  of 
such  real  or  personal  estate,  or  the  interest  therein  conveyed.  Such  tax  shall 
be  a  first  lien  on  the  real  or  personal  estate  thus  conveyed  or  given,  until  such 
tax  is  paid  in  full. 


1148  STATUTES  ANNOTATED.  [Vt.  St. 

Foreign  Taxes  Deducted. 

S.  824.  General  provisions.  If  a  transfer  or  other  similar  tax  has  been  law- 
fully paid  to  another  state  or  to  a  government  other  than  the  United  States, 
for  or  on  account  of  an  assignment  or  transfer  of  stocks,  obligations,  securities 
or  other  evidences  of  indebtedness,  or  for  or  on  account  of  the  collection,  delivery 
or  assignment  of  securities,  deposits  or  other  assets,  and  such  stocks,  obligations, 
securities,  other  evidences  of  indebtedness,  deposits  or  assets,  or  the  proceeds 
thereof,  shall  in  whole  or  in  part  be  included  in  any  legacy  or  distributive  share 
decreed  subsequent  to  the  ninth  day  of  December,  1904^  by  a  probate  court  of 
this  state  to  a  legatee  or  heir  liable  to  the  tax  imposed  by  section  eight  hundred 
twenty-two,  such  legatee  or  heir  shall  be  liable  to  pay  to  this  state  under  the 
provisions  of  said  section  only  such  part  of  the  tax  therein  imposed  as  will  make 
the  entire  tax  both  within  and  without  this  state,  based  on  such  portion  of  a 
legacy  or  distributive  share  taxed  in  such  other  state  or  government,  equal  to 
five  per  cent  of  the  total  value  thereof,  to  be  determined  as  provided  in  this 
chapter.     (As  amended  by  St.  1908,  c.  31.) 

Discount. 

The  tax  was  assessed  in  the  state  of  New  York  on  certain  New 
York  property  and  the  estate  paid  the  tax  within  six  months,  and 
therefore  obtained  a  rebate  of  five  per  cent.  The  court  holds  that 
the  estate  can  deduct  before  paying  the  Vermont  tax  only  what  had 
been  actually  paid  in  New  York  and  not  the  New  York  tax  as 
assessed.    In  re  Meadon,  81  Vt.  490,  70  A.  1064. 

S.  825.  Official  receipt  required.  No  rebate  from  the  full  amount  of  the 
tax  required  by  the  third  preceding  section  shall  be  allowed  by  the  probate 
court  under  the  provisions  of  the  preceding  section,  unless  an  official  receipt  or 
other  competent  evidence,  showing  the  amount  so  paid  to  such  other  state  or 
government,  the  date  of  payment,  the  rate,  the  valuation  of  the  property  upon 
which  such  tax  was  computed  and  a  brief  description  thereof,  is  presented  to 
the  probate  court. 

[This  section  refers  to  section  824.] 

S.  826.  Bequests  to  Maintain  Burial  Lots  Exempt.  Towns,  cities, 
villages,  trustees,  officials  therein  and  official  boards,  corporations,  associations 
and  persons  that  receive  a  legacy  in  trust  or  otherwise,  the  use,  income  or  prin- 
cipal sum  of  which  is  to  be  used  for  the  sole  purpose  of  purchasing,  maintain- 
ing, caring  for  or  beautifying  a  burial  lot  owned  by  the  decedent,  or  wherein 
he  or  any  of  his  kin  shall  be  interred,  or  for  the  sole  purpose  of  erecting,  caring 
for  or  maintaining  a  monument  or  other  structure  thereon,  shall  be  exempt 
from  the  payment  of  taxes  imposed  by  this  chapter. 

Taxes,  How  Made  Payable. 

S.  827.  Administrator,  etc.,  to  .deduct.  An  administrator,  executor  or 
trustee  having  in  charge  or  in  trust  a  legacy  or  distributive  share  passing  to  a 
legatee  or  heir  liable  to  a  tax  imposed  by  this  chapter,  shall,  before  paying  or 
delivering  the  same  to  such  legatee  or  heir,  deduct  the  tax  therefrom  or  collect  it 
from  such  legatee  or  heir. 


1906,  c.  38.]  VERMONT.  1149 

S.  828.  Sale  of  legacy  for  tax.  In  case  the  tax  cannot  be  deducted  there- 
from and  the  legatee  or  heir  neglects  or  refuses  to  pay  such  tax,  the  probate 
court  may,  in  the  same  manner  as  administrators  and  executors  are  licensed  to 
sell  real  and  personal  estate  for  the  payment  of  debts,  license  such  administrator, 
executor  or  trustee  to  sell  a  part  or  all  of  a  legacy  or  distributive  share  belong- 
ing to  a  person  liable  to  a  tax  imposed  by  this  chapter,  for  the  payment  of  such 
tax. 

S.  829.  Legacy  delivered  when  tax  is  paid;  lien.  An  administrator, 
executor  or  trustee  shall  not  deliver  any  specific  legacy,  property  or  the  proceeds 
thereof  to  any  legatee  or  heir  liable  to  such  tax,  until  such  tax  has  been  deducted 
or  collected  as  aforesaid.  Conveyances,  mortgages,  attachments,  sales  or  assign- 
ments of  such  legacy,  share,  the  proceeds  thereof,  or  any  interest  therein,  shall  be 
subject  to  the  taxes  imposed  by  this  chapter;  and  such  taxes  shall  be  a  lien 
on  such  legacies,  distributive  shares  and  the  proceeds  thereof,  until  the  same  are 
fully  paid. 

S.  830.  Liability  for  tax;  collection;  report.  A  person  having  in  charge 
or  in  trust  as  administrator,  executor  or  trustee,  a  legacy  or  distributive  share 
passing  to  a  person  in  the  manner  mentioned  in  section  eight  hundred  and  twenty- 
two,  shall  be  liable  for  the  taxes  imposed  by  this  chapter,  with  interest  as  here- 
inafter provided,  until  the  same  are  fully  paid.  The  administrator,  executor 
or  trustee  shall  collect  the  tax  due  the  state  from  a  person  to  whom  real  estate 
passes  in  the  manner  mentioned  in  such  section  from  the  decedent  of  whose 
estate  he  is  administrator,  executor  or  trustee;  but  if  such  administrator,  execu- 
tor or  trustee  is  unable  to  collect  such  tax  before  his  final  account  is  allowed,  he 
shall  make  a  full  and  detailed  report  to  the  commissioner  of  state  taxes,  showing 
the  names  of  the  persons  liable  to  such  unpaid  tax  and  a  description  of  the  real 
estate  on  account  of  which  such  tax  is  due. 

Legacy,  When  Made  a  Charge  upon  Property. 

S.  831.  Tax  to  be  deducted  from  legacy;  lien;  payment.  When  a 
legacy  passing  to  a  legatee  liable  to  such  tax  is  charged  upon  or  payable  out 
of  any  real  or  personal  estate  devised  to  any  person,  said  person  shall,  before 
paying  such  legacy,  deduct  such  tax  therefrom  and  pay  it  to  the  administrator, 
executor  or  trustee  of  the  estate  of  which  such  real  and  personal  estate  is  a  part. 
Such  tax  shall  be  a  lien  upon  such  real  or  personal  estate,  until  the  same  is  paid. 
Payment  thereof  may  be  enforced  by  the  administrator,  executor  or  trustee  in 
the  manner  provided  in  the  third  preceding  section. 

Probate  Court  Proceedings. 

S.  832.  Final  settlement  of  account  of  an  administrator,  etc.  A  final 
settlement  of  the  account  of  an  administrator,  executor  or  trustee  shall  not  be 
allowed  by  a  probate  court,  unless  such  account  shall  show  and  said  court  shall 
find  that  ihe  taxes  imposed  by  the  provisions  of  this  chapter  are  paid,  and  that 
one  of  the  triplicate  receipts  issued  by  the  state  treasurer  therefor  is  filed  in  said 
probate  court. 

S.  833.  Jurisdiction  of  probate  court.  1.  The  probate  court  having 
either  principal  or  ancillary  jurisdiction  of  the  settlement  of  the  estate  of  a 


1150  STATUTES  ANNOTATED.  [Vt.  St. 

decedent  shall,  except  as  otherwise  provided  in  this  chapter,  hear  and  determine 
all  questions  relating  to  the  taxes  hereby  imposed  and  t'he  value  of  all  legacies 
and  distributive  shares  upon  which  such  taxes  are  computed. 

2.  In  case  it  shall  be  made  to  appear  to  a  probate  court  that  the  amount 
of  a  tax  heretofore  or  hereafter  fixed  by  it  is  less  than  or  in  excess  of  the  amount 
imposed  by  the  provisions  of  this  chapter,  it  may  in  its  discretion  upon  applica- 
tion of  said  commissioner  or  of  the  administrator  or  executor  of  the  estate  mak- 
ing such  payment,  and  upon  reasonable  notice  in  writing  thereto,  determine 
the  amount  which  should  have  been  thus  imposed  and  accordingly  modify  or 
amend  its  decree  therefore  made.     (As  amended  by  St.  1910,  c.  56.) 

Appeals. 

S.  834.  Who  may  appeal.  A  legatee,  heir  or  beneficiary  affected  by  a  decree 
of  the  probate  court  respecting  the  taxes  imposed  by  this  chapter,  the  adminis- 
trator, executor  or  trustee  of  an  estate  of  which  a  legacy  or  distributive  share  pass- 
ing to  a  person  liable  to  the  taxes  imposed  is  a  part,  and  the  commissioner  of 
state  taxes  in  behalf  of  the  state,  may  appeal  to  the  county  court  from  such  orders 
and  decrees  of  said  probate  court. 

Proceedings  in  Supreme  Court. 

S.  835.  Probate  court  to  certify  finding  and  decree.  Whenever  the 
legal  construction  of  a  part  of  this  chapter  is  in  dispute  and  the  facts  relating 
thereto  have  been  determined  by  the  probate  court  wherein  the  estate  is  being 
administered,  the  judge  of  such  court  shall,  if  no  appeal  is  taken,  upon  the  written 
application  of  the  administrator,  executor  or  trustee  of  such  estate  and  the 
commissioner  of  state  taxes,  filed  therein  before  the  time  for  an  appeal  has  ex- 
pired, certify  to  the  supreme  cburt  such  part  of  its  finding  and  decree  as  relates 
to  such  construction,  together  with  the  contentions  of  the  parties  relating  thereto, 
which  shall  be  filed  with  such  application. 

S.  836.  Certificate;  hearing;  judgment.  Such  certificate  shall  be  placed 
on  file  in  the  office  of  the  clerk  of  the  county  wherein  such  probate  district  is 
located,  on  or  before  twenty-five  days  from  the  date  of  such  finding  or  decree; 
and  thereupon  the  supreme  court  shall  have  jurisdiction  of  all  questions  of  law 
presented  thereby;  and  the  same  shall  be  heard  and  determined,  as  if  the  cause 
had  been  passed  to  said  court  upon  the  pro  forma  judgment  of  a  county  cour 
to  which  such  cause  might  have  been  appealed.  The  final  decision  and  judgment 
therein  shall  be  certified  to  the  probate  court  in  the  same  manner  and  with  the 
same  legal  effect  as  provided  in  section  two  thousand  nine  hundred  and  eighty- 
eight. 

Costs. 

S.  837.  Orders.  In  proceedings  therein,  involving  questions  of  taxation  under 
thp  provisions  of  this  chapter,  the  county  or  supreme  court  shall,  upon  final 
hearing,  make  such  orders  respecting'  the  payment  of  costs  as,  in  the  opinion 
of  said  court,  are  just  and  equitable.  The  auditor  of  accounts  shall  draw  an 
order  for  the  costs  to  be  paid  by  the  state,  upon  receipt  of  a  bill  thereof  signed 
by  the  person  taxing  the 


1906,  c.  38.]  VERMONT.  1151 

Valuation  by  Probate  Court. 

S.  838.  Determination  upon  application;  notice.  The  probate  court 
having  jurisdiction  of  an  estate  may,  at  any  time,  or  upon  the  application  of  the 
commissioner  of  state  taxes  or  a  legatee,  heir,  administrator,  executor  or  trustee 
of  such  estate,  determine,  so  far  as  possible,  the  value  of  all  legacies  and  dis- 
tributive shares  passing  to  persons  who  are  liable  to  the  tax  imposed  by  this 
chapter,  and  the  amount  of  taxes  due  therefrom.  Notice  of  such  application 
and  of  the  time  and  place  of  the  hearing  shall  be  given  in  the  same  manner  as  in 
case  of  the  settlement  of  accounts  by  administrators  and  executors. 

S.  839.  Notice  as  to  findings  and  decrees.  Said  probate  court  shall  notify 
the  commissioner  of  state  taxes  in  writing,  upon  blanks  to  be  furnished  by  him 
for  that  purpose,.of  its  findings  and  decrees  respecting  the  matter  specified  in  the 
preceding  section,  and  the  date  on  which  such  decree  was  made. 

S.  840.  How  determined.  The  value  of  a  legacy  or  distributive  share  men- 
tioned in  section  eight  hundred  and  twenty-two,  except  as  otherwise  provided  in 
this  chapter,  shall  be  its  actual  market  value  in  money  at  the  expiration  of  one 
year  from  the  death  of  the  decedent;  but  if  such  legacy  or  share  is  sooner  paid  or 
delivered,  the  valuation  thereof  shall  be  determined  as  of  the  date  at  which  the 
person  entitled  to  the  same  comes  into  or  is  entitled  to  the  possession  or  the  ben- 
eficial use  thereof. 

S.  841.     Same.     The  value  of  property  passing  by  voluntary  conveyance  or 
gift  mentioned  in  section  eight  hundred  and  twenty-three,  except  as  otherwise 
provided  in  this  chapter,  shall  be  its  market  value  in  money  at  the  date  the  per- 
son entitled  to  the  same  comes  into  or  is  entitled  to  the  possession  or  the  bene- 
I       ficial  use  thereof. 

Valuation  by  Appraisers. 

S.  842.  'Appraisers.  Upon  the  written  application  signed  by  the  com- 
missioner of  state  taxes,  or  by  a  legatee  or  heir  liable  to  a  tax  on  account  of  a 
legacy  or  distributive  share  passing  to  him  in  the  manner  designated  in  section 
eight  hundred  and  twenty-two,  or  by  the  administrator,  executor  or  trustee  of 
an  estate  of  which  such  legacy  or  share  is  a  part,  or  by  the  grantee  or  donee  of 
property  passing  in  the  manner  designated  in  section  eight  hundred  and  twenty- 
three,  the  probate  court  wherein  such  estate  is  being  administered  or  for  the 
district  where  a  part  of  the  property  passing  in  the  manner  designated  in  section 
eight  hundred  and  twenty-three  is  situated,  if  no  letters  of  administration  have 
been  granted  upon  the  estate  of  the  grantor  or  donor  therein  mentioned,  or  for 
any  district  wherein  a  corporation  mentioned  in  section  eight  hundred  and 
seventy-six,  or  a  savings  bank  or  trust  company  or  any  corporation  having 
securities  or  assets  mentioned  in  section  eight  hundred  and  seventy-eight  has  its 
principal  place  of  business  in  this  state,  or  within  which  a  person  holding  such 
assets  or  securities  resides,  may,  in  its  discretion,  appoint  not  more  than  three 
disinterested  persons,  to  determine,  upon  hearing  or  otherwise,  the  value  of 
all  or  a  part  of  the  real  estate  or  personal  property,  or  of  an  interest  therein, 
ing  to  a  person  liable  to  a  tax  imposed  by  this  chapter. 


1152  STATUTES  ANNOTATED.  [Vt.  St. 

S.  843.  Warrant  to  appraisers.  Said  probate  court  shall  issue  a  warrant 
to  said  appraisers  and  shall  therein  designate  what  part  of  such  real  and  per- 
sonal property,  or  interest  therein,  shall  be  appraised  by  them,  and  shall  therein 
fix  the  time  within  which  such  warrant  shall  be  returnable  to  said  court. 

S.  844.  Oath;  notice.  Said  appraisers  shall,  before  entering  upon  the  per- 
formance of  their  duties,  be  duly  sworn  and  shall  give  such  notice  to  the  parties 
as  said  probate  court  orders. 

S.  845.  Authority.  An  appraiser  shall  have  the  same  authority  to  compel 
the-  attendance  of  witnesses,  and  to  administer  oaths  thereto,  that  judges  of 
probate  have. 

S.  846.  Returns;  proceedings.  Said  appraisers  shall  make  returns  of  their 
findings  to  the  probate  court  within  the  time  mentioned  in  such  warrant;  and 
said  probate  court  may,  in  its  discretion,  accept  or  reject  a  part  or  all  of  such 
findings.  If  such  report  is  rejected,  the  probate  court  may  appoint  new  ap- 
praisers to  determine  such  valuation,  or  it  may  determine  such  valuation  upon 
hearing. 

S.  847.  Fees.  The  fees  of  said  appraisers  shall  be  fixed  by  the  probate  court 
and  shall  be  paid  by  the  administrator,  executor  or  trustee  of  the  estate,  if  the 
property  so  appraised  is  a  part  or  all  of  an  estate  in  which  letters  of  administra- 
tion have  been  granted  within  this  state.  In  case  no  letters  of  administration 
have  been  granted,  the  fees  of  said  appraisers,  when  fixed  as  aforesaid,  shall  be 
paid  by  an  order  drawn  by  the  auditor  of  accounts. 

Valuation  by  Agreement. 

S.  848.  How  made.  Whenever  it  is  necessary  under  the  provisions  of  this 
chapter  to  establish  the  value  of  property  or  an  interest  therein,  the  commis- 
sioner of  state  taxes  may  agree  upon  such  valuation  with  the  administrator, 
executor  or  trustee  of  an  estate  of  which  such  property  is  a  part.  This  section 
shall  apply  to  any  agreement  made  with  a  foreign  administrator,  executor  or 
trustee. 

S.  849.  Agreement  to  be  in  writing,  when.  In  cases  where  the  valuation. 
of  a  part  or  all  of  the  property  mentioned  in  the  preceding  section  or  for  any 
interest  therein  has  been  established  by  agreement  pursuant  to  the  preceding 
section,  the  commissioner  of  state  taxes  and  said  administrator,  executor  or 
trustee  shall  cause  such  agreement  to  be  written,  and  specify  therein  the  various 
items  of  property  and  the  value  of  each  item. 

S.  850.  Agreement  to  be  filed  where.  One  copy  of  the  agreement  specified 
in  the  preceding  section  shall  be  filed  in  the  office  of  the  commissioner  of  state 
taxes,  one  with  the  state  treasurer,  and  one  in  the  probate  court,  if  any,  having 
jurisdiction  of  such  estate  within  this  state.  In  case  a  foreign  administrator, 
ej^ecutor  or  trustee  is  a  party  to  such  agreement,  one  copy  thereof  shall  be  deliv- 
ered to  him. 

S.  851.  Agreement  may  be  set  aside.  The  probate  court  shall  have  power 
to  affirm  or  set  aside  the  agreement  mentioned  in  the  three  preceding  sections, 


1906,  c.  38.1  VERMONT.  1153 

in  all  estates  within  its  jurisdiction;  and  the  state  treasurer  may,  in  his  discretion, 
set  aside  any  such  agreed  statement  of  valuation  to  which  a  foreign  adminis- 
trator, executor  or  trustee  is  a  party,  if  he  is  satisfied  that  the  interests  of  the 
state  so  require. 

S.  852.  Same.  If  the  agreed  statement  of  valuation  hereinbefore  mentioned 
is  set  aside  for  any  cause,  the  value  of  such  propertv  shall  be  determined  as 
hereinbefore  otherwise  provid 

Valuation  of  Life  Estate. 

S.  853.  How  determined.  When  it  becomes  necessary  for  the  purpose  of 
computing  a  tax  imposed  by  this  chapter  to  determine  the  value  at  the  time  such 
tax  accrues  of  an  interest  in  property  arising  from  the  bequest  or  devise  of  the 
use  or  income  thereof  for  the  term  of  an  individual  life  or  lives,  or  involving  the 
contingency  of  the  duration  of  such  life  or  lives,  it  shall  be  determined  according 
to  the  "American  Experience  Table  of  Mortality,"  with  interest  at  the  rate  of 
three  and  one-half  per  cent  per  annum. 

S.  854.  Same.  When  it  becomes  necessary  for  the  purpose  of  computing 
a  tax  imposed  by  this  chapter  to  determine  the  value  at  the  time  such  tax  accrues 
of  an  annuity  or  ah  interest  in  property  arising  from  the  bequest  or  devise  for  the 
use  or  income  thereof  for  a  term  of  years  or  for  a  period  in  which  the  life  duration 
or  life  contingency  is  not  involved,  the  value  shall  be  determined  by  discount 
tables  computed  at  the  rate  of  three  and  one-half  per  cent  per  annum. 

S.  855.  Duties  to  probate  court.  In  making  the  computation  specified  in 
the  two  preceding  sections,  the  probate  court  shall  determine  the  amount  of 
such  yearly  income,  whether  for  life  or  for  a  term  of  years,  or  the  probable  aver- 
age annual  value  of  the  use  or  income  of  such  estate  for  life  or  for  a  term  of  years. 

S.  856.  Duties  of  commissioner  of  state  taxes.  The  commissioner  of- 
state  taxes  shall  procure  suitable  tables  for  the  purposes  of  this  chapter  and 
may  cause  the  same  or  a  part  thereof  to  be  printed  in  convenient  form  with 
propei  explanation  for  the  use  of  the  probate  courts  within  this  state,  and  such 
tables  shall  be  used  in  computing  the  value  of  yearly  incomes  or  life  estates  men- 
tioned in  this  chapter.  The  auditor  of  accounts  shall  draw  his  order  to  defray 
the  expenses  incurred  under  this  section. 

S.  857.  Whenever  a  person  bequeaths  or  devises  the  use  of  property  for  the 
term  of  a  natural  life  or  lives,  or  for  a  term  of  years,  or  gives  or  conveys  such  use 
in  the  manner  provided  in  section  eight  hundred  twenty-three,  to  or  for  the  use 
of  any  person,  society,  institution  or  corporation  exempt  from  the  payment  of  a 
tax  imposed  by  this  chapter,  and  bequeaths,  devises,  gives  or  conveys  the  re- 
mainder to  a  person,  society,  institution  or  corporation  subject  to  the  taxes 
hereinbefore  imposed,  the  value  of  the  prior  estate  shall,  in  the  manner  herein- 
before provided,  be  deducted  from  the  appraised  value  of  such  property;  and 
the  person  entitled  to  such  remainder  shall  be  liable  to  the  tax  imposed  by  this 
chapter.  Such  tax  shall  become  due  and  payable  at  the  same  time  that  a  tax 
would  become  due  and  payable,  if  the  entire  property,  instead  of  a  remainder 
therein,  had  passed  to  the  person  receiving  such  remainder.  (As  amended  by 
St.  1908,  c.  31.) 


1154  STATUTES  ANNOTATED.  [Vt.  St. 

Legacy  to  an  Executor. 

S.  858.  Liable  to  tax,  when.  When  a  decedent  appoints  one  or  more  execu- 
tors or  trustees  and,  in  lieu  of  their  compensation,  makes  a  bequest  or  devise  of 
property  to  them  which  would  otherwise  be  liable  to  a  tax  imposed  by  this  chap- 
ter, or  appoints  them  his  residuary  legatees,  and  such  bequests,  devises  or  residu- 
ary legacies  exceed  what  would  be  a  reasonable  compensation  for  their  services, 
such  excess  shall  be  liable  to  the  taxes  imposed  by  this  chapter.  The  probate 
court  having  jurisdiction  of  their  accounts  shall  determine  what  would  have  been 
such  reasonable  compensation,  and  the  amount  of  such  excess,  if  any. 

Receipts  on  Payment  of  Taxes. 

S.  859.  State  treasurer  to  issue;  filing.  The  state  treasurer  shall,  upon 
receiving  the  amount  of  a  tax  under  the  provisions  of  this  chapter,  issue  receipts 
in  triplicate  to  the  person  paying  the  tax,  who  shall  forthwith  file  one  copy  thereof 
with  the  auditor  of  accounts,  one  with  the  commissioner  of  state  taxes  and  one 
with  the  probate  court  wherein  the  estate  is  administered;  provided  that  the 
person  paying  such  tax  upon  property  passing  in  any  other  manner  than  that 
described  in  section  eight  hundred  and  twenty-two  may  retain  one  copy  of  sucn 
receipt  instead  of  filing  the  same  with  the  probate  court. 

Method  of  Refunding  Taxes. 

S.  860.  Duties  of  commissioner  of  state  taxes.  Whenever  the  state  treas- 
urer has  received  money  on  account  of  a  tax  imposed  by  this  chapter  in  excess 
of  the  amount  finally  fixed  by  a  court  having  jurisdiction  thereof,  or  in  excess 
of  the  amount  otherwise  determined  under  the  provisions  of  this  chapter,  the 
commissioner  of  state  taxeajnay  certify  the  amount  of  such  excess  and  the  name 
of  the  person  entitled  thereto  to  the  auditor  of  accounts,  who  shall  thereupon 
draw  an  order  for  such  excess,  in  favor  of  the  person  designated  in  such  certificate. 
Said  commissioner  shall  execute  such  certificate  in  quadruplicate  and  shall 
deliver  one  copy  thereof  to  the  person  entitled  to  such  rebate,  file  one  with  the 
state  treasurer  and  one  with  the  auditor  of  accounts  and  retain  one  for  his  own 
files. 

Time  of  Payment  of  Taxes. 

S.  861.  Generally.  Taxes  imposed  by  this  chapter,  unless  otherwise  pro- 
vided, shall  be  payable  to  the  state  treasurer  on  or  before  the  expiration  of  two 
years  from  the  date  of  the  death  of  the  decedent. 

S.  862.  On  legacies  or  distributive  shares.  When  legacies  or  distributive 
shares  are  delivered  or  paid  within  such  two  years  to  a  legatee  or  heir,  the  taxes 
due  on  account  of  such  legacies  or  shares  shall  be  paid  to  the  state  treasurer  at 
the  time  such  legacies  or  shares  are  paid  or  delivered. 

^  S.  863.  Probate  court  may  extend.  A  probate  court  administering  an 
estate  may  extend  the  time  within' which  a  tax  imposed  by  this  chapter  shall  be 
due  and  payable,  whenever  the  circumstances  of  the  case  so  require. 

S.  864.  Same.  If,  for  any  reason,  said  probate  court  shall,  at  any  time,  be 
unable  to  determine  the  value  of  a  part  or  all  of  such  legacies  or  snares,  or  the 


1906,  c.  38.]  VERMONT.  1155 

amount  of  a  part  or  all  of  a  tax  due  the  state  thereon,  it  shall,  from  time  to  time, 
extend  the  time  within  which  such  taxes  shall  become  due  and  payable. 

S.  865.  Same.  Whenever  the  probate  court  extends  the  time  for  assessment 
and  payment  of  a  tax  imposed  by  this  chapter,  it  shall  make  a  record  thereof  and 
shall  forthwith  file  with  the  commissioner  of  state  taxes  a  statement  showing  the 
date  to  which  such  extension  is  made  and  what  legacies  or  shares  are  thereby 
affected. 

S.  866.  On  transfers.  Taxes  due  under  the  provisions  of  section  eight  hundred 
and  twenty-three  shall  be  payable  on  or  before  the  expiration  of  three  months 
from  the  date  of  the  death  of  the  grantor  or  donor  therein  mentioned,  unless 
the  grantee  or  donee  sooner  enters  into  possession  of  the  property  acquired  in 
the  manner  therein  mentioned;  in  which  case,  the  tax  shall  thereupon  become 
payable. 

Inventory  of  Property. 

S.  867.  Duty  of  grantee  or  donee.  A  person  who  as  grantee  or  donee  comes 
into  the  possession  or  enjoyment  of  property  in  the  manner  specified  in  section 
eight  hundred  and  twenty-three  shall  forthwith  file  with  the  commissioner  of  state 
taxes  a  just  and  true  inventory  under  oath  of  all  such  property,  giving  a  descrip- 
tion of  the  property  included  in  such  conveyances,  deeds  and  gifts. 

S.  868.  Penalty.  A  person  who  neglects  or  refuses  to  file  the  inventory 
provided  in  the  preceding  section  shall  be  subject  to  a  penalty  of  not  more  than 
ten  per  cent  nor  less  than  five  per  cent  of  the  value  of  the  property  which  so 
comes  into  his  possession  or  enjoyment,  to  be  recovered  in  an  action  on  this  statute 
brought  in  the  name  of  the  state  by  the  commissioner  of  state  taxes. 

Interest  on  Taxes. 

S.  »69.  When.  Taxes  not  paid  to  the  state  treasurer  when  due  under  the 
provisions  of  this  chapter,  unless  the  time  for  payment  thereof  has  been  extended 
by  the  probate  court  pursuant  to  the  provisions  of  this  chapter,  shall  bear  inter- 
est from  the  date  at  which  the  same  become  payable  until  the  same  are  paid. 

Reports  to  Commissioner  of  State  Taxes. 

S.  870.  Duties  of  register  of  probate.  In  estates  wherein  property  may 
be  decreed  to  a  legatee  or  heir  liable  to  a  tax  imposed  by  this  chapter,  the  register 
of  the  probate  court  having  jurisdiction  thereof  shall,  at  the  time  of  granting 
letters  of  administration  therein,  upon  blanks  to  be  furnished  by  the  commissioner 
of  state  taxes,  report  the  name  of  the  decedent,  the  date  of  his  death,  the  name 
and  address  of  the  administrator  or  executor,  and  the  relationship,  if  any,  and  the 
names  of  all  known  legatees  or  heirs  liable  to  the  taxes  imposed  by  this  chapter. 

S.  87 1 .  Same.  Whenever  the  probate  court  fixes  a  date  for  the  determination 
of  the  amount  due  to  the  state  on  account  of  a  tax  imposed  by  this  chapter,  or 
for  the  determination  of  the  value  of  a  legacy  or  share  passing  to  a  legatee  or  heir 
liable  to  such- tax,  or  for  the  determination  of  any  matter  pertaining  to  a  tax 
imposed  by  this  chapter,  the  register  of  probate  shall,  upon  blanks  furnished  for 


1156  STATUTES  ANNOTATED.  [Vt.  St. 

that  purpose  by  the  commissioner  of  state  taxes,  forthwith  mail  to  said  com* 
missioner  a  statement  showing  the  name  of  the  estate,  the  date  of  such  hearing, 
the  nature  thereof,  whether  or  not  the  property  out  of  which  such  legacy  or  share 
is  to  be  decreed  is  in  money  or  its  equivalent,  and,  if  in  other  property,  a  brief 
description  thereof  as  shown  by  the  files  of  said  court.  If  such  hearing  is  con- 
tinued, notice  thereof  shall  be  given  in  person  or  by  mail  to  said  commissioner. 

Estates  Not  Administered  upon. 

S.  872.  Administrator,  how  appointed.  If,  upon  the  decease  of  a  person 
leaving  an  estate  passing  in  whole  or  in  part  to  legatees  or  heirs  liable  to  the  taxes 
imposed  by  this  chapter,  no  will  disposing  of  such  estate  is  offered  for  probate 
within  the  time  prescribed  by  law  and  no  application  for  administration  is  made 
within  four  months  from  the  date  of  such  decease,  the  commissioner  of  state 
taxes  shall  apply  to  the  probate  court  for  the  appointment  of  an  administrator 
of  such  estate. 

S.  873.  Duties  of  probate  court.  A  judge  or  register  of  probate  shall  forth- 
with notify  the  commissioner  of  state  taxes,  upon  blanks  to  be  furnished  by  him, 
of  estates  mentioned  in  the  preceding  section,  known  to  them  or  either  of  them, 
in  which  no  will  or  application  for  administration  is  presented  within  the  time 
specified. 

Certified  Copies  of  Wills  and  Inventories. 

S.  874.  To  be  furnished  commissioner  of  state  taxes.  An  adminibtrator, 
executor,  trustee  or  other  legal  representative  of  a  decedent,  appointed  by  a 
probate  court  within  this  state  or  by  a  foreign  court  or  government,  shall,  when 
required  in  writing  by  the  commissioner  of  state  taxes,  withm  a  reasonable 
time  after  receiving  such  requisition  and  without  expense  to  the  state,  furnish 
said  commissioner  a  certified  copy  of  any  part  or  all  of  any  record,  or  of  the 
will,  inventory  or  other  document  required  to  be  filed  in  the  court  wherein  the 
estate  of  which  he  is  such  administrator,  executor,  trustee  or  legal  representative 
is  being  administered. 

S.  875.  Failure  to  furnish;  penalty,  etc.  An  administrator,  executor, 
trustee  or  legal  representative  mentioned  in  the  preceding  section,  appointed 
by  a  probate  court  in  this  state,  shall  forfeit  to  the  state  five  dollars  for  each 
day's  neglect  or  refusal  to  provide  the  certified  copies  therein  specified,  within  a 
reasonable  time  after  receiving  requisition  therefor;  and  if  a  foreign  administrator, 
executor,  trustee  or  legal  representative  neglects  or  refuses  to  furnish  the  copies 
therein  required,  no  certificate  shall  be  given  by  the  commissioner  of  state  taxes 
under  the  provisions  of  section  eight  hundred  and  eighty-two,  until  such  certified 
copies  are  furnished  and  a  reasonable  time  has  thereafter  elapsed. 

S,  876.  Deduction  of  tax  on  estate  of  non-resident.  I.  If  a  foreign 
administrator,  executor  or  trustee  assigns  or  transfers  any  stock  or  obligation 
in  a  domestic  corporation,  or  in  a  foreign  corporation  having  its  principal  place  of 
business  located  in  this  state,  or  in  a  national  bank  located  in  this  state,  owned 
by  a  deceased  non-resident  at  the  time  of  his  death  and  passing  by  will  or  the 
laws  of  descent  of  the  state  or  government  wherein  such  administrator,  executor 
or  trustee  receives  his  appointment,  to  or  for  the  use  of  any  person  other  than  the 


1906,  c.  38.1  VERMONT. 


1157 


father,  mother,  husband,  wife,  lineal  descendant,  stepchild,  child  adopted  as 
aforesaid,  child  of  a  stepchild  or  of  such  adopted  child,  the  wife  or  widow  of  a 
son,  the  husband  of  a  daughter,  a  bishop  in  his  ecclesiastical  capacity  for  religious 
uses  within  this  state,  a  town  or  oity  in  this  state  for  cemetery  purposes,  or  to  or 
for  the  use  of  a  charitable,  educational  or  religious  society  or  institution  created 
and  existing  under  the  laws  of  this  state,  such  administrator,  executor  or  trustee 
shall  pay  to  the  state  a  tax  equal  to  five  per  cent  of  the  value  in  money,  at  the 
date  of  such  assignment  or  transfer,  of  such  part  or  all  of  such  stocks  or  obliga- 
tions so  passing  by  will  or  the  laws  of  descent. 

II.  If  such  taxes  are  not  paid  on  or  before  the  date  of  such  assignment  or 
transfer,  they  shall  be  a  lien  on  such  stock  or  obligation  until  the  same  are  paid. 

•III.  In  determining  the  amount  of  any  tax  imposed  by  this  section,  no  deduc- 
tions on  account 'of  debts  or  expenses  of  administration  shall  be  made  unless 
such  debts  or  expenses  have  been  allowed  by  the  probate,  surrogate  or  other 
court  having  original  jurisdiction  of  said  estate. 

IV.  The  words  "stock"  and  "obligation"  as  used  in  this  section,  shall  be 
construed  to  include  the  proceeds  thereof.  (As  amended  by  St.  1908,  c.  31; 
St.  1910,  c.  55.) 

S.  877.  Transfer  of  stock  before  payment  of  tax  prohibited.  A  domestic 
corporation,  or  a  foreign  corporation  having  its  principal  place  of  business  in 
this  state,  or  a  national  bank  located  in  this  state,  which  records  a  transfer  of  a 
share  of  its  stock  or  of  its  obligation,  made  by  a  foreign  administrator,  executor 
or  trustee,  or  which  issues  a  new  certificate  for  a  share  of  its  stock  or  of  the  trans- 
fer of  an  obligation  aforesaid  at  the  instance  of  a  foreign  administrator,  executor 
or  trustee,  before  the  taxes  imposed  by  the  preceding  section  are  paid,  shall  be 
liable  for  such  tax  in  an  action  upon  this  statute  brought  in  the  name  of  the 
state  by  the  commissioner  of  state  taxes. 

S.  878.  Estate  of  non-resident.  I.  If  a  foreign  administrator,  executor 
or  trustee  of  a  non-resident  decedent,  or  a  legatee  or  heir  of  such  decedent,  or  an 
assignee  of  suth  administrator,  executor,  trustee,  legatee  or  heir,  collects,  receives 
or  assigns  securities  or  assets,  being  in  this  state  at  the  time  of  the  death  of  such 
non-resident  decedent,  and  belonging  to  him  at  his  decease,  which  shall  pass  in 
whole  or  in  part  by  will  or  the  laws  of  the  state  or  government  wherein  such 
foreign  administrator,  executor  or  trustee  has  received  his  appointment,  to  or 
for  the  use  of  any  person  other  than  the  father,  mother,  husband,  wife,  lineal 
descendant,  stepchild,  child  adopted  as  aforesaid,  child  of  a  stepchild  or  of  such 
adopted  child,  the  wife  or  widow  of  a  son,  the  husband  of  a  daughter,  a  bishop 
in  his  ecclesiastical  capacity  for  religious  uses  within  this  state,  or  a  town  or  city 
in  this  state  for  cemetery  purposes,  or  to  or  for  the  use  of  a  charitable,  educa- 
tional or  religious  society  or  institution  created  and  existing  under  the  laws 
of  this  state,  such  foreign  administrator,  executor  or  trustee,  the  assignee  of  such 
securities  or  assets,  or  any  legatee  or  heir  of  such  non-resident  decedent,  shall 
pay  to  the  state  a  tax  equal  to  five  per  cent  of  the  value  in  money,  at  the  date 
of  the  delivery,  collection  or  assignment  of  such  part  pr  all  of  such  securities  or 
assets  so  passing  by  will  or  the  laws  of  descent. 

II.  If  such-taxes  are  not  paid  on  or  before  the  date  of  such  delivery,  collec- 
tion, or  assignment  they  shall  be  a  lien  on  such  securities  or  assets  until  such 
taxes  are  paid. 


1158  STATUTES  ANNOTATED.  [Vt.  St. 

III.  In  determining  the  amount  of  any  tax  imposed  by  this  section,  no  deduc- 
tions on  account  of  debts  or  expenses  of  administration  shall  be  made,  unless 
such  debts  or  expenses  have  been  allowed  by  the  probate,  surrogate  or  other 
court  having  original  jurisdiction  of  said  estate.  (As  amended  by  St,  1908, 
c.  31,  and  St.  1910,  c.  55.) 

Delivery  of  Property  of  Non-resident. 

S.  879.  The  securities  or  assets  mentioned  in  the  preceding  section  shall 
not  be  delivered  or  transferred  by  a  person  or  corporation  to  a  foreign  adminis- 
trator, executor  or  trustee  of  a  non-resident  decedent,  nor  to  a  legatee  or  heir 
of  such  decedent,  nor  to  an  assignee  of  such  administrator,  executor,  trustee, 
legatee  or  heir,  before  the  taxes,  if  any,  imposed  by  the  preceding  section  are  paill, 
or  the  certificate  mentioned  in  section  eight  hundred  eighty-two  is  issued  by 
said  commissioner.  Said  commissioner,  or  person  designated  by  him  in  writing, 
may  at  all  reasonable  times  examine  such  securities  or  assets.  (As  amended 
by  St.  1910,  c.  55.) 

S.  880.  Failure  to  give  notice;  liability.  Failure  to  mail  or  deliver  such 
notice  as  provided  in  the  preceding  section  shall  render  the  person  or  corpora- 
tion required  to  report  such  delivery  or  transfer  liable  in  an  action  upon  this  statute, 
brought  in  the  name  of  the  state  by  the  commissioner  of  state  taxes,  for  all  taxes 
imposed  by  the  second  preceding  section. 

S.  881.    Deposits  not  to  be  paid  or  transferred  before  payment  of  tax. 

No  savings  bank,  savings  institution,  trust  company  or  savings  bank  and  trust 
company  shall  pay  a  part  or  all  of  a  deposit,  or  any  interest  or  dividend  thereon, 
to  an  administrator  or  executor,  under  the  provisions  of  section  four  thousand 
six  hundred  and  thirty-seven,  nor  transfer  the  same  to  the  account  of  any  per- 
son upon  its  records,  unless  the  certificate  mentioned  in  the  following  section  has 
been  delivered  thereto. 

S.  882.  Waiver  of  liability.  A  certificate  signed  by  the  commissioner  of 
state  taxes  certifying  that  an  administrator,  executor,  trustee,  legatee,  heir  or 
assignee  is  not  liable  to  the  taxes  imposed  by  sections  eight  hundred  and  seventy- 
six  and  eight  hundred  and  seventy-eight,  or  certifying  that  such  taxes  are  paid, 
shall  operate  as  a  waiver  or  discharge  of  all  liability  to  the  state  on  the  part  of 
any  person  or  corporation  mentioned  in  the  six  preceding  sections. 

Reports  by  Savings  Banks  and  Trust  Companies. 

S.  883.  Notice  of  death  of  non-resident  depositor,  etc.  A  savings  bank, 
savings  institution,  trust  company,  or  savings  bank  and  trust  company  shall 
notify  the  commissioner  of  state  taxes,  upon  blanks  to  be  furnished  by  him, 
of  the  decease  of  any  non-resident  depositor  and  the  name  and  residence  of  any 
foreign  administrator,  executor  or  trustee  as  soon  as  the  same  is  known  thereto. 

*  S.  884.  Payment  of  an  account  prohibited  without  consent  of  com- 
missioner of  state  taxes.  If  a  savings  bank,  savings  institution,  trust  com- 
pany, or  savings  bank  and  trust  company  has  notice  of  the  death  of  a  depositor 
residing  within  this  state  at  the  time  of  his  decease,  or  has  reasonable  grounds 
for  believing  him  to  be  dead,  it  shall  not,  without  the  consent  in  writing  of  the 


1906,  c.  38.1  VERMONT.  1159 

commissioner  of  state  taxes,  pay  or  transfer  upon  its  records  a  part  or  all  of  a 
deposit  or  account  standing  in  the  name  of  such  decedent,  for  which  an  order, 
assignment  or  other  instrument  in  writing  signed  by  such  decedent  has  been 
given,  other  than  checks  given  in  the  ordinary  course  of  business.  Notice  in 
writing  shall  be  forthwith  given  by  such  corporation  to  said  commissioner,  set- 
ting forth  the  character  of  such  order,  assignment  or  other  instrument,  and  the 
name  and  residence  of  the  payee  or  assignee  therein  named. 

S.  885.  Liability.  A  savings  bank,  savings  institution,  trust  company,  or 
savings  bank  and  trust  company,  that  wilfully  violates  a  provision  of  the  first, 
second  and  fourth  preceding  sections,  shall  be  liable  to  the  state,  in  an  action  on 
this  statute,  brought  m  the  name  of  the  state  by  the  commissioner  of  state  taxes, 
for  all  taxes  imposed  by  sections  eight  hundred  and  seventy-six  and  eight  hundred 
and  seventy-eight  upon  a  person  liable  to  the  same.  But  no  such  action  shall 
be  commenced  without  the  consent  of  the  governor. 

Equity  Proceedings. 

S.  886.  Cotninissioner  may  institute.  Whenever  the  commissioner  of 
state  taxes  claims  that  a  tax  is  due  on  account  of  a  transfer  of  property  in  the 
manner  described  in  section  eight  hundred  and  twenty-three,  eight  hundred  and 
seventy-six,  eight  hundred  and  seventy-eight  or  eight  hundred  and  eighty- 
four,  he  may,  in  the  name  of  the  state,  petition  the  court  of  chancery  in  any 
county  to  determine  the  amount  of  any  or  all  taxes  due,  as  provided  in  such  sec- 
tions, and  to  establish  such  taxes  as  a  lien  upon  the  property  passing  or  being 
transferred  in  the  manner  therein  mentioned. 

S.  887.  Service,  how  made.  Service  of  the  petition  mentioned  in  the 
preceding  section  may  be  made  in  the  manner  provided  by  law;  and  service 
thereof  upon  a  foreign  administrator,  executor,  trustee,  legatee  or  assignee  may 
be  made  by  delivering  a  copy  of  such  petition  to  the  custodian  of  the  property 
in  this  state  therein  named. 

S.  888.  Proceedings.  A  court  of  chancery  or  a  chancellor  shall,  subject  to 
the  right  of  appeal  to  the  supreme  court,  hear  and  determine  such  cause  at  a  stated 
term  of  said  court  or  during  vacation,  and  may  grant  temporary  and  permanent 
injunctions  restraining  any  or  all  persons  or  corporations  mentioned  in  the  sec- 
tions named  in  the  second  preceding  section,  from  making  any  transfer  or  other 
disposition  of  the  property  named  therein,  until  all  taxes  imposed  by  this  chapter 
and  found  to  be  due  on  account  of  the  passing  of  such  property  in  the  manner 
therein  mentioned  are  paid,  and  shall  make  all  necessary  orders  and  decrees  to 
carry  out  the  provisions  of  this  chapter. 

Bonds  and  Recognizances. 

S.  889.  State  not  required  to  give.  In  cases  or  appeals  involving  ques- 
tions arising  under  the  provisions  of  this  chapter,  the  state  shall  not  be  required 
to  give  a  bond  or  recognizance  for  costs  or  for  an  appeal,  nor  an  injunction  bond. 

Proceedings  in  Probate  Court. 

S.  890.  Jurisdiction  and  powers.  A  probate  court,  upon  application  of 
the  commissioner  of  state  taxes,  may  summon  and  examine,  upon  oath,  respect- 


1160  STATUTES  ANNOTATED.  [Vt.  St. 

ing  any  matter  pertaining  to  a  tax  or  penalty  imposed  by  this  chapter,  an  officer, 
stockholder,  member  or  agent  of  a  corporation  mentioned  in  section  eight  hundred 
and  seventy-six,  eight  hundred  and  eighty-one,  eight  hundred  and  eighty-three 
or  eight  hundred  and  eighty-four,  or  of  any  corporation  or  banking  institution 
having  its  principal  place  of  business  in  the  probate  district  wherein  such  pro- 
bate court  has  jurisdiction;  a  custodian  of  the  securities  or  assets,  or  the  pro- 
ceeds thereof,  mentioned  in  section  eight  hundred  and  seventy-eight,  residing  or 
having  its  principal  place  of  business  in  such  probate  district;  an  administrator, 
executor,  trustee,  legatee,  heir  or  assignee  mentioned  in  the  last  named  section, 
entitled  to  receive  or  who  has  received  any  part  or  all  of  such  securities  or  assets, 
or  the  proceeds  thereof,  held  by  such  custodian;  a  member  or  officer  of  a  society 
or  institution,  and  a  person  entitled  to  receive  or  who  has  received  a  part  or  all 
of  such  securities,  assets  or  proceeds  thereof  mentioned  in  section  eight  hundred 
seventy-eight  from  a  custodian  thereof  residing  or  having  its  principal  place  of 
business  in  such  probate  district,  or  who  is  entitled  to  receive  or  has  received, 
by  assignment  or  otherwise,  a  part  or  all  of  a  deposit  mentioned  in  section  eight 
hundred  and  eighty-one  or  eight  hundred  and  eighty-four,  from  a  banking  insti- 
tution having  its  principal  place  of  business  in  such  probate  district;  and  the 
grantee  or  donee  of  property,  or  an  interest  therein,  passing  in  the  manner  set 
forth  in  section  eight  hundred  and  twenty-three,  within  such  probate  district. 

S.  891.  Summons  to  witnesses.  If  a  probate  court  has  issued  a  summons 
for  a  person  mentioned  in  the  preceding  section,  or  has  examined  a  person  therein 
named  concerning  any  matter  pertaining  to  a  tax  or  penalty  imposed  by  this 
chapter,  said  court  shall  thereupon  have  jurisdiction  to  summon  and  so  examine 
any  and  all  persons  therein  named,  notwithstanding  the  residence  of  such  person, 
the  location  of  the  principal  place  of  business  of  a  corporation  specified  in  the 
preceding  section,  or  the  location  of  property  therein  specified,  is  in  some  town 
or  city  without  the  probate  district  within  which  said  court  has  original  jurisdic- 
tion to  issue  such  summons  and  conduct  such  examination. 

S.  892.  Issuance  of  letters  of  administration.  If,  upon  the  examination 
specified  in  the  two  preceding  sections,  the  probate  court  wherein  such  examina- 
tion is  had,  determines  that,  in  order  to  aid  in  the  collection  of  a  tax  imposed  by 
this  chapter,  an  administrator  should  be  appointed  to  administer  upon  the 
estate  whereof  property  within  its  original  jurisdiction,  passing  to  a  person  liable 
to  a  tax  imposed  by  this  chapter,  is  the  whole  or  a  part,  said  probate  court  shall 
take  jurisdiction  of  such  estate  and  shall  thereupon  issue  letters  of  administration. 

S.  893.  Same;  proceedings.  Whenever  letters  of  administration  are  issued 
upon  an  estate  mentioned  in  the  preceding  section,  the  probate  court  issuing 
such  letters  shall  have  jurisdiction  of  all  property  within  this  state  belonging 
thereto.  The  same  proceedings  shall  be  had  in  such  estate  as  provided  by  law 
for  the  settlement  of  an  estate  wherein  no  will  is  probated. 

S.  894.  Production  of  books,  records  and  documents.  The  probate 
court  shall  have  authority  to  require,  by  summons  or  otherwise,  the  production 
of  books  of  account,  records  or  documents  kept  or  possessed  by  a  corporation 
or  person  mentioned  in  the  third  and  fourth  preceding  sections,  concerning 
matters  as  to  which  information  shall  be  required  to  carry  out  the  provisions 
of  this  chapter. 


1906,  c.  38.]  VERMONT.  1161 

S.  895.  Summons,  generally.  A  probate  court  shall  have  power  to  summon 
a  person  not  hereinbefore  specifically  mentioned  to  appear  before  said  court  to 
give  evidence  therein  respecting  any  matter  or  thing  hereinbefore  mentioned 
which  shall  be  the  subject  of  investigation;  and  said  court  may  also  require  such 
person  to  produce  in  court  any  book  of  account,  record  or  document  pertinent 
to  such  investigation. 

S.  896.  Witness  fees.  Persons  except  those  liable  to  pay  a  tax  imposed  by 
this  chapter  shall  be  allowed  the  same  per  diem  and  travel  fees  as  witnesses 
in  county  court,  to  be  paid  by  the  state  on  the  certificate  of  the  commissioner 
of  state  taxes. 

S.  897.  Penalty.  A  person  or  officer  designated  in  section  eight  hundred  and 
ninety,  eight  hundred  and  ninety-one  or  eight  hundred  and  ninety-five  who 
refuses  or  neglects  to  appear  before  the  probate  court  in  obedience  to  the  sum- 
mons therein  mentioned,  or  refuses  to  be  sworn  as  hereinbefore  provided,  or 
neglects  or  refuses  to  produce  the  books,  records  or  documents  mentioned  in 
sections  eight  hundred  and  ninety-four  and  eight  hundred  and  ninety-five,  or 
refuses  to  testify  concerning  any  matter  respecting  which  he  shall  be  lawfully 
examined,  shall  be  fined  not  more  than  five  thousand  dollars  nor  less  than  five 
hundred  dollars. 

Reports  by  Listers. 

S.  898.  How  made.  Listers  in  the  several  towns  shall  annually,  within  ten 
days  after  the  date  on  which  the  grand  list  is  required  by  law  to  be  filed  by  them 
with  the  town  clerk,  report  to  the  commissioner  of  state  taxes,  upon  blanks  to 
be  furnished  by  him,  the  names  of  persons  who  acquired,  within  the  year  end- 
ing with  the  first  day  of  April  in  the  year  in  which  such  report  is  made,  real  or 
personal  estate  situate  in  such  town,  or  an  interest  therein,  passing  from  a 
deceased  person  by  the  laws  of  descent  or  in  the  manner  specified  in  section 
eight  hundred  and  twenty-three. 

Miscellaneous. 

S.  899.  False  swearing.  A  person  who  wilfully  swears  falsely  to  a  return, 
report  or  statement,  or  upon  an  examination  hereinbefore  mentioned,  shall  be 
guilty  of  perjury. 

S.  900.  Application  of  chapter.  The  foregoing  sections  of  this  chapter, 
in  so  far  as  they  pertain  to  a  tax  imposed  upon  a  person,  corporation,  society 
or  institution  that  shall,  in  any  manner  hereinbefore  provided,  receive  property 
or  any  interest  therein  passing  from  a  deceased  person,  shall  also  apply  to  the 
estates  of  all  persons  who  deceased  prior  to  December  ninth,  nineteen  hundred 
and  four,  but  whose  estates  were  not  then  decreed  or  distributed;  but  if  any  part 
of  such  an  estate  has  been  lawfully  paid  or  decreed  prior  to  such  date,  such  part 
shall  not  be  affected  by  this  chapter;  nor  shall  this  chapter  apply  to  an  act  done 
prior  to  such  date  for  which  a  penalty  is  hereinbefore  provided. 

S.  901.  Exception.  This  chapter  shall  not,  except  as  otherwise  provided, 
affect  the  liability  of  any  person,  corporation,  society  or  institution  to  pay  taxes 
already  accrued  under  the  provisions  of  number  forty-six  of  the  acts  of  eighteen 
hundred  and  ninety- six,  nor  any  proceedings  affecting  the  same. 


1162  STATUTES  ANNOTATED.  [Va.  St. 


VIRGINIA. 


In  General. 

Virginia  adopted  a  collateral  inheritance  tax  in  1844.  Its  last 
legislation  was  in  1910,  and  this  state  now  has  the  distinction  of 
possessing  the  shortest  inheritance  tax  law  of  any  state.  The  tax 
is  on  collateral  inheritances  only,  the  rate  is  uniformly  five  per  cent 
and  there  is  no  amount  exempted.  The  tax  is  not  levied  on  an  in- 
heritance to  grandparents,  father,  mother,  husband,  wife,  brother, 
sister  or  lineal  descendant.  Stock  of  Virginia  corporations  owned 
by  non-residents  is  not  taxable. 

Constitutional  Limitations. 

The  Virginia  constitution  of  1850,  article  IV,  s.  22,  prescribed  as 
follows: —  - 

"Taxation  shall  be  equal  and  uniform  throughout  the  common-      • 
wealth,  and  all  property  other  than  slaves  shall  be  taxed  in  propor- 
tion to  its  value,  which  shall  be  ascertained  in  such  manner  as  may 
be  prescribed  by  law." 

Virginia  Constitution,  1902,  a.  13. 

S.  168.  All  property,  except  as  hereinafter  provided,  shall  be  taxed;  all 
taxes,  whether  state,  local  or  municipal,  shall  be  uniform  upon  the  same  class  of 
subjects  within  the  territory  limits  of  the  authority  levying  the  tax,  and  shall 
be  levied  and  collected  under  general  laws. 

S.  169.  Except  as  hereinafter  provided,  all  assessments  of  real  estate  and 
tangible  personal  property  shall  be  at  their  fair  market  value,  to  be  ascertained 
as  prescribed  by  law.  The  general  assembly  may  allow  a  lower  rate  of  taxation 
to  be  imposed  for  a  period  of  years  by  a  city  or  town  upon  land  added  to  its 
corporate  limits,  than  is  imposed  on  similar  property  within  its  limits  at  the  time 
soch  land  is  added.  Nothing  in  this  constitution  shall  prevent  the  general 
assembly,  after  the  first  day  of  January,  nineteen  hundred  and  thirteen,  from 
segregating  for  the  purposes  of  taxation,  the  several  kinds  or  classes  of  property, 
so  as  to  specify  and  determine  upon  what  subjects,  state  taxes,  and  upon  what 
subjects,  local  taxes  may  be  levied. 


Va.  St.] 


1843-44. 

Statutes 

1842-43. 

" 

1843-44. 

" 

1843-44. 

" 

1843-44. 

" 

1843-44. 

" 

1843-44. 

" 

1848-49. 

<< 

1848-49. 

" 

1849. 

Code 

1849. 

(< 

1849. 

"- 

1849. 

" 

1849. 

<< 

1852. 

" 

1852. 

<< 

1852-53. 

Statutes 

iooo— O'l. 

1853-54. 

u 

1855-56. 

<< 

1859-60. 

<< 

1859-60. 

" 

1860. 

Code 

1860. 

" 

1860. 

" 

1860. 

" 

1861-62. 

Statutes 

1863. 

Code 

1863. 

i< 

1863-64. 

.Statutes 

1864-65. 

" 

1865-66. 

" 

1865-66. 

" 

1865-66. 

(< 

1866-67. 

" 

1869-70. 

(1 

1869-70. 

" 

1869-70. 

" 

1870-71. 

<< 

1871-72. 

" 

1873. 

Code 

1873. 

<< 

1873. 

<( 

1873. 

(( 

1874. 

" 

1874. 

" 

1874-75. 

Statutes 

1874-75. 

it 

of  Virginia, 


VIRGINIA. 

t  of  Sta 

itute 

c.      1,  s. 

6. 

c.      2,  s. 

9. 

c,      1,  s. 

6. 

c.      1,  s. 

7. 

c.      2,  s. 

2. 

c.      3,  s. 

1. 

c.      3,  s. 

3. 

c.      1,  s. 

1. 

c.      1,  s. 

3. 

c.    35,  s. 

10. 

c.    35,  s. 

42. 

c.    39,  s. 

6. 

c.    39,  s. 

12. 

c.    40,  s. 

3. 

c.    17,  s. 

17. 

c.    17,  s. 

20. 

c.      8,  s. 

16. 

c.      2,  s. 

15. 

c.      2,  s. 

19. 

c.      9,  s. 

30. 

c.      1,  s. 

9. 

c.      1,  s. 

38. 

c.    35,  s. 

9. 

c.    35,  s. 

38. 

c.    39,  s. 

5. 

c.    39,  s. 

11. 

c.      1,  s. 

18. 

c.        1,  S. 

15. 

c.        1,  S. 

23. 

c.      1. 

c.    39,  s. 

33. 

c.      1,  s. 

20. 

c.      3,  s. 

3. 

c.      3,  s. 

18. 

c.    64,  s. 

3,p 

c.    45,  s. 

18. 

c.  226,  s. 

3. 

c.  226,  s. 

13. 

c.  193,  s. 

3. 

c.  385,  s. 

3. 

c.    33,  s. 

19. 

c.    35,  s. 

3. 

c.    36,  s. 

1. 

c.    36,  s. 

7. 

c.  240,  s. 

21. 

c.  240,  s. 

22. 

c.  206,  s. 

20. 

c.  239,  s. 

12. 

1163 


861. 


1164 


STATUTES  ANNOTATED. 


[Va.  St. 


1874-75. 
1875-76. 
1875-76. 
1875-76. 

1881-82. 

1881-82. 

1883-84. 

1883-84. 

1883-84. 

1895-96. 

1897-98. 

1897-98. 

1903. 

1903. 

1904. 


Statutes  of  Virginia,  c.  239,  s. 
c.  161. 


13. 


12. 
13. 

12. 


12. 
44. 


c.  162,  s.    12. 

c.  162,  s.    13. 

c.  119,  s. 

c.  119,  s. 

c.  389. 

c.  450,  s. 

c.  513. 

c.  334. 

c.  539. 

c.  562. 

c.  148,  s. 

c.  148,  s. 
Pollard's  Code  of  Virginia,  Vol  2,  p.  2219,  Clause  44,  s.    457. 
Constitution  of  Virginia.     See  Pollard's  Code  of  Virginia,  Vol.  1,  s. 
183,  of  Constitution,  Clause  G. 
1910.     Pollard's  Virginia  Code,  Supplement,  Vol.  3,  p.  530,  s.  44. 
1910.     Statutes  of  Virginia,  c.  148,  p.  229. 

The  history  of  the  Virginia  legislation  is  traced  as  follows: — 

Session  Laws  of  1843-44,  p.  9,  s.  1. 

Code  of  1849,  c.  39,  s.  6. 

The  omission  from  the  revenue  law  of  the  tax  in  1855-56  operated 
as  a  repeal  of  the  statute.  The  law  was  again  enacted  in  March 
28,  1863,  s.  15. 

The  tax  was  omitted  from  the  general  tax  law  until  1867,  when 
it  was  again  enacted  by  the  session  laws  1866-67,  c.  64,  s.  3.  Miller 
V.  Commonwealth,  27  Gratt.  (Va.)  110. 


THE   EARLY  STATUTES. 

Va.  St.  1687  imposed  a  fee  of  two  hundred  pounds  of  tobacco  and  casque  on 
the  issuance  of  probates  and  letters  of  administration.  [Burke,  History  of 
Virginia,  Vol.  II,  p.  200.     See  West  on  Inheritance  tax,  p.  104.] 

Va.  St.  1843-44,  c.  1.     Passed  January  26,  1844. 

S.  6.  Be  it  further  enacted.  That  all  estates  inherited  by,  or  devised  or 
bequeathed  to  any  other  person  or  persons  (or  incorporated  bodies)  than  a 
father,  mother,  brother,  sister,  husband,  wife,  child  or  lineal  descendant,  shall 
be  subject  to  a  tax  of  two  per  centum,  on  every  hundred  dollars  of  the  clear 
valiie  of  such  estate,  to  be  ascertained,  collected  and  accounted  for  in  the  mode 
which  shall  be  prescribed  by  law. 

Va.  St.  1843-44,  c.  3.     Passed  February  6,  1844. 

An  Act  prescribing  the  mode  of  ascertaining  and  collecting  the 
TAX  ON  collateral  INHERITANCES,  devises  and  bequests,  and  amending 
the  act  passed  March  28,  1843,  prescribing  the  mode  of  ascertaining  certain 
subjects  of  taxation. 


1843-44,  c.  3.]  VIRGINIA.  1165 

S.  1.  Be  it  enacted  by  the  general  assembly,  That  from  and  after  the  first, 
day  of  March  next,  all  estates,  real,  personal  and  mixed,  of  every  kind  whatso- 
ever, passing  from  any  person  who  may  die  seized  or  possessed  of  such  estate, 
being  within  this  commonwealth,  either  by  will  or  under  the  intestate  laws  thereof, 
to  any  person  or  persons,  or  to  bodies  politic  and  corporate,  in  trust  or  otherwise, 
other  than  to  or  for  the  use  of  a  father,  mother,  husband,  wife,  brother,  sister, 
children,  or  lineal  descendants,  born  in  lawful  wedlock,  shall  be  and  they  are 
hereby  made  subject  to  a  tax  or  duty  imposed  by  law,  on  every  hundred  dollars 
of  the  clear  value  of  such  estate  or  estates,  and  at  and  after  the  same  rate  for 
any  less  amount,  to  be  paid  to  the  use  of  the  commonwealth;  and  all  executors, 
and  administrators,  and  their  sureties,  shall  only  be  discharged  from  liability 
for  the  amount  of  any  or  all  such  duties  or  taxes  on  estates,  the  settlement  of 
which  they  may' be  charged  with,  by  having  paid  the  same  over  for  the  use 
aforesaid,  as  herein  directed:  Provided,  That  no  estate  which  may  be  valued 
at  a  less  sum  than  two  hundred  and  fifty  dollars,  shall  be  subject  to  the  duty  or 
tax. 

S.  3  makes  it  the  duty  of  clerks  of  courts  to  make  an  inventory  of  all  real 
estate  which  may  have  passed  from  deceased  persons  and  attach  this  list  to 
the  annual  lists  of  transfers  required  to  be  furnished  and  the  same  shall  con- 
stitute a  lien  upon  estates  until  paid  and  discharged. 

Va.  St.  1848-49,  c.  1.     Passed  March  2,  1849. 

S.  1  imposes  a  tax  of  two  per  cent  on  all  estates  inherited,  bequeathed  or 
devised  mentioned  in  the  collateral  inheritance  tax  law. 

Va.  Code  1849,  c.  35. 

S.  10  provides  that  the  clerk  of  probate  court  should  report  all  probates  and 
administrations. 

S.  42.  Where  any  real  estate  of  a  decedent,  of  greater  value  than  two  hundred 
and  fifty  dollars,  shall,  by  descent  or  devise,  pass  to  any  other  person,  or  for  any 
other  use  than  to  or  for  the  use  of  the  decedent's  father  or  other  relations  enum- 
erated in  the  tenth  section,  the  commissioner  shall,  in  addition  to  the  annual  land 
tax  imposed  upon  real  estate,  charge  thereon  such  specific  tax  as  may  be  im- 
posed by  law  in  the  case  of  such  devise  or  descent. 

Va.  Code  1849,  c.  39. 

S.  6.  Where  any  estate  within  this  commonwealth  of  any  decedent  shall 
pass  under  his  will,  or  the  laws  regulating  descents  and  distributions  to  any 
other  person  or  for  any  other  use,  than  to  or  for  the  use  of  the  father,  mother, 
husband,  wife,  brother,  sister  or  lineal  descendant  of  such  decedent,  the  estate 
so  passing,  if  of  greater  value  than  two  hundred  and  fifty  dollars,  shall  be  subject 
to  a  tax  of  a  certain  per  cent. 

Ss.  7-12  cover  the  collection  of  the  tax. 

S.  11  provides  that  the  clerk  on  receiving  the  payment  of  the  tax  shall  issue  a 
receipt  for  which  the  representative  of  the  estate  shall,  pay  fifty  cents. 

Va.  Code  1849,  c.  40. 

S.  3  provides  that  the  taxes  prescribed  by  c.  39,  s.  1,  on  the  estate  of  a  dece- 
dent  shall  be  two  per  cent  of  such  estate. 


1166  STATUTES  ANNOTATED.  [Va.  St. 

Va.  St.  1852,  c.  17. 

S.  16  provides  that  the  inheritance  tax  shall  be  two  per  cent  of  the  estate. 
S.  20,  passed  June  5,  1852,  repeals  Virginia  Code,  chapter  40. 

Va.  St.  1853-54,  c.  2,  s.  15.     Passed  March  2,  1854. 

The  tax  on  the  estate  of  a  decedent,  prescribed  by  the  39th  chapter  of  the  Code 
of  Virginia,  shall  be  two  per  centum  of  such  estate. 

The  Virginia  collateral  inheritance  tax  of  1854  is  not  a  tax  on 
property.  The  property  tax  which  the  framers  of  the  constitution 
were  contemplating  in  the  twenty-second  section  was  the  ordinary 
annually  recurring  tax  for  the  support  of  government  laid  upon  all 
property  whatsoever.  Eyre  v.  Jacob,  14  Gratt.  (Va.)  422,  430, 
73  Am.  Dec.  367. 

Effect  of  Omission  to  Fix  Rates. 

Where  the  testator  died  in  June,  1855,  the  inheritance  tax  was 
due  according  to  the  rate  prescribed  by  the  act  of  March  2,  1854, 
notwithstanding  the  legislature  had  omitted  to  fix  any  rate  in  the 
tax  law  of  March  18,  1856.  The  failure  of  the  legislature  to  fix  a 
rate  in  1856  without  any  repeal  of  the  previous  laws  prescribing 
the  tax  and  fixing  its  rate,  could  not  operate  as  a  release  of  a  tax 
accrued  in   1855. 

The  provisions  of  the  code  and  of  the  act  of  March  2,  1854,  are 
permanent  provisions  and  must  remain  in  force  until  they  are 
expressly  repealed  or  replaced  by  other  provisions  intended  to  be 
substituted.  Eyre  v.  Jacob,  14  Gratt.  (Va.)  422,  439,  73  Am.  Dec. 
367. 

Va.  St.  1853-54,  c.  2.     Approved  March  2,  1854. 
S.  19  repeals  the  Code  of  Virginia,  c.  40. 

Repeal  by  Implication. 

The  court  holds  that  the  Virginia  statute  of  March  18,  1856, 
imposing  taxes,  is  a  perfect  tax  law  imposing  all  taxes  intended  to 
be  imposed  for  the  support  of  the  government,  but  it  omitted  the 
tax  on  collateral  inheritances  for  the  purpose  of  discontinuing  it, 
and  therefore  it  repealed  by  implication  the  fifteenth  section  of 
Ihe  act  of  1853-54.    Fox  v.  Commonwealth,  16  Gratt.  (Va.)  1. 

Va.  St.  1859,  c.  1.     Passed  March  30,  1860. 

S.  9.  Where  any  real  estate  of  a  decedent  shall  under  his  will  or  by  descent 
pass  to  any  other  person,  or  for  any  other  use  than  to  or  for  the  use  of  the  father, 


1859,  C.I.]  VIRGINIA.  1167 

mother,  husband,  wife,  brother,  sister  or  lineal  descendant  of  such  decedent, 
the  clerk  of  the  court  in  which  such  will  is  recorded,  and  the  clerk  of  the  court 
of  the  county  or  corporation  in  which  any  real  estate  is  situate,  upon  ascertain- 
ing the  fact,  shall  report  the  same  to  the  commissioner  for  the  district  in  which  such 
real  estate  may  be. 

S.  38.  Where  any  real  estate  of  a  decedent,  of  a  greater  value  than  two  hundred 
and  fifty  dollars,  shall,  by  descent  or  devise,  pass  to  any  other  person,  or  for  any 
other  use  than  to  or  for  the  use  of  the  decedent's  father  or  other  relations,  enum- 
erated in  the  ninth  section  of  this  act,  the  commissioner  shall,  in  addition  to  the 
annual  land  tax  imposed  upon  such  real  estate,  charge  thereon  a  specific  tax  of 
two  per  centum  on  said  estate. 

Va.  Code  1860^  c.  35. 

S.  9.  Where  any  real  estate  of  a  decedent  shall  under  his  will  or  by  descent 
pass  to  any  other  person,  or  for  any  other  use  than  to  or  for  the  use  of  the  father, 
mother,  husband,  wife,  brother,  sister  or  lineal  descendant  of  such  decedent,  the 
clerk  of  the  court  in  which  such  will  is  recorded,  and  the  clerk  of  the  court  of 
the  county  or  corporation  in  which  any  such  real  estate  is  situate,  upon  ascertain- 
ing the  fact,  shall  report  the  same  to  the  commissioner  for  the  district  in  which 
such  real  estate  may  be. 

S.  38.  Where  ^ny  real  estate  of  a  decedent,  of  a  greater  value  than  two  hun- 
dred and  fifty  dollars,  shall,  by  descent  or  devise,  pass  to  any  other  person,  or 
for  any  other  use  than  to  or  for  the  use  of  the  decedent's  father  or  other  relations, 
enumerated  in  the  ninth  section  of  this  act,  the  commissioner  shall,  in  addition 
to  the  annual  land  tax  im  posed  upon  such  real  estate,  charge  thereon  a  specific 
tax  of  two  per  centum  on  said  estate. 

Va.  Code  1860,  c.  39. 

S.  5.  Where  any  estate  within  this  commonwealth  of  any  decedent  shall 
pass  under  his  will,  or  the  laws  regulating  descents  and  distributions,  to  any  other 
pe  rson,  or  for  any  other  use,  than  to  or  for  the  use  of  the  father,  mother,  husband, 
wife,  brother,  sister  or  lineal  descendant  of  said  decedent,  the  estate  so  passing, 
if  of  greater  value  than  two  hundred  and  fifty  dollars,  shall  be  subject  to  a  tax 
of  a  certain  per  centum. 

S.  11  imposes  a  penalty  on  any  personal  representative  failing  to  pay  the 
inheritance  tax. 

Va.  St.  1861,  c.  1.     Passed  April  3,  1861. 

S.  12.  On  the  estate  of  a  decedent,  which  passes  under  his  will,  or  by  descent 
to  any  other  person,  or  for  any  other  use  than  to  or  for  the  use  of  the  father, 
mother,  husband,  wife,  brother,  sister,  nephew,  niece  or  lineal  descendant  of  such 
decedent,  there  shall  be  a  tax  of  two  per  centum  of  such  estate. 

Va.  St.  1863,  c.  1.     Passed  March  28,  1863. 

S.  15.  On  the  estate  of  a  decedent,  which  passes, under  his  will  or  by  descent 
to  any  other  person,  or  for  any  other  use  than  to  or  for  the  use  of  the  father, 
mother,  husband,  wife,  brother,  sister,  nephew,  niece,  or  lineal  descendant  of 
such  decedent,  there  shall  be  a  tax  of  three  per  centum  of  such  estate. 


1168  STATUTES  ANNOTATED.  [Va.  St. 


Va.  St.  1863-64.     Passed  March  3,  1864. 

C.  1  suspends  until  January  31,  1865,  the  operation  of  the  revenue  statute  of 
March  28,  1863. 

Va.  St.  1865-66,  c.  1.      Passed  February  15,  1866. 

S.  20.  If  any  estate  of  a  decedent  shall,  under  his  will  or  by  descent,  pass 
to  any  person  other  than  to  his  lineal  descendants,  or  his  father,  mother,  hus- 
band, wife,  brother,  sister,  nephew  or  niece,  or  to  or  for  their  use,  the  clerk  of 
the  court  in  which  the  will  is  recorded,  and  the  clerk  of  the  court  of  the  county 
or  corporation  in  which  such  estate  is  situate,  or  in  which  the  persons,  or  any 
of  them  taking  the  same,  reside,  upon  ascertaining  the  fact,  shall  report  the 
same  to  the  proper  commissioner  of  the  revenue.  On  such  estate  the  commis- 
sioner shall,  in  addition  to  the  annual  tax,  charge  a  specific  tax  to  the  person  or 
persons  taking  under  the  will  or  by  descent  as  aforesaid. 

Va.  St.  1865-66,  c.  3.     Passed  February  28,  1866. 

S.  3.  Upon  any  estate  of  a  decedent,  which  shall  pass  by  his  will,  or  upon  his 
intestacy,  to  any  other  than  to  his  lineal  descendants,  or  his  father,  mother, 
husband,  wife,  brother,  sister,  nephew  or  niece,  two  per  centum  upon  the  value 
or  amount  thereof. 

The  collateral  inheritance  tax  was  imposed  in  Virginia  in  1849, 
was  abolished  in  1855  and  was  reimposed  in  1863.  In  re  Howard, 
5  Dem.  Surr.  483,  493. 

Va.  St.  1866-7,  c.  64.     Passed  April  20,  1867. 

S.  3.  Upon  any  estate  of  a  decedent,  which  shall  pass  by  his  will,  or  upon  his 
intestacy,  to  any  person  other  than  his  lineal  descendants,  or  his  father,  mother, 
husband,  wife,  brother,  sister,  nephew,  or  niece,  four  per  centum  upon  the  value 
or  amount  thereof. 

Va.  St.  1869-70,  c.  45.     In  force  April,  8  1870. 

S.  18.  If  any  estate  of  a  decedent  shall,  under  his  will  or  by  descent,  pass 
to  any  person  other  than  to  his  lineal  descendants,  or  his  father,  mother,  hus- 
band, wife,  brother,  sister,  nephew,  or  niece,  or  to  or  for  their  use,  the  clerk  of  the 
court  in  which  the  will  is  recorded,  and  the  clerk  of  the  court  of  the  county  or 
corporation  in  which  such  estate  is  situate,  reside,  upon  ascertaining  the  fact, 
shall  report  the  same  to  the  proper  commissioner  of  the  revenue.  On  such  estate 
the  commissioner  shall,  in  addition  to  the  annual  tax,  charge  a  specific  tax  to  the 
persoa  or  persons  taking  under  the  will  or  by  descent,  as  aforesaid. 

Va,  St.  1869-70,  c.  226.    Approved  July  9,  1870. 

S.  3.  Upon  any  estate  of  a  decedent  which  shall  pass  by  his  will,  or  upon  his 
intestacy,  to  any  person  other  than  his  lineal  descendants,  or  his  father,  mother, 
husband,  wife,  brother,  sister,  nephew,  or  niece,  six  per  centum  upon  the  value 
or  amount  thereof. 


1870-76.]  VIRGINIA.  1169 

Va.  St.  1870-71,  c.  193. 

S.  3  imposes  a  tax  of  six  per  cent  excepting  on  lineals  or  the  father,  mother, 
husband,  wife,  brother,  sister,  nephew  or  niece. 

Va.  St.  1871-72,  c.  385.     Approved  April  5,  1872. 

S.  3  imposes  a  tax  of  six  per  cent  except  on  lineals,  or  the  father,  mother, 
husband,  wife,  brother,  sister,  nephew  or  niece. 

Va.  Code  1873,  c.  33. 

S.  19  provides  for  a  report  by  the  clerk  of  the  court  to  the  proper  authorities 
of  cases  where  the  inheritance  tax  is  due. 

Va.  Code  1873',  c.  35. 

S.  3.  Upon  any  estate  of  a  decedent,  which  shall  pass  by  his  will,  or  upon 
his  intestacy,  to  any  person  other  than  his  lineal  descendant,  or  his  father,  mother, 
husband,  wife,  brother,  sister,  nephew,  or  niece,  the  tax  thereon  shall  be  six 
per  centum  upon  the  value  or  amount  thereof. 

Va.  Code  1873,  c.  36. 

S.  1.  Where  any  estate  within  this  commonwealth,  of  any  decedent,  shall 
pass  under  his  will,  or  the  laws  regulating  descents  and  distributions,  to  any 
other  person,  or  for  any  other  use  than  to  or  for  the  use  of  the  father,  mother, 
wife,  brother,  sister,  nephew  or  niece,  or  lineal  descendant  of  such  decedent, 
the  estate  so  passing,  if  of  greater  value  than  two  hundred  and  fifty  dollars, 
shall  be  subject  to  a  tax  of  a  certain  per  centum. 

S.  7  imposes  on  personal  representatives  liability  for  failing  to  pay  the  inherit- 
ance tax. 

Va.  St.  1874,  c.  240.     Approved  April  30,  1874. 

S.  21  requires  clerks  of  court  to  report  cases  where  the  inheritance  tax  is  due. 

S.  22  imposes  a  tax  of  six  per  cent  excepting  lineal  descendants  or  the  father, 
mother,  husband,  wife  or  sister  of  the  decedent.  This  statute  also  contains  a 
provision  that  property  conveyed  by  voluntary  deed  to  evade  the  collateral 
inheritance  tax  shall  be  assessed  and  taxed  in  all  respect  as  collateral  inheritances. 

Va.  St.  1874-75,  c.  206.     Approved  March  16,  1874. 

S.  20  imposes  a  duty  on  clerks  of  court  to  report  all  cases  subject  to  the  in- 
heritance tax. 

Va.  St.  1874-75,  c.  239.    Approved  March  31,  1875. 

S.  12  imposes  a  tax  of  six  per  cent  on  any  transfer  to  others  than  lineals,  or 
the  father,  mother,  husband,  wife  or  sister. 

Va.  St.  1875-76,  c.  161.     Approved  March  27,  1876. 

S,  1  amends  the  statute  of  March  16,  1875,  section  20,  as  to  the  report  of  the 
clerks  of  court  of  estates  subject  to  inheritance  tax. 


1170  STATUTES  ANNOTATED.  [Va.  St. 

Va.  St.  1875-76,  c.  162.     Approved  March  27,  1876. 

S.  12  provides  a  tax  of  six  per  cent  on  all  persons  other  than  lineals,  or  the 
father,  mother,  husband,  wife,  or  sister  of  the  decedent;  and  also  provides  for 
a  tax  on  voluntary  conveyances  to  evade  the  tax. 

Va.  St.  1881-82,  c.  119.     Approved  April  22,  1882. 

S.  12  provides  a  tax  of  six  per  cent  except  to  lineals,  or  the  father,  mother, 
husband,  wife,  or  sister;  and  provides  also  a  tax  on  deeds  made  to  evade  the  tax. 

Repeal. 

Va.  St.  1883-84,  c.  389,  in  force  March  11,  1884,  repeals  the  collateral  inherit- 
ance tax  law  and  provides  that  all  penalties  hereafter  incurred  under  it  are 
remitted  and  all  taxes  hereafter  claimed  to  be  due  are  hereby  remitted. 

Va.  St.  1883-84,  c.  513,  approved  March  18,  1884,  provides  wherever  a  tax 
has  been  assessed  under  the  Code  of  1873,  c.  36,  ss.  2  and  7,  which  has  not  been 
paid  or  wherever  any  such  tax  has  been  paid  since  January  1,  1883,  the  party 
taxed  may  apply  to  the  proper  court  to  have  the  tax  corrected  as  an  erroneous 
assessment  and  to  have  the  tax  refunded,  excepting  the  cost  of  collection. 
Such  applications  shall  be  made  within  twelve  months  of  the  passage  of  the  act. 

Va.  St.  1896,  c.  334,  p.  367,  approved  February  14,  1896,  levied  a  tax  of  five 
per  cent  on  lineals. 

Va.  St.  1897-98,  c.  539,  approved  February  28,  1898,  amends  Va.  St.  1896,  to 
read  as  follows :  — 

S.  1.  That  where  any  estate,  within  this  commonwealth  of  any  decedent 
shall  pass  under  his  will,  or  the  laws  regulating  descents  and  distributions,  to  any 
other  person,  or  for  any  other  use  than  to  or  for  the  use  of  the  grandfather  and 
grandmother,  father,  mother,  husband,  wife,  brother,  sister,  or  lineal  descendant 
of  such  decedent,  the  estate  so  passing  shall  be  subject  to  a  tax  of  five  per  centum 
on  every  hundred  dollars'  value  thereof;  provided,  that  such  tax  shall  not  be 
imposed  upon  any  property  used  exclusively  for  state,  county,  municipal,  benevo- 
lent, charitable,  educational,  or  religious  purposes. 

S.  2.     This  act  shall  be  in  force  from  its  passage. 

Va.  St.  1898,  c.  539,  p.  569,  approved  February  28,  1898,  amends  Va.  St.  1896, 
s.  1,  by  providing  an  exemption  on  property  used  exclusively  for  state,  county, 
municipal,  benevolent,  charitable,  educational  or  religious  purposes. 

Va.  St.  1897-98,  c.  562,  approved  February  28,  1898,  is  an  act  especially 
exempting  certain  charitable  bequests  in  the  will  of  a  certain  decedent. 

Va.  St.  1903,  c.  148,  s.  44,  provides  a  tax  on  collateral  inheritances  of  five  per 
cent. 

Va.  St.  1910,  c.  148,  approved  March  14,  1910,  amends  Va.  St.  April  16,  1903, 
s.  44. 

Probate  Fees. 

Va.  St.  1842-43,  c.  1,  s.  6,  imposes  a  fee  on  the  probate  of  a  will  and  a  grant 
of  administration  of  fifty  cents. 

Va.  St.  1842-43,  c.  2,  s.  9,  makes  it  the  duty  of  clerks  of  court  to  furnish  a  list 
for  the  issuance  of  all  wills  and  administrations. 

Va.  St.  1843-44,  c.  1,  s.  7,  provides  a  tax  of  fiftv  per  cent  on  every  probate  or 
administration. 


1843-1903.]  VIRGINIA.  1171 

Va.  St.  1843-44,  c.  2.     Passed  February  6,  1844. 

S.  2,  provides  that  the  payment  of  the  probate  or  administration  tax  is  a  pre- 
requisite to  granting  probate  or  administration. 

Va.  St.  1848-49,  c.  1,  s.  3,  imposes  a  tax  of  fifty  per  cent  upon  every  probate 
or  administration. 

Va.  St.  1852,  c.  17,  s.  17,  increases  the  tax  on  probate  and  administrations  to 
seventy-five  cents. 

Va.  St.  1852-53,  c.  8,  s.  16,  imposes  a  tax  on  every  will  or  administration, - 
of  seventy-five  cents  by  which  the  tax  is  to  be  assessed  under  the  Virginia  Code 
chapter  39. 

Va.  St.  1852-53,  c.  8,  s.  16,  provides  a  tax  for  probate  and  administration  of 
seventy-five  cents. 

Va.  St.  1858-54,  c.  2,  s.  16,  provides  a  fee  for  probate  and  administration  of 
seventy-five  cents. 

Va.  St.  1855-56,  c.  9,  s.  30,  makes  the  tax  on  probate  and  administration  one 
dollar. 

Va.  St.  1859-60,  c.  3,  s.  44,  provides  a  tax  on  every  probate  and  administration 
of  one  dollar. 

Va.  St.  1861-62,  c.  1,  s.  18,  increased  the  rate  of  probate  and  administration 
to  one  dollar  and  fifty  cents. 

Va.  St.  1863,  passed  March  28,  1863,  c.  1,  s.  23,  imposes  a  tax  of  two  dollars 
and  fifty  cents  on  the  probate  of  every  will  or  grant  of  administration  not  then 
exempt  by  law. 

Va.  St.  1864-65,  c.  39,  passed  March  3,  1865,  s.  33,  imposes  on  the  probate  of 
every  will  or  administration  a  tax  of  one  dollar. 

Va.  St.  1865-66,  c.  3,  s.  18,  imposes  a  tax  of  one  dollar  on  every  probate  or 
administration  not  exempt  by  law. 

Va.  St.  1869-70,  c.  226,  s.  13,  imposes  a  tax  of  one  dollar  on  every  probate  or 
administration  where  the  estate  does  not  exceed  one  thousand  dollars,  and  for 
every  additional  one  hundred  dollars  an  additional  tax  of  ten  cents. 

Va.  St.  1874-75,  c.  239,  approved  March  31,  1875,  s.  13,  imposes  a  tax  on  pro- 
bates and  administration  of  one  dollar  where  the  estate  does  not  exceed  a  thousand 
dollars,  and  for  every  additional  one  hundred  dollars  an  additional  tax  of  ten 
cents,  except  where  the  estate  is  committed  to  a  sheriflF  to  be  administered. 
(This  exception  of  estates  committed  to  a  sheriff  occurs  in  all  these  statutes.) 

Va.  St.  1875-76,  c.  162,  approved  March  27,  1876,  s.  13,  imposes  a  tax  of  one 
dollar  on  every  probate  and  administration  where  the  estate  does  not  exceed  one 
thousand  dollars,  and  for  every  additional  one  hundred  dollars  or  fraction  an 
additional  tax  of  ten  cents. 

Va.  St.  1881-82,  c.  119,  approved  April  22,  1882,  s.  13,  imposes  a  tax  of  one 
dollar  on  probates  and  administrations  not  exempt  by  law  where  the  estate  shall 
not  exceed  a  thousand  dollars,  and  for  every  additional  one  hundred  dollars  an 
additional  tax  of  ten  cents. 

Va.  St.  1883-84,  c.  450,  s.  12,  imposes  a  tax  of  one  dollar  on  every  probate  and 
administration  where  the  estate  does  not  exceed  a  thousand  dollars,  and  for 
every  additional  one  hundred  dollars  an  additional  tax  of  ten  cents. 

Va.  St..  1903,  c.  148,  approved  April  16,  1903,  s.  12,  provides  a  tax  on  pro- 
bates and  administration  of  one  dollar  where  the  estate  does  not  exceed  a  thou- 
sand dollars,  and  for  every  additional  one  hundred  dollars  an  additional  tax 
of  ten  cents. 


1172  STATUTES  ANNOTATED.  [Va.  Code. 

THE  PRESENT  ACT. 

Va.  Code. 

S.  44.  (As  amended  by  St.  1910,  c.  148,  approved  March  14,  1910.)  (a)  Tax 
on  collateral  inheritance.  Where  any  estate  in  this  commonwealth  of  any  de- 
cedent shall  pass  under  his  will,  or  the  laws  regulating  descents  and  distributions, 
to  any  other  person  or  for  any  other  use  than  to  or  for  the  use  of  the  grandfather 
and  grandmother,  father,  mother,  husband,  wife,  brother,  sister  or  lineal 
descendant  of  such  decedent,  the  estate  so  passing  shall  be  subject  to  a  tax  at 
the  rate  of  five  per  centum  on  every  hundred  dollars'  value  thereof:  provided,  that 
such  tax  shall  not  be  imposed  upon  any  property  bequeathed  or  devised  where 
such  bequest  or  devise  is  exclusively  for  state,  county,  municipal,  benevolent, 
charitable,  educational,  or  religious  purposes. 

{b)  The  personal  representative  of  such  decedent  shall  pay  the  whole  of  such 
tax,  except  on  real  estate,  to  sell  which  or  to  receive  the  rents  and  profits  of  which 
he  is  not  authorized  by  the  will,  and  the  sureties  on  his  official  bond  shall  be  bound 
for  the  payment  thereof. 

(c)  Where  there  is  no  personal  estate,  or  the  personal  representative  is  not 
authorized  to  sell  or  receive  the  rents  and  profits  of  the  real  estate,  the  tax  shall 
be  paid  by  the  devisee  or  devisees,  or  those  to  whom  the  estate  may  descend  by 
operation  of  law;  and  the  tax  shall  be  a  lien  on  such  real  estate,  and  the  treasurer 
may  rent  or  levy  upon  and  sell  so  much  of  said  real  estate  as  shall  be  sufficient  to 
pay  the  tax  and  expenses  of  sale,  etc. 

(d)  Such  payment  shall  be  made  to  the  treasurer  of  the  county  or  city  in 
which  certificate  was  granted  such  personal  representative  for  obtaining  probate 
of  the  will  or  letters  of  administration. 

(e)  The  corporation  or  hustings  court  of  a  city,  the  circuit  court  of  a  county, 
or  city,  the  chancery  court  of  the  city  of  Richmond,  the  law  and  chancery  court 
of  the  city  of  Norfolk,  or  the  clerk  of  the  circuit  court  of  a  county  or  city,  before 
whom  a  will  is  probated  or  administration  is  granted  shall  determine  the  collateral 
inheritance  tax,  if  any,  to  be  paid  on  the  estate  passing  by  will  or  administra- 
tion, and  shall  enter  of  record  in  the  order  book  of  the  court  or  clerk,  as  the 
case  may  be,  by  whom  such  tax  shall  be  paid  and  the  amount  to  be  paid.  The 
clerk  of  the  court  shall  certify  a  copy  of  such  order  to  the  treasurer  of  his  county 
or  city  and  to  the  auditor  of  public  accounts,  for  which  services  the  clerk  shall  be 
paid  a  fee  of  two  dollars  and  fifty  cents  by  the  personal  representative  of  the 
estate.  The  auditor  of  public  accounts  shall  charge  the  treasurer  with  the  tax, 
and  the  treasurer  shall  pay  the  same  into  the  treasury  as  soon  as  collected,  less 
a  commission  of  five  per  centum.  Every  personal  representative  or  other  party 
or  officer  failing  in  any  respect  to  comply  with  this  section  shall  forfeit  one  hundred 
dollars. 

(/)  Any  personal  representative,  devisee  or  person  to  whom  the  estate  may 
descend  by  operation  of  law,  failing  to  pay  such  tax  before  the  estate  on  which 
it  is  chargeable  is  paid  or  delivered  over  (whether  he  be  applied  to  for  the  tax 
or  n(Jt)  shall  be  liable  to  damages  thereon  at  the  rate  of  ten  per  centum  per  annum 
for  the  time  such  estate  is  paid  or  delivered  over  until  the  tax  is  paid,  which 
damages  may  be  recovered,  with  the  tax,  on  motion  of  the  commonwealth,  and 
in  the  name  of  the  commonwealth  against  him  in  the  circuit  court  for  the  county 
or  in  the  corporation  court  of  the  city  wherein  such  tax  was  assessed,  except  that 


Va.  Code.]  VIRGINIA.  1173 

in  the  city  of  Richmond,  the  motion  shall  be  in  the  chancery  court.  Such  estate 
shall  be  deemed  paid  or  delivered  at  the  end  of  a  year  from  the  decedent's  death, 
unless  and  except  so  far  as  it  may  appear  that  the  legatee  or  distributee  has  ne  ther 
received  such  estate,  nor  is  entitled  then  to  demand  it. 

Not  a   Property  Tax. 

The  collateral  inheritance  tax  is  not  a  tax  on  property.  Wythe- 
ville  V.  Johnson,  108  Va.  589,  62  S.  E.  328,  18  L.  R.  A.  (N.  S.)  960. 
Schoolfield  v.  Lynchburg,  78  Va.  366,  372. 

Uniformity. 

It  was  argued  that  the  inheritance  tax  lacked  uniformity  because 
it  was  not  fixed  at  a  sum  certain,  the  same  to  all,  but  varied  accord- 
ing to  the  value  of  the  estate  taken.  The  court  holds  that  the  legis- 
lature may  define  the  class  to  which  this  tax  shall  be  restricted, 
taking  care  to  render  it  uniform  with  all  those  who  constitute 
the  class.   Eyre  v.  Jacob,  14  Gratt.  (Va.)  422,  73  Am.  Dec.  367. 

As  the  Virginia  statute  of  1854  is  not  a  property  tax  the  ad 
valorem  principle  cannot  be  applied  to  it  and  therefore  it  is  not 
within  the  provision  of  the  twenty-second  section  nor  of  the  twenty- 
third  section  of  the  Virginia  constitution,  the  twenty-second  sec- 
tion declaring  that  all  other  property  than  slaves  shall  be  taxed  in 
proportion  to  its  value,  the  twenty-third  section  regulating  the  taxa- 
tion of  slaves. 

Judge  Lee,  in  delivering  the  opinion  of  the  court,  said : — 

"I  do  not  perceive  wherein  the  inequality  and  want  of  uniformity 
complaiped  of  can  be  said  to  consist.  .  .  .  The  tax  is  equal 
and  uniform  throughout  the  state  as  far  as  it  is  susceptible  of  the 
application  of  the  rule.  It  is  the  same  everywhere  upon  the  suc- 
cession to  estates  of  equal  value  of  whatever  subjects  they  may  con- 
sist."  Eyre  v.  Jacob,  1858,  14  Gratt.  422. 

Classification  by  Relationship  Valid. 

That  the  inheritance  tax  is  confined  to  collateral  inheritances  and 
devises  presents  no  difficulty.  The  discretion  of  the  legislature 
to  make  this  discrimination  must  be  regarded  as  having  been  prop- 
erly exercised.  Eyre  v.  Jacob,  14  Gratt.  (Va.)  422,  431,  73  Am. 
Dec.  367. 

Absolute  Power  of  State  over  Descents. 

"That -the  general  assembly  of  Virginia  in  the  absence  of  a  con- 
stitutional prohibition  does  possess  the  power  to  tax  a  civil  right 


1174  STATUTES  ANNOTATED.  [Va.  Code. 

or  privilege  like  this  is  beyond  all  question.  This  is  fully  embraced 
within  its  general  and  comprehensive  power  upon  the  subject  to 
which  allusion  has  already  been  made.  But  it  may  be  deduced 
from  the  very  nature  of  the  subject  itself.  The  right  to  take  prop- 
erty by  devise  or  descent  is  the  creature  of  the  law  and  secured  and 
protected  by  its  authority.  The  legislature  might,  if  it  saw  proper, 
restrict  the  succession  to  a  decedent's  estate,  either  by  devise  or 
descent  to  a  particular  class  of  his  kindred,  say  to  his  lineal  descend- 
ants and  ascendants;  it  might  impose  terms  and  conditions  upon 
which  collateral  relations  may  be  permitted  to  take  it;  or  it  may 
tomorrow,  if  it  pleases,  absolutely  repeal  the  statute  of  wills  and 
that  of  descents  and  distributions  and  declare  that  upon  the  death 
of  a  party  his  property  shall  be  applied  to  the  payment  of  his 
debts  and  the  residue  appropriated  to  public  uses.  Possessing  this 
sweeping  power  over  the  whole  subject,  it  is  difficult  to  see  upon 
what  ground  its  right  to  appropriate  a  modicum  of  the  estate,  call 
it  a  tax  or  what  you  will,  as  the  condition  upon  which  those  who  take 
the  estate  shall  be  permitted  to  enjoy  it,  can  be  successfully  ques- 
tioned." Per  Lee,  J.,  in  Eyre  v.  Jacob,  14  Gratt.  (Va.)  422,  430, 
73  Am.  Dec.  367. 

Power  in  Legislature  and  not  in  Municipal  Corporations. 

The  collateral  inheritance  tax  is  not,  in  a  proper  legal  sense,  a 
tax  upon  property,  but  is  a  premium  demanded  for  the  privilege  of 
transmitting  an  estate,  and  the  imposition  of  such  a  tax  is  a  power 
inherent  in  the  legislature  in  the  absence  of  express  constitutional 
prohibition.  The  legislature  has  the  power  to  confer  on  municipal 
corporations  the  right  to  levy  an  inheritance  tax,  but  such  power 
cannot  be  inferred  from  the  legislative  authority  unless  such 
appears  to  be  the  clear  legislative  intent.  Schoolfield  v.  Lynchburg, 
78  Va.  366,  372. 

The  testator  died  June  21,  1907.  On  August  2,  1907,  the  town 
council  of  the  town  of  her  domicile  passed  an  ordinance  levying  a 
collateral  inheritance  tax  for  the  use  of  the  town  and  declared  that 
the  ordinance  should  take  effect  from  January  1,  1907.  The  au- 
thority to  towns  under  the  Virginia  code  of  1904,  section  1043, 
to  levy  taxes  allows  the  tax  to  be  levied  "upon  any  property  therein, 
and  upon  such  other  subject  as  may  at  that  time  be  assessed  with 
state  taxes  against  persons  residing  therein."  The  town  charter 
provides  that  the  council  "may  raise  taxes  annually  by  assessments 
in  said  town  on  all  subjects  taxable  by  the  state." 


Va.  Code.]  VIRGINIA.  1175 

The  court  holds,  however,  that  the  section  of  the  code  and  the 
town  charter  apply  only  to  the  ordinary  annually  recurring  tax  on 
property  and  other  subjects  of  taxation,  and  not  to  sporadic  sub- 
jects which,  though  connected  with  the  transmission  and  enjoy- 
ment of  property,  are  casual  in  their  nature  and  not  recurrent. 
The  court  notes  further  that  a  collateral  inheritance  tax  is  not  in 
any  proper  sense  a  tax  on  property.  Wytheville  v.  Johnson,  108 
Va.  589,  62  S.  E.  328,  18  L.  R.  A.  N.  S.  960. 

The  authority  given  to  a  town  to  levy  taxes  upon  any  property  in 
said  town  cannot  be  held  to  confer  the  power  to  levy  an  inheritance 
tax  as  this  is,  not  a  property  tax.  But  this  provision  applies  only 
to  subjects  such  as  are  assessed  annually  with  state  taxes.  School- 
field  V.Lynchburg,  78  Va.  366,  373. 

Practice. 

The  levy  by  the  sheriff  for  the  collection  of  inheritance  tax  was 
attacked  by  injunction  and  the  attorney  general  did  not  contro- 
vert the  propriety  of  the  proceeding  in  Eyre  v.  Jacob,  14  Gratt. 
(Va.)  422,  73  Am.  Dec.  367. 

A  general  exemption  from  taxation  of  the  property  of  certain 
charitable  institutions  does  not  include  an  exemption  from  a 
devise  or  bequest  of  property  to  such  institution.  Miller  v.  Common- 
wealth, 27  Gratt.  (Va.)  110,  118. 

Corporations  Included  under  Persons. 

The  omission  in  the  Virginia  statute  of  1867,  c.  64,  s.  3,  of  the 
words  "bodies  politic  and  corporate,"  and  of  the  words  "to  any 
other  use  than  to  and  for  the  use  of  the  father,"  etc.,  cannot  be 
taken  as  an  indication  of  an  intention  of  the  legislature  to  exempt 
corporations  from  this  tax.  If  the  word  "person"  in  the  act 
embraces  corporations,  then  these  words  were  useless  and  unnec- 
essary and  were  properly  omitted,  and  the  court  finds  that  "per- 
son" here  covers  corporations.  Miller  v.  Commonwealth,  27  Gratt. 
(Va.)  110,  116. 


1176  STATUTES  ANNOTATED.  [Wash.  St. 


WASHINGTON, 


In  General. 

Washington  adopted  an  inheritance  tax  in  1901,  with  important 
amendments  in  1905  and  1907.  The  exemption  under  direct  in- 
heritances applies  to  the  estate  as  a  whole,  not  to  individual  shares, 
and  if  the  Washington  portion  of  the  estate  of  a  non-resident  is 
less  than  this  amount  the  estate  is  not  taxed. 

Washington  taxes  stock  of  a  Washington  corporation  owned  by 
a  non-resident.  A  corporation  that  transfers  stock  or  a  safe 
deposit  company  that  delivers  over  securities  without  notifying 
the  state  treasurer  is  responsible  for  the  tax. 

Washington  has  not  hitherto  made  any  claim  for  inheritance 
taxes  where  a  deceased  non-resident  owns  stock  in  a  foreign  cor- 
poration owning  property  within  the  state  of  Washington,  but  the 
tax  commission  proposes  ^o  undertake  the  collection  of  such  a  tax 
in  the  near  future.  It  is  not  the  practice  to  require  an  inventory 
of  the  entire  estate  before  permitting  the  corporation  to  transfer 
stock  owned  by  a  deceased  non-resident. 

The  twenty-five  per  cent  tax  on  inheritances  to  non-resident 
aliens,  which  the  courts  had  declared  invalid  as  in  conflict  with 
certain  treaties,  was  repealed  in  1911. 

Constitutional  Limitations. 

Washington  Constitution  1889,  a.  7. 

S.  1.  All  property  in  the  state,  not  exempt  under  the  laws  of  the  United  States, 
or  under  this  constitution,  shall  be  taxed  in  proportion  to  its  value,  to  be  ascer- 
tained as  provided  by  law.  .  .  . 

S.  2.  The  legislature  shall  provide  by  law  a  uniform  and  equal  rate  of  assess- 
ment and  taxation  on  all  property  in  the  state,  according  to  its  value  in  money, 
and  shall  prescribe  such  regulations  by  general  law  as  shall  secure  a  just  valuation 
for  taxation  of  all  property,  so  that  every  person  and  corporation  shall  pay  a 
tax  in  proportion  to  the  value  of  his,  her  or  its  property:  Provided.That  a  deduc- 
tion of  debts  from  credits  may  be  authorized.  .  .  . 


1901,  c.  55.]  WASHINGTON.  1177 

List  of  Statutes. 

1901.  Statutes  of  Washington,  c.    55,  p.    67. 

1899-1903.    Supplement  to  BalUnger's  Code,  p.  114,  s.  1655. 

1905.  Statutes  of  Washington,  c.    93,  p.  199. 

1905.  "         "  "  c.  114,  p.  222. 

1905.  "         "  "  c.  115,  p.  225,  s.  2,  clause  3. 

1907.  c.  217,  pp.  499-506 

1907.  Revenue  Laws,  ss.  204-221. 

1910.  Remington  &  Bellinger's  Annotated  Codes  &  Statutes,  vol.  2,  c.  7, 

ss.  9182,  9199. 

1911.  Statutes  of  Washington,  c.  19,  p.  60. 

Power  of  Legislature. 

It  was  urged  that  the  state  constitution  grants  to  the  legislature 
special  and  delegated  powers,  and  legislative  enactments,  to  be 
valid,  must  come  within  such  grant  of  powers.  But  the  court  finds 
that  the  legislature  in  the  absence  of  constitutional  prohibition 
has  the  power  to  impose  conditions  by  way  of  a  tax  upon  legacies 
and  successions.     State  v.  Clark,  30  Wash.  439,  71  P.  20. 


THE  ACT  OF   1901. 

Wash.  St.  1901,  c.  55.     Approved  March  6,  1901. 

An  Act  relating  to  the  taxation  of  inheritances  and  providing  for 
w  disposition  of  same. 

It  was  claimed  that  the  title  was  not  broad  enough  to  sustain 
the  pr6vision  which  imposes  a  tax  upon  property  passing  by  will. 
The  court  observes  that  the  word  "inheritance"  is  no  doubt  properly 
confined  to  property  passing  by  descent  or  by  operation  of  law. 
But  by  popular  use  this  word  has  become  applicable  to  cases  of 
testacy  and  the  court  is  therefore  of  opinion  that  the  title  of  the  act 
is  broad  enough  to  sustain  the  provision  imposing  a  tax  on  the  right 
of  succession  by  will.     In  re  White,  42  Wash.  360,  84  P.  831. 

S.  1.  All  property  within  the  jurisdiction  of  this  state,  and  any  interest 
therein,  whether  belonging  to  the  inhabitants  of  this  state  or  not,  and  whether 
tangible  or  intangible,  which  shall  pass  by  will  or  by  the  statutes  of  inheritance 
of  this  or  any  other  state,  or  by  deed,  grant,  sale  or  gift  made  or  intended  to 
take  effect  in  possession  or  in  enjoyment  after  the  death  of  the  grantor  or  donor 
to  any  person  in  trust  or  otherwise,  shall,  for  the  use  of  the  state,  be  subject  to 
a  tax  as  provided  for  in  section  two  of  this  act,  after  the  payment  of  all  debts 
owing  by  the  decedent  at  the  time  of  his  death,  the  local  and  state  taxes  due  from 
the  estate  prior  to   his  death,  and  a  reasonable  sum  for  funeral  expenses,  court 


1178  STATUTES  ANNOTATED.  [Wash.  St. 

costs,  including  cost  of  appraisement  made  for  the  purpose  of  assessing  the 
inheritance  tax,  the  statutory  fees  of  executors,  administrators  or  trustees,  and 
no  other  sum,  but  said  debts  shall  not  be  deducted  unless  the  same  are  allowed 
or  established  within  the  time  provided  by  law,  unless  otherwise  ordered  by  the 
judge  or  court  of  the  proper  county  and  all  administrators,  executors  and  trustees, 
and  any  such  grantee  under  a  conveyance,  and  any  such  donee  under  a  gift,  made 
during  the  grantor's  or  donor's  life,  shall  be  respectively  liable  for  all  such  taxes 
to  be  paid  by  them,  with  lawful  interest  until  the  same  shall  have  been  paid. 
The  inheritance  tax  shall  be  and  remain  a  lien  on  such  estate  from  the  death 
of  the  decedent  until  paid. 

Nature  of  Succession  and  of  Tax. 

The  court  finds  that  the  right  to  inherit  or  to  take  on  the  death 
of  the  owner  is  a  creature  of  law  and  not  a  natural  right,  and  that 
an  inheritance  tax  is  not  a  tax  on  property  but  one  on  succession. 
State  V.  Clark,  30  Wash.  439,  71  P.  20. 

Validity  of  Exemption. 

It  was  claimed  that  an  exemption  of  ten  thousand  dollars  in 
value  from  estates  going  to  lineals,  which  exemption  was  not  ex- 
tended to  collaterals  or  strangers,  violated  the  rule  of  equality 
in  taxation.  But  the  court  observes  that  the  rule  invoked  does 
not  forbid  a  liberal  classification  for  the  purposes  of  taxation. 
The  classification  made  here  is  manifestly  reasonable  and  there  is 
no  inequality  among  the  ihembers  of  the  same  class.  State  v.  Clark, 
30  Wash.  439,  71  P.  20,  23. 

Decree  of  Foreign  Court. 

The  testator  was  a  resident  of  Maine  and  died  there  leaving 
property  both  in  Maine  and  in  Washington.  The  Maine  court 
ordered  distribution  of  the  estate  of  the  testator  within  the  state 
of  Maine  to  collateral  heirs  and  strangers  in  full,  and  this  was 
done  leaving  the  entire  estate  in  Washington  to  pass  to  lineals. 

The  Washington  court  holds  that  it  must  presume  that  the 
authority  of  the  Maine  court  was  rightfully  exercised  and  cannot 
hold  the  executor  here  or  other  legatees  responsible  for  the  errors  of 
that  court.  The  fact  that  the  same  persons  acted  as  executors  in 
both  states  and  the  fact  that  the  executors  were  beneficiaries 
under  the  will  can  make  no  difference. 

*  The  Washington  court  has  no  right  or  power  to  review  the  judg- 
ment of  the  court  of  Maine.  The  executor  in  Washington  had  no 
opportunity  to  collect  the  inheritance  tax  from  the  collateral  heirs 
and   strangers   to   the  blood,    and    this    court   will    not    compel 


1901,  c.  55.]  WASHINGTON.  1179 

him    to     pay   such   tax   out   of   his   own    funds   or   out   of   the 
funds  belonging  to  other  heirs  or  legatees.     In  re  Clark,  37  Wash 
671,  80  P.  267. 

S.  2.  The  inheritance  tax  shall  be  and  is  to  be  levied  on  all  estates  subject 
to  the  operation  of  this  act  on  all  sums  above  the  first  $10,000.00  where  the 
same  shall  pass  to  or  for  the  use  of  the  father,  mother,  husband,  wife,  lineal 
descendant,  adopted  child,  or  the  lineal  descendant  of  an  adopted  child,  one  (1) 
per  centum.  On  all  sums  not  exceeding  the  first  fifty  thousand  dollars,  of  three 
per  centum,  where  such  estate  passes  to  collateral  heirs  to  and  including  the 
third  degree  of  relationship,  and  to  six  per  cent  where  such  estates  pass  to  col- 
lateral heirs  beyond  the  third  degree  or  to  strangers  to  the  blood.  On  all  sums 
above  the  first  fifty  thousand  dollars  and  not  exceeding  the  first  one  hundred 
thousand  dollars,  four  and  one-half  per  centum  to  collateral  heirs  to  and  includ- 
ing the  third  degree,  and  nine  per  centum  to  collateral  heirs  beyond  the  third 
degree  or  to  strangers  to  the  blood.  And  on  all  sums  in  excess  of  the  first  one 
hundred  thousand  dollars  the  tax  shall  be  six  per  centum  to  collateral  heirs  to 
and  including  the  third  degree,  and  twelve  per  centum  to  collateral  heirs  beyond 
the  third  degree  or  to  strangers  to  the  blood. 

S.  3.  Except  as  to  the  limitations  prescribed  in  section  2  from  the  inheritance 
tax  and  real  property  located  outside  the  state  passing  in  fee  from  the  decedent 
owner,  the  tax  imposed  under  section  two  shall  hereafter  be  assessed  against  and 
be  collected  from  property  of  every  kind,  which,  at  the  death  of  the  decedent  owner 
is  subject  to,  or  thereafter,  for  the  purpose  of  distribution,  is  brought  into  this 
state  and  becomes  subject  to  the  jurisdiction  of  the  courts  of  this  state  for  dis- 
tribution purposes,  or  which  was  owned  by  any  decedent  domiciled  within  the 
state  at  the  time  of  the  death  of  such  decedent,  even  though  the  property  of 
said  decedent  so  domiciled  was  situated  outside  of  the  state. 

S.  4.  In  case  of  any  property  belonging  to  a  foreign  estate,  which  estate,  in 
whole  or  in  part,  is  liable  to  pay  a  collateral  inheritance  tax  in  this  state,  the  said 
tax  shall  be  assessed  upon  the  market  value  of  said  property  remaining  after  the 
payment  of  such  debts  and  expenses  as  are  chargeable  to  the  property  under 
the  laws  of  this  state.  In  the  event  that  the  executor,  administrator  or  trustee 
of  such  foreign  estate  files  with  the  clerk  of  the  court  having  ancillary  jurisdiction 
and  with  the  state  treasurer  duly  certified  statements  exhibiting  the  true  market 
value  of  the  entire  estate  of  the  decedent  owner,  and  the  indebtedness  for  which 
the  said  estate  has  been  adjudged  liable,  which  statements  shall  be  duly  attested 
by  the  judge  of  the  court  having  original  jurisdiction,  the  beneficiaries  of  said 
estate  shall  then  be  entitled  to  have  deducted  such  proportion  of  the  said  in- 
debtedness of  the  decedent  from  the  value  of  the  property  as  the  value  of  the 
property  within  this  state  bears  to  the  value  of  the  entire  estate. 

Ss.  5,  6,  and  7  provide  for  the  inventory  and  appraisal. 
S.  8  covers  the  assessment  of  the  tax  on  life  estates  and  estates  for  years. 
S.  9  covers  the  tax  on  legacies    to    executors    above   compensation    for   their 
services. 

Ss.  10-18  cover  the  assessment,  collection  and  payment  of  the  tax. 


1180  STATUTES  ANNOTATED.  (Wash.  St. 

AMENDMENTS. 

Wash.  St.  1905,  c.  93.     Approved  March  9,  1905. 

An  Act  to  exempt  bequests  and  devises,  when  made  for  certain  chari- 
table purposes,  from  the  payment  of  any  tax  or  sum  under  any  inheritance 
tax  law,  and  remitting  any  such  tax  claimed  to  be  due  on  any  such  bequest 
or  inheritance. 

S.  1.  All  bequests  and  devises  of  property  within  this  state  when  the  same  is 
for  one  of  the  following  charitable  purposes,  namely:  The  relief  of  aged,  im- 
potent (indigent)  and  poor  people;  maintenance  of  the  sick  or  maimed  or  the 
support  or  education  of  orphans  or  indigent  children  shall  be  exempt  from  the 
payment  of  any  tax  or  sum  under  any  inheritance  tax  law;  and  any  property  in 
this  state  which  has  been  devised  or  bequeathed  for  such  charitable  purposes, 
and  upon  which  a  state  inheritance  tax  is  claimed  or  is  owing,  is  hereby  declared 
to  be  exempt  from  the  payment  of  such  tax,  and  the  same  is  hereby  remitted. 

Wash.  St.  1905,  c.  114,  approved  March  9,  1905,  amends  Wash.  St.  1901, 
ss.  13  and  15. 

Wash.  St.  1905,  c.  115,  approved  March  9,  1905,  s.  2,  clause  3,  gives  the  state 
tax  commission  authority  over  the  enforcement  of  the  direct  and  collateral 
inheritance  law  and  the  collection  of  taxes  provided  for  therein. 

Wash.  St.  1907,  c.  217,  approved  March  16,  1907,  amends  Wash.  St.  1901, 
ss.  1,  2,  4,  7,  9,  10,  12,  14,  17,  18  and  repeals  s.  5,  and  amends  ss.  1  and  2  of  the 
amendatory  act  of  1905. 

Wash.  St.  1907,  c.  217.     Approved  March  16,  1907. 

S.  2.  That  section  two  (2)>of  said  act  be  and  the  same  is  hereby  amended 
to  read  as  follows:  Sec.  2.  The  inheritance  tax  shall  be  and  is  to  be  levied  on 
all  estates  subject  to  the  operation  of  this  act  on  all  sums  above  the  first  $10,000.00, 
where  the  same  shall  pass  to  or  for  the  use  of  the  father,  mother,  husband,  wife, 
lineal  descendant,  adopted  child,  or  the  lineal  descendant  of  an  adopted  child, 
one  (1)  per  centum.  On  all  sums  not  exceeding  the  first  fifty  thousand  dollars, 
of  three  per  centum,  where  such  estate  passes  to  collateral  heirs  to  and  including 
the  third  degree  of  relationship,  and  to  six  per  cent  where  such  estates  pass  to 
collateral  heirs  beyond  the  third  degree,  or  to  strangers  to  the  blood.  On  all 
sums  above  the  first  fifty  thousand  dollars  and  not  exceeding  the  first  one  hundred 
thousand  dollars,  four  and  one-half  per  centum  to  collateral  heirs,  to  and  includ- 
ing the  third  degree,  and  nine  per  centum  to  collateral  heirs,  beyond  the  third 
degree,  or  to  strangers  to  the  blood.  And  on  all  sums  in  excess  of  the  first  one 
hundred  thousand  dollars,  the  tax  shall  be  six  per  centum  to  collateral  heirs  to 
and  including  the  third  degree,  and  twelve  per  centum  to  collateral  heirs  beyond 
the  third  degree  or  to  strangers  to  the  blood:  Provided,  That  on  all  sums  passing 
to  or  for  the  benefit  of  collateral  relatives  or  strangers  of  the  blood,  who  are  aliens 
not  residing  in  the  United  States,  a  tax  of  twenty-five  per  centum  shall  be  levied 
and  collected. 

Alien  Tax  Invalid  as  to  Certain  Treaties. 

Wash.  St.  1907,  c.  217,  s.  2,  imposed  an  inheritance  tax  of  twenty- 
five  per  cent  on  collaterals  or  strangers  who  are  aliens  not  residing 


1901,  c.  55.]  WASHINGTON.  1181 

in  the  United  States,  and  a  tax  of  only  three  per  cent  on  property 
passing  to  citizens  of  the  United  States.  This  provision  is  void 
as  contravening  the  words  of  the  treaty  between  the  United  States 
and  Norway  and  Sweden  of  1827,  article  17,  which  provides  that 
inheritances  passing  from  one  country  to  the  other  "shall  be 
exempt  from  all  duty  called  droit  de  detraction  on  the  part  of  the 
government  of  the  two  states  respectively,"  and  that  the  heirs 
shall  have  the  right  to  receive  the  succession  without  having 
occasion  to  take  out  letters  of  naturalization. 

The  treaty  between  Norway  and  Sweden  and  the  United  States  of 
1827  uses  the  words  "goods  and  effects"  to  designate  the  property 
the  treaty  is' applicable  to,  but  the  court  holds  that  these  words 
include  real  estate,  following  Adams  v.  Akerlund,  168  111.  632, 
48  N.  E.  454,  and   University  v.  Miller,  14  N.  C.  207. 

The  treaty  of  1827  further  provided  for  succession  by  "heirs," 
and  the  court  notes  that  this  word  has  a  technical  common  law 
meaning  restricting  it  to  those  who  take  by  inheritance  only,  while 
by  the  civil  law  it  applies  to  all  persons  who  are  called  to  the  suc- 
cession whether  by  act  of  the  party  or  by  operation  of  law.  As 
the  word  is  used  in  this  treaty  by  countries  in  one  of  which  the 
common  law  prevails  and  the  other  of  which  the  civil  law  prevails, 
there  does  not  appear  to  be  any  reason  for  here  attributing  to  it 
the  technical  meaning  of  either  of  these  systems  of  law  in  preference 
to  the  other,  and  hence  the  word  "heirs"  includes  those  who  receive 
by  will  as  well  as  those  who  receive  by  operation  of  law.  In  re 
Stixrud,  58  Wash.  339,  109  P.  343,  349. 

Alien  Tax.  —  Validity  under  State  Constitution. 

The  question  whether  the  Washington  statute  of  1907,  c.  217, 
s.  2,  is  unconstitutional  in  view  of  the  provisions  of  the  Washing- 
ton state  constitution,  in  so  far  as  it  placed  a  higher  tax  on  aliens 
than  it  did  on  residents,  was  not  decided  in  In  re  Stixrud,  58 
Wash.  339,  109  P.  343. 

Wash.  St.  1911,  c.  19,  abolished  the  twenty-five  per  cent  tax  on  non-resident 
aliens. 

THE  PRESENT  ACT. 
Wash.  St,  1901,  c.  55,  as  amended. 

S.  1.  Property  subject  to  inheritance  tax.  All  property  within  the 
jurisdiction  of  this  state,  and  any  interest  therein,  whether  belonging  to  the 
inhabitants  of  this  state  or  not,  and  whether  tangible  or  intangible,  which  shall 
pass  by  will  or  by  the  statutes  of  inheritance  of  this  or  any  other  state,  or  by  deed, 


1182  STATUTES  ANNOTATED.  [Wash.  St. 

grant,  sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor  or  donor, 
or  by  deed,  grant,  sale  or  gift  made  or  intended  to  take  effect  in  possession  or  in 
enjoyment  after  the  death  of  the  grantor  or  donor  to  any  person  in  trust 
or  otherwise,  shall,  for  the  use  of  the  state,  be  subject  to  a  tax  as  provided 
for  in  section  two  of  this  act,  after  the  payment  of  all  debts  owing  by  the  decedent 
at  the  time  of  his  death,  the  local  and  state  taxes  due  from  the  estate  prior  to 
his  death,  and  a  reasonable  sum  for  funeral  expenses,  court  costs,  including  cost 
of  appraisement  made  for  the  purpose  of  assessing  the  inheritance  tax,  the  statu- 
tory fees  of  executors,  administrators  or  trustees,  and  no  other  sum,  but  said 
debts  shall  not  be  deducted  unless  the  same  are  allowed  or  established  within  the 
time  provided  by  law,  unless  otherwise  ordered  by  the  judge  or  court  of  the  proper 
county,  and  all  administrators,  executors  and  trustees,  and  any  such  grantee 
under  a  conveyance,  and  any  such  donee  under  a  gift,  made  during  the  grantor's 
or  donor's  life,  shall  be  respectively  liable  for  all  such  taxes  to  be  paid  by  them, 
with  lawful  interest  until  the  same  shall  have  been  paid.  The  inheritance  tax 
shall  be  and  remain  a  lien  on  such  estate  from  the  death  of  the  decedent  until 
paid.     (L.  '07,  s.  1,  p.  499.) 

[See  notes  to  the  Act  of  1901,  ante,  p.  1178.] 

S.  2.  Rate  of  levy.  The  inheritance  tax  shall  be  and  is  to  be  levied  on 
all  estates  subject  to  the  operation  of  this  act  on  all  sums  above  the  first  $10,000.00, 
where  the  same  shall  pass  to  or  for  the  use  of  the  father,  mother,  husband,  wife, 
lineal  descendant,  adopted  child,  or  the  lineal  descendant  of  an  adopted  child, 
one  (1)  per  centum.  On  all  sums  not  exceeding  the  first  fifty  thousand  dollars, 
or  three  per  centum,  where  such  estate  passes  to  collateral  heirs  to  and  including 
the  third  degree  of  relationship,  and  to  six  per  cent  where  such  estates  pass  to 
collateral  heirs  beyond  the  thir^  degree,  or  to  strangers  to  the  blood.  On  all  sums 
above  the  first  fifty  thousand  dollars  and  not  exceeding  the  first  one  hundred 
thousand  dollars,  four  and  one-half  per  centum  to  collateral  heirs,  to  and  includ- 
ing the  third  degree,  and  nine  per  centum  to  collateral  heirs,  beyond  the  third 
degree,  or  to  strangers  to  the  blood.  And  on  all  sums  in  excess  of  the  first  one 
hundred  thousand  dollars,  the  tax  shall  be  six  per  centum  to  collateral  heirs  to  and 
including  the  third  degree,  and  twelve  per  centum  to  collateral  heirs  beyond  the 
third  degree  or  to  strangers  to  the  blood:  Provided,  That  on  all  sums  passing  to 
or  for  the  benefit  of  collateral  relatives  or  strangers  of  the  blood,  who  are  aliens 
not  residing  in  the  United  States,  a  tax  of  twenty-five  per  centum  shall  be  levied 
and  collected.     (L.  '07,  s.  2,  p.  500.) 

[The  Washington  legislature  has  by  the  statute  of  1911,  c.  19,  repealed  the 
inheritance  tax  ot  twenty-five  per  cent  on  estates  passing  to  foreign  heirs  and  left 
the  tax  on  the  same  basis  as  though  the  heirs  were  citizens  of  the  United  States.] 

S.  3.  Property  outside  state.  Except  as  to  the  limitations  prescribed 
in  section  two  from  the  inheritance  tax  and  real  property  located  outside  the  state 
passing  in  fee  from  the  decedent  owner,  the  tax  imposed  under  section  two  shae 
hereafter  be  assessed  against  and  be  collected  from  property  of  every  kind,  whichl 
at  the  death  of  the  decedent  owner  is  subject  to,  or  thereafter,  for  the  purpose  of 
distribution,  is  brought  into  this  state  and  becomes  subject  to  the  jurisdiction 
of  the  courts  of  this  state  for  distribution  purposes,  or  which  was  owned  bv  any 
decedent  domiciled  within  the  state  at  the  time  of  the  death  of  such  decedent. 


1901,  c.  55.]  WASHINGTON.  •  1183 

even  though  the  property  of  said  decedent  so  domiciled  was  situated  outside  of 
the  state.     (L.  '01,  s.  3,  p.  68;  P.  C,  s.  8744.) 

S.  4.  Valuation  of  foreign  estate.  In  case  of  any  property  belonging  to 
a  foreign  estate,  which  estate,  in  whole  or  in  part,  is  liable  to  pay  a  collateral  in- 
heritance tax  in  this  state,  the  said  tax  shall  be  assessed  upon  the  market  value  of 
said  property  remaining  after  the  payment  of  such  debts  and  expenses  as  are 
chargeable  to  the  property  under  the  laws  of  this  state.  In  the  event  that  the 
executor,  administrator  or  trustee  of  such  foreign  estate  files  with  the  clerk  of 
the  court  having  ancillary  jurisdiction  and  with  the  state  board  of  tax  com- 
missioners duly  certified  statements  exhibiting  the  true  market  value  of  the  entire 
state  of  the  decedent  owner,  and  the  indebtedness  for  which  the  said  estate  has 
been  adjudged  liable,  which  statements  shall  be  duly  attested  by  the  judge  of  the 
court  having  original  jurisdiction,  the  beneficiaries  of  said  estate  shall  then  be 
entitled  to  have  deducted  such  proportion  of  the  said  indebtedness  of  the  decedent 
from  the  value  of  the  property,  as  the  value  of  the  property  within  thisestate 
bears  to  the  value  of  the  entire  estate.     (L  '07,  s.  3,  p.  501.) 

[S.  5  repealed  by  St.  1907,  c.  217.] 

S.  6.  Payment  of  tax.  —  Sale  of  delinquent.  All  the  real  estate  of  the 
decedent  subject  to  such  tax  shall,  except  as  hereinafter  provided,  be  appraised 
within  the  time  provided  by  law  for  the  appraisement  of  decedent's  estates,  and 
the  tax  thereon,  calculated  upon  the  appraised  value  after  deducting  debts  for 
which  the  estate  is  liable,  shall  be  paid  by  the  person  entitled  to  said  estate  within 
fifteen  months  from  the  approval  by  the  court  of  such  appraisement,  unless  a 
longer  period  is  fixed  by  the  court,  and  in  default  thereof  the  court  may  order 
the  same,  or  so  much  thereof  as  may  be  necessary  to  pay  such  tax,  to  be  sold. 
(L.  '01,  s.  6,  p.  70.) 

S.  7.    by  estates  in  remainder.      When  any  person  shall  devise  any 

real  property  to  or  for  the  use  of  the  father,  mother,  husband,  wife,  lineal  descend- 
ant, adopted  child,  or  lineal  descendant  of  such  child,  during  life  or  for  a  term 
of  years,  and  the  remainder  to  a  collateral  heir  or  to  a  stranger  to  the  blood,  the 
court,  upon  the  determination  of  such  estate  for  life  or  years,  shall  upon  its  own 
motion  or  upon  the  application  of  the  state  board  of  tax  commissioners,  cause 
such  estate  to  be  appraised  at  its  then  actual  market  value  from  which  shall  be 
deducted  the  value  of  any  improvements  thereon  or  betterments  thereto,  made 
by  the  remainder  man  during  the  time  of  the  prior  estate,  to  be  ascertained  and 
determined  by  the  appraiser  and  the  tax  on  the  remainder  shall  be  paid  by  such 
remainder  man  within  six  months  from  the  approval  of  the  court  of  the  report 
of  the  appraisers.  If  such  tax  is  not  paid  within  said  time,  the  court  may  then 
order  said  real  estate,  or  so  much  thereof  as  may  be  necessary  to  pay  said  tax,  to 
be  sold.     (L.  '07,  s.  4,  p.  501.) 

S.  8.     by  estates  for  life.     Whenever  any  real  estate  of  a  decedent 

shall  be  subject  to  such  tax,  and  there  be  a  life  estate  or  interest  for  a  term  of  years 
given  to  a  party  other  than  the  father,  mother,  husband,  wife,  lineal  descendant, 
adopted  child,  or  lineal  descendant  of  such  child,  and  the  remainder  to  a  col- 
lateral heir  or  stranger  to  the  blood,  the  court  shall  direct  the  interest  of  the  life 
estate  or  term  of  years  to  be  appraised  at  the  actual  value  thereof  according  to 
the  rules  or  standards  of  mortality  and  of  value  commonly  used  in  actuaries' 


1184  •  STATUTES  ANNOTATED.  [Wash.  St. 

combined  experience  tables.  The  state  treasurer  is  directed  to  obtain  and  pub- 
lish for  the  use  of  the  courts  and  appraisers  throughout  the  state  tables  showing 
the  average  expectancy  of  life,  and  the  value  of  annuities  of  life  and  term  estates, 
and  the  present  worth  or  value  of  remainders  and  reversions.  The  taxable  value 
of  life  or  term,  deferred  or  future  estates,  shall  be  computed  at  the  rate  of  four  per 
cent  per  annum  interest.  Whenever  it  is  desired  to  remove  the  lien  of  the  in- 
heritance tax  on  remainders,  reversions  or  deferred  estates,  parties  owning  the 
beneficial  interest  may  pay  at  any  time  the  said  tax  on  the  present  worth  of  such 
interest  determined  according  to  the  rules  herein  fixed.  Upon  the  approval  of 
such  appraisement  by  the  court,  the  party  entitled  to  such  life  estate  or  term  of 
years  shall  within  sixty  days  thereafter  pay  the  tax  on  such  life  or  term  estate, 
and  in  default  thereof  the  court  may  order  such  interest  in  such  estate  or  so  much 
thereof  as  shall  be  necessary  to  pay  such  tax,  to  be  sold.  Upon  the  determina- 
tion of  such  life  estate  or  term  of  years,  unless  the  tax  on  the  remainder  shall  have 
been  previously  paid,  as  provided  in  this  section,  the  same  provision  shall  apply 
as  to  the  ascertainment  of  the  amount  of  the  tax  and  the  collection  of  the  same  on 
the  real  estate  in  remainder  as  in  like  cases  is  provided  in  the  preceding  section. 
Whenever  any  personal  estate  of  a  decedent  shall  be  subject  to  such  tax,  and  there 
be  a  life  estate  or  interest  for  a  term  of  years  given,  the  court  shall  inquire  into 
and  determine  the  value  of  the  life  estate  or  interest  for  the  terms  of  years,  and 
order  and  direct  the  amount  of  the  tax  thereon  to  be  paid  by  the  prior  estate,  and 
that  to  be  paid  by  the  remainder  man,  each  of  whom  shall  pay  their  proportion 
of  such  tax  within  six  months  from  such  determination,  unless  a  longer  period 
is  fixed  by  the  court,  and  in  default  thereof  the  executor,  administrator  or  trustee 
shall  pay  the  tax  out  of  said  property,  as  the  court  may  direct.  (L.  '01,  s.  8,  p. 
70.) 

S.  9.  Executor  shall  pay  if  devisee  or  legatee.  Whenever  a  decedent 
appoints  one  or  more  executors  or  trustees  and  in  lieu  of  their  allowance  or  com- 
mission, makes  a  bequest  or  devise  of  property  to  them  which  would  otherwise 
be  liable  to  said  tax,  or  appoints  them  his  residuary  legatees,  and  said  bequests, 
devises,  or  residuary  legacies  exceed  what  would  be  a  reasonable  compensation 
for  their  services,  such  excess  shall  be  liable  to  such  tax,  and  the  court  having 
jurisdiction  of  their  accounts,  upon  its  own  motion,  or  on  the  application  of  the 
state  board  of  tax  commissioners,  shall  fix  such  compensation.  (L.  '07,  s.  5, 
p.  502.) 

S.  10.  When  heir  or  devisee  shall  pay  tax  on  legacy.  Whenever  any 
legacies  subject  to  said  tax  are  charged  upon  or  payable  out  of  any  real  estate, 
the  heir  or  devisee,  before  paying  the  legacies,  shall  deduct  said  tax  therefrom  and 
pay  it  to  the  executor,  administrator,  trustee  or  state  treasurer,  and  the  same 
shall  remain  a  charge  and  be  a  lien  upon  said  real  estate  until  it  is  paid;  and  pay- 
ment thereof  shall  be  enforced  by  the  executor,  administrator,  trustee  or  state 
board  of  tax  commissioners,  in  the  same  manner  as  the  payment  of  the  legacy 
itself  could  be  enforced.     (L.  '07,  s.  6,  p.  502.) 

S.  11.  Fiduciaries  shall  pay  tax. "  Every  executor,  administrator  or  trustee 
having  in  charge  or  trust  any  property  subject  to  said  tax,  and  which  is  made 
payable  by  him,  shall  deduct  the  tax  therefrom,  or  shall  collect  the  tax  thereon 
from  the  legatee  or  person  entitled  to  said  property,  and  he  shall  not  deliver  any 


1901,  c.  55.]  WASHINGTON. 


1185 


specified  legacy  or  property  subject  to  said  tax  to  any  person  until  he  has  collected 
the  tax  thereon.     (L.  '01,  s.  11,  p.  72.) 

S.  12.  Taxes  payable  to  state  treasurer.  —  Interest.  All  taxes  imposed 
by  this  act  shall  be  payable  tb  the  state  treasurer,  who  shall  issue  his  receipt 
therefor  in  duplicate,  one  of  which  shall  be  filed  with  the  state  board  of  tax  com- 
missioners, and  those  taxes  which  are  made  payable  by  executors,  administrators 
or  trustees,  shall  be  paid  within  fifteen  months  from  the  death  of  the  testator  or 
intestate,  or  within  fifteen  months  from  assuming  the  trust  by  such  trustee, 
unless  a  longer  period  is  fixed  by  the  court.  All  taxes  not  paid  within  the  time 
prescribed  in  this  section  shall  draw  interest  at  the  legal  rate  until  paid  (L  '07 
s.  7,  p.  502.)  ■       ' 

S.  13.  Procedure  in  appraisement.  —  Appeal.  The  superior  court, 
having  jurisdiction',  shall  appoint  three  suitable,  disinterested  persons  to  appraise 
the  state  and  effects  of  deceased  persons  for  inheritance  tax  purposes,  and  unless 
otherwise  provided  by  order  of  the  court,  the  appraisers  appointed  under  the  pro- 
bate law  to  appraise  the  estate  and  effects  of  deceased  persons,  shall  be  and  con- 
stitute the  appraisers  under  the  provisions  of  this  act.  It  shall  be  the  duty  of 
all  such  appraisers  to  forthwith  give  notice  to  the  state  board  of  tax  commissioners, 
of  the  time  and  place  at  which  they  will  appraise  such  property,  which  time  shall 
not  be  less  than  twenty  days  from  the  date  of  such  notice.  The  notice  shall  be 
served  in  the  same  manner  as  is  prescribed  for  the  commencement  of  civil  actions, 
unless  a  different  one  is  ordered  by  the  court  or  judge,  and  the  notice,  with  the 
proof  of  the  service  thereof,  shall  be  returned  to  the  court  with  the  appraisement. 
The  state  board  of  tax  commissioners  or  any  person  interested  in  the  estate 
appraised,  may  file  exceptions  to  the  appraisement,  which  shall  be  heard  and  deter- 
mined by  the  court  having  jurisdiction  in  probate  of  the  estate  involved.  If, 
upon  the  hearing,  the  court  finds  the  amount  at  which  the  property  is  appraised 
is  its  market  value  and  the  appraisement  was  fairly  and  in  good  faith  made,  it 
shall  approve  such  appraisement;  but  if  it  finds  that  the  appraisement  was  made, 
at  a  greater  or  less  sum  than  the  market  value  of  the  property,  or  that  the  same 
was  not  fairly  or  in  good  faith  made,  it  shall  set  aside  the  appraisement  and 
determine  such  value.  The  state  board  of  tax  commissioners,  or  any  one  inter- 
ested in  the  property  appraised,  may  appeal  to  the  supreme  court  from  the  order 
of  the  superior  court  in  the  premises.     (L.  '07,  s.  12,  p.  504.) 

S.  14.  Tax  on  corporate  stock.  —  How  paid.  If  a  foreign  executor, 
administrator  or  trustee  shall  assign  any  corporate  stock,  or  obligations  in  this 
state  standing  in  the  name  of  a  decedent,  or  in  trust  for  a  decedent,  liable  to 
such  tax,  the  tax  shall  be  paid  to  the  state  treasurer  on  or  before  the  transfer 
thereof,  otherwise,  the  corporation  permitting  its  stock  to  be  so  transferred  on 
its  books  shall  be  liable  to  pay  such  tax.  No  safe  deposit  company,  bank  or  other 
institution,  person  or  persons,  holding  any  securities,  property  or  assets  of  any 
non-resident  decedent,  shall  deliver  or  transfer  the  same  to  any  non-resident 
executor,  administrator  or  representative  of  such  decedent,  until  after  a  notice 
in  writing  of  the  time  and  place  of  such  transfer  shall  have  been  duly  given  the 
state  board  of  tax  commissioners  at  least  ten  (10)  days  prior  thereto,  and  the  tax 
imposed  by  this  act  paid  thereon,  and  every  such  safe  deposit  company,  bank 
or  other  institution,  person  or  persons,  shall  be  liable  for  the  payment  of  such 
tax.     (L.  '07,  s.  8,  p.  503.) 


1186  STATUTES  ANNOTATED.  [Wash.  St. 

S.  15.  List  of  heirs.  Upon  the  filing  of  any  petition  for  letters  of  adminis- 
tration or  for  the  probate  of  any  will,  it  shall  be  the  duty  of  the  petitioner  to  fur- 
nish the  clerk  of  the  court  with  a  list  of  the  heirs,  legatees  or  devisees  of  the 
estate,  and  the  relationship  which  each  bears  to  the  decedent,  together  with  a 
statement  of  the  location,  nature  and  probable  value  of  the  entire  estate,  and  an 
estimate  of  the  amount  or  value  of  each  distributive  share.  The  clerk  of  the  court 
shall  immediately  forward  a  true  copy  of  such  list  to  the  state  board  of  tax  com- 
missioners, also  notifying  said  board  of  the  date  of  such  filing,  together  with 
the  name,  and,  if  known,  the  place  of  residence  of  the  deceased,  the  name,  and, 
if  known,  the  place  of  residence  of  the  petitioner,  and,  if  known,  the  name  and  place 
of  residence  of  the  attorney  for  petitioner,  such  list  and  notice  to  be  in  such  form 
as  the  state  board  of  tax  commissioners  may  prescribe.     (L.  '07,  s.  13,  p.  505.) 

S.  16.  Extension  of  time  if  estate  complicated.  Whenever,  by  reason 
of  the  complicated  nature  of  an  estate,  or  by  reason  of  the  confused  condition  of 
the  decedent's  affairs,  it  is  [impracticable]  for  the  executor,  administrator,  trustee 
or  beneficiary  of  said  estate  to  file  with  the  clerk  of  the  court  a  full,  complete  and 
itemized  inventory  of  the  personal  assets  belonging  to  the  estate,  within  the  time 
required  by  statute  for  filing  inventories  of  the  estate,  the  court  may,  upon  the 
application  of  such  representatives  or  parties  in  interest,  extend  the  time  for 
the  filing  of  the  appraisement  for  a  period  not  to  exceed  three  months  beyond 
the  time  fixed  by  law.     (L.  '01,  s.  16,  p.  74;    P.  C,  s.  8757.) 

S.  17.  Compounding  tax  if  value  of  estate  doubtful.  Whenever  an 
estate  charged,  or  sought  to  be  charged  with  the  inheritance  tax,  is  of  such  a  nature, 
or  is  so  disposed,  that  the  liability  of  the  estate  is  doubtful,  or  the  value  thereof 
cannot,  with  reasonable  certainty,  be  ascertained  under  the  provisions  of  law,  the 
state  board  of  tax  commissioners  may  compromise  with  the  beneficiaries  or  repre- 
sentatives of  such  estates,  and  compound  the  tax  thereon;  but  said  settlement 
must  be  approved  by  the  superior  court  having  jurisdiction  of  the  estate,  and 
after  such  approval,  the  payment  of  the  amount  of  the  taxes  so  agreed  upon  shall 
discharge  the  lien  against  the  property  of  the  estate.     (L.  '07,  s.  9,  p.  503.) 

S.  18.  State  board  of  tax  commissioners  to  supervise  collection  of 
tax.  —  Records.  Administrators,  executors  and  trustees  of  the  estates  subject 
to  the  inheritance  tax  shall,  when  demanded  by  the  state  board  of  tax  commis- 
sioners, send  such  board  certified  copies  of  such  parts  of  their  reports  as  may  be 
demanded  by  it  or  any  member  thereof,  and  upon  refusal  of  said  parties  to  comply 
with  such  demand,  it  is  the  duty  of  the  clerk  of  the  court  to  furnish  such  copies, 
and  the  expense  of  making  the  same  shall  be  charged  against  the  estate  as  are 
other  costs  in  probate.  And  it  shall  be  the  duty  of  the  state  board  of  tax  com- 
missioners to  exercise  general  supervision  of  the  collection  of  the  inheritance  taxes 
provided  in  this  act,  and  in  the  discharge  of  such  duty  the  state  board  of  tax 
commissioners,  or  any  member  thereof,  may  institute  and  prosecute  such  suits 
o^  proceedings  in  the  courcs  pf  the  state  as  may  be  necessary  and  proper,  appear- 
ing therein  for  such  purpose;  and  it  shall  be  the  duty  of  the  several  county 
attorneys  to  render  assistance  therein  when  called  upon  by  such  board  so  to  do. 
The  said  board  shall  keep  a  record  in  which  shall  be  entered  a  memoranda  of  all 
the  proceedings  had  in  each  case,  and  shall  also  keep  an  itemized  account  show- 


1901.  c.  55.]  WASHINGTON.  1187 

jng  the  amount  of  such  taxes  collected,  in  detail,  charging  the  state  treasurer 
therewith.     (L.  '07,  s.  10,  p.  503.) 

Certain  charitable  bequests  exempted.  All  bequests  and  devises  of 
property  within  this  state  when  the  same  is  for  one  of  the  following  charitable 
purposes,  namely:  The  relief  of  aged,  impotent  [indigent]  and  poor  people; 
maintenance  of  the  sick  or  maimed  or  the  support  or  education  of  orphans  or 
indigent  children  shall  be  exempt  from  the  payment  of  any  tax  or  sum  under 
any  inheritance  tax  law;  and  any  property  in  this  state  which  has  been  devised 
or  bequeathed  for  such  charitable  purposes,  and  upon  which  a  state  inheritance 
tax  is  claimed  or  is  owing,  is  hereby  declared  to  be  exempt  from  the  payment 
of  such  tax,  and  the  same  is  hereby  remitted.    (L.  '05,  s.  1,  p.  199;  P.  C,  s.  8759k.) 


► 


1188  STATUTES  ANNOTATED.  [W.  Va.  St. 


WEST  VIRGINIA. 


In  General. 

West  Virginia  adopted  a  collateral  inheritance  tax  in  1887  and 
extended  it  to  direct  inheritances  in  1907.  The  exemptions  apply 
to  the  individual  shares,  not  to  the  estate  as  a  whole. 

As  to  the  position  of  stocks  in  a  West  Virginia  corporation  owned 
by  a  non-resident,  the  tax  commissioner  says :  — 

"The  legislature  of  1909  attempted  to  pass  a  law  whereby  such 
inheritance  tax  could  be  collected  on  stock  in  West  Virginia  cor- 
porations owned  by  deceased  non-residents,  but  so  far  no  taxes 
have  been  collected  under  this  statute.  The  collection  of  the  same 
has  been  resisted  with  a  claim  that  the  statute  does  not  fix  a  tax 
on  such  stock." 

The  statute  contains  a  retaliative  provision  designed  to  reduce 
double  taxation  of  non-resident  securities  similar  to  that  in  Con- 
necticut, though  not  limited  to  registered  bonds.  It  provides 
that  the  state  shall  tax  stock  and  bonds  of  a  West  Virginia  cor- 
poration kept  outside  the  state  if  owned  by  residents  of  states 
which  so  tax  stocks  and  bonds  of  their  own  corporations  if  owned 
by  West  Virginia  residents. 

The  following  property  of  all  non-residents  is  specifically  mad-e 
taxable:  all  real  estate  and  tangible  property  including  money 
on  deposit  within  the  state;  all  intangible  personal  property  in- 
cluding bonds,  securities,  shares  of  stock  and  choses  in  action,  the 
evidence  of  ownership  of  which  is  actually  within  the  state. 

Double  taxation  of  personal  property  belonging  to  a  resident 
of  the  state  but  kept  outside  the  state  is  avoided  by  a  provision 
similar  to  that  in  Massachusetts,  that  if  such  property  has  been 
taxed  in  other  states  West  Virginia  will  not  tax  it  unless  the  out- 
side tax  is  less  than  the  West  Virginia  tax,  and  then  West  Virginia 
^collects  only  the  difference. 

A  corporation  is  responsible  for  the  tax  if  it  transfers  securities 
before  the  tax  is  paid,  if  it  had  reasonable  cause  to  know  that  the 
property  was  subject  to  the  tax.  It  is  not  the  practice  to  require 
an  inventory  of  the  estate  of  a  non-resident. 


1887,  c.  31.1  WEST  VIRGINIA. 


1189 


Constitutional  Limitations. 

West  Virginia  Constitution  1872,  a.  10,  s.  1. 

Taxation  shall  be  equal  and  uniform  throughout  the  state,  and  all  property, 
both  real  and  personal,  shall  be  taxed  in  proportion  to  its  value,  to  be  ascertained 
as  directed  by  law.  No  one  species  of  property,  from  which  a  tax  may  be  col- 
lected, shall  be  taxed  higher  than  any  other  species  of  property  of  equal  value; 
but  property  used  for  educational,  literary,  scientific,  religious  or  charitable 
purposes;  all  cemeteries  and  public  property  may,  by  law,  be  exempted  from 
taxation.  The  legislature  shall  have  power  to  tax,  by  uniform  and  equal  laws, 
all  privileges  and  franchises  of  persons  and  corporations. 


List  of  Statutes. 

1887.  Statutes  of  West  Virginia,  c.    31. 

1891.  ' c.    116. 

1904.  '  "        c.      6,  pp.  108-117. 

1907.  "         "      "  "         c.    55. 

1909.  "        "      "  "        c.    63. 

1887.  Warth's  Code  of  West  Virginia,  pp.  244-247,  s.  51a,  els.  1-19. 

1891.  Ditto  (3d  edition),  pp.  244-246,  s.  51a,  cIs.  1-19. 

1899.  Ditto  (4th  edition),  c.  32,  pp.  266-268,  s.  51a,  els.  1-19. 

1906.  Code  of  West  Virginia,  c.  33,  ss.  1064-1089. 

1907.  West  Virginia  Code  Annotated  (Supplement),  c.  33,  ss.  1064-1065. 
1909.  Ditto,  c.  33.  ss.  1064,  1065,  1065a,  1065b  and  1069. 

Statutes. 

W.  Va.  St.  1887,  c.  31.  Passed  February  24,  1887;  in  efTect  ninety  days  there- 
after. 
S.  1.  All  estates,  real,  personal  and  mixed,  money,  public  and  private  securi- 
ties for  money  of  every  kind,  passing  from  any  person  who  may  die  seized  or  pos- 
sessed thereof,  being  in  this  state,  or  any  part  of  such  estate  or  estates,  money 
or  securities,  or  interest  therein  transferred  by  the  intestate  laws  of  this  state,  by 
will,  deed,  grant,  bargain,  gift  or  sale,  made  or  intended  to  take  effect  in  posses- 
sion after  the  death  of  the  grantor,  bargainor,  devisor  or  donor,  to  any  person 
or  persons,  bodies  politic  or  corporate,  in  trust  or  otherwise,  other  than  to  or 
for  the  use  of  the  father,  mother,  wife,  children  and  lineal  descendants  of  the 
grantor,  bargainor,  devisor,  donor  or  intestate,  shall  be  subject  to  a  tax  of  two 
and  a  half  per  centum  on  every  hundred  dollars  of  the  clear  value  of  such  estates, 
money  or  securities;  and  all  personal  representatives  shaH  only  be  discharged 
from  liability  for  the  amount  of  such  tax,  the  payment  of  which  they  may  be 
charged  with,  by  paying  the  same  for  the  use  of  this  state,  as  hereinafter  directed; 
Provided,  That  no  estate  which  may  be  valued  at  a  less  sum  than  one  thousand 
dollars,  shall  be  subject  to  the  tax  imposed  by  this  section. 

Ss.  2-19  cover  the  assessment  and  collection  of  the  tax. 

W.  Va.  St.  1891,  c.  116,  amends  W.  Va.  St.  1887  by  including  the  husband  in  the 
exempt  classes. 


1190  STATUTES  ANNOTATED.  [W.  Va.  St. 

West  Va.  St.  1904,  c.  6,  re-enacts  the  W.  Va.  Code,  c.  33.  The  statute  pro- 
vides a  tax  of  three  per  cent  on  transfers  to  brothers  or  sisters,  five  per  cent 
to  the  grandfather  or  grandmother,  and  seven  and  one  half  per  cent  to  any 
other  person  excepting  father,  mother,  husband,  wife  and  child  or  lineal  descend- 
ants, or  bequests  for  public  purposes  or  for  educational,  literary,  scientific,  reli- 
gious or  charitable   purposes. 

W.  Va.  St.  1907,  0.  55,  in  effect  May  22,  1907,  amends  W.  Va.  Code,  c.  33,  ss. 
1  and  2. 

W.  Va.  St.  1907,  c.  55,  approved  February  27,  1907,  in  effect  ninety  days 
from  passage,  amends  and  re-enacts  W.  Va.  Code,  c.  33,  ss.  1  and  2,  by  providing 
a  tax  except  for  educational,  literary,  scientific,  religious,  charitable,  or  public 
purposes  on  the  transfer  by  will  or  inheritance  or  by  transfer  in  contemplation 
of  death  or  intended  to  take  effect  in  possession  at  or  after  death,  or  certain 
transfers  by  joint  tenancy  or  by  power  of  appointment. 

S.  2  provides  that  the  amount  of  the  tax  shall  be  one  per  cent  on  lineals,  three 
per  cent  on  a  brother  or  sister,  five  per  cent  to  a  grandfather  or  grandmother, 
and  seven  and  one  half  per  cent  to  any  other  person  or  corporation,  with  an 
exemption  to  any  father,  mother,  husband,  wife,  child  or  lineal  descendants 
when  the  gift  is  less  than  twenty  thousand  dollars. 

W.  Va.  St.  1909,  in  effect  May  23,  1909,  c.  63,  amends  W.  Va.  Code,  c.  33,  ss- 
1,  2,  and  6. 

THE  PRESENT  ACT. 

An  Act  enacting  chapter  thirty-three  of  the  Code  of  West  Vir- 
ginia RELATING  TO  TAXES  ON  COLLATERAL  INHERITANCES,  devises, 
distributive  shares  and  legacies,  as  amended  and  re-enacted  by  the  legislature 
of  1907  and  the  legislature  of  1909. 

[Original  act  passed  August  8,  1904;  in  effect  90  days  from  its  passage. 
Amended  by  Senate  Bill  No.  178,  Acts  of  the  Legislature  of  1907,  passed  Feb.  22, 
1907,  and  in  effect  90  days  from  passage.  Further  amended  by  Chapter 
63,  Acts  of  the  Legislature  of  1909,  passed  Feb.  26,  and  in  effect  90  days 
from  its  passage.] 

S.  1.  Transfers  taxable.  A  tax,  payable  into  the  treasury  of  the  state,  shall 
be  imposed  upon  the  transfer,  in  trust  or  otherwise,  of  any  property,  or  interest 
therein,  real,  personal  or  mixed,  if  such  transfer  be 

(o)  by  will  or  by  the  laws  of  this  state  regulating  descents  and  distributions 
from  any  person  who  is  a  resident  of  the  state  at  the  time  of  his  death  and  who 
shall  die  seized  or  possessed  of  the  property; 

(&)  by  will  or  by  laws  regulating  descents  and  distributions,  of  property  within 
the  state,  or  within  its  jurisdiction,  and  the  decedent  was  a  non-resident  of  the 
state. at  the  time  of  his  death; 

(c)  by  a  resident,  or  be  [sic]  of  property  within  the  state,  or  within  its  jurisdic- 
tion, by  a  non-resident,  by  deed,  grant,  bargain,  sale  or  gift  made  in  contem- 
plation of  the  death  of  the  grantor,  vendor,  bargainer  or  donor,  or  intended 
to  take  effect  in  possession  or  enjoyment  at  or  after  such  death. 

(d)  If  any  person  shall  transfer  any  property  which  he  owns  or  shall  cause 
any  property,  to  which  he  is  absolutely  entitled,  to  be  transferred  to,  or  vested 


1887.  c.  31.]  WEST  VIRGINIA.  1191 

in,  himself  and  any  other  person  jointly,  so  that  the  title  therein,  or  in  some  part 
thereof,  vest  no  survivorship  in  such  other  person,  a  transfer  shall  be  deemed  to 
occur  and  to  be  taxable  under  the  provisions  of  this  act  upon  the  vesting  of 
such  title. 

(e)  Whenever  a  person  shall  exercise  by  will  a  power  of  appointment  derived 
from  any  disposition  of  property,  such  appointment,  when  made,  shall  be  deemed 
a  transfer  taxable  under  the  provisions  hereof. 

S.  2.  Rates.  When  the  property  or  any  beneficial  interest  therein  passes 
by  any  such  transfer  where  the  amount  of  the  property  shall  exceed  in  value  the 
exemption  hereinafter  specified,  and  shall  not  exceed  in  value  twenty-five  thousand 
dollars,  the  tax  hereby  imposed  shall  be:  — 

(a)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such  prop- 
erty shall  be  the  "Wife,  husband,  child,  lineal  descendant  or  lineal  ancestor  of  the 
decedent,  at  the  rate  of  one  per  centum  of  the  market  value  of  such  interest  in 
such  property. 

(b)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  decedent  (and  the  term  brother  or 
sister  shall  not  include  a  brother  or  sister  of  the  half  blood),  at  the  rate  of  three 
per  centum  of  the  market  value  of  such  interest  in  such  property. 

(c)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  further  removed  in  relationship  from  the  decedent  than  wife 
husband,  child,  lineal  descendant,  lineal  ancestor,  brother  or  sister,  at  the  rate 
of  five  per  centum  of  the  market  value  of  such  interest  in  such  property. 

S.  2a.  Progressive  rates.  The  foregoing  rates  in  section  two  are  for  con- 
venience termed  the  primary  rates.  When  the  amount  of  the  market  value 
of  such  property  or  interest  exceeds  twenty-five  thousand  dollars,  the  rate  of 
tax  upon  such  excess  shall  be  as  follows:  — 

(a)  Upon  all  in  excess  of  twenty-five  thousand  dollars  up  to  fifty  thousand 
dollars  one  and  one-half  times  the  primary  rates. 

(6)  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  hundred  thousand 
dollars,  two  times  the  primary  rates. 

(c)  Upon  all  in  excess  of  one  hundred  thousand  dollars  and  up  to  five  hundred 
thousand  dollars,  two  and  one-half  times  the  primary  rates. 

(d)  Upon  all  in  excess  of  five  hundred  thousand  dollars,  three  times  the  primary 
rates. 

S.  2b.  Exemptions.  The  following  exemptions  from  the  tax  are  hereby 
allowed :  — 

(a)  All  property  transferred  to  a  person  or  corporation  in  trust  or  use  solely 
for  educational,  literary,  scientific,  religious  or  charitable  purposes,  or  to  the 
state  or  any  county  or  municipal  corporation  thereof  for  public  purposes,  pro- 
vided the  property  so  transferred  is  used  for  the  purposes  herein  mentioned  in 
this  state,  shall  be  exempt. 

(b)  Property  of  the  market  value  of  fifteen  thousand  dollars  transferred  to  the 
widow  of  the  decedent,  and  ten  thousand  dollars  transferred  to  each  of  the 
other  persons  described  in  sub-division  (a)  of  section  two  shall  be  exempt. 

S.  3.  Market  value.  The  market  value  of  property  is  its  actual  market 
value  after  deducting  debts  and  incumbrances  for  which  the  same  is  liable,  and 


1192  STATUTES  ANNOTATED.  [W.  Va.  St. 

to  the  payment  of  which  it  shall  actually  be  subjected.  In  fixing  such  market 
value,  allowances  shall  not  be  made  for  debts  incurred  by  the  decedent,  or  incum- 
brances made  by  him,  unless  such  debts  or  incumbrances  were  incurred  or  created 
in  good  faith  for  an  adequate  consideration,  nor  for  any  debt  in  respect  whereof 
there  is  a  right  to  reimbursement  from  any  other  estate  or  person,  unless  such 
reimbursement  from  any  other  estate  or  person  cannot  be  obtained. 

S.  4.  Bequest  in  payment  of  debt  or  to  executor.  Every  devise  or 
bequest  ostensibly  in  payment  of  a  debt  of  the  testator  shall  be  taxable  upon 
the  excess  in  value  of  the  property  devised  or  bequeathed,  otherwise  liable  to 
such  tax,  over  and  above  the  true  amount  of  such  debt.  Every  devise  or  bequest 
to  an  executor  or  trustee,  purporting  to  be  in  compensation  for  services  shall  be 
taxable  upon  so  much  of  the  value  of  the  property  devised  or  bequeathed,  other- 
wise liable  to  such  tax,  as  is  in  excess  of  a  reasonable  compensation  for  such 


S.  5.  Particular  estates  and  remainders.  Whenever  the  transfer  of 
any  property  shall  be  subject  to  tax  hereunder  and  only  a  life  estate,  or  an  inter- 
est for  a  term  of  years,  or  a  contingent  interest  to  be  transferred  to  one  person 
and  the  remainder  or  reversionary  interest  to  another,  the  state  tax  commissioner 
on  the  application  of  any  person  in  interest,  or  upon  his  own  motion,  may 
after  due  notice  to  the  persons  interested,  apportion  such  taxes  among  such 
persons  and  assess  to  each  of  them  his  proper  share  of  such  taxes,  and  shall  make 
his  certificates  accordingly,  which  shall  be  forwarded  and  disposed  of  in  the  same 
manner  as  other  certificates  by  him  herein  provided  for.  The  portion  of  any  such 
taxes  apportioned  to  any  person  entitled  in  remainder  or  reversion  shall  be 
payable  at  once,  and  such  person  shall  be  required  to  pay  them  in  the  same 
manner,  and  within  the  same^ime,  as  if  his  interest  had  vested  in  possession. 

[That  portion  of  this  law  imposing  an  inheritance  tax  of  one  per  cent  on  the 
value  of  property  in  excess  of  $20,000  passing  to  the  father,  mother,  husband, 
wife,  or  lineal  descendant  of  the  person  making  the  transfer,  is  in  effect  from 
May  22,  1907,  until  May  27,  1909.  By  act  of  the  legislature  of  1909,  taking 
effect  May  27,  1909,  property  of  the  value  of  $15,000  passing  to  the  widow  of 
decedent,  and  $10,000  passing  to  husband,  child,  lineal  descendant  or  lineal 
ancestor  of  decedent  is  exempt  from  the  inheritance  tax  of  one  per  cent.  J 

S.  6.  Property  taxable  in  another  state.  A  transfer  of  personal  property 
of  a  resident  of  the  state  which  is  not  therein  or  within  the  jurisdiction  thereof, 
at  the  time  of  his  death,  shall  not  be  taxable,  under  the  provisions  of  this  act  if 
such  transfer  or  the  property  be  legally  subject  in  another  state  or  country  to  a 
tax  of  a  like  character  and  amount  to  that  hereby  imposed,  and  if  such  tax  be 
actually  paid  or  guaranteed  or  secured,  in  accordance  with  law  in  such  other  state 
or  country,  if  legally  subject  in  another  state  or  country  to  a  tax  of  like  character, 
but  of  less  amount  than  that  hereby  imposed,  and  such  a  tax  be  actually  paid, 
05  guaranteed  or  secured,  as  aforesaid,  the  transfer  of  such  property  shall  be 
taxable  under  this  act  to  the  extent  of  the  difference  between  the  tax  thus  actually 
paid,  guaranteed  or  secured,  and  the  amount  for  which  such  transfer  would 
otherwise  be  liable  hereunder,  or  within  the  jurisdiction  thereof.  The  provision 
of  this  act  shall  apply  to  the  following  property  belonging  to  deceased  persons. 


1887,  c.  31.]  WEST  VIRGINIA.  1193 

non-residents  of  this  state,  which  shall  pass  by  will  or  inheritance  under  the  law 
of  any  other  state  or  country,  and  such  property  shall  be  subject  to  the  tax 
prescribed  in  this  section.  All  real  estate  and  tangible  personal  property, 
including  money  on  deposit  within  this  state;  all  intangible  personal  property, 
including  bonds,  securities,  shares  of  stock  and  choses  in  action  the  evidence  of 
ownership  to  which  shall  be  actually  within  this  state;  shares  of  the  capital  stock 
or  bonds  of  all  corporations  organized  and  existing  under  the  laws  of  this  state,  the 
certificate  of  which  stocks  or  bonds  shall  be  within  this  state,  where  the  laws  of 
the  state  or  country  where  such  decedent  resided,  shall,  at  the  time  of  his  death 
impose  a  succession,  inheritance,  transfer,  or  similar  tax  upon  the  shares  of  the 
capital  stock  or  bond  of  all  corporations  organized  or  existing  under  the  laws 
of  such  state  or  country,  held  under  such  conditions  at  their  decease  by  residents 
of  this  state. 

S.  7.  Lien.  —  Liabilities.  All  such  taxes  upon  any  transfer,  and  the  inter- 
est that  may  accrue  on  such  transfer  shall,  until  paid,  be  and  remain  a  charge 
and  lien  upon  the  property  transferred,  superior  to  any  lien  created  after  such 
transfer,  and  no  title  shall  vest  or  be  transferred  as  to  any  such  property,  except 
subject  to  the  lien  for  such  taxes,  and  no  such  property  shall  be  paid,  trans- 
ferred or  delivered,  in  whole  qr  in  part,  until  the  payment  into  the  treasury  of  the 
state  of  the  amount  of  such  tax  as  by  the  certificate  of  the  state  tax  commis- 
sioner may  be  shown  to  have  been  assessed,  as  hereinafter  provided.  The 
person  to  whom  the  property  is  transferred,  if  he  shall  receive  the  same  before 
the  tax  thereon  is  paid,  and  the  executors,  administrators  and  trustees  having 
charge  of  every  estate  so  transferred,  shall  be  personally  liable  for  such  tax  and 
interest  until  its  payment,  and  no  statute  of  limitations  shall  be  a  defence  to  an 
action  for  the  recovery  thereof. 

^  S.  8.  Suspending  payment.  Whenever  it  shall  be  necessary  in  the  settle- 
ment of  any  estate  to  retain  property  or  funds  for  the  purpose  of  paying  any  lia- 
bility, the  amount  or  validity  of  which  is  not  determined,  the  payment  of  the 
whole  or  a  proportionate  part  of  the  tax  may  be  suspended  to  await  the  disposi- 
tion of  such  claim. 

S.  9.  When  due.  —  Interest.  In  the  case  of  such  a  suspension  the  tax  shall 
be  payable  when  the  time  of  the  suspension  expires.  In  all  other  cases  the  tax 
shall  be  payable  as  soon  as  the  amount  thereof  is  assessed  by  the  state  tax  com- 
missioner, as  herein  provided.  Interest  shall  be  charged  and  collected  upon  all 
taxes  imposed  by  this  act  from  the  time  when  the  same  become  payable,  at  the 
rate  of  four  per  cent  per  annum. 

S.  10.  Property  liable.  —  Power  of  sale.  Every  executor,  administrator, 
trustee,  guardian,  committee  or  other  fiduciary  having  charge  of  an  estate,  any 
part  of  which  is  subject  to  such  tax,  and  every  person  to  whom  property  is  trans- 
ferred which  is  subject  to  such  tax,  but  is  not  in  charge  of  any  such  fiduciary, 
shall  pay  the  same  upon  the  market  value  of  all  the  property  subject  to  tax, 
whether  there  are  or  are  not  devises  or  bequests  of  successive  interests  in  the 
same  property,  and  whether  such  successive  interests,  if  any,  are  defeasible  or 
indefeasible,  absolute  or  contingent.  Such  payment  shall  be  made  out  of  said 
estate  in  the  same  manner  as  other  debts  may  be  paid.     Any  such  fiduciary 


1194  STATUTES  ANNOTATED.  [W.  Va.  St. 

may  sell  personal  property  for  mat  purpose  when  necessary,  and  the  circuit 
court  may  authorize  him  to  sell  real  estate  for  the  payment  thereof  in  the  same 
manner  as  it  may  authorize  the  sale  of  real  estate  for  the  payment  of  debts. 

S.  11.  Payment  on  transfer.  —  Liabilities.  Whenever  any  foreign 
executor,  administrator  or  trustee  shall  assign  or  transfer  in  this  state  any  stock, 
bond  or  other  security  liable  to  any  such  tax,  standing  in  the  name  of,  or  in  trust 
for  a  decedent,  he  shall  have  the  tax  assessed  on  such  transfer  by  the  state  tax 
commissioner,  and  shall  pay  the  tax  into  the  state  treasury  on  the  transfer  thereof; 
otherwise  any  person  having  authority  to  make  or  permit  such  transfer,  who  shall 
make  or  permit  it,  shall  be  liable  to  pay  the  tax  if  he  then  had  knowledge,  or  rea- 
sonable cause  to  believe,  that  the  property  was  liable  to  tax. 

S.  12.  Reports.  Whenever  the  county  court  of  any  county,  or  the  clerk 
thereof,  shall  have  reason  to  believe  that  a  transfer  subject  to  taxation  hereunder 
has  been  made,  whether  such  belief  be  based  on  any  application  for  the  probate  of  a 
will,  the  appointment  of  any  fiduciary  or  the  admission  to  record  of  a  deed  or 
other  writing  intended  to  take  effect  in  possession  or  enjoyment,  at  or  after  the 
death  of  the  maker  thereof,  or  appearing  to  be  in  contemplation  of  his  death, 
or  be  based  on  any  information  otherwise  derived,  such  clerk  shall  report  the 
same  to  the  state  tax  commissioner.  Such  a  report  shall  be  made  quarterly 
as  soon  as  possible  after  the  first  day  of  January,  April,  July  and  October  in  each 
year,  and  shall  relate  to  all  such  matters  as  were  not  covered  by  any  previous 
reports.  A  special  report  may  be  made  by  the  clerk  at  any  time.  If  there  be 
no  reason  to  believe  that  any  such  transfer  has  been  made  since  the  date  of  the 
last  preceding  report,  that  fact  shall  be  stated  in  such  quarterly  report,  but  if 
there  be  reason  to  believe  that  such  a  transfer  has  been  made,  such  quarterly 
or  special  report  shall  show  the  nature  thereof,  the  name  of  the  decedent,  devisor, 
grantor,  vendor,  bargainer,  or  donor;  the  name  or  other  description,  and  the 
address  of  the  person  or  corporation  to  or  for  whose  use  or  benefit  any  property 
may  be  transferred,  and  the  relationship,  if  any,  between  such  person  and  the 
person  from  whom  the  property  is  transferred,  as  far  as  the  court  or  clerk  may 
have  any  information  respecting  such  matters;  the  nature  of  the  property  trans- 
ferred, with  such  general  description  and  approximate  valuation  as  the  court 
or  clerk  may  be  able  to  give.  Any  other  person,  whether  interested  in  such  prop- 
erty or  not,  may  make  a  like  report  to  the  state  tax  commissioner.  Every  such 
report,  whether  by  the  clerk  or  by  any  other  person,  shall  be  filed  by  the  com- 
missioner, and  retained  in  his  office  until  the  tax  be  paid  on  the  transfers  therein 
mentioned,  or  it  shall  be  ascertained  that  they  are  not  subject  to  tax,  and  shall  then 
be  destroyed;  and  at  all  times  such  report  shall  be  confidential  and  privileged, 
and  its  contents  shall  not  be  inspected  or  made  known  by  any  one,  except  by  the 
state  tax  commissioner  as  to  any  report  made  by  a  clerk,  when  there  shall  be  a 
question  whether  such  clerk  has  complied  with  the  provisions  of  this  chapter. 

S.  13.  Statement  by  executors.  With  the  inventory  of  every  estate  the 
executor,  administrator  or  trustee  shaL  file  a  statement  showing,  jo  the  best  of 
his  judgment,  whether  any  transfer  of  any  property  mentioned  in  such  inven- 
tory is  taxable  hereunder,  and  if  any  be  so  taxable,  setting  forth  the  same  matters 
mentioned  in  the  preceding  section,  with  as  much  accuracy  as  possible;  and  if 
the  estate  be  one,  no  inventory  of  which  is  required  to  be  filed,  such  statement 


1887.  c.  31.]  WEST  VIRGINIA.  1195 

shall  nevertheless  be  filed  in  the  same  office,  and  within  the  same  time,  in  which 
an  inventory  is  in  other  cases  required  to  be  filed. 

S.  14.  Assessment.  The  state  tax  commissioner  shall  as  soon  as  may  be, 
from  the  statements  and  reports  made  by  the  clerk  and  the  personal  represen- 
tative or  trustee  or  other  person  as  aforesaid,  from  the  inventory  of  the  estate, 
if  there  be  one,  and  from  such  other  information  as  he  may  be  able  to  procure, 
ascertain  whether  any  transfer  of  any  property  be  subject  to  a  tax  under  the 
provisions  of  this  chapter,  and  if  it  be  subject  to  tax,  shall  ascertain  and  assess 
the  amount  of  the  tax  to  which  it  is  subject.  If  in  his  opinion  no  transfer  of 
any  part  of  such  property  is  taxable  hereunder,  he  shall  certify  that  fact  in 
writing  made  in  duplicate.  One  of  said  certificates  shall  be  forwarded  by  him 
to  the  clerk  of  the  county  court,  who  is  required  to  make  report  under  section 
twelve  hereof,  and  the  other  certificate  shall  be  forwarded  to  the  administrator, 
executor  or  trustee  having  such  property  in  charge,  or  to  the  grantee,  vendee,  bar- 
gainee or  donee  thereof.  If  in  his  opinion  the  transfer  of  any  of  the  property  so 
transferred  is  taxable  under  the  provisions  of  this  act,  he  shall  in  like  manner 
certify  a  description  of  the  property,  or  of  the  part  thereof  so  liable,  and  of  the 
amount  of  tax  with  which  it  is  assessed,  and  shall  make  duplicate  certificates 
showing  those  facts,  one  of  which  he  shall  forward  to  the  said  clerk  and  one  to 
said  administrator,  trustee,  grantee,  vendee,  bargainee  or  donee. 

S.  15.  If  any  transfer  be  not  reported  to  the  state  tax  commissioner  by  the 
clerk  of  the  county  court  or  the  executor,  administrator,  trustee,  grantee,  vendee, 
bargainee  or  donee,  or  other  person,  the  said  tax  commissioner  may  proceed, 
upon  such  information  as  he  can  obtain,  to  inquire  and  determine  whether  any 
such  transfer  is  subject  to  tax  under  this  act,  and  what  tax,  if  any,  should  be 
assessed,  and  shall  proceed  as  to  any  such  transfer  and  the  property  passing 
thereby,  in  all  respects,  as  if  the  same  had  been  reported  to  him  as  required  by 
this  chapter. 

S.  16.  Certificate  to  be  recorded.  The  executor,  administrator,  trustee, 
devisee,  vendee,  grantee,  bargainee  or  donee  shall  cause  the  certificate,  so  re- 
ceived from  the  state  tax  commissioner,  to  be  recorded  by  the  clerk  of  the  county 
court.  Such  certificate  shall  be  recorded  in  the  book  wherein  inventories  and 
accounts  of  fiduciaries  are  recorded;  but  it  shall  be  in  compliance  with  this  sec- 
tion if  such  a  certificate  be  laid  before  a  commissioner  of  accounts  of  said  court 
at  the  first  settlement  thereafter  of  the  account  of  any  fiduciary,  and  be  made 
a  part  of  the  report  of  such  commissioner  of  accounts  and  be  recorded  with  it. 

S.  17.  Additional  assessment.  Notwithstanding  any  such  certificates 
may  have  been  made  and  recorded,  if  it  afterward  appear  to  the  state  tax  com- 
missioner that  the  transfer  of  the  property  mentioned  in  such  certificate,  or  any 
part  thereof,  is  subject  to  any  tax  and  in  addition  to  that  mentioned  in  such  cer- 
tificate, or  that  it  is  taxable  in  a  case  where  such  certificate  showed  that  it  was 
not  liable  to  such  tax,  he  shall  assess  the  proper  tax  thereon  in  addition  to  any 
tax  which  may  have  been  theretofore  assessed,  and  shall  forthwith  certify  the 
amount  of  the  same  in  duplicate,  and  forward  one  of  such  certificates  to  each 
of  the  persons  to  whom  his  original  certificate  was  required  to  be  forwarded. 
The   certificate,  so  forwarded  to  the  clerk  of  the  county,  shall  by  him   be 


1196  STATUTES  ANNOTATED.  [W.  Va.  St. 

forthwith  recorded  in  the  book  in  which  deeds  of  trust  and  mortgages  are  recorded, 
and  from  the  time  of  its  admission  to  record  shall  constitute  a  lien  on  the  prop- 
erty on  which  tax  is  assessed,  for  the  amount  of  such  taxes,  and  any  interest 
accruing  thereon,  until  the  same  are  paid,  except  as  against  purchasers  for  value 
before  such  admission  to  record,  without  notice  of  such  additional  liability  and 
as  against  those  who  may  claim  under  such  purchaser,  having  purchased  for 
valuable  consideration  without  notice  of  such  liability. 

S.  18.  Payment.  As  soon  as  the  amount  of  any  tax  upon  any  transfer 
shall  be  certified  by  the  state  tax  commissioner,  the  person  liable  for  such  tax 
shall  pay  the  amount  thereof  to  the  credit  of  the  treasury  of  West  Virginia,  in 
the  manner  provided  for  the  payment  of  other  moneys  into  such  treasury,  except 
that  the  certificate  of  the  bank  in  which  the  same  may  be  deposited  shall  be  in 
duplicate,  and  shall  describe  the  property  upon  the  transfer  of  which  the  tax  is 
assessed  and  that  one  of  such  duplicate  certificates  of  deposit  shall  be  forwarded 
to  the  state  tax  commissioner.  The  said  state  tax  commissioner  shall  at  once 
certify,  in  duplicate,  that  all  the  taxes  upon  such  transfer  under  the  provisions 
of  this  act  have  been  paid,  and  shall  forward  such  certificates,  one  to  the  person 
making  the  payment  and  the  other  to  the  clerk  of  the  county  court,  who  shall 
record  the  same  in  the  book  in  which  releases  are  recorded.  From  the  date 
when  any  such  certificate  of  payment,  or  any  such  certificate  that  the  property  is 
not  liable  to  such  taxes,  is  admitted  to  record,  the  property  mentioned  in  such 
certificate  shall  be  free  from  any  lien  or  claim  for  any  such  taxes,  except  as  pro- 
vided in  the  preceding  section. 

S.  19.  Proceedings  to  collect.  If  any  such  taxes,  hereinbefore  provided 
for,  shall  not  be  paid  within  sixty  days  from  the  time  they  become  payable,  or  if 
there  be  an  appeal  with  respect  to  the  same  or  payment  thereof  be  prevented  by 
litigation  or  other  unavoidable  cause,  within  sixty  days  after  the  decision  of  such 
appeal  or  the  end  of  such  litigation  or  other  cause  of  delay,  the  state  tax  commis- 
sioner shall  on  behalf  of  the  state,  and  with  the  assistance  of  the  prosecuting  attor- 
ney of  the  county,  proceed  in  the  circuit  court,  by  appropriate  proceedings  to 
enforce  the  lien  of  such  taxes  upon  any  property  subject  to  such  lien,  and  to 
obtain  the  sale  thereof,  or  of  so  much  thereof  as  may  be  necessary  to  satisfy  such 
lien,  and  relief  shall  be  given  by  such  circuit  court  accordingly.  In  addition  to 
any  other  remedy  for  the  collection  of  any  tax  upon  such  transfer,  the  same 
may  be  recovered  in  an  action  of  assumpsit  on  behalf  of  the  state  of  West  Virginia 
against  any  person  liable  for  such  tax,  and  the  state  tax  commissioner  is  author- 
ized to  bring  such  action  in  any  circuit  court  or  before  any  justice  having  juris- 
diction, and  the  prosecuting  attorney  shall  assist  in  the  prosecution  thereof. 
The  state  tax  commissioner  may  compromise  and  settle  the  amount  of  any  such 
tax  when  there  is  a  controversy  as  to  the  relationship  between  the  former  owner 
of  the  property  and  the  person  to  whom  it  is  transferred. 

^S.  20.  Appeal.  Within  thirty  days  after  the  state  tax  commissioner  shall 
have  forwarded  a  certificate  of  the  ainount  of  tax  assessed  upon  the  transfer  of 
any  property,  any  person  interested  in  such  transfer  or  in  such  property,  may 
apply  to  the  circuit  court  of  any  county,  in  which  such  property  or  the  greater 
part  thereof  may  be,  for  an  appeal  from  the  assessment  so  made.  Such  applica- 
tion shall  be  by  petition  in  writing,  stating  the  names  and  addresses  of  all 


1887,  c.  31.]  WEST  VIRGINIA.  1197 

persons  interested,  showing  the  grounds  upon  which  the  appellant  claims  to  be 
aggrieved,  and  an  appeal  shall  be  allowed  thereon  forthwith,  and,  until  the  same 
shall  have  been  heard  and  decided,  proceedings  for  the  collection  of  such  taxes 
may  be  stayed  by  order  of  said  court  for  good  cause  shown,  and  upon  such  con- 
ditions as  it  may  direct.  Such  appeal  shall  have  precedence  over  other  civil 
cases,  except  those  relating  to  taxes  claimed  by  the  state,  and  shall  be  heard  and 
decided  as  soon  as  may  be.  Before  any  such  hearing  reasonable  notice  thereof 
shall  be  given  to  all  other  persons  interested,  and  the  state  tax  commissioner  and 
prosecuting  attorney,  who,  with  the  said  commissioner,  shall  defend  the  inter- 
ests of  the  state.  Upon  such  hearing  the  court  shall  consider  all  certificates 
relating  to  such  taxes,  and  all  other  pertinent  evidence  that  may  be  offered  by 
either  party.  If  it  be  of  the  opinion  that  the  assessment  appealed  from  was 
correct,  it  shall  affirm  the  same;  if  it  be  of  the  opinion  that  the  transfer  was  not 
subject  to  any  such  taxes,  it  shall  set  aside  the  said  assessment  and  enter  an 
order  exonerating  the  property  from  taxes.  If  it  be  of  the  opinion  that  the  trans- 
fer was  subject  to  such  taxation,  but  that  the  amount  of  taxes  assessed  was 
erroneous,  it  shall  correct  the  assessment  thereof  by  increasing,  or  decreasing 
the  amount  thereof,  as  it  may  think  just,  and  shall  enter  judgment  accordingly. 
A  copy  of  the  judgment  upon  any  such  appeal  shall  be  certified  in  duplicate,  and 
forwarded  and  recorded  as  is  herein  provided  with  respect  to  the  certificate  of 
the  state  tax  commissioner. 

S.  21.  Fees.  For  his  services  in  recording  such  certificate  or  copy  of  judg- 
ment, the  clerk  of  the  county  court  shall  be  entitled  to  a  fee  of  fifty  cents,  to  be 
taxed  to  and  paid  by  the  person  to  whom  such  property  shall  be  transferred. 

S.  22.  Accounts  of  fiduciary.  In  the  settlement  of  his  accounts  any 
fiduciary  making  payment  of  the  amount  assessed  upon  any  such  transfer,  as 
shown  by  any  such  certificate  or  judgment,  may  have  credit  for  such  payment 
upon  filing  the  certificate  of  the  state  tax  commissioner  that  such  taxes  have  been 
paid,  but  no  fina|  settlement  shall  be  made  of  the  account  of  any  fiduciary  liable 
for  such  taxes  until  he  shall  have  filed  such  certificate  of  payment. 

S.  23.  Compromise.  The  state  tax  commissioner  may  compromise  and 
settle  the  amount  of  such  taxes  whenever  controversy  may  arise  as  to  the  owner- 
ship between  the  former  owner  of  the  property  and  the  person  to  whom  the  same 
may  have  passed. 

S.  24.  Liabilities  on  bonds  of  fiduciaries.  Every  fiduciary,  and  the 
sureties  on  his  bond,  shall  be  liable  upon  such  bond  for  all  moneys  such  fiduciary 
may  receive  for  taxes  under  this  chapter,  and  for  the  proceeds  of  all  sales  of  real 
estate  received  by  him  under  the  provisions  hereof;  and  if  any  such  fiduciary 
fail  to  perform  any  of  the  duties  imposed  on  him  by  this  chapter,  he  and  his 
sureties  shall  be  liable  upon  his  bond  for  any  damages  resulting  from  such  failure, 
the  court  under  whose  order  he  qualified  may  revoke  his  authority,  and  he  and 
his  sureties  shall  be  liable  to  the  same  proceedings  as  if  his  authority  has  been 
revoked  for  any  other  cause. 

S.  25.  Misdemeanors.  Any  clerk  or  other  person  failing  to  discharge  any 
duty  imposed  upon  him  by  this  act  shall  be  guUty  of  a  misde  meanor,  and  be 


1198  STATUTES  ANNOTATED.  [W.  Va.  St. 

fined  in  the  discretion  of  the  court,  not  less  than  ten  nor  more  than  five  hundred 
dollars. 

S.  26.  Furnishing  information  to  tax  commissioner.  Every  person 
having  in  his  possession  or  control  any  book  or  paper  containing  any  information 
respecting  property  transferred  as  aforesaid,  shall  at  the  request  of  the  state 
tax  commissioner  exhibit  the  same  to  him  or  to  the  prosecuting  attorney  of 
the  county,  and  any  person  in  interest  shall  make  written  answer  under  oath 
to  any  questions  which  the  said  state  tax  commissioner  may  put  in  writing 
concerning  such  property.  Any  person  failing  to  comply  with  the  provisions 
of  this  section  shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  thereof 
shall  be,  in  the  discretion  of  the  court,  fined  not  less  than  ten  nor  more  than 
five  hundred  dollars.  All  acts  and  parts  of  acts  inconsistent  herewith  are  hereby 
repealed. 


Wis.  St.]  WISCONSIN.  1199 


WISCONSIN, 


In  General. 

Wisconsin's  iirst  inheritance  tax  law,  passed  in  1868,  amounted 
to  little  more  than  a  sliding  scale  of  probate  fees,  and  after  various 
amendments  was  declared  unconstitutional.  A  genuine  inheritance 
tax,  enacted  in  1899,  was  declared  unconstitutional  because  the 
exemption  applied  to  the  estate  as  a  whole,  not  to  the  individual 
shares.  Finally  in  1903  the  legislature  passed  an  act  which  satis- 
fied the  constitutional  requirements.  This  is  the  present  act  with 
important  amendments  in  1911.  The  acts  of  1911  confined  exemp- 
tions to  the  first  twenty-five  thousand  dollars  and  extended  the 
liability  for  transfer  of  stock  of  a  non-resident  to  any  foreign  or 
domestic  corporation  doing  business  in  the  state.  The  amendments 
strengthened  other  administrative  provisions  of  the  statute  and 
also  gave  the  attorney  general  power  to  compromise  certain  tax 
claims.  Consent  to  transfers  must  now  be  obtained  from  the 
court  instead  of  from  the  attorney  general  or  public  adminis- 
trator. 

The  exemption  applies  to  each  individual  share,  not  to  the  estate 
as  a  whole.  If  the  Wisconsin  portion  of  an  inheritance  is  less  than 
the  exempted  amount,  Wisconsin  imposes  no  tax. 

Wisconsin  taxes  stock  in  a  Wisconsin  corporation  owned  by  a 
non-resident  in  a  foreign  corporation  owning  property  in  Wisconsin 
also  taxable.  On  this  point  the  attorney  general  says:  'This 
question  has  never  been  before  our  supreme  court,  and  this  de- 
partment has  not  had  occasion  as  yet  to  deal  with  a  case  squarely 
in  point." 

A  corporation  or  individual  that  transfers  or  delivers  any  securi- 
ties or  assets  of  a  non-resident  without  first  notifying  the  attorney 
general,  and  then  receiving  his  permission  to  do  so,  is  responsible 
for  the  tax.  It  is  not  the  practice  to  require  a  complete  inventory 
of  a  non-resident's  estate.  The  tax  is  producing  not  far  from 
$200,000  annually. 


1200  STATUTES  ANNOTATED.  IWis.  Sc. 

List  of  Statutes. 


1868. 

Statutes  of  Wisconsin,  c.  121,  s.  4. 

1871. 

Revised  Statutes,  c.  117,  pars.  59-62,  69. 

1872. 

General  Laws,  c.  40. 

1877. 

Statutes  of  Wisconsin,  c.  98. 

1878' 

Revised  Statutes,  par.  2483. 

1880. 

Statutes  of  Wisconsin,  c.  262. 

1889. 

c.  176. 

1899. 

c.  355. 

1901. 

c.  245, 

1903. 

c.    44. 

1903. 

c.  249. 

1903. 

c.  297. 

1905. 

c.    96. 

1907. 

c.  500. 

1907. 

c.  660,  St.  3813A. 

1909. 

c.    38. 

1909. 

c.  504. 

1899-1906.     Wisconsin  Statutes  (Supplement),  Sees.  1087-1  to  1087-24. 

1911. 

Statutes  of  Wisconsin,  c.  450. 

1911. 

c.  530. 

1899-1906.     Wisconsin  Statutes,  sees.  1087-1  to  1087-24. 

Constitutional  Limitations. 

Wisconsin  Constitution,  1848,  a.  8,  s.  1. 

The  rule  of  taxation  shall  be  uniform,  and  taxes  shall  be  levied  upon  such     | 
property  as  the  legislature  shall  prescribe. 

It  was  claimed  that  the  Wisconsin  constitution  limits  the  power 
of  taxation  to  property  only  and  that  the  inheritance  tax  is  an  excise 
levied  upon  a  right  or  privilege  and  hence  unconstitutional  within 
this  section.  The  court  quotes  at  length  from  debates  in  the 
constitutional  convention  and  upon  the  practical  construction  of 
the  provision  by  the  legislature  since  the  passage  of  the  constitution 
and  finds  that  this  section  1,  article  8.,  is  a  section  governing  the 
taxation  of  property  alone  and  not  intended  to  prohibit  the  taxa- 
tion of  privileges  or  occupations.  Nunnemacher  v.  State,  129  Wis. 
190,  204-220,  108  N.  W.  627,  9  L.  R.  A.  N.  S.  121. 

The  clause,  "the  rule  of  taxation  shall  be  uniform,"  if  applicable 
to  excise  taxation  at  all,  means  no  more  than  the  general  equality 
clauses  of  the  constitution,  and  hence,  uniformity  of  taxation  or 
even  equality  of  taxation  as  applied  to  excise  taxes  must  necessarily 
mean  taxation  which  does  not  discriminate,  but  which  operate 


1868,  c.  121.]  WISCONSIN.  1201 

alike  on  all  persons  similarly  situated.  In  other  words,  proper 
classification  may  be  made  and  a  different  rate  applied  to  each  class. 
Nunnemacher  v.  State,  129  Wis.  190,  221,  108  N.  W.  627,  9  L.  R. 
A.  N.  S.  121. 

Wis.  Const.  1848,  a.  8,  s.  5. 

The  legislature  shall  provide  for  an  annual  tax  sufficient  to  defray  the  esti- 
mated expenses  of  the  state  for  each  year;  and  whenever  the  expenses  of  any  year 
shall  exceed  the  income,  the  legislature  shall  provide  for  levying  a  tax  for  the 
ensuing  year  sufficient,  with  other  sources  of  income,  to  pay  the  deficiency,  as 
well  as  the  estimated  expenses  of  such  ensuing  year. 

The  Wisconsin  statute  of  1903  does  not  violate  this  section.  This 
section  expressly  recognizes  the  fact  that  the  state  may  have  other 
sources  of  income  aside  from  the  direct  tax  upon  property  and  that 
the  section  is  simply  intended  as  a  regulation  covering  the  levying 
of  a  direct  tax  upon  property  if  such  a  tax  be  necessary.  Nunne- 
macher V.  State,  129  Wis.  190,  223,  108  N.  W.  627,  9  L.  R.  A.  N.  S. 
121. 

The  Amendment  of  1908. 

It  is  noted  by  Timlin,  J.,  dissenting,  that  the  constitution  of  Wis- 
consin was  amended  in  1908,  by  adding  to  Article  8,  s.  1,  "taxes  may 
also  be  imposed  on  incomes,  privileges  and  occupations,  which 
taxes  may  be  graduated  and  progressive,  and  reasonable  exemp- 
tions may  be  provided."  Beats  v.  State,  139  Wis.  544,  557,  121 
N.  W.  347. 

Wis.  Const.  1848,  a.  1,  s.  9. 

Every  person  is  entitled  to  a  certain  remedy  in  the  laws,  for  all  injuries  or 
wrongs  which  he  may  receive  in  his  person,  property,  or  character;  he  ought 
to  obtain  justice  freely,  and  without  being  obliged  to  purchase  it;  completely 
and  without  denial,  promptly  and  without  delay;  conformably  to  the  laws. 

The  Unconstitutional  Statute  of  1868  and  Amendments. 

Wis.  St.  1868,  c.  121.     Approved  March  5,  1868,  in  effect  December  1,  1868. 

S.  3.  The  provisions  of  this  act  shall  not  apply  to  counties  or  county  judges 
wherein  the  county  judge  or  county  court  has  civil  jurisdiction. 

S.  4.  It  shall  be  the  duty  of  each  executor,  administrator  or  guardian,  to  pay 
or  cause  to  be  paid,  to  the  county  treasurer  for  the  use  and  benefit  of  the  county 
in  which  the  estate  of  the  deceased,  or  minor,  is  situate,  the  following  sum  accord- 
ing to  the  value  of  the  estate  and  property  as,  shown  by  the  inventory  and  ap- 
praisal, that  is  to  say:  twenty  dollars  when  the  value  of  the  estate  shall  exceed 
one  thousand  dollars,  and  shall  not  exceed  the  value  of  two  thousand  dollars; 


1202  STATUTES  ANNOTATED.  [Wis.  St. 

thirty  dollars  when  the  estate  shall  exceed  the  value  of  two  thousand  dollars, 
and  shall  not  exceed  the  value  of  five  thousand  dollars;  forty  dollars  when  the 
value  of  the  estate  shall  exceed  five  thousand  dollars,  and  shall  not  exceed  the 
value  of  eight  thousand  dollars;  fifty  dollars  when  the  value  of  the  estate  shall 
exceed  eight  thousand  dollars,  and  shall  not  exceed  the  value  of  ten  thousand 
dollars;  and  seventy-five  dollars  in  all  cases  when  the  value  of  the  property  shall 
exceed  ten  thousand  dollars;  said  sum  of  money  to  be  paid  to  the  county  treasurer 
of  the  proper  county  upon  the  return  and  approval  of  the  inventory  and  appraise- 
ment to  the  county  court;  and  the  county  court  is  hereby  prohibited  from  allow- 
ing the  account  of  any  such  executor,  administrator  or  guardian  until  satisfactory 
proof  shall  be  produced  to  said  county  court  of  the  payment  of  the  sum  of  money 
required  by  the  provisions  of  this  section. 

Wis.  St.  1872,  c.  40,  approved  March  7,  1872,  repealed  Wis.  St.  1868,  c.  121, 
s.  4. 

Wis.  St.  1877,  c.  98,  approved  February  28,  1877,  entitled:  "An  act  regulating 
the  salary  of  the  county  judge  of  Milwaukee  County,"  provided  in  section  4  that 
the  provisions  of  Wis.  St.  1868,  c.  121,  s.  4,  shall  apply  to  Milwaukee  county. 
The  act  took  effect  January  1,  1878. 

Wis.  St.  1880,  c.  262,  provides  for  the  payment  of  fees  on  the  settlement  of 
estates  in  the  county  of  Milwaukee,  amending  the  revised  statutes  of  1878, 
s.  2483. 

Wis.  St.  1889,  c.  176,  approved  March  25, 1889,  entitled:  "An  act  to  provide  for 
the  payment  of  certain  amounts  into  the  county  treasury  by  executors,  adminis- 
trators and  guardians,  in  lieu  of  fees  in  all  counties  whose  population  exceeds 
one  hundred  and  fifty  thousand." 

S.  1.  Every  executor,  administrator  or  guardian  appointed  by  the  county 
court  of  any  county  whose  population  exceeds  one  hundred  and  fifty  thousand 
shall,  in  all  cases  of  the  administration  of  estates,  and  of  guardianship  here- 
after commenced  in  said  court,  and  in  all  cases  now  pending  in  said  court  in 
which  the  inventory  has  not  been  returned  and  approved  according  to  law,  pay 
to  the  county  treasurer  of  such  county  for  the  use  thereof,  a  sum  equal  to  one- 
half  of  one  per  cent  of  the  appraised  value  of  such  estate  or  property  of  a  ward, 
as  shown  by  the  inventory  and  appraisal,  or  established  in  accordance  with 
chapter  262,  of  the  laws  of  1880;  provided,  however,  that  when  the  value  of  auy 
estate  or  property  of  ward  shall  exceed  five  hundred  thousand  dollars  the  execu- 
tor, administrator  or  guardian,  shall  pay  to  the  county  treasurer  as  aforesaid  one- 
half  of  one  per  cent  of  the  five  hundred  thousand  dollars,  and  one-tenth  of  one 
per  cent  of  the  value  of  said  estate  or  property  over  and  above  said  sum  of  five 
hundred  thousand  dollars.  "Provided,  further,  that  estates  of  three  thousand 
dollars  or  less,  shall  be  exempt  from  the  payment  of  probate  fees."  Such  sums 
shall  be  paid  at  the  time  of  the  return  and  approval  of  the  inventory,  or  when- 
ever the  county  judge  shall  have  ascertained  the  amount  of  the  estate,  as  pro- 
vided in  chapter  262,  of  the  laws  of  1880.  And  no  account  of  any  executor, 
adniinistrator  or  guardian,  shall  be  allo\ved  without  proof  of  the  payment  thereof 
and  the  same  shall  constitute  a  part  of  the  expense  of  administration  and  guar- 
dianship. In  fixing  the  value  of  any  estate  or  property  of  ward  for  the  purpose 
of  this  section,  the  amount  of  existing  specific  liens  shall  be  deducted  from  the 
gross  valuation  of  such  estate  or  property. 


1889,  c.  176.]  WISCONSIN  1203 

THE  VOID  ACT  OF  1889. 

Wis.  St.  1889,  c.  176.     Approved  March  25,  1889,  published  March  28,  1889. 

An  Act  to  provide  for  the  payment  of  certain  amounts  into  the  county 
treasury  by  executors,  administrators  and  guardians,  in  lieu  of  fees  in  all 
counties  whqge  population  exceed  one  hundred  and  fifty  thousand. 

S.  1.  Every  executor,  administrator  or  guardian  appointed  by  the  county 
court  of  any  county  whose  population  exceeds  one  hundred  and  fifty  thousand 
shall,  in  all  cases  of  the  administration  of  estates  and  of  guardianship  here-after 
commenced  in  said  court,  and  in  all  cases  now  pending  in  said  court  in  which  the 
inventory  has  not  been  returned  and  approved  according  to  law,  pay  to  the  county 
treasurer  of  such  county  for  the  use  thereof,  a  sum  equal  to  one-half  of  one 
per  cent  oi  the' appraised  value  of  such  estate  or  property  of  a  ward,  as  shown 
by  the  inventory  and  appraisal,  or  established  in  accordance  with  chapter  262, 
of  the  laws  of  1880;  provided,  however,  that  when  the  value  of  any  estate  or 
property  of  ward  shall  exceed  five  hundred  thousand  dollars  the  executor,  admin- 
istrator or  guardian  shall  pay  to  the  county  treasurer  as  aforesaid  one-half  of 
one  per  cent  of  the  five  hundred  thousand  dollars,  and  one-tenth  of  one  per 
cent  of  the  value  of  said  estate  or  property  over  and  above  said  Sum  of  five 
hundred  thousand  dollars.  "Provided,  further,  that  estates  of  three  thousand 
dollars  or  less,  shall  be  exempt  from  the  payment  of  probate  fees."  Such  sums 
shall  be  paid  at  the  time  of  the  return  and  approval  of  the  inventory,  or  whenever 
the  county  judge  shall  have  ascertained  the  amount  of  the  estate,  as  provided  in 
chapter  262  of  the  laws  of  1880.  And  no  account  of  any  executor,  administrator 
or  guardian,  shall  be  allowed  without  proof  of  the  payment  thereof,  and  the 
same  shall  constitute  a  part  of  the  expense  of  administration  and  guardianship. 
In  fixing  the  value  of  any  estate  or  property  of  ward  for  the  purposes  of  this 
section,  the  amount  of  existing  specific  liens  shall  be  deducted  from  the  gro&s 
valuation  of  such  estate  or  property. 

A  Tax. 

This  statute  provides  for  the  payment  by  estates  in  counties 
having  a  population  of  over  one  hundred  and  fifty  thousand  of 
certain  fees.  The  law  cDuld  apply  to  only  one  county  in  the 
state.  It  was  claimed  that  it  was  "in  lieu  of  fees"  of  the  judge 
or  register  for  administration  of  the  estate,  as  might  be  inferred 
from  the  title  of  the  act.  The  exaction,  however,  is  not  in  lieu  of 
fees,  as  the  amount  collected  is  in  no  way  dependent  upon  the 
amount  and  value  of  such  service,  but  depends  entirely  upon  the 
valuation  oi  appraisal  of  the  estate,  and,  if  regarded  as  a  probate 
fee,  may  be  so  large  as  to  shock  the  good  sense  of  everybody.  This 
is  not  a  probate  fee,  but  a  charge  imposed  by  the  legislature  as  a 
condition  precedent  of  allowing  the  county  court  to  proceed  with 
the  administration  of  the  estate.  Such  charge  is  necessarily  a 
buiden  so  imposed   upon  such  administrators  or  such  estates  or 


1204  STATUTES  ANNOTATED.  [Wis.  St. 

both  to  raise  money  for  public  purposes.  This  brings  it  within 
the  well-recognized  definitions  of  a  tax.  State  v.  Mann,  76  Wis. 
469,  474,  45  N.  W.  526,  46  N.  W.  51. 

Not  Sustained  as  Tax  for  a  Salary  of  Judges. 

The  Wisconsin  constitution  provides  that  "the  legislature  shall 
impose  a  tax  on  all  civil  suits  commenced  or  prosecuted  in  the 
municipal,  inferior  or  circuits  courts,  which  shall  constitute  a  fund 
to  be  applied  toward  the  payment  of  the  salary  of  the  judges." 

Wis.  St.  1889,  c.  176,  cannot  be  sustained  under  this  section,  as 
the  fund  thereby  raised  is  not  restricted  to  the  payment  of  the 
salary  of  judges.  State  v.  Mann,  76  Wis.  469,  477,  45  N.  W.  526, 
46  N.  W.  51. 

Tax  on  Whole  Estate  and  not  on  Succession. 

This  act  is  not  a  tax  upon  a  succession,  but  upon  the  whole  estate 
at  its  appraised  valuation  regardless  of  whether  it  is  solvent  or 
insolvent.  In  the  case  of  an  insolvent  estate  nothing  would  be  left 
after  the  payment  of  debts  for  transmission  and  in  most  estates 
there  are  likely  to  be  sufficient  debts  to  reduce  the  amount  of  such 
transmission  far  below  the  amount  of  such  valuation.  Besides,  the 
amount  of  such  tax  is  graduated  by  the  amount  of  such  appraisal 
and  is  to  be  paid  by  the  executors  at  the  time  of  filing  the  appraisal 
notwithstanding  they  may  only  be  interested  as  such  officials  and 
never  succeed  to  any  of  such  estate.  Manifestly  the  burden  im- 
posed is  not  a  succession  tax,  but  a  tax  upon  the  whole  estate 
regardless  of  whether  it  is  solvent  or  insolvent.  State  v.  Mann, 
76  Wis.  469,  478,  45  N.  W.  526,  46  N.  W.  51. 

Void  as  Limited  to  Certain  Estates  in  one  County. 

The  act  is  unconstitutional  as  it  provides  for  the  imposition  of 
a  tax  on  certain  estates  only  in  counties  having  more  than  a  certain 
population  and  the  tax  in  question  really  applies  only  to  one  county 
and  is  further  limited  to  a  certain  class  of  estates  in  that  county. 
State  V.  Mann,  76  Wis.  469,  45  N.  W.  526,  46  N.  W.  51. 

Double  Taxation  if  a  Property  Tax. 

«This  act  cannot  be  sustained  as  a  tax  upon  the  estate  as  this 
would  be  double  taxation  where  an  estate  is  already  assessed  for 
the  same  year  as  of  the  first  day  of  May.  State  v.  Mann,  76  Wis. 
469,  478,  45  N.  W.  526,  46  N.  W.  51. 


1899,  c.  355.1  WISCONSIN.  1205 

Whether  Void  as  a  Probate  Fee. 

The  court  notices  State  v.  Gorman,  40  Minn.  232,  which  decides 
the  statute  cited  in  that  case  was  in  violation  of  a  provision  of  the 
Minnesota  constitution  similar  to  that  of  Wisconsin  which  declares 
that  "every  person  .  .  .  ought  to  obtain  justice  freely  and  with- 
out being  obliged  to  purchase  it."  The  Wisconsin  statute  of  1889 
purports  to  close  the  door  of  the  county  court  against  adminis- 
trators and  the  estate  unless  they  first  advance  and  pay  the  amount 
exacted.  This  looks  very  much  like  purchasing  the  privilege  of 
going  into  the  county  court  for  the  settlement  of  the  estate,  but 
the  court  finds  it  unnecessary  to  determine  that  question.  State  v. 
Mann,  76  Wis.  469,  480,  45  N.  W.  526,  46  N.  W.  51. 

THE  VOID  ACT  OF   1899. 

Wis.  St.  1899,  c.  355.     Approved  May  4,  1899,  in  force  July  1,  1899. 

An  Act  for  a  tax  on  gifts,  inheritances,  bequests  and  legacies  in  certain 
cases. 

S.  1.  A  tax  shall  be  and  is  hereby  imposed  upon  any  transfer  of  any  personal 
property,  of  the  value  of  ten  thousand  dollars  or  over,  or  of  any  interest  therein, 
or  income  therefrom,  in  trust  or  otherwise,  to  any  persons  or  corporations,  except 
any  corporation  organized  for  any  religious,  charitable  or  educational  purpose, 
which  uses  the  property  so  transferred  to  it  solely  for  the  purposes  of  its  organi- 
zation, in  the  following  cases:  — 

(1)  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  from 
any  person  dying  possessed  of  the  property  while  a  resident  of  the  state. 

(2)  When  the  transfer  is  by  will  or  intestate  law,  of  property  within  the  state, 
and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

(3)  When  the  transfer  is  of  property  made  by  a  resident,  or  by  a  non-resident 
when  such  non-resident's  property  is  within  this  state,  by  bargain,  sale  or  gift 
made  in  contemplation  of  the  death  of  the  vendor  or  donor,  or  intended  to  take 
effect,  in  possession  or  enjoyment  at  or  after  such  death. 

(4)  Such  tax  shall  be  imposed  when  any  such  beneficiary  entitled  in  possession 
or  expectancy,  to  any  personal  property,  or  the  income  thereof  by  any  such 
transfer,  whether  made  before  or  after  the  passage  of  this  act. 

(5)  The  tax  so  imposed  shall  be  at  the  rate  of  five  per  centum  upon  the  clear 
market  value  of  such  property,  except  as  otherwise  prescribed  in  the  next  section. 

S.  2.  When  the  property,  or  any  beneficial  interest  therein,  passes  by  any  such 
transfer  to  or  for  the  use  of  any  father,  mother,  husband,  wife,  child,  brother, 
sister,  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter,  or  any  child  or 
children  adopted  as  such  in  conformity  with  the  laws  of  this  state,  of  the  dece- 
dent, grantor,  donor  or  vendor  or  to  any  person  to- whom  any  such  decedent, 
grantor,  donor  or  vendor,  for  not  less  than  ten  years  prior  to  such  transfer,  stood 
in  the  mutuaUy  acknowledged  relation  of  a  parent,  or  to  any  lineal  descendant, 
of  such  decedent,  grantor,  donor  or  vendor,  born  in  lawful  wedlock,  such  transfer 


1206  STATUTES  ANNOTATED.  [Wis.  St. 

of  property  shall  not  be  taxable  under  this  act,  unless  it  is  of  the  value  of  ten 
thousand  dollars  or  more,  in  which  case  it  shall  be  taxable  under  this  act  at  the 
rate  of  one  per  centum  upon  the  clear  market  value  of  such  property. 

S.  19.  The  words  "estate"  and  "property,"  as  used  in  this  act,  shall  be  taken 
to  mean  the  personal  property  or  interest  therein  of  the  testator,  intestate,  grantor, 
bargainor  or  vendor,  passing  or  transferred  to  those  not  herein  especially  exempted 
from  the  provisions  of  this  act,  and  not  as  the  property  or  interest  therein  passing 
or  transferred  to  individual  legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees 
or  vendees,  and  shall  include  all  personal  property  or  interest  therein,  whether 
situated  within  or  without  this  state,  over  which  this  state  has  any  juris- 
diction for  the  purpose  of  taxation.  The  word  "transfer,"  as  used  in  this  act, 
shall  be  taken  to  include  the  passing  of  property  or  any  interest  therein  in  pos- 
session or  enjoyment,  present  or  future,  by  inheritance,  descent,  bequest,  grant, 
deed,  bargain,  sale  or  gift,  in  the  manner  herem  prescribed.  The  words  "county 
treasurer"  and  "district  attorney"  as  used  in  this  act,  shall  be  taken  to  mean 
the  treasurer  and  district  attorney  of  the  county  of  the  county  court  having 
jurisdiction,  as  provided  in  section  10  of  this  act.  Provided,  that  no  language 
in  this  act  shall  be  construed  as  imposing  any  tax  upon  the  transfer  of  real  prop- 
erty. In  case  of  any  transfer  of  any  shares  of  the  capital  stock  of  any  corpora- 
tion which  owns  real  estate,  the  proportionate  market  value  of  its  real  estate 
taxed  as  such,  shall  be  deducted  from  the  appraised  value  of  any  such  shares  so 
transferred  and  taxed  as  herein  provided. 

Modeled  after  New  York  Act. 

This  act  is  in  all  essential  respects  a  literal  copy  of  the  New- 
York  law  of  1892  with  the  important  exceptions  that  in  the  New 
York  law  all  transfers  to  collateral  kindred  and  strangers  of  the 
value  of  five  hundied  dollars  or  over  are  taxed,  while  in  the  Wis- 
consin law  such  transfers  are  not  taxed  unless  they  equal  or  exceed 
ten  thousand  dollars;  and  in  New  York  the  tax  is  imposed  upon 
transfers  of  both  real  and  personal  property,  while  in  Wisconsin  it 
is  confined  to  personal  property  alone.  Black  v.  State,  113  Wis. 
205,  211,  89  N.  W.  522,  90  Am.  St.  Rep.  853. 

Construction  of  New  York  Act  Followed. 

The  construction  placed  upon  the  New  York  law  before  it  was 
adopted  in  Wisconsin  must,  so  far  as  the  provisions  are  identical 
or  substantially  so,  be  followed  in  Wisconsin.  Black  v.  Slate, 
113  Wis.  205,  211,  89  N.  W.  522,  90  Am.  St.  Rep.  853. 

The  court  remarks  that  the  New  York  decisions  on  this  inherit- 
ance tax  have  not  decided  the  question  whether  the  New  York 
statute  of  1892  in  any  respect  violates  the  rule  of  equaHty  or  in- 
fringes upon  the  fourteenth  amendment  of  the  constitution  of  the 
United  States.  Black  v.  State,  113  Wis.  205,  213,  89  N.  W.  522,  90 
Am.  St.  Rep.  853. 


1889,  c.  355.]  WISCONSIN. 


1207 


The  succession  tax  is  a  tax  on  the  privilege  of  receiving 
property,  not  a  tax  upon  property.     Black  v.  State,  113  Wis  205 
217,  89  N.  W.  522,  90  Am.  St.  Rep.  853. 

Exemptions  Applied  to  Entire  Property. 

Following  the  construction  placed  by  the  New  York  courts  on 
the  New  York  statute  it  should  be  held  to  apply  the  limitations  of 
the  act  to  the  aggregate  value  of  the  entire  property  or  estate 
transferred  and  not  to  the  share  of  each  individual  beneficiary. 
Black  V.  State,  113  Wis.  205,  213,  89  N.  W.  522,  90  Am.  St  Reo 
853. 

Classification  Void. 

There  are  two  questions  as  to  the  validity  of  Wis.  St.  1899, 
c.  355 ;  first,  whether  the  exemption  of  all  estates  under  ten  thous- 
and dollars  is  reasonable;  and  second,  is  the  attempted  classification 
a  legal  and  rational  one?  The  court  believes  that  the  exemption 
of  ten  thousand  dollars  in  unduly  large,  but  feels  that  this  is  a 
legislative  question  and  declines  to  hold  the  statute  void  for  that 
reason.  As  to  the  second  question  of  classification,  the  court 
admits  the  validity  of  a  progressive  rate,  but  remarks  as  follows: 
"But  while  classification  is  proper,  there  must  always  be  uniformity 
within  the  class.  If  persons  under  the  same  circumstances  and 
conditions  are  treated  differently,  there  is  arbitrary  discrimination, 
and  not  classification. 

"It  is  claimed  that  such  is  the  effect  of  the  present  law,  and  we 
can  see  no  escape  from  the  conclusion.  People  in  the  same  class  are 
subject  to  different  rules,  some  being  exempt  and  some  being  taxed. 
This  results  from  the  peculiar  provisions  of  section  19  of  the  law, 
which  defines  'estate'  and  'property'  as  construed  by  the  New 
York  courts  before  we  borrowed  the  law.  As  already  pointed  out, 
under  this  provision  the  $10,000  limitation  or  exemption  is  based 
on  the  size  of  the  whole  property  devised  or  granted,  and  not  upon 
the  amount  received  by  each  individual  legatee  or  grantee.  Thus 
it  results  that  one  collateral  relative,  receiving  a  legacy  of  $2,000 
from  one  testator  whose  estate  amounts  to  but  $9,500,  pays  no 
tax,  while  another  collateral  relative  in  the  same  degree,  receiving 
a  legacy  of  $2,000  from  another  testator  whose  estate  amounts 
to  $10,500,  is  obliged  to  pay  a  tax.  Here  is  unlawful  discrimination, 
pure  and  simple.  No  rational  distinction  or  difference  can  be 
drawn  between  the  two  legatees  simply  because  the  estates  from 
which  their  legacies  come  are  of  slightly  different  size.     They  are 


1208  STATUTES  ANNOTATED.  [Wis.  St. 

both  within  the  same  class,  surrounded  by  the  same  conditions 
and  receiving  the  same  benefits.  One  pays  a  tax,  and  the  other 
does  not.  This  is  not  the  equal  protection  of  the  laws."  Per  Win- 
slow,  J.,  in  Black  v.  State,  113  Wis.  205,  218,  89  N.  W.  522,  90  Am. 
St.  Rep.  853. 

Requirement  of  Uniformity. 

The  court  does  not  decide  whether  an  inheritance  tax  is  subject 
to  the  constitutional  provision  that  the  rule  of  taxation  shall  be 
uniform.  "Considering  the  clause  without  undue  refinement  of 
reasoning,  it  is  difhcult  to  see  why  it  does  not  apply  to  an  inheritance 
or  succession  tax.  It  is  true  such  a  tax  is  called  an  excise  in  the 
decisions.  An  excise  is  a  duty  levied  on  articles  of  sale  or  manu- 
facture, upon  licenses  to  pursue  certain  trades  or  deal  on  certain 
commodities,  upon  official  privileges,  etc.  Cooley,  Taxation  (2d 
ed.),  4.  But  when  such  duty  is  levied  upon  a  trade,  occupation  or 
privilege  as  a  means  of  producing  revenue  alone,  and  not  in  exer- 
cise of  the  police  power,  it  is,  to  all  intents  and  purposes,  an  exer- 
cise of  the  taxing  power,  and  no  good  reason  is  perceived  why  such 
taxation  is  not  included  within  the  taxation  referred  to  in  the  con- 
stitution in  the  clause  quoted.  The  argument  against  this  position 
is  that  the  words  immediately  following  this  clause,  namely,  "and 
taxes  shall  be  levied  upon  such  property  as  the  legislature  shall 
prescribe,"  indicate  that  it  is  a  taxation  of  property  alone  which 
the  section  covers.  Per  Winslow,  J.,  in  Black  v.  State,  113  Wis.  205, 
218,  89  N.  W.  522,  90  Am.  St.  Rep.  853. 

Whether  or  not  the  inheritance  tax  is  included  within  the  word 
"taxation"  as  used  in  the  Wisconsin  constitution,  article  8,  section  1, 
the  court  remarks  that  there  is  still  the  fourteenth  amendment  to  the 
federal  constitution  to  be  considered,  there  is  still  the  principle 
that  all  men  are  equal  before  the  law;  that  life,  liberty  and  property 
are  secure  to  all  alike. 

The  court  quotes  Wisconsin  constitution,  a.  1,  s.  1:  — 

"All  men  are  born  equally  free  and  independent,  and  have  cer- 
tain inherent  rights;  among  these  are  life,  liberty  and  the  pursuit 
of  happiness ;  to  secure  these  rights,  governments  are  instituted  among 
men  deriving  their  just  powers  from  the  consent  of  the  governed." 
Bl^ck  V.  State,  113  Wis.  205,  218,  89  N.  W.  522, 90  Am.  St.  Rep.  853. 

Power  of  Legislature  to  Abolish  Descent. 

The  language  used  in  Eyre  v.  Jacob,  14  Gratt.  430,  to  the  effect 
that  the  legislature  may  "absolutely  repeal  the  statute  of  wills 


1903,  c.  44.]  WISCONSIN. 


1209 


and  that  of  descents  and  distributions,  and  declare  that  upon  the 
death  of  a  party  his  property  shall  be  applied  to  the  payment  of  his 
aebts  and  the  residue  appropriated  to  public  uses,"  is  charac- 
terized as  a  pure  dictum  and  the  language  used  solely  by  way  of 
argument.  The  idea  expressed  has  been  referred  to  several  times  by 
other  courts  as  in  Mager  v.  Grima,  8  How.  490;  Magoun  v.  Illinois 
Trust  &  Savings  Bank,  170  U.  S.  283;  State  v.  Hamlin,  86  Me.  495, 
25  L.  R.  A.  632,  41  Am.  St.  Rep.  569  n.  The  court  intimates  no 
favorable  opinion  upon  the  proposition  laid  down  by  the  Virginia 
court.  Black  v.  State,  113  Wis.  205,  216,  89  N.  W.  522,  90  Am. 
St.  Rep.  853. 

The  Act  of  1901. 

Wis.  St.  1901,  c.  245,  approved  April  27,  1901,  amends  Wis.  St. 
1899,  c.  355,  ss.  1,  2,  4,  5,  6,  11,  13,  19.  The  act  contained  a  clause 
saving  all  rights  accrued  or  accruing  under  the  previous  act. 

THE  STATUTE  OF   1903. 

Wis.  St.  1903,  c.  44.     Approved  March  27,  1903. 

An  act  for  a  tax  on  gifts,  inheritances,  bequests,  legacies,  devises  and 
successions  in  certain  cases. 

S.  1.  Tax  imposed  on  property  of  any  kind  transferred.  A  tax  shall 
be  and  is  hereby  imposed  upon  any  transfer  of  any  property,  real,  personal  or 
mixed,  or  any  interest  therein,  or  income  therefrom  in  trust  or  otherwise,  to  any 
person,  association,  or  corporation,  except  corporations  of  this  state  organized 
under  its  laws  solely  for  religious,  charitable  or  educational  purposes,  which  shall 
use  the  property  so  transferred  exclusively  for  the  purposes  of  their  organization 
within  the  state  in  the  following  cases:  — 

(1)  While  a  resident  of  state.  When  the  transfer  is  by  will  or  by  the 
intestate  laws  of  this  state  from  any  person  dying  possessed  of  the  property  while 
a  resident  of  the  state. 

(2)  Property  within  state.  When  a  transfer  is  by  will  or  intestate  law 
of  property  within  the  state  or  within  its  jurisdiction  and  the  decedent  was  a 
non-resident  of  the  state  at  the  time  of  his  death. 

(3)  Non-residents'  property  within  state.  When  the  transfer  is  of 
property  made  by  a  resident  or  by  a  non-resident  when  such  non-resident's 
property  is  within  this  state,  or  within  its  jurisdiction,  by  deed,  grant,  bargain, 
sale  or  gift,  made  in  contemplation  of  the  death  of  the  grantor  vendor  or  donor, 
or  intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such  death. 

(4)  Transfer  before  or  after  passage  of  act.  Such  tax  shall  be  imposed 
when  any  such  person  or  corporation  becomes  beneficially  entitled,  in  possession 
or  expectancy  to  any  property  or  the  income  thereof,  by  any  such  transfer 


1210  STATUTES  ANNOTATED.  [Wis.  St. 

whether  made  before  or  after  the  passage  of  this  act,  provided  that  property  or 
estates  which  have  vested  in  such  persons  or  corporations  before  this  act  takes 
effect  shall  not  be  subject  to  the  tax. 

(5)  Transfer  under  power  of  appointment.  Whenever  any  person  or 
corporation  shall  exercise  a  power  of  appointment  derived  from  any  disposition 
of  property  made  either  before  or  after  the  passage  of  this  act,  such  appointment 
when  made  shall  be  deemed  a  transfer  taxable  under  the  provisions  of  this  act 
in  the  same  manner  as  though  the  property  to  which  such  appointment  relates 
belonged  absolutely  to  the  donee  of  such  power  and  had  been  bequeathed  or 
devised  by  such  donee  by  will ;  and  whenever  any  person  or  corporation  possess- 
ing such  a  power  of  appointment  so  derived  shall  omit  or  fail  to  exercise  the 
same  within  the  time  provided  therefor,  in  whole  or  in  part  a  transfer  taxable 
under  the  provisions  of  this  act  shall  be  deemed  to  take  place  to  the  extent  of  such 
omission  or  failure,  in  the  same  manner  as  though  the  persons  or  corporations 
thereby  becoming  entitled  to  the  possession  or  enjoyment  of  the  property  to 
which  such  power  related  had  succeeded  thereto  by  a  will  of  the  donee  of  the 
power  failing  to  exercise  such  power,  taking  effect  at  the  time  of  such  omission 
or  failure. 

(6)  Basis  of  tax.  The  tax  so  imposed  shall  be  upon  the  clear  market  value 
of  such  property  at  the  rate  hereinafter  prescribed  and  only  upon  the  excess 
of  the  exemptions  hereinafter  granted. 

Nature. 

The  inheritance  tax  is  a  tax  upon  the  transfer,  transaction  or 
right  to  receive  propert>^.  The  theory  is  that  it  is  not  one  on 
property,  but  on  the  right  of  succession.  State  v.  Bullen,  143  Wis. 
512,  518,  128  N.  W.  109. 

The  court  sustains  the  theory  oj  an  inheritance  tax  not  on  the 
power  to  prohibit  succession,  but  upon  the  power  to  reasonably 
regulate  by  tax.  Nunnemacher  v.  State,  129  Wis.  190,  203,  108  N. 
W.  6,  27,  9  L.  R.  A.  N.  S.  121. 

Not  a  Property  Tax.  —  Uniformity. 

It  was  claimed  that  because  the  court  held  in  the  Nunnemacher 
case,  129  Wis.  190,  108  N.  W.  627,  9  L.  R.  A.  N.  S.  121,  that  the 
right  to  inherit  a  devised  property  was  a  natural  right,  therefore 
it  was  a  property  right,  and  hence  an  inheritance  tax  must  logi- 
cally be  held  to  be  a  tax  upon  a  property  right  and  subject  to 
the  provision  that  it  must  be  absolutely  uniform.  The  court 
sa^s  that  the  conclusion  does  not  follow;  that  taxes  frequently 
are  levied  upon  transactions  or  occupations  which  are  matters  of 
natural  right,  and  that  these  matters  are  mere  privilege  taxes. 
Beats  V.  State,  139  Wis.  544,  556,  121  N.  W.  347. 


1903,  c.  44.]  WISCONSIN.  1211 

Modeled  on  New  York  Act. 

As  the  Wisconsin  inheritance  tax  law  of  1903  was  borrowed  from 
New  York,  therefore  the  judicial  construction  given  it  there  is 
significant  in  interpreting  it  in  Wisconsin.  State  v.  Bullen  143 
Wis.  512,  520,  128  N.  W.  109. 

Exemptions  and  Classification  by  Relationship  Upheld. 

Classification  between  Hneals  and  collateral  relatives  and  strangers 
does  not  violate  the  rule  of  uniformity  nor  the  principle  of  equal 
protection  of  the  laws;  and  reasonable  exemption  of  small  estates 
also  may  be  allowed  without  violating  uniformity.  Nunnemacher 
V.  State,  129'Wis.  190,  221,  108  N.  W.  627,  9  L.  R.  A.  N.  S.  121, 
qxxotmg  Black  v.  State,  113  Wis.  205,  90  Am.  St.  Rep.  853. 

As  to  the  progressive  feature  of  the  statute  of  1903,  the  court 
says  that  this  feature  has  been  upheld  by  the  supreme  court  of 
the  United  States  in  the  decision  in  Magoun  v.  Illinois  Trust 
&  Savings  Bank,  170  U.  S.  283,  18  Sup.  Ct.  594,  and  Knowlton 
V.  Moore,  178  U.  S.  41,  20  Sup.  Ct.  747,  and  remarks  that  the 
decision  of  that  court  is  conclusive  as  to  the  fourteenth  amendment 
to  the  federal  constitution,  and  as  the  general  equality  guarantees 
of  the  Wisconsin  constitution  are  substantially  equivalent  to  the 
equal  protection  of  the  laws  guaranteed  by  the  fourteenth  amend- 
ment, the  court  is  contented  to  follow  the  decisions  of  the  United 
States  supreme  court  and  hold  that  the  progressive  feature  does  not 
violate  the  constitution.  Nunnemacher  v.  State,  129  Wis.  190,  222, 
108  N.  W.  627,  9  L.  R.  A.  N.  S.  121. 

The  court  re-examines  and  afiirms  the  case  of  Nunnemacher  v. 
State,  129  Wis.  190,  as  to  the  constitutionality  of  the  inheritance  law 
in  Beats  v.  State,  139  Wis.  544,  552,  121  N.  W.  347. 

The  meaning  of  the  words  **in  contemplation  of  death/' 
as  used  in  the  statute,  must  be  inferred  and  ascertained  from  the 
context  of  the  act  and  the  object  sought  to  be  accomplished  by  the 
law.  It  is  manifest  that  they  were  intended  to  cover  transfers  of 
parties  who  were  prompted  to  make  them  by  reason  of  the  expecta- 
tion of  death,  and  which,  in  view  of  that  event,  accomplish  transfers 
of  the  property  of  decedents  in  the  nature  of  a  testamentary  dis- 
position. It  is  therefore  obvious  that  they  are  not  used  as  referring 
to  that  expectation  of  death  generally  entertained  by  every  person. 
The  words  are  evidently  intended  to  refer  to  an  expectation  of  death 
which  arises  from  such  a  bodily  or  mental  condition  as  prompts 
persons  to  dispose  of  their  property  and  bestow  it  on  those  whom 


1212  STATUTES  ANNOTATED.  [Wis.  St. 

they  regard  as  entitled  to  their  bounty.  This  accords  with  the 
general  objects  and  purposes  of  the  law,  namely,  the  imposition  of 
a  tax  on  the  devolution  of  property  involved  in  the  demise  of  the 
owner."  .  .  . 

"The  claim  that  the  words  can  include  only  gifts  causa  mortis 
attributes  to  them  too  restricted  a  meaning.  A  transfer  valid  as 
a  gift  inter  vivos ^  if  made  under  circumstances  which  impress  it 
with  the  distinguishing  characteristics  of  being  prompted  by  an 
apprehension  of  impending  death,  occasioned  by  a  bodily  or  mental 
state  which  has  a  basis  for  the  apprehension  that  death  is  imminent, 
would  be  a  transfer  made  in  contemplation  of  death  within  the 
meaning  of  the  law."  Per  Siebecker,  J.,  in  State  v.  Pabst,  139 
Wis.  561,  589,  121  N.  W.  3^1. 

**In  Contemplation  of  Death."  —  Evidence. 

On  the  question  of  whether  a  deed  was  made  in  contemplation 
of  death,  evidence  was  introduced  as  to  the  cause  of  his  death  — 
diabetes.  The  decedent's  declaration  three  years  before  his  death 
that  in  recognition  of  the  valuable  aid  of  his  sons  in  building  up 
his  estate  he  intended  to  dispose  of  part  of  his  estate  to  them 
was  put  in  as  evidence.  But  the  court  remarks  that  it  is  signifi- 
cant that  he  did  not  do  so  then  or  in  the  immediately  succeeding 
years.  The  court  remarks  that  considering  his  condition,  the 
execution  of  the  deed  of  gift  and  the  will  simultaneously  indicates 
that  he  was  disposing  of  his  property  to  those  whom  he  regarded  as 
natural  objects  of  his  bounty  rather  than  that  he  was  transferring 
it  to  them  as  compensation  for  worthy  and  valuable  service  rendered 
by  them.  He  knew  his  condition  and  was  aware  of  the  outcome  to 
be  inferred  from  his  symptoms.  The  deed  of  gift  was  made  about 
six  months  before  his  death  and  the  court  finds  that  the  evidence 
abundantly  sustains  the  conclusion  of  the  trial  court  that  the  deed 
of  gift  was  made  in  contemplation  of  death.  State  v.  Pabst,  139 
Wis.  561,  593,  121  N.  W.  351. 

The  death  certificate  of  the  decedent's  attending  physician  was 
proper  evidence  under  Wisconsin  statutes  where  it  was  introduced 
as  evidence  of  its  contents  on  the  issue  of  whether  the  deed  made  was 
made  in  contemplation  of  death,  in  State  v.  Pabst,  139  Wis,  561, 
591,  121  N.  W.  351. 

Situs  of  Personal  Property. 

The  New  York  statute  of  which  the  Wisconsin  statute  is  a  copy 
received  the  construction  in  New  York  that  in  respect  to  personal 


1903,  c.  44.]  WISCONSIN. 


1213 


property  not  within  the  state  at  the  time  of  the  resident  decedent's 
death,  the  court  will  apply  the  maxim  Mobilia  sequuntur  personam. 
The  effect  of  this  rule  is  to  make  the  legal  situs  of  the  property 
at  the  domicile  of  the  decedent. 

It  seems  to  be  the  New  York  and  Massachusetts  rule  that  personal 
property  for  the  purpose  of  taxation  has  its  situs  at  the  domicile 
of  the  owner  and  the  court  follows  the  rule  of  Frothingham  v.  Shaw, 
175  Mass.  59,  78  Am.  St.  Rep.  475,  55  N.  E.  623;  Estate  of  Cornell 
170  N.  Y,  423,  63  N.  E.  445.  The  court  remarks  that  In  re  Joyslin, 
76  Vt.  88,  56  A.  281,  appears  to  be  out  of  harmony  with  the  New 
York  and  Massachusetts  rule. 

So  where  a  resident  of  Wisconsin,  while  in  another  state,  trans- 
fers property  which  is  then  in  the  foreign  state  and  which  never  has 
been  in  the  state  of  Wisconsin,  the  situs  of  the  property  for  the  pur- 
pose of  the  tax  is  the  state  of  Wisconsin  and  it  is  subject  to  the 
Wisconsin  inheritance  tax.  State  v.  Bullen,  143  Wis.  512,  523, 
128  N.  W.  109. 

Life  Insurance. 

Where  a  life  insurance  policy  was  made  payable  to  the  wife  of 
the  decedent  and  she  joined  with  him  in  conveying  it  to  a  trust 
company  in  trust  in  contemplation  of  death,  though  without  giving 
up  her  rights  in  it,  therefore  this  property  remained  the  property 
of  the  wife,  and  was  not  a  part  of  the  estate  of  the  decedent,  and 
therefore  was  not  subject  to  the  inheritance  tax.  State  v.  Bullen, 
143  Wis,  512,  523,  128  N.  W.  109. 

S.  2.  Primary  rates  where  not  in  excess  of  $25,000.  When  the  property 
or  any  beneficial  interest  therein  passes  by  any  such  transfer  where  the  amount 
of  the  property  shall  exceed  in  value  the  exemption  hereinafter  specified,  and 
shall  not  exceed  in  value  twenty-five  thousand  dollars  the  tax  hereby  imposed 
shall  be:  — 

(1)  One  per  centum,  where.  Where  the  person  or  persons  entitled  to  any 
beneficial  interest  in  such  property  shall  be  the  husband,  wife,  lineal  issue,  lineal 
ancestor  of  the  decedent  or  any  child  adopted  as  such  in  conformity  with  the  laws 
of  this  state,  or  any  child  to  whom  such  decedent  for  not  less  than  ten  years 
prior  to  such  transfer  stood  in  the  mutually  acknowledged  relation  of  a  parent, 
provided,  however,  such  relationship  began  at  or  before  the  child's  fifteenth 
birthday,  and  was  continuous  for  said  ten  years  thereafter,  or  any  lineal  issue  of 
such  adopted  or  mutually  acknowledged  child,  at  the  rate  of  one  per  centum  of 
the  clear  value  of  such  interest  in  such  property. 

(2)  One  and  one-half  per  centum,  where.  Where  the  person  or  persons 
entitled  to  any  beneficial  interest  in  such  property  shall  be  the  brother  or  sister 
or  a  descendant  of  a  brother  or  sister  of  the  decedent,  a  wife  or  widow  of  a  son. 


1214  STATUTES  ANNOTATED.  [Wis.  St. 

or  the  husband  of  a  daughter  of  the  decedent,  at  the  rate  of  one  and  one-half 
per  centum  of  the  clear  value  of  such  interest  in  such  property. 

(3)  Three  per  centum,  where.  Where  the  person  or  persons  entitled  to 
any  beneficial  interest  in  such  property  shall  be  the  brother  or  sister  of  the  father 
or  mother  or  a  descendant  of  a  brother  or  sister  of  the  father  or  mother  of  the 
decedent,  at  the  rate  of  three  per  centum  of  the  clear  value  of  such  interest  in 
such  property. 

(4)  Four  per  centum,  where.  Where  the  person  or  persons  entitled  to  any 
beneficial  interest  in  such  property  shall  be  the  brother  or  sister  of  the  grand- 
father or  grandmother  or  a  descendant  of  the  brother  or  sister  of  the  grandfather 
or  grandmother  of  the  decedent,  at  the  rate  of  four  per  centum  of  the  clear  value 
of  such  interest  in  such  prpperty. 

(5)  Five  per  centum,  where.  Where  the  person  or  persons  entitled  to  any 
beneficial  interest  in  such  property  shall  be  in  any  other  degree  of  collateral 
consanguinity  than  is  hereinbefore  stated,  or  shall  be  a  stranger  in  blood  to  the 
decedent,  or  shall  be  a  body  politic  or  corporate,  at  the  rate  of  five  per  centum 
of  the  clear  value  of  such  interest  in  such  property. 

S.  3.  Other  rates:  where  in  excess  of  $25,000.  The  foregoing  rates  in 
section  .two  are  for  convenience  termed  the  primary  rates.  When  the  amount 
of  the  clear  value  of  such  property  or  interest  exceeds  twenty-five  thousand  dollars 
the  rates  of  tax  upon  such  excess  shall  be  as  follows:  — 

(1)  Rate  where  amount  $25,000  to  $50,000.  Upon  all  in  excess  of  twenty- 
five  thousand  dollars  and  up  to  fifty  thousand  dollars  one  and  one-half  times  the 
primary  rates. 

(2)  Rate  where  amount  $50,000  to  $100,000.  Upon  all  in  excess  of  fifty 
thousand  dollars  and  up  to  one  hundred  thousand  dollars,  two  times  the  primary 
rates. 

(3)  Rate  where  am  ount  $100,000  to  $500,000.  Upon  all  in  excess  of  one 
hundred  thousand  dollars  and  up  to  five  hundred  thousand  dollars,  two  and 
one-half  times  the  primary  rates. 

(4)  Rate  where  amount  over  $500,000.  Upon  all  in  excess  of  five  hundred 
thousand  dollars,  three  times  the  primary  rates. 

Exemptions  Valid. 

It  was  argued  that  section  2  provides  for  the  taxation  of  the 
transfer  of  estates  not  exceeding  in  value  twenty-five  thousand 
dollars  and  in  section  3  provides  in  effect  that  the  transfer  of  the 
first  twenty-five  thousand  dollars  in  an  estate  exceeding  that  sum 
shall  not  be  taxed,  and  that  only  the  transfer  of  an  amount  exceed- 
ing twenty-five  thousand  dollars  shall  be  subject  to  taxation.  If 
thi^  were  true  the  law  would  be  manifestly  unconstitutional. 
The  court  finds  that  the  language  of  other  sections  of  the  statute 
forbids  such  a  construction  of  sections  2  and  3.  It  is  very  significant 
that  section  4,  which  provides  for  the  exemptions,  is  a  general  sec- 


1903,  c.  44.]  WISCONSIN.  1215 

tion,  fixing  the  exemptions  to  be  allowed  in  all  estates  both  great 
and  small,  and  is  intended  to  cover  the  whole  subject  of  exemptions. 
It  is  manifestly  unreasonable  to  suppose  that  the  legislature 
imagined  when  they  provided  this  careful  and  complete  code  of 
exemptions  that  they  had  already  made  an  enormous  exemption  of 
twenty-five  thousand  dollars  in  favor  of  all  beneficiaries  who  were 
fortunate  enough  to  receive  more  than  that  sum.  But  the  first 
section  of  the  act  is  quite  conclusive,  as  it  provides  that  a  tax  shall 
be  imposed  upon  any  transfer  of  any  property  or  any  interest 
therein  except  the  exemptions.  Beals  v.  State,  139  Wis.  544,  554, 
121  N.  W.  347. 

S.  6.  Discount,  rate  of  interest  on  deferred  payments.  If  such  tax  is 
paid  within  one  year  from  the  accruing  thereof,  a  discount  of  five  per  centum 
shall  be  allowed  and  deducted  therefrom.  If  such  tax  is  not  paid  within  eighteen 
months  from  the  accruing  thereof  interest  shall  be  charged  and  collected  thereon 
at  the  rate  of  ten  per  centum  per  annum  from  the  time  the  tax  accrued;  unless 
by  reason  of  claims  made  upon  the  estate,  necessary  litigation  or  other  unavoid- 
able cause  of  delay,  such  tax  shall  not  be  determined  and  paid  as  herein  provided, 
in  which  case  interest  at  the  rate  of  six  per  centum  per  annum  shall  be  charged 
upon  such  tax  from  the  accrual  thereof  until  the  cause  of  such  delay  is  removed, 
after  which  ten  per  centum  shall  be  charged.  In  all  cases  when  a  bond  shall 
be  given  under  the  provisions  of  section  9  of  this  act,  interest  shall  be  charged 
at  the  rate  of  six  per  centum  from  the  accrual  of  the  tax,  until  the  date  of  pay- 
ment thereof. 

The  penalty  of  ten  per  cent  should  not  be  imposed  for  a  three 
years'  delay  when  it  was  uncertain  during  that  time  whether  or 
not  the  transfer  by  a  deed  of  gift  was  subject  to  taxation  as  to  the 
amount  of  stock  included  in  it  and  the  value  of  the  stock  transferred. 
State  V.  Pabst,  139  Wis.  561,  595.  121  N.  W.  351. 

S.  12.    Jurisdiction  of  county  court:    petition  for  ancillary  letters. 

The  county  court  of  every  county  of  the  state  having  jurisdiction  to  grant  letters 
testamentary  or  of  administration  upon  the  estate  of  a  decedent  whose  property 
is  chargeable  with  any  tax  under  this  act,  or  to  appoint  a  trustee  of  such  estate 
or  any  part  thereof,  or  to  give  ancillary  letters  thereon,  shall  have  jurisdiction 
to  hear  and  determine  all  questions  arising  under  the  provisions  of  this  act,  and 
to  do  any  act  in  relation  thereto  authorized  by  law  to  be  done  by  a  county  court 
in  other  matters  or  proceedings  coming  within  its  jurisdiction,  and  if  two  or  more 
county  courts  shall  be  entitled  to  exercise  any  such  jurisdiction,  the  county  court 
first  acquiring  jurisdiction  hereunder,  shall  retain  the  same  to  the  exclusion  of 
every  other  county  court.  Every  petition  for  ancillary  letters  testamentary  or 
ancillary  letters  of  administration  made  in  pursuance  of  the  laws  governing 
probate  practice  of  a  person  to  be  cited  as  therein  prescribed,  and  a  true  and 
correct  statement  of  all  the  decedent's  property  in  this  state,  and  the  value 


1216  STATUTES  ANNOTATED.  [Wis.  St. 

thereof;  and  upon  presentation  thereof  the  county  court  shall  issue  a  citation 
directed  to  such  county  treasurer;  and  upon  the  return  of  the  citation,  the 
county  court  shall  determine  the  amount  of  the  tax  which  may  be  or  become 
due  under  the  provisions  of  this  act,  and  his  decree  awarding  the  letters  may 
contain  any  provisions  for  the  payment  of  such  tax  or  the  giving  of  security  there- 
for which  might  be  made  by  such  county  court  if  the  county  treasurer  were  a 
creditor  of  deceased. 

It  was  claimed  that  this  act  is  unconstitutional  because  it  com- 
mits the  appraisal  of  property  and  the  fixing  of  the  amount  of  the 
tax  to  the  county  court,  and  these  are  claimed  to  be  administrative 
and  not  judicial  duties.  The  court  replies  that  this  is  not  so,  that 
the  court  simply  determines  in  a  judicial  way  certain  facts  necessary 
to  be  ascertained  to  determine  how  much  the  tax  fixed  by  the  law 
amounts  to  in  a  given  case.  These  duties  are  judicial  in  their 
character  and  very  properly  entrusted  to  the  county  court  in  which 
the  estate  is  being  administered.  Nunnemacher  v.  State,  129  Wis. 
190,  223,  108  N.  W.  627,  9  L.  R.  A.  N.  S.  121. 

Sections  12  and  15  do  not  give  to  the  county  court  the  authority 
to  order  the  corporation  in  which  the  decedent  was  a  stockholder 
to  produce  its  private  books,  papers  and  documents  for  inspection 
to  enable  the  court  to  determine  the  value  of  the  estate  of  the 
decedent  and  the  amount  of  the  tax  to  which  the  same  is  liable. 
The  court  finds  that  such  supposed  entries  and  statements  made  in 
the  books,  papers  and  documents  of  the  corporation  by  its  officers 
or  agents  have  no  more  probative  force  as  evidence  in  court,  in  the 
controversy  between  the  executors  and  the  state  of  Wisconsin, 
than  oral  declarations  to  the  same  effect,  made  by  the  same  officers 
and  agents,  would  have  had.  Such  entries  and  statements  were 
obviously  mere  hearsay  made  by  third  parties  without  the  sanction 
of  an  oath.  There  is  nothing  in  the  statute  authorizing  the  county 
court,  whether  acting  as  a  judicial  tribunal  or  as  an  appraiser,  to 
compel  a  third  party  to  produce  his  private  books,  papers  and 
documents,  and  certainly  the  county  court  has  no  such  power  in 
the  absence  of  statutory  authority.  A  writ  of  prohibition  against 
the  proceedings  in  the  county  court  was  granted.  State  v.  Car- 
penter, 129  Wis.  180,  108  N.  W.  641,  8  L.  R.  A.  N.  S.  788. 

Refunding. 

*Under  the  terms  of  Wisconsin  statutes  of  1898,  section  3200, 
one  who  has  paid  an  inheritance  tax  under  protest  may  bring 
action,  although  he  has  not  appealed  from  the  order  of  the  county 
court  fixing  the  tax  and  assessing  the  same.     It  is  claimed  that  the 


1903,  c.  44.]  WISCONSIN.  1217 

order  of  the  county  court  rendered  the  assessment  of  the  tax  res 
judicata.  Although  the  court  acts  on  these  matters  in  a  judicial 
manner  they  are  really  but  steps  in  the  enforcement  of  the  tax  law 
of  the  state  rather  than  a  judgment  in  a  judicial  controversy. 
Beals  V.  State,  139  Wis.  544,  552,  121  N.  W.  347. 

S.  13.  Transfer  subject  to  contingent  trusts.  (5)  When  property  is 
transferred  in  trust  or  otherwise,  and  the  rights,  interests  or  estates  of  the  trans- 
ferees are  dependent  upon  contingencies  or  conditions  whereby  they  may  be  wholly 
or  in  part  created,  defeated,  extended  or  abridged,  a  tax  shall  be  imposed  upon 
such  transfer  at  the  highest  rate  which,  on  the  happening  of  any  of  the  said 
contingencies  or  conditions  would  be  possible  under  the  provisions  of  this  act, 
and  such  tax  so  imposed  shall  be  due  and  payable  forthwith  out  of  the  property 
transferred,  provided,  however,  that  on  the  happening  of  any  contingency  whereby 
the  said  property  or  any  part  thereof  is  transferred  to  a  person  or  corporation 
exempt  from  taxation  under  the  provisions  of  this  act  or  to  a  person  taxable  at 
a  less  rate  than  the  rate  imposed  and  paid,  such  person  or  corporation  shall  be  en- 
titled to  a  return  of  so  much  of  the  tax  imposed  and  paid  as  is  the  difference  be- 
tween the  amount  paid  and  the  amount  which  said  person  or  corporation  should 
pay  under  the  provisions  of  this  act  with  legal  interest  from  the  time  of  payment. 
Such  return  of  overpayment  shall  be  made  in  the  manner  provided  by  section  8 
of  this  act. 

Tax  on  Contingent  Estates  Upheld. 

It  was  claimed  that  Wisconsin  statute  of  1903,  c.  44,  as  amended 
by  the  statute  of  1903,  c.  249,  is  invalid  as  it  attempts  to  impose 
a  tax  on  transfers  limited  to  vest  on  contingencies  which  may  never 
happen,  or  to  persons  not  in  being  or  ascertainable,  and  making 
the  tax  due  and  payable  forthwith  out  of  the  property  transferred, 
by  compelling  parties  to  pay  such  tax  on  defeasible  estates  which 
they  may  never  own  and  in  contemplating  the  payment  of  penal- 
ties before  any  opportunity  is  offered  to  pay  the  tax.  The  court 
replies  that  the  law  does  not  operate  to  enforce  the  assessment  and 
payment  of  the  tax  on  interests  or  estates  not  vested,  or  on  those 
whose  value  cannot  be  ascertained  by  reason  of  the  uncertainties 
of  contingencies.  Payment  of  the  tax  on  such  transfers  is  expressly 
postponed  until  the  beneficiary  comes  into  the  actual  possession  or 
enjoyment  thereof. 

The  claim  that  the  present  owners  of  defeasible  estates  are  com- 
pelled to  pay  the  tax  on  the  whole  estate  is  not  well  founded,  for 
provision  is  made  for  reimbursing  them  should  it  happen  that 
such  estates  and  interests  should  be  abridged,  defeated  or  dimin- 
ished. Section  13,  subdivision  3.  State  v.  Pabst,  139  Wis.  561,  857, 
121  N.  W.  351. 


1218  STATUTES  ANNOTATED.  [Wis.  St. 

Contingent  Interests. 

The  will  provided  that  if  E.  S.  should  have  no  issue  of  the  age 
of  ten  years  living  at  the  time  of  the  death  of  the  life  tenant,  then 
the  interest  on  the  estate  transferred  to  her  should  remain  in  trust 
and  only  the  income  should  be  paid  to  her  until  she  should  have  a 
child  of  the  age  of  ten  years.  If  no  child  of  hers  shall  attain  this 
age,  then  she  is  to  receive  only  the  income  of  estate. 

The  conditions  of  this  transfer  are  governed  by  the  provisions  of 
section  13,  subdivision  5,  because  her  rights  are  depend.ent  upon 
contingencies  which  may  extend  and  change  her  interest  in  the  es- 
tate from  a  life  estate  to  one  in  fee. 

Wis.  statute  of  1903,  c.  44,  section  13,  subdivision  5,  as  amended 
by  statute  of  1903,  c.  249,  section  2,  provides  that  such  a  transfer 
shall  be  taxed  at  the  lowest  possible  rate  under  the  conditions  on 
which  it  passes  at  the  time  of  transfer,  and  that  the  tax  shall  be 
due  and  payable  forthwith  out  of  the  property  so  transferred.  She 
was  properly  taxed  the  same  rate  as  would  be  imposed  if  her 
brothers  and  sisters  should  eventually  be  entitled.  In  the  event 
that  the  beneficiary  shall  enjoy  no  more  than  la  life  interest  she 
will  be  entitled  to  be  reimbursed  in  the  manner  above  indicated 
out  of  the  corpus  of  the  share  so  transferred  to  her.  State  v.  Pabst, 
39  of  Wis.  561,  589,  121  N.  W.  351. 

Annuity  Deducted. 

Where  a  will  provides  that  beneficiaries  may  take  property  and 
its  income  subject  to  annual  payments  to  the  widow  unless  she 
exercise  an  option  to  take  a  portion  of  the  estate  in  lieu  thereof, 
and  to  similar  payments  for  the  support  of  the  child  during  minor- 
ity, there  is  nothing  in  these  conditions  which  postpones  their  right 
to  the  property  or  income  thereof  from  the  time  of  death.  The 
law  provides  means  of  calculating  the  value  of  the  interest  of  the 
widow  and  the  child  and  hence  the  fair  market  value  of  the  re- 
mainder of  the  estate  and  the  other  interests  was  ascertainable. 
State  V.  Pabst,  139  Wis.  561,  588,  121  N.  W.  351. 

S.  15.  Reportof  appraiser:  county  court  to  give  notice.  (1)  The  report 
of  the  appraiser  shall  be  made  in  duplicate,  one  of  which  duplicates  shall  be 
filed  in  the  office  of  the  county  court  and  the  other  in  the  office  of  the  secretary 
of  state.  Upon  filing  such  report  in  the  county  court,  the  county  court  shall  forth- 
with give  twenty  days'  notice  by  mail  to  all  persons  known  to  be  interested  in 
the  estate,  including  the  county  treasurer,  of  the  time  and  place  for  the  hearing 
in  the  matter  of  such  report  and  the  county  court  from  such  report  and  other 
proofs  relating  to  any  such  estate  shall  forthwith  at  the  time  so  fixed,  determine 


1903,  Amend.]  WISCONSIN.  1219 

the  cash  value  of  such  estate  and  the  amount  of  tax  to  which  the  same  is  liable, 
or  the  county  court  without  appointing  an  appraiser  upon  giving  twenty  days, 
notice  by  mail  to  all  persons  known  to  be  interested  in  the  estate  including  the 
county  treasurer,  of  the  time  and  place  of  hearing,  may  at  the  time  so  fixed 
hear  evidence  and  determine  the  cash  value  of  such  estate  and  the  amount  of 
tax  to  which  the  same  is  liable.  If  the  residence  or  post-office  address  of  any 
person  interested  in  any  estate  is  unknown  to  the  executor,  administrator  or 
trustee,  notice  of  the  hearing  in  the  matter  of  the  report  of  the  appraiser  or 
notice  that  the  county  court  without  appointing  an  appraiser  will  determine  the 
cash  value  of  an  estate  shall  be  given  to  all  such  persons  by  publication  of  such 
notice  not  less  than  three  successive  weeks  prior  to  the  time  fixed  for  such  hear- 
ing or  determination  in  such  newspaper  published  within  the  county  as  the 
court  shall  direct. 

Valuation  of  Stock. 

Certain  stock  was  valued  at  $1,150  per  share  and  the  county  court 
valued  it  at  $1,408.45  per  share,  the  face  value  being  $1,000  per 
share.  The  law  requires  that  the  tax  should  be  assessed  on  the 
clear  market  value  of  the  property.  It  appeared  that  there  had 
been  no  sales  of  the  stock  in  the  market,  but  that  the  decedent 
had  dealt  with  the  stock  on  the  basis  of  its  book  value,  and  the 
transfers  shown  were  apparently  made  in  reliance  on  the  book  value. 
Evidence  was  introduced  showing  the  dividends  declared  and  paid 
for  a  period  of  years  before  the  death  of  the  testator,  and  the  value 
of  the  corporation  assets  during  that  time.  In  the  deed  of  gift 
the  decedent  declared  the  book  value  of  2,840  shares  of  stock 
to  be  four  million  dollars. 

The  court  finds  that  the  facts  regarding  the  business  of  the  cor- 
poration and  its  property  furnish  a  basis  for  valuation,  and  are 
sufftcient  to  sustain  the  conclusion  of  the  trial  court.  State  v. 
Pahst,  139  Wis.  561,  594,  121  N.  W.  351. 

THE  AMENDMENTS  OF  1903. 

Wis.  St.  1903,  c.  249,  published  May  16,  1903,  amends  Wis.  St.  1903,  c.  44, 
ss.  1  and  13.     (See  post,  p.  1220,  the  Present  Act.) 

Wis.  St.  1903,  c.  297,  provides  for  the  refund  of  inheritance  taxes  received 
by  the  state  under  the  void  acts  of  1899  and  1901,  provided  that  petitions  for  the 
repayment  of  these  taxes  should  be  filed  with  the  county  court  within  two  years 
after  the  act  was  passed. 

RECENT  AMENDMENTS. 

Wis.  St.  1905,  c.  96,  amends  Wis.  St.  1903,  c.  44,  s.  1,  by  exempting  gifts  to 
municipal  corporations  for  strictly  municipal  purposes. 

Wis.  St.  1905,  c.  96,  s.  2,  includes  in  the  exemption  property  transferred  to 
municipal  corporations  for  strictly  municipal  purposes. 


1220  STATUTES  ANNOTATED.  [Wis.  St. 

Wis.  St.  1905,  c.  96,  s.  3.  This  statute  is  made  retroactive  and  extends  the 
exemption  to  any  transfer  of  property  heretofore  made  to  any  municipal  cor- 
poration within  the  state  for  strictly  municipal  purposes. 

Wis.  St.  1907,  c.  600,  approved  July  9,  1907,  covers  the  appointment  of  special 
counsel  by  the  attorney  general. 

Wis.  St.  1909,  c.  38,  approved  April  10,  1907,  published  April  14,  1909,  amends 
Wis.  St.  s.  3871,  relating  to  computations  of  life  estates. 

Wis.  St.  1907,  c.  660,  approved  July  16, 1907  (s.  3813a),  provides  that  a  special 
administrator  may  be  appointed  on  the  estate  of  a  resident  deceased  person  and 
prima  facie  inventory,  appraisal  and  heirship  determination  had  thereunder  for 
the  purpose  of  having  inheritance  taxes  determined  and  paid;  and  of  having 
prima  facie  certificate  of  real  estate  issued  in  cases  where  it  appears  the  estate 
may  come  under  the  provisions  of  the  inheritance  tax  laws. 

Wis.  St.  1909,  c.  504,  approved  June  16.  1909,  in  force  from  and  after  July  1, 
1909,  amends  Wis.  St.  ss.  1087-5,6,  7,  8,  11,  12,  13,  14,  15;  repeals  and  re-enacts 
s.  17;   repeals  s.  18:  amends  ss.  19,  20,  21,  22,  23,  24;  and  also  amends  s.  3818. 

Wis.  St.  1911,  c.  450,  in  effect  June  27,  1911,  added  section  1087-18,  conferring 
certain  duties  on  the  tax  commission. 

Wis.  St.  1911,  c.  530,  in  effect  July  5,  1911,  amended  ss.  1087-4,  11,  12, 
15  subd.  5,  9,  and  created  s.  1087-llm. 


THE  PRESENT  ACT. 
Wis.  St.,  88.  1087-1  to  1087-24  inclusive,  162,  3813a,  3818  and  3871a. 
Tax  on  Transfers:  Exceptions. 

S.  1087-1.  (Sec.  1,  ch.  44,  and  sec.  1,  ch.  249,  1903,  and  sec.  1,  ch.  96,  1905.) 
A  tax  shall  be  and  is  hereby  imposed  upon  any  transfer  of  property  real,  personal 
or  mixed,  or  any  interest  therein,  or  income  therefrom  in  trust  or  otherwise, 
to  any  person,  association,  or  corporation,  except  county,  town  or  municipal 
corporations  within  the  state,  for  strictly  county,  town  or  municipal  purposes, 
and  corporations  of  this  state  organized  under  its  laws  solely  for  religious,  charit- 
able or  educational  purposes,  which  shall  use  the  property  so  transferred  exclu- 
sively for  the  purposes  of  their  organization  within  the  state  in  the  following  cases: 

(1)  By  a  resident  of  state.  *  When  the  transfer  is  by  will  or  by  the  intestate 
laws  of  this  state  from  any  person  dying  possessed  of  the  property  while  a  resident 
of  the  state. 

(2)  Non-resident's  property  within  state.  When  a  transfer  is  by  will 
or  intestate  law,  of  property  within  the  state  or  within  its  jurisdiction  and  the 
decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

(3)  In  contemplation  of  deatli.  When  the  transfer  is  of  property  made 
by  a  resident  or  by  a  non-resident  when  such  non-resident's  property  is  within 
this  state,  or  within  its  jurisdiction,  by  deed,  grant,  bargain,  sale  or  gift,  made 
iij  contemplation  of  the  death  of  the  grantor,  vendor  or  donor,  or  intended  to 
take  effect  in  possession  or  enjoyment  at  or  after  such  death. 

(4)  Imposed  when  beneficially  transferred.  Such  tax  shall  be  imposed 
when  any  such  person  or  corporation  becomes  beneficially  entitled,  in  possession, 
or  expectancy,  to  any  property  or  the  income  thereof,  by  any  such  transfer  whether 


s.  1087-1.1  WISCONSIN.  1221 

made  before  or  after  the  passage  of  this  act;  provided,  that  property  or  estates 
which  have  vested  in  such  persons  or  corporat  ons  before  this  act  takes  effect, 
shall  not  be  subject  to  the  tax;  and  provided  further,  that  contingent  interests 
created  by  the  will  of  any  person  who  died  prior  to  the  passage  of  this  act  shall 
not  be  taxes. 

(5)  Transfer  under  power  of  appointment.  Whenever  any  person  or 
corporation  shall  exercise  a  power  of  appointment  derived  from  any  disposition 
of  property  made  either  before  or  after  the  passage  of  this  act,  such  appointment 
when  made  shall  be  deemed  a  transfer  taxable  under  the  provisions  of  this  act  in 
the  same  manner  as  though  the  property  to  which  such  appointment  relates 
belonged  absolutely  to  the  donee  of  such  power  and  had  been  bequeathed  or 
devised  by  such  donee  by  will ;  and  whenever  any  person  or  corporation  possess- 
ing such  a  power  of  appointment  so  derived  shall  omit  or  fail  to  exercise  the 
same  within  the  time  provided  therefor,  in  whole  or  in  part,  a  transfer  taxable 
under  the  provisions  of  this  act  shall  be  deemed  to  take  place  to  the  extent  of  such 
omission  or  failure,  in  the  same  manner  as  though  the  persons  or  corporations 
thereby  becoming  entitled  to  the  possession  or  enjoyment  of  the  property  to  which 
such  power  related  had  succeeded  thereto  by  a  will  of  the  donee  of  the  power 
failing  to  exercise  such  power,  taking  effect  at  the  time  of  such  omission  or  failure. 

(6)  On  clear  market  value.  The  tax  so  imposed  shall  be  upon  the  clear 
market  value  of  such  property  at  the  rate  hereinafter  prescribed  and  only  upon 
the  excess  of  the  exemptions  hereinafter  granted. 

[As  to  validity,  see  notes  to  the  acts  of  1868,  1889,  1899,  1901,  1903,  ante, 
pp.  1203,  1207,  1210.] 

Right  of  Descent  Protected. 

The  court  holds  that  the  right  to  take  property  by  inheritance  or  by 
will  is  a  natural  right  protected  by  the  constitution,  which  cannot  be 
wholly  taken  away  or  substantially  impaired  by  the  legislature. 

The  court  remarks  that  it  is  fully  aware  that  the  contrary  propo- 
sition has  been  stated  by  the  great  majority  of  the  courts  of  this 
country,  including  the  supreme  court  of  the  United  States,  in  Magoun 
V.  Illinois  Trust  &  Savings  Bank,  170  U.  S.  283,  18  S.  Ct.  594. 
The  court  quotes  from  Eyre  v.  Jacob,  14  Gratt.  422,  and  Pullen  v. 
CommWs,  66  N.  C.  267,  in  which  latter  case  the  following  language 
was  used:  "Property  itself,  as  well  as  the  succession  to  it,  is  the 
creature  of  positive  law.  The  legislative  power  declares  what  ob- 
jects in  nature  may  be  held  as  property;  it  provides  by  what  forms 
and  on  what  conditions  it  may  be  transmitted  from  one  person  to  an- 
other; it  confines  the  right  of  inheriting  to  certain  persons  whom  it 
defines  as  heirs;  and  on  the  failure  of  such  it  takes  the  property 
to  the  state  as  an  escheat.  The  right  to  give  or  take  property  is 
not  one  of  those  natural  and  inalienable  rights  which  are  supposed 
to  precede  all  government  and  which  no  government  can  right- 
fully impair." 


1222  STATUTES  ANNOTATED.  [Wis.  St. 

The  court  remarks  that  the  unanimity  with  which  the  proposi- 
tion is  stated  is  only  equaled  by  the  paucity  of  reasoning  by  which 
it  is  supported,  and  says  that  the  declaration  of  the  court  of  North 
Carolina  seems  to  have  reached  the  logical  goal  toward  which  the 
other  cases  only  tend,  namely,  the  denial  of  all  natural  rights  of 
property.  It  comes  perilously  near  the  doctrine  that  might 
makes  right. 

The  court  quotes  from  Mr.  Justice  Brown,  United  States  v.  Per- 
kins, 163  U.  S.  625,  16  Sup.  Ct.  1073,  where  he  says:  "The  general 
consent  of  the  most  enlightened  nations  has  from  the  earliest  his- 
torical period  recognized  a  natural  right  in  children  to  inherit  the 
property  of  their  parents." 

The  court  notices  the  difference  between  our  theory  of  govern- 
ment that  political  rights  flow  from  the  people  and  the  mediaeval 
theory  that  political  rights  flow  from  the  crown,  and  remarks  that 
this  difference  makes  the  European  cases  of  no  value  in  this  country. 
The  court  remarks  after  discussion :  — 

"So  clear  does  it  seem  to  us  from  the  historical  point  of  view 
that  the  right  to  take  property  by  inheritance  or  will  has  existed 
in  some  form  among  civilized  nations  from  the  time  when  the 
memory  of  man  runneth  not  to  the  contrary,  and  so  conclusive 
seems  the  argument  that  these  rights  are  a  part  of  the  inherent 
rights  which  governments,  under  our  conception,  are  established  to 
conserve,  that  we  feel  entirely  justified  in  rejecting  the  dictum  so 
frequently  asserted  by  such  a  vast  array  of  courts  that  these  rights 
are  purely  statutory  and  may  be  wholly  taken  away  by  the 
legislature. 

"It  is  true  that  these  rights  are  subject  to  reasonable  regulation 
by  the  legislature,  lines  of  descent  may  be  prescribed,  the  persons 
who  can  take  as  heirs  or  devisees  may  be  limited,  collateral  relatives 
may  doubtless  be  included  or  cut  off,  the  manner  of  the  execution  of 
wills  may  be  prescribed,  and  there  may  be  much  room  for  legisla- 
tive action  in  determining  how  much  property  shall  be  exempted 
entirely  from  the  power  to  will,  so  that  dependents  may  not  be 
entirely  cut  off.  These  are  all  matters  within  the  field  of  regula- 
tion. The  fact  that  these  powers  exist  and  have  been  universally 
exercised  affords  no  ground  for  claiming  that  the  legislature  may 
abolish  both  inheritances  and  wills,  turn  every  fee-simple  title 
into  a  mere  estate  for  life,  and  thus,  in  effect,  confiscate  the  prop- 
erty of  the  people  once  every  generation.'* 

The  court  quotes  with  approval  Minot  v.  Winthrop,  162  Mass. 


s.  1087-21  WISCONSIN.  1223 

113,  26  L.  R.  A.  259,  38  N.  E.  512,  to  the  effect  "that  the  legis- 
lature cannot  so  far  restrict  the  right  to  transmit  property  by  will 
or  by  descent  as  to  amount  to  an  appropriation  of  property  gen- 
erally; that  it  cannot  impose  a  tax  which  shall  be  equivalent  or 
almost  equivalent  to  the  value  of  the  property,  and  cannot  so  limit 
the  persons  who  can  take  as  heirs,  devisees,  distributees,  or  legatees 
that  the  great  mass  of  all  the  property  of  the  inhabitants  become 
vested  in  the  commonwealth  by  escheat."  Nunnemacher  v.  State, 
120  Wis.  190,  198,  108  N.  W.  627,  9  L.  R.  A.  N.  S.  121.  See  notes 
to  the  act  of  1903,  ante,  p.  1210. 

Primary  Rates;  Where  not  in  Excess  of  $25,000. 

S.  1087-2.  (Sec.  2,  ch.  44,  1903.)  When  the  property  or  any  beneficial  interest 
therein  passes  by  any  such  transfer  where  the  amount  of  the  property  shall  exceed 
in  value  the  exemption  hereinafter  specified,  and  shall  not  exceed  in  value  twenty- 
five  thousand  dollars  the  tax  hereby  imposed  shall  be :  — 

(1)  One  per  centum,  where.  Where  the  person  or  persons  entitled  to  any 
beneficial  interest  in  such  property  shall  be  the  husband,  wife,  lineal  issue,  lineal 
ancestor  of  the  decedent  or  any  child  adopted  as  such  in  conformity  with  the 
laws  of  this  state,  or  any  child  to  whom  such  decedent  for  not  less  than  ten  years 
prior  to  such  transfer  stood  in  the  mutually  acknowledged  relation  of  a  parent, 
provided,  however,  such  relationship  began  at  or  before  the  child's  fifteenth 
birthday,  and  was  continuous  for  said  ten  years  thereafter,  or  any  lineal  issue 
of  such  adopted  or  mutually  acknowledged  child,  at  the  rate  of  one  per  centum 
of  the  clear  value  of  such  interest  in  such  property. 

(2)  One  and  one-half  per  centum,  where.  Where  the  person  or 
persons  entitled  to  any  beneficial  interest  in  such  property  shall  be  the 
brother  or  sister  or  a  descendant  of  a  brother  or  sister  of  the  decedeftt, 
a  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter  of  the  de- 
cedent, at  the  rate  of  one  and  one-half  per  centum  of  the  clear  value 
of  such  interest  in  such  property. 

(3)  Three  per  centum,  where.  Where  the  person  or  persons  entitled  to 
any  beneficial  interest  in  such  property  shall  be  the  brother  or  sister  of  the  father 
or  mother  of  the  decedent,  at  the  rate  of  three  per  centum  of  the  clear  value  of 
such  interest  in  such  property. 

(4)  Four  per  centum,  where.  Where  the  person  or  persons  entitled  to 
any  beneficial  interest  in  such  property  shall  be  the  brother  or  sister  of  the  grand- 
father or  grandmother  or  a  descendant  of  the  brother  or  sister  of  the  grandfather 
or  grandmother  of  the  decedent,  at  the  rate  of  four  per  centum  of  the  clear  value 
of  such  interest  in  such  property. 

(5)  Five  per  centum,  where.  Where  the  person  or  persons  entitled  to  any 
beneficial  interest  in  such  property  shall  be  in  any  other  degree  of  collateral 
consanguinity  than  is  hereinbefore  stated,  or  shall  be  a  stranger  in  blood  to  the 
decedent,  or  shall  be  a  body  politic  or  corporate,  at  the  rate  of  five  per  centum 
of  the  clear  value  of  such  interest  in  such  property. 

[See  notes  to  the  Act  of  1903,  ante,  p.  1214.] 


1224  STATUTES  ANNOTATED.  [Wis.  St. 

Other  Rates:    Where  in  Excess  of  $25,000. 

S.  1087-3.  (Sec.  3,  ch.  44,  1903.)  The  foregoing  rates  in  section  two  (1087-2) 
are  for  convenience  termed  the  primary  rates. 

When  the  amount  of  the  clear  value  of  such  property  or  interest  exceeds 
twenty-five  thousand  dollars,  the  rates  of  tax  upon  such  excess  shall  be  as 
follows:  — 

(1)  Rate  where  amount  $25,000  to  $50,000.  Upon  all  in  excess  of  twenty- 
five  thousand  dollars  and  up  to  fifty  thousand  dollars,  one  and  one-half  times 
the  primary  rates. 

(2)  Rate  where  amount  $50,000  to  $100,000.  Upon  all  in  excess  of  fifty 
thousand  dollars  and  up  to  one  hundred  thousand  dollars,  two  times  the  primary 
rates. 

(3)  Rate  where  amount  $100,000  to  $500,000.  Upon  all  in  excess  of  one  hun- 
dred thousand  dollars  and  up  to  five  hundred  thousand  dollars,  two  and  one-half 
times  the  primary  rates. 

(4)  Rate  where  amount  over  $500,000.  Upon  all  in  excess  of  five  hun- 
dred thousand  dollars,  three  times  the  primary  rates. 

[See  notes  to  the  Act  of  1903,  ante,  p.  1214.] 

Exemptions. 

S.  1087-4.  The  following  exemptions  from  the  tax,  to  be  taken  out  of  the 
first  twenty-five  thousand  dollars,  are  hereby  allowed :  — 

(1)  All  property  transferred  to  municipal  corporations  within  the  state  for 
strictly  county,  town,  or  municipal  purposes,  or  to  corporations  of  this  state  organ- 
ized under  its  laws,  sole'y  for  religious,  charitable,  or  educational  purposes, 
which  shall  use  the  property  sq  transferred,  exclusively  for  the  purposes  of  their 
organization,  within  the  state,  shall  be  exempt. 

.  .  .  The  inheritance  tax  laws  shall  not  be  held  applicable  to  any  transfer 
of  property  heretofore  made  to  any  county,  town,  or  municipal  corporation 
within  the  state,  for  strictly  municipal  purposes. 

(2)  Property  of  the  clear  value  of  ten  thousand  dollars  transferred  to  the 
widow  of  the  decedent,  and  two  thousand  dollars  transferred  to  each  of  the 
other  persons  described  in  the  first  subdivision  of  section  .  .  .  1087-2  shall  be 
exempt. 

(3)  Property  of  the  clear  value  of  five  hundred  dollars  transferred  to  each  of 
the  persons  described  in  the  third  subdivision  of  section  .  .  .  1087-2  shall  be 
exempt. 

'  (4)  Property  of  the  clear  value  of  two  hundred  and  fifty  dollars  transfered 
to  each  of  the  persons  described  in  the  third  subdivision  of  section  1087-2  shall 
be  exempt. 

(5)  Property  of  the  clear  value  of  one  hundred  and  fifty  dollars  transferred 
to  each  of  the  persons  described  in  the  fourth  subdivision  of  section  .  .  .  1087-2 
shall  be  exempt. 

(§)  Property  of  the  clear  value  of  one  hundred  dollars  transferred  to  each  of 
the  persons  and  corporations  described  in  the  fifth  subdivision  of  section  .  .  . 
1087-2  shall  be  exempt. 

(As  amended  by  St.  1911,  c.  530.) 

[See  notes  to  the  Act  of  1903,  ante,  p.  1214.] 


s.  1087-7.1  WISCONSIN.  1225 

Tax  to  be  a  Lien  on  Property;    Where  Paid;    When  Due. 

S.  1087-5.  (Sec.  5,  ch.  44,  1903,  and  Sec.  1,  ch.  504,  1909.)  (1)  Every  such 
tax  shall  be  and  remain,  a  lien  upon  the  property  transferred  until  paid  and  the 
person  to  whom  the  property  is  transferred  and  the  administrators,  executors, 
and  trustees  of  every  estate  so  transferred,  shall  be  personally  liable  for  such 
tax  until  its  payment. 

(2)  County  Treasurer  makes  Duplicate  Receipts.  The  tax  shall  be  paid 
to  the  treasurer  of  the  county  in  which  the  county  court  is  situated  having  juris- 
diction as  herein  provided ;  and  said  treasurer  shall  make  duplicate  receipts  . 

of  such  payment,  one  of  which  he  shall  immediately  send  to  the  .  .  .  state  treas- 
urer, whose  duty  it  shall  be  to  charge  the  county  treasurer  so  leceivmg  tax, 
with  the  amount  thereof,  and  ...  the  other  receipt  shall  be  delivered  to  the 
executor,  administrator,  or  trustee,  whereupon  it  shall  be  a  proper  voucher  in 
the  settlement  of  his  accounts. 

(3)  Final  Accounting  on  filing  Receipt.  Buc  no  executor,  administrator, 
or  trustee  shall  be  entitled  to  a  final  accounting  of  an  estate,  in  settlement  of 
which  a  tax  is  due  under  the  provisions  of  this  act,  unless  he  shall  produce  .  .  , 
such  receipt  (s)  ...  or  a  certified  copy  thereof  ...  or  unless  a  bond  shall 
have  been  filed  as  prescribed  by  section  1087-9.  .  .  . 

(4)  Tax  due  at  time  of  transfer.  All  taxes  imposed  by  this  act  shall  be  due 
and  payable  at  the  time  of  the  transfer,  except  as  hereinafter  provided.  Taxes 
upon  the  transfer  of  any  estate,  property,  or  interest  therein,  limited,  conditioned, 
dependent,  or  determinable  upon  the  happening  of  any  contingency  or  future 
event,  by  reason  of  which  the  fair  market  value  thereof  cannot  be  ascertained 
at  the  time  of  transfer,  as  herein  provided,  shall  accrue  and  become  due  and 
payable  when  the  beneficiary  shall  come  into  actual  possession  or  enjoyment 
thereof. 

Discount  or  Penalty,  When. 

S.  1087-6.  (Sec.  6,  ch.  44,  1903,  and  Sec.  2,  ch.  504,  1909.)  If  such  tax  is 
paid  within  one  year  from  the  accruing  thereof,  a  discount  of  five  per  centum 
shall  be  allowed  and  deducted  therefrom.  If  such  tax  is  not  paid  within  eighteen 
months  from  the  accruing  thereof,  interest  shall  be  charged  and  collected  thereon 
at  the  rate  of  ten  per  centum  per  annum  from  the  time  the  tax  accrued;  unless 
by  reason  of  claims  made  upon  the  estate,  necessary  litigation  or  other  unavoid- 
able cause  of  delay,  such  tax  shall  not  be  determined  and  paid  as  herein  provided, 
in  which  case  interest  at  the  rate  of  six  per  centum  per  annum  shall  be  charged 
upon  such  tax  from  the  accrual  thereof  until  the  cause  of  such  delay  is  removed, 
after  which  ten  per  centum  shall  be  charged.  In  all  cases  when  a  bond  shall  be 
given  under  the  provisions  of  section  1087-9,  .  .  .  interest  shall  be  charged  at 
the  rate  of  six  per  centum  from  the  accrual  of  the  tax,  until  the  date  of  pay- 
ment thereof. 

[See  notes  to  the  Act  of  1903,  ante,  p.  1215.1 

Powers  of  Executors,  etc.;    Where  Legacy  not  in  Money. 

S.  1087-7.  (Sec.  7,  ch.  44,  1903,  and  Sec.  3,  ch.  504,  1909.)  Every  execu- 
tor, administrator,  or  trustee  shall  have  full  power  to  sell  so  much  of  the  property 
of  the  decedent  as  will  enable  him  to  pay  such  tax  in  the  same  manner  as  he  might 


1226  STATUTES  ANNOTATED.  [Wis.  St. 

be  entitled  by  law  to  do  for  the  payment  of  the  debts  of  the  testator  or  intestate. 
Any  such  administrator,  executor,  or  trustee  having  in  charge  or  in  trust  any 
legacy  or  property  for  distribution,  subject  to  such  tax,  shall  deduct  the  tax  there- 
from ;  and  within  thirty  days  therefrom  shall  pay  over  the  same  to  the  county  treas- 
urer, as  herein  provided.  If  such  legacy  or  property  be  not  in  money,  he  shall 
collect  the  tax  thereon  upon  the  appraised  value  thereof,  from  the  person  entitled 
thereto.  He  shall  not  deliver  or  be  compelled  to  deliver  any  specific  legacy  or 
property  subject  to  tax  under  this  act,  to  any  person  until  he  shall  have  collected 
the  tax  thereon.  If  any  such  legacy  shall  be  charged  upon  or  payable  out  of 
real  property,  the  heir  or  devisee  shall  deduct  such  tax  therefrom  and  pay  it  to 
the  administrator,  executor,  or  trustee,  and  the  tax  shall  remain  a  lien  or  charge 
on  such  real  property  until  paid,  and  the  payment  thereof  shall  be  enforced  by 
the  executor,  administrator,  or  trustee  in  the  same  manner  that  payment 
of  the  legacy  might  be  enforced,  or  by  the  district  attorney  under  section  1087- 
16.  .  .  .  If  any  such  legacy  shall  be  given  in  money  to  any  such  person  for  a 
limited  period,  the  administrator,  executor,  or  trustee  shall  retain  the  tax  upon 
the  whole  amount,  but  if  it  be  not  in  money,  he  shall  make  application  to  the 
court  having  jurisdiction  of  an  accounting  by  him  to  make  an  apportionment 
if  the  case  require  it,  of  the  sum  to  be  paid  into  his  hands  by  such  legatees,  and 
for  such  further  order  relative  thereto  as  the  case  may  require. 

Subsequent  Debts;  State  Treasurer  may  Refund  Tax. 

S.  1087-8.  (Sec.  8,  ch.  44,  1903,  and  Sec.  4,  ch.  504,  1909.)  (1)  If  any 
debt  shall  be  proved  against  the  estate  of  the  decedent  after  the  payment  of 
any  legacy  or  distributive  share  thereof,  from  which  any  such  tax  has  been 
deducted,  or  upon  which  it  has  been  paid  by  the  person  entitled  to  such  legacy  or 
distributive  share,  and  such  person  is  required  by  the  order  of  the  county  court 
having  jurisdiction  thereof  on  notice  to  the  .  .  .  state  treasurer  to  refund  the 
amount  of  such  debts  or  any  part  thereof,  an  equitable  proportion  of  the  tax 
shall  be  repaid  to  such  person  ...  by  the  executor,  administrator,  .  .  .  trustee, 
...  or  officer  to  whom  said  tax  has  been  paid. 

(2)  How  refund  of  tax  made.  When  any  amount  of  said  tax  shall  have 
been  paid  erroneously  into  the  state  treasury,  it  shall  be  lawful  for  the  .  .  . 
state  treasurer  upon  .  .  .  receiving  a  transcript  from  the  county  court  record 
showing  the  facts  to  refund  ...  the  amount  of  such  erroneous  or  illegal  pay- 
ment to  .  .  .  the  executor,  administrator,  trustee,  person,  or  persons  who  have 
paid  any  such  tax  in  error,  from  the  treasury;  or  the  said  .  .  .  state  treasurer 
may  order,  direct,  and  allow  the  treasurer  of  any  county  to  refund  the  amount 
of  any  illegal  or  erroneous  payment  of  such  tax  out  of  the  funds  in  his  hands 
or  custody  to  the  credit  of  such  taxes,  and  credit  him  with  the  same  in  his  quarterly 
account  rendered  to  the  .  .  .  state  treasurer  under  this  act.  Provided,  however, 
that  all  applications  for  such  refunding  of  erroneous  taxes  shall  be  made  within 
one  year  from  the  payment  thereof,  or  within  one  year  after  the  reversal  or 
modification  of  the  order  fixing  such  tax. 

Bond  for  Payment  of  Legacies  not  in  Possession. 

S.  1087-9.  (Sec.  9,  ch.  44,  1903.)  Any  beneficiary  of  any  property  chargeable 
with  a  tax  under  this  act,  and  any  executors,  administrators  and  trustees  thereof, 
may  elect,  within  eighteen  months  from  the  date  of  the  transfer  thereof  as  herein 


8.  1087-9.]  WISCONSIN.  1227 

provided,  not  to  pay  such  tax  until  the  person  or  persons  beneficially  interested 
therein  shall  come  into  the  actual  possession  or  enjoyment  thereof.  The  person 
or  persons  so  electing  shall  give  a  bond  to  the  state  in  a  penalty  of  three  times 
the  amount  of  any  such  tax,  with  such  sureties  as  the  county  court  of  the  proper 
county  may  approve,  conditioned  for  the  payment  of  such  tax  and  interest 
thereon,  at  such  time  or  period  as  the  person  or  persons  beneficially  interested 
therein  may  come  into  the  actual  possession  or  enjoyment  of  such  property, 
which  bond  shall  be  filed  in  the  county  court.  Such  bond  must  be  executed 
and  filed  and  a  full  return  of  such  property  upon  oath  made  to  the  county  court 
within  one  year  from  the  date  of  such  transfer  thereof  as  herein  provided,  and 
such  bond  must  be  renewed  every  five  years 


Bequests  to  Executors  for  Services. 

S.  1087-10.  (Sec.  10,  ch.  44,  1903.)  If  a  testator  bequeaths  property  to  one 
or  more  executors  or  trustees  in  lieu  of  their  commissions  or  allowances,  or  makes 
them  his  legatees  to  an  amount  exceeding  the  commissions  or  allowances  pre- 
scribed by  law  for  an  executor  or  trustee,  the  excess  in  value  of  the  property  so 
bequeathed,  above  the  amount  of  commissions  or  allowances  prescribed  by  law 
in  similar  cases,  shall  be  taxable  by  this  act. 


Transfer  of  Stock  by  Foreign  Executors. 

S.  1087-11.  (1)  If  a  foreign  executor,  administrator,  or  trustee  shall  assign 
or  transfer  any  stock  or  obligations  in  this  state,  standing  in  the  name  of  a  dece- 
dent or  in  trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to 
the  treasurer  of  the  proper  county  or  the  state  treasurer  on  the  transfer  thereof. 

(2)  No  safe  deposit  company,  bank,  or  other  institution,  person  or  persons, 
holding  securities  or  assets  of  a  non-resident  decedent,  nor  any  foreign  or  domestic 
corporation  doing  business  within  this  state  in  which  a  non-resident  decedeat 
held  stock  at  his  decease,  shall  deliver  or  transfer  the  same  to  the  executors, 
administrators,  or  legal  representatives  of  said  decedent,  or  upon  their  order 
or  request,  unless  notice  of  the  time  and  place  of  such  intended  transfer  be 
served  upon  the  attorney  general  at  least  ten  days  prior  to  the  said  transfer; 
nor  shall  any  such  safe  deposit  company,  bank,  or  other  institution,  person  or 
persons,  nor  any  such  foreign  or  domestic  corporation,  deliver  or  transfer  any 
securities  or  assets  of  the  estate  of  a  non-resident  decedent  without  retaining  a 
sufficient  portion  or  amount  thereof  to  pay  any  tax  which  may  thereafter  be 
assessed  on  account  of  the  transfer  of  such  securities  or  assets  under  the  pro- 
visions of  .  .  .  the  inheritance  tax  laws,  without  an  order  from  the  proper 
court  authorizing  such  transfer;  and  it  shall  be  lawful  for  the  attorney  general  or 
public  administrator  personally  or  by  representative,  to  examine  said  securities 
or  assets  at  .  .  .  any  time  .  .  .  before  such  delivery  or  transfer.  Failure  to 
serve  such  notice  or  to  allow  such  examination  or  to  retain  a  suflScient  portion 
or  amount  to  pay  such  tax  as  herein  provided,  shall  render  said  safe  deposit 
company,  trust  company,  bank,  or  other  institution,  person  or  persons,  or  such 
foreign  or  domestic  corporation,  liable  to  the  payment  of  the  tax  due  upon  said 
securities  or-  assets  in  the  pursuance  of  the  provisions  of  .  .  .  the  inheritance 
tax  laws.     (As  amended  by  St.  1911,  c.  530.) 


1228  STATUTES  ANNOTATED.  [Wis.  St. 

Compromise  of  Tax. 

S.  1087-1  Im.  All  claims  for  taxes,  under  the  inheritance  tax  laws,  on  account 
of  any  transfer  by  any  non-resident  decedent,  which  accrued  prior  to  the  passage 
of  this  act,  may  be  compounded,  settled,  and  adjusted  by  the  attorney  general, 
subject  to  the  approval  of  the  governor  and  tax  commission,  upon  such  terms 
as  may  by  them  be  deemed  equitable  and  for  the  best  interests  of  the  state. 
(Added  by  St.  1911.  c.  530.) 

Jurisdiction.  —  Ancillary  Letters. 

S.  1087-12.  (1)  The  county  court  of  every  county  of  the  state  having  juris- 
diction to  grant  letters  testamentary  or  of  administration  upon  the  estate  of  a 
decedent  whose  property  is  chargeable  with  any  tax  under  .  .  .  the  inheritance 
tax  laws,  or  to  appoint  a  trustee  of  such  estate  or  any  part  thereof,  or  to  give 
ancillary  letters  thereon,  shall  have  jurisdiction  to  hear  and  determine  all  ques- 
tions arising  under  the  provisions  of  .  .  .  the  inheritance  tax  laws  and  to  do 
any  act  in  relation  thereto  authorized  by  law  to  be  done  by  a  county  court  in 
other  matters  or  proceedings  coming  within  its  jurisdiction;  and  if  two  or  more 
county  courts  shall  be  entitled  to  exercise  any  such  jurisdiction,  the  county 
court  first  acquiring  jurisdiction  hereunder,  shall  retain  the  same  to  the  exclusion 
of  every  other  county  court. 

(2)  Every  petition  for  ancillary  letters  testamentary  or  of  administration 
shall  include  the  public  administrator  as  a  person  to  be  notified,  and  a  true  and 
correct  statement  of  all  the  decedent's  property  in  this  state  with  the  value 
thereof;  upon  presentation  thereof,  the  county  court  shall  cause  the  order  for 
hearing  to  be  served  personally  upon  the  public  administrator;  and  upon  the 
hearing,  the  county  court  shall  determine  the  amount  of  the  inheritance  tax 
which  may  be  or  become  due",  and  the  decree  awarding  the  letters  may  con- 
tain provisions  for  the  payment  of  such  tax  or  the  giving  of  security  therefor. 

S.  3.  (3)  The  county  court  and  the  judge  thereof  at  the  seat  of  govern- 
ment shall  have  jurisdiction  to  hear  and  determine,  as  other  matters  not  apper- 
taining to  its  regular  probate  business,  all  questions  relating  to  the  determination 
and  adjustment  of  inheritance  taxes  in  the  estates  of  non-resident  decedents  in 
which  it  does  not  otherwise  appear  necessary  for  regular  administration  to 
be  had  therein.  And  in  such  estates  the  public  administrator  may  be  appointed 
as  special  administrator  for  the  purposes  of  such  adjustment.  The  county 
treasurer  shall  retain  for  the  use  of  the  county  out  of  all  such  taxes  paid  and 
accounted  for,  only  one  per  cent,  and  the  balance,  less  the  statutory  expenses 
of  collection  and  adjustment  as  fixed  by  the  court,  shall  be  paid  into  the  state 
treasury;  provided,  however,  that  the  minimum  fee  to  which  the  county 
shall  be  entitled  shall  be  five  dollars  in  each  case  and  that  in  no  case  shall  the 
maximum  fee  exceed  five  hundred  dollars.     (As  amended  by  St.  1911,  c.  530.) 

[See  notes  to  the  Act  of  1903,  ante,  p.  1216.] 

Sp^ial  Appraiser  may  be  Appointed. 

S.  1087-13.  (Sec.  13,  ch.  44,  1903,  Sec.  2,  ch.  249,  1903,  and  Sec.  7,  ch.  504. 
1909.)  (1)  The  county  court  upon  the  application  of  any  interested  party 
including  the  attorney  general  and  public  administrator  ...  or  upon  ...  its 
own  motion,  shall  as  often  as,  and  whenever  occasion  may  require  appoint  a 


s.  1087-13.]  WISCONSIN.  1229 

competent  person  as  special  appraiser  to  fix  the  fair  market  value  at  the  time 
of  the  transfer  thereof  of  the  property  of  persons  whose  estate  shall  be  subject 
to  the  payment  of  any  tax  imposed  by  this  act. 

(2)  Appraisal  at  clear  market  value;  annuities,  how  computed. 
Whenever  a  transfer  of  property  is  made  upon  which  there  is,  or  in  any  contin- 
gency there  may  be,  a  tax  imposed,  such  property  shall  be  appraised  at  its  clear 
market  value  immediately  upon  the  transfer  or  as  soon  thereafter  as  practicable. 
The  value  of  every  future  or  limited  estate,  income,  interest,  or  annuity  depend- 
ent upon  any  life  or  lives  in  being,  shall  be  determined  by  the  rule,  method,  and 
standard  of  mortality  and  value  employed  by  the  commissioner  of  insurance  in 
ascertaining  the  value  of  policies  of  life  insurance  and  annuities  for  the  deter- 
mination of  liabilities  of  life  insurance  companies  except  that  the  rate  of  interest 
for  making  such  computations  shall  be  five  per  centum  per  annum.  .  .  . 

[See  notes  to  the  Act  of  1903,  ante,  p.  1216.] 

(3)  Contingent  incumbrances.  In  estimating  the  value  of  any  estate  or 
interest  in  property  to  the  beneficial  enjoyment  or  possession  whereof  there  are 
persons  or  corporations  presently  entitled  thereto,  no  allowance  shall  be  made 
in  respect  of  any  contingent  incumbrance  thereon,  nor  in  respect  of  any  contin- 
gency upon  the  happening  of  which  the  estate  or  property  or  some  part  thereof, 
or  interest  therein,  might  be  abridged,  defeated,  or  diminished;  provided,  how- 
ever, that  in  the  event  of  such  incumbrance  taking  effect  as  an  actual  burden 
upon  the  interest  of  the  beneficiary  or  in  the  event  of  the  abridgement,  defeat, 
or  diminution  of  such  estate  or  property  or  interest  therein  as  aforesaid,  a  return 
shall  be  made  to  the  person  properly  entitled  thereto  of  a  proportionate  amount 
of  such  tax  in  respect  of  the  amount  or  value  of  the  incumbrance  when  taking 
effect  or  so  much  as  will  reduce  the  same  to  the  amount  which  would  have  been 
assessed  in  respect  of  the  actual  duration  or  extent  of  the  estate  or  interest 
enjoyed.  Such  return  of  tax  shall  be  made  in  the  manner  provided  in  section 
.  .  .  1087-8. 

(4)  Tax  when  subject  to  charge  determinable  by  death.  Where  any 
property  shall  after  the  passage  of  this  act  be  transferred  subject  to  any  charge, 
estate,  or  interest  determinable  by  the  death  of  any  person  or  at  any  period 
ascertainable  only  by  reference  to  death,  the  increase  of  benefit  accruing  to 
any  person  or  corporation  upon  the  extinction  or  determination  of  such  charge* 
estate  or  interest  shall  be  deemed  a  transfer  of  property  taxable  under  the  pro- 
visions of  this  act  in  the  same  manner  as  though  the  person  or  corporation  benefi- 
cially entitled  thereto  had  then  acquired  such  increase  of  benefit  from  the 
person  from  whom  the  title  to  their  respective  estates  or  interests  is  derived. 

[See  notes  to  the  Act  of  1903,  ante,  p.  1218.] 

(5)  Contingent  trusts  taxed  primarily  at  lowest  rate.  When  property 
is  transferred  in  trust  or  otherwise,  and  the  rights,  interests,  or  estates  of  the 
transferees  are  dependent  upon  contingencies  or  conditions  whereby  they  may 
be  wholly  or  in  part  created,  defeated,  extended,  or  abridged,  a  tax  shall  be 
imposed  upon  such  transfer  at  the  lowest  rate  which  on  the  happening  of  any  of  the 
said  contingencies  or  conditions  would  be  possible  under  the  provisions  of  this 
act,  and  such  tax  so  imposed  shall  be  due  and  payable  forth  with  out  of  the 
property  transferred;  provided,  however,  that  on  the  happening  of  any  con- 
tingency or  condition  whereby  the  said  property  or  any  part  thereof  is  trans- 


1230  STATUTES  ANNOTATED.  [Wis.  St- 

ferred  to  a  person  or  corporation,  which  under  the  provisions  of  this  act  is 
required  to  pay  a  tax  at  a  higher  rate  than  the  tax  imposed,  then  such  transferee 
shall  pay  the  difference  between  the  tax  imposed  and  the  tax  at  the  higher  rate, 
and  the  amount  of  such  increased  tax  shall  be  enforced  and  collected  as  pro- 
vided in  this  act. 

[See  notes  to  the  Act  of  1903,  ante,  p.  1218.] 

(6)  Contingent  or  defeasible  estates  in  expectancy.  Estates  in  expec- 
tancy which  are  contingent  or  defeasible  and  in  which  proceedings  for  determina- 
tion of  the  tax  have  not  been  taken  or  where  the  taxation  thereof  has  been  held 
in  abeyance  shall  be  appraised  at  their  full  undiminished  clear  value  when  the 
persons  entitled  thereto  shall  come  into  the  beneficial  enjoyment  or  possession 
thereof  without  diminution  for  or  on  account  of  any  valuation  theretofore  made 
of  the  particular  estates  for  purposes  of  taxation  upon  which  said  estates  in 
expectancy  may  have  been  limited.  Where  an  estate  for  life  or  for  years  can  be 
divested  by  the  act  or  omission  of  the  legatee  or  devisee,  it  shall  be  taxed  as  if 
there  were  no  possibility  of  such  divesting. 

[See  notes  to  the  Act  of  1903,  ante,  p.  1217.] 

Notice  by  and  Duty  of  Special  Appraiser;  Compensation. 

S.  1087-14.  (Sec.  14,  ch.  44,  1903,  and  Sec.  8,  ch.  504,  1909.)  Every  such 
appraiser  shall  forthwith  give  notice  by  mail  to  all  persons  known  to  have  a 
claim -or  interest  in  the  property  to  be  appraised,  including  the  public  adminis- 
trator .  .  .  and  to  such  persons  as  the  county  court  may  by  order  direct,  of 
the  time  and  place  when  he  will  appraise  such  property.  He  shall,  at  such  time 
and  place,  appraise  the  same  at  its  fair  market  value,  as  herein  prescribed,  and 
for  that  purpose  the  said  appraiser  is  authorized  to  issue  subpoenas  and  to  compel 
the  attendance  of  witnesses  before  him  and  to  take  the  evidence  of  such  witnesses 
under  oath  concerning  such  property  and  the  value  thereof;  and  he  shall  make 
report  thereof  and  of  such  value  in  writing,  to  the  said  county  court,  together 
with  the  depositions  of  the  witnesses  examined,  and  such  other  facts  in  relation 
thereto  and  to  the  said  matter  as  the  said  county  court  may  order  or  require. 
Every  appraiser  shall  be  paid  on  the  certificate  of  the  county  court  at  the  rate  of 
three  dollars  per  day  for  every  day  actually  and  necessarily  employed  in  such 
appraisal,  and  his  actual  and  necessary  traveling  expenses  and  the  fees  paid 
such  witnesses,  which  fees  shall  be  the  same  as  those  now  paid  to  witnesses 
subpoenaed  to  attend  in  courts  of  record,  by  the  county  treasurer  out  of  any 
funds  he  may  have  in  his  hands  on  account  of  any  tax  imposed  under  the  pro- 
visions of  this  act. 

Report  of  Special  Appraiser;  Notice  for  Hearing. 

S.  1087-15.  (Sec.  15,  ch.  44,  1903,  and  Sec.  9,  ch.  504,  1909.)  (1)  The  report 
of  the  special  appraiser  shall  be  made  in  duplicate,  one  of  which  duplicates  shall 
be  filed  in  the  office  of  the  county  court  and  the  other  in  the  office  of  the  attorney 
general.  .  .  Upon  filing  such  report,  .  .  .  the  county  court  shall  forthwith  give 
twenty  days'  notice  by  mail  to  all  persons  known  to  be  interested  in  the  estate, 
including  the  attorney  general  and  public  administrator  ...  of  the  time  and 
place  for  the  hearing  in  the  matter  of  such  report,  and  the  county  court,  from 
such  report  and  other  proofs  relating  to  any  such  estate,  shall  forthwith  at  the 


s.  1087-15.]  WISCONSIN.  1231 

time  so  fixed,  determine  the  cash  value  of  such  estate  and  the  amount  of  tax  to 
which  the  same  is  liable. 

(2)  Or  hearing  by  court  without  appointing  special  appraiser.    Or  the 

county  court  without  appointing  such.  .  .  appraiser  upon  giving  twenty  days' 
notice  by  mail  to  all  persons  known  to  be  interested  in  the  estate,  including  the 
attorney  general  and  public  administrator ...  of  the  time  and  place  of  hearing, 
may  at  the  time  so  fixed  hear  evidence  and  determine  the  cash  value  of  such 
estate  and  the  amount  of  tax  to  which  the  same  is  liable.  If  the  residence  or 
post-office  address  of  any  person  interested  in  any  estate  is  unknown  to  the 
executor,  administrator,  or  trustee,  notice  of  the  hearing  in  the  matter  of  the 
report  of  the  appraiser  or  notice  that  the  county  court  without  appointing  such 
.  .  .  appraiser  will  determine  the  cash  value  of  an  estate,  shall  be  given  to  all 
such  persons  by  publication  of  such  notice  not  less  than  three  successive  weeks 
prior  to  the  time  fixed  for  such  hearing  or  determination  in  such  newspaper 
published  within  the  county  as  the  court  shall  direct. 

(3)  Additional  third  appraiser  to  represent  county  and  state  at  original 
appraisal.  If  the  county  court  without  appointing  such  special  appraiser 
decide  to  hear  evidence  as  to  the  cash  value  of  the  estate  for  inheritance  tax 
purposes,  the  court  may,  at  the  time  of  the  appointment  of  the  regular  appraisers 
of  the  estate,  on  its  own  motion,  designate  an  additional  third  appraiser  to  repre- 
sent the  county  and  state,  and  such  additional  appraiser  shall  report  the  inven- 
tory and  appraisal  of  said  property  with  the  other  appraisers;  or,  in  case  of 
failure  to  agree,  in  a  separate  report,  and  be  entitled  to  compensation  of  three 
dollars  per  day  for  each  day  necessarily  employed  in  such  appraisal  and  his 
mileage,  which  fees  shall  be  paid  on  the  certificate  of  the  county  judge  by  the 
county  treasurer  out  of  any  of  the  state's  inheritance  tax  funds  he  may  have 
in  his  possession. 

(4)  Commissioner   of   insurance  to  value  future  estates,   etc.    The 

commissioner  of  insurance  shall  on  application  of  any  county  court  determine 
the  value  pi  any  such  future  or  contingent  estates,  income,  or  interests  therein, 
limited,  contingent,  dependent,  or  determinable  upon  the  life  or  lives  of  the 
person  or  persons  in  being  upon  the  facts  contained  in  such  special  appraiser's 
report  or  upon  the  facts  contained  in  the  county  court's  finding  and  determina- 
tion and  certify  the  same  to  the  county  court,  and  his  certificate  shall  be  pre- 
sumptive evidence  that  the  method  of  computation  adopted  therein  is  correct. 

(5)  Order  Determining  Tax;  Form;  Notice.  Upon  the  determination 
by  the  county  court  as  to  the  value  of  any  estate  which  is  taxable  under 
.  .  .  the  inheritance  tax  laws  and  of  the  tax  to  which  it  is  liable,  notice 
shall  be  given  to  all  persons  known  to  be  interested,  including  the  county 
treasurer  and  the  state  treasurer  by  delivering  personally  or  mailing  to  each 
a  copy  of  the  order  of  determination.  Such  order  shall  include  a  statement 
of  (1)  the  date  of  the  death  of  the  decedent,  (2)  the  net  value  of  the  real 
and  personal  property  to  be  transferred,  (3)  the  proportions  and  amounts 
of  all  such  property  of  such  decedent,  (4)  the  names  and  relationship  of 
the  persons  entitled  to  receive  the  same,  (5)  the  rates  and  amounts  of 
inheritance- tax  to  which  each  of  such  amounts  and  proportions  are  liable,  (6) 
the  total  amount  of  tax  to  be  paid,  and  (7)  a  statement  as  to  penalty  for  delay, 


1232  STATUTES  ANNOTATED.  [Wis.  St. 

if  any,  and  shall  be  substantially  in  the  form  to  be  prescribed  and  furnished  to 
county  courts  by  the  attorney  general.     And  no  final  judgment  shall  be  entered 
in  such  estates  until  due  proof  is  filed  with  the  court  showing  that  a  copy  of  such 
order  has  been  delivered  or  mailed  to  the  state  treasurer. 
(As  amended  by  St.  1911,  c.  630.) 

(6)  Guardian  ad  litem  for  infants  and  incompetents.  If,  however,  it 
appears  at  this  or  any  stage  of  the  proceedings  that  any  of  such  parties  known 
to  be  interested  in  the  estate  is  an  infant  or  an  incompetent,  who  is  not  already 
represented  by  a  guardian  ad  litem,  the  county  court  shall  if  the  interest  of  such 
infant  or  incompetent  is  presently  involved  and  is  adverse  to  that  of  the  other 
persons  interested  therein  appoint  a  .  .  .  guardian  ad  litem  for  .  .  .  such 
infant,  but  nothing  in  this  provision  shall  affect  the  right  of  an  infant  over 
fourteen  years  of  age  or  of  any  one  on  behalf  of  an  infant  under  fourteen  years 
of  age  to  nominate  and  apply  for  the  appointment  of  a  .  .  .  guardian  ad  litem 
of  such  infant  at  any  .  .  .  stage  of  the  proceedings. 

(7)  Rehearing  within  sixty  days  upon  record.  .  .  .  The  .  .  .  attorney 
general  or  any  person  dissatisfied  with  the  appraisement  or  assessment  and  deter- 
mination of  such  tax  may  apply  for  a  rehearing  thereof  before  the  county  court 
within  sixty  days  from  the  fixing,  assessing,  and  determination  of  the  tax  by 
the  county  court  as  herein  provided  on  filing  a  written  notice  which  shall  state 
the  grounds  of  the  application  for  a  rehearing.  The  rehearing  shall  be  upon  the 
records,  proceedings,  and  proofs  had  and  taken  on  the  hearings  as  herein  pro- 
vided and  a  new  trial  shall  not  be  had  or  granted  unless  specially  ordered  by  the 
county  court. 

(8)  Re- appraisement  in  circuit  court  within  two  years.  Within  two 
years  after  the  entry  of  an  order  or  decree  of  the  county  court  determining  the 
value  of  an  estate  and  assessing  the  tax  thereon,  the  .  .  .  attorney  general,  may, 
if  he  believes  that  such  appraisal,  assessment,  or  determination  has  been  fraudu- 
lently, coUusively,  or  erroneously  made,  make  application  to  the  circuit  judge 
of  the  judicial  circuit  in  which  the  former  owner  of  such  estate  resided  for  a 
re-appraisal  thereof.  The  circuit  judge  to  whom  such  application  is  made  may 
thereupon  appoint  a  competent  person  to  re-appraise  such  estate.  Such  ap- 
praiser shall  possess  the  powers,  be  subject  to  the  duties,  shall  give  the  notice 
and  receive  the  compensation  provided  by  sections  .  .  .  1087-13  and  .  .  . 
1087-14.  .  .  .  Such  compensation  shall  be  payable  by  the  county  treasurer 
out  ot  any  funds  he  may  have  on  account  of  any  tax  imposed  under  the  pro- 
visions of  this  act  upon  the  certificate  of  the  circuit  judge.  .  .  .  The  report  of 
such  appraiser  shall  be  filed  in  the  circuit  court  .  .  .  and  thereafter  the  same 
proceedings  shall  be  taken  and  had  by  and  before  such  circuit  court  as  herein 
provided  to  be  taken  and  had  by  and  before  the  county  court.  The  determina- 
tion and  assessment  of  such  circuit  court  shall  supersede  the  determination  and 
assessment  of  the  county  court  and  shall  be  filed  ...  in  the  office  of  the  state 
treasurer  .  .  .  and  a  certified  copy  .  .  .  transmitted  to  the  county  court  of 
the  proper  county. 

Duties  of  County  Treasurer,  County  Judge  and  District  Attorney,  Where 
Tax  is  Unpaid. 

S.  1087-16.     (Sec.  16,  ch.  44,  1903.)     (1)    If  the  treasurer  of  any  county  shall 
have  reason  to  believe  that  any  tax  is  due  and  unpaid  under  this  act  after  the 


s.  1087-16.]  WISCONSIN.  1233 

refusal  or  neglect  of  any  person  liable  therefor  to  pay  the  same,  he  shall  notify 
the  district  attorney  of  the  county  in  writing  of  such  failure  or  neglect  and  such 
district  attorney  if  he  have  probable  cause  to  believe  that  such  tax  is  due  and 
unpaid,  shall  apply  to  the  county  court  for  a  citation  citing  the  person  liable  to 
pay  such  tax  to  appear  before  the  court  on  the  day  specified  not  more  than 
three  months  from  the  date  of  such  citation  and  show  cause  why  the  tax  should 
not  be  paid. 

County  court  may  issue  citation,  etc.  The  judge  of  the  county  court 
upon  such  application  and  whenever  it  shall  appear  to  him  that  any  such  tax. 
accruing  under  this  act,  has  not  been  paid  as  required  by  law,  shall  issue  such 
citation  and  the  service  of  such  citation  and  the  time,  manner  and  proof  thereof 
and  the  hearing  and  determination  thereof,  shall  conform  as  near  as  may  be 
to  the  provisions, of  the  laws  governing  probate  practice  of  this  state,  and  when- 
ever it  shall  appear  that  any  such  tax  is  due  and  payable  and  the  payment  thereof 
cannot  be  enforced  under  the  provisions  of  this  act  in  said  county  court,  the 
person  or  corporation  from  whom  the  same  is  due  is  hereby  made  liable  to  the 
county  of  the  county  court  having  jurisdiction  over  such  estate  or  property  for 
the  amount  of  such  tax,  and  it  shall  be  the  duty  of  the  district  attorney  of  said 
county  in  the  name  of  such  county  to  sue  for  and  enforce  the  collection  of  such 
tax,  and  it  is  made  the  duty  of  said  district  attorney  to  appear  for  and  act  on 
behalf  of  any  county  treasurer,  who  shall  be  cited  to  appear  before  any  county 
court  under  the  provisions  of  this  act. 

Public  Administrator  may  Administer  Estates  after  Sixty  Days. 

S.  1087-17.  (Sec.  17,  ch.  44,  1903,  and  Sec.  10,  ch.  504,  1909.)  (1)  Where 
no  application  for  administration  on  the  estate  of  any  deceased  person  is  made 
within  sixty  days  after  the  demise  of  such  person,  and  such  estate  appears  to 
come  under  the  provisions  of  the  inheritance  tax  laws,  the  public  administrator 
of  the  proper  county  shall  make  application  for  and  shall  be  entitled  to  such 
general  or  special  administration  of  such  estate  as  may  be  necessary  for  the  pur- 
pose of  the  adjustment  and  payment  of  the  inheritance  tax  provided  by  law  and 
shall  administer  the  same  as  other  estates  are  administered. 

(2)  Where  transfer  made  in  contemplation  of  death.  Where  it  appears 
that  the  estate  of  a  deceased  person  subject  to  the  inheritance  tax  laws  was 
transferred  in  contemplation  of  the  death  of  the  grantor  without  the  adjustment 
and  payment  of  the  inheritance  taxes  and  no  application  for  such  adjustment  is 
made  within  sixty  days  after  the  demise  of  such  grantor,  the  public  adminis- 
trator of  the  proper  county  shall  make  application  for  and  shall  be  entitled  to 
such  general  or  special  administration  as  may  be  necessary  for  the  purpose  of 
the  adjustment  and  payment  of  the  inheritance  taxes  provided  by  law  and  shall 
administer  such  estate  the  same  as  other  estates  are  administered  as  though 
such  estate  had  not  been  transferred  by  the  grantor. 

(3)  Public  administrator  to  appear  for  county  and  state;  compensa- 
tion;  general  supervision  of  attorney  general.  It  shall  be  the  duty  of  the 
public  administrator,  under  the  general  supervision  of  the  attorney  general  and 
with  the  assistance  of  the  district  attorney,  when  required  by  the  attorney  general 
or  county  judge,  to  investigate  the  estates  of  deceased  persons  within  his  county 
and  to  appear  for  and  act  in  behalf  of  the  county  and  state  in  the  county  court 


1234  STATUTES  ANNOTATED.  [Wis.  St. 

in  such  estates  as  the  court  may  in  its  discretion  deem  necessary,  and  for  such 
services  the  public  administrator  shall  be  entitled  to  five  per  centum  of  the  gross 
inheritance  tax  as  determined  in  each  such  estate,  to  be  paid  by  the  county 
treasurer  out  of  the  inheritance  tax  funds  upon  an  order  of  the  county  judge, 
provided  that  the  minimum  fee  for  each  such  estate  shall  not  be  less  than  three 
dollars  and  the  maximum  fee  not  more  than  twenty-five  dollars. 

(4)  In  counties  of  over  200,000,  public  administrator  or  assistant 
district  attorney.  In  counties  containing  a  population  of  over  two  hundred 
thousand,  an  assistant  district  attorney,  compensated  as  otherwise  provided  by 
law,  may  by  order  of  the  county  court  be  designated  to  take  the  place  of  and  per- 
form all  the  duties  of  the  public  administrator  relating  to  the  inheritance  tax  laws, 
except  as  provided  in  subdivisions  1  and  2  of  this  section.  Whenever  the  assis- 
tant district  attorney  is  designated  as  public  administrator  he  shall  receive  the 
same  fees  as  the  public  administrator  in  other  counties,  provided,  however,  that 
all  such  fees  collected  by  him  as  public  administrator  shall  be  turned  into  the 
county  treasury. 

S.  1087-18  of  the  statutes  was  repealed.  (Sec.  18,  ch.  44,  1903,  repealed  by 
Sec.  11,  ch.  504,  1909.) 

Powers  of  Tax  Commission. 

S.  1087-18.  (1)  It  shall  be  the  duty  of  the  tax  commission  to  investigate 
and  cause  to  be  investigated  the  administration  of  the  inheritance  tax  laws,  and 
such  particular  estates  to  which  the  inheritance  tax  laws  apply,  throughout  the 
various  counties  of  the  state,  and  to  cause  to  be  made  and  filed  in  its  offices  re- 
ports of  such  investigation  together  with  specific  information  and  facts  as  to  par- 
ticular estates  that  may  seem  to  require  especial  consideration  and  attention  by 
the  legal  department  of  the  state. 

(2)  Under  its  general  authority  as  set  forth  in  section  1087-37,  the  commission 
shall  appoint,  and  fix  compensation  of  at  a  sum  not  exceeding  three  thousand 
dollars  annually,  besides  expenses,  as  inheritance  tax  investigator  who  shall 
have  charge  of  the  inheritance  tax  work  under  the  supervision  of  the  tax  commis- 
sion, and  who  shall  be  provided  with  such  further  assistance  from  time  to  time 
from  the  regular  force  of  the  tax  commission  office  as  may  be  necessary  and 
expedient.  Such  inheritance  tax  investigator  shall  devote  his  time  to  the  work 
of  inheritance  tax  investigations,  and  he  shall  personally  make  such  investiga- 
tions at  the  different  county  courts  from  time  to  time  as  deemed  advisable.  He 
shall  file  with  the  commission  triplicate  reports  on  the  first  day  of  January, 
April,  July,  and  October  each  year,  together  with  such  additional  triplicate 
reports  of  particular  estates  from  time  to  time  as  seem  to  require  the  special 
attention  of  the  legal  department.  One  copy  of  such  reports  shall  be  filed  with 
the  commission,  one  copy  shall  be  submitted  to  the  attorney  general  by  the 
commission  with  such  recommendation  thereon  as  it  may  deem  advisable  for  the 
due  administration  of  the  inheritance  tax  laws,  and  one  copy  may  in  the  dis- 
cretion of  the  commission  be  submitted  by  it  to  the  county  judge  or  public 
administrator  of  the  county  reported  on  with  such  recommendation  as  the 
commission  may  deem  wise  and  expedient. 

(3)  The  commission  and  its  inheritance  tax  investigator,  in  the  conduct  of 
mheritance  tax  affairs,  shall  have  the  same  and  similar  powers  and  authority 
for  gathering  information  and  making  investigations  as  is  conferred  by  law  on 


s.  1087-18.]  WISCONSIN.  1235 

the  commission  in  the  performance  of  its  other  duties.  The  commission  shall 
biennially  report  to  the  legislature  at  the  opening  of  the  sessions  the  general 
result  of  its  laborsand  investigations  in  inheritance  tax  matters  during  the  previous 
biennial  period,  together  with  specific  reports  of  the  several  counties  where  the 
administration  of  the  inheritance  tax  laws  has  been  lax  and  unsatisfactory,  with 
such  recomn  endations  for  action  thereon  by  the  legislature  as  may  be  deemed 
advisable  and  proper. 

(4)  The  commission  and  its  inheritance  tax  investigator  shall  also  gather  infor- 
mation and  make  investigations  and  reports  concerning  the  estates  of  non-resi- 
dent decedents  witnin  the  provisions  of  the  inheritance  tax  laws,  and  shall  espe- 
cially investigate  the  probate  and  other  records  for  such  probable  estates  without 
the  state  and  report  thereon  from  time  to  time  to  the  legal  department  of  the  state 
and  to  the  public  administrator  of  the  proper  county  court  for  appr  priate  legal 
action. 

(5)  It  shall  be  the  duty  of  the  legal  department  of  the  state  to  carry  out  and 
enforce  the  recommendations  and  directions  of  the  tax  commission  in  all  matters 
pertaining  to  the  conduct  of  inheritance  tax  affairs;  and  in  every  estate  in  which 
the  amount  of  inheritance  tax  collectible  shall  exceed  or  probably  exceed  the 
sum  of  one  thousand  dollars,  there  shall  be  no  compounding,  composition,  or 
settlement  of  the  taxes  under  the  authority  conferred  by  section  1087-21,  or  other- 
wise, until  the  tax  commission  or  its  inheritance  tax  investigator  shall  have 
investigated  such  estate  and  made  a  report  thereon,  nor  until  the  commission 
consents  to  such  compounding,  compromise,  or  settlement. 

(6)  The  inheritance  tax  investigator  herein  provided  for  shall  be  in  the  exempt 
class  of  the  civil  service.     (Added  by  St.  1911,  c.  450.) 

S.  1087-19.  Each  county  treasurer  shall  make  a  report  under  oath,  to  the 
state  treasurer,  on  January,  April,  July,  and  October  first  of  each  year,  of  all 
taxes  received  by  him  under  .  .  .  the  inheritance  tax  laws,  stating  for  what 
estate  and  by  whom  and  when  paid.  The  form  of  such  report  may  be  prescribed 
by  the  state  treasurer.  He  shall  at  the  same  time  pay  the  state  treasurer  all  the 
taxes  received  by  him  under  .  .  .  the  inheritance  tax  laws  and  not  previously 
paid  into  the  state  treasury,  and  for  all  such  taxes  collected  by  him  and  not 
paid  into  the  state  treasury,  within  .  .  .  five  days  from  the  times  herein  required, 
he  shall  pay  interest  at  the  rate  of  ten  per  centum  per  annum. 

(As  amended  by  St.  1911,  c.  530.) 

Seven  and  One-Half  Per  Cent  to  be  Retained  by  County. 

S.  1087-20.  (Sec.  20,  ch.  44,  1903,  and  Sec.  12a,  ch.  504,  1909.)  The  county 
treasurer  shall  retain  tor  the  use  of  the  county,  out  of  all  taxes  paid  and  accounted 
for  by  him  each  year  under  this  act  .  .  .  seven  and  one-half  per  cent  ...  on 
all  sums  so  collected  by  or  paid  to  said  treasurer. 

Composition  or  Settlement  of  Tax  in  Expectant  Estates. 

S.  1087-21.  (Sec.  21,  ch.  44,  1903,  and  Sec.  13,  ch.  504,  1909,)  The  public 
administrator  .  .  .  with  the  consent  of  the  state  treasurer  .  .  .  and  the  attor- 
ney general,  expressed  in  writing,  is  authorized  to  enter  into  an  agreement  with 
the  executor,  administrator,  or  trustee  of  any  estate  therein  situate,  in  which 
remainders  or  expectant  estates  have  been  of  such  a  nature  or  so  disposed  and 
circumstanced   that  the  taxes  therein  were  held  not  presently  payable  or  where 


1236  STATUTES  ANNOTATED.  [Wis.  St. 

the  interests  of  the  legatees  or  devisees  are  not  ascertainable  under  the  provi- 
sions of  this  act,  and  to  compound  such  taxes  upon  such  terms  as  may  be  deemed 
equitable  and  expedient  and  to  grant  discharges  to  said  executors,  administrators, 
or  trustees  upon  the  payment  of  the  taxes  provided  for  in  such  composition, 
provided,  however,  that  no  such  composition  shall  be  conclusive  in  favor  of 
said  executors,  administrators,  or  trustees  as  against  the  interests  of  such  cestui 
que  trust  as  may  possess  either  present  rights  of  enjoyment  or  fixed,  absolute, 
or  indefeasible  rights  of  future  enjoyment,  or  of  such  as  would  possess  such  rights 
in  the  event  of  the  immediate  termination  of  particular  estates,  unless  they  con- 
sent thereto  either  personally  when  competent  or  by  guardian.  Composition 
or  settlement  made  or  affected  under  the  provisions  of  this  section  shall  be  exe- 
cuted in  triplicate  and  one  copy  shall  be  filed  in  the  office  of  the  state  treas- 
urer; .  .  .  one  copy  in  the  office  of  the  judge  of  the  county  court  in  which  the 
tax  was  paid;  and  one  copy  to  be  delivered  to  the  executors,  administrators,  or 
trustees,  who  shall  be  parties  thereto. 

Transfer  Receipts  May  be  Recorded. 

S.  1087-22.  (Sec.  22,  ch.  44,  1903,  and  Sec.  14,  ch.  504,  1909.)  Any  person 
shall,  upon  the  payment  of  the  sum  of  fifty  cents,  be  entitled  to  a  receipt  from 
the  county  treasurer  of  any  county,  or  the  state  treasurer,  .  .  .  or  at  his  option 
to  a  receipt  that  may  have  been  given  by  such  county  treasurer  or  .  .  .  state 
treasurer  for  the  payment  of  any  tax  under  this  act,  under  the  official  seal  of  such 
county  treasurer,  or  state  treasurer,  .  .  .  which  receipt  shall  designate  upon 
whose  estate  .  .  .  such  tax  shall  have  been  paid,  by  whom,  and  whether  in  full 
of  such  tax.  Such  receipt  may  be  recorded  in  the  office  of  the  register  of  deeds 
of  the  county  in  which  such  estate  ...  is  situate  in  a  book  to  be  kept  by  him  for 
that  purpose,  which  shall  be  labeled  "transfer  tax." 

Tax  how  Applied;   Deductions. 

S.  1087-23.  (Sec.  23,  ch.  44,  1903,  and  Sec.  15,  ch.  504,  1909.)  All  taxes  levied 
and  collected  under  this  act,  less  any  expenses  of  collection,  the  percentage 
to  be  retained  by  the  county,  and  the  deduction  authorized  under  this  act,  shall 
be  paid  into  the  treasury  of  the  state  for  the  use  of  the  state,  and  shall  be  appli- 
cable to  the  expenses  of  the  state  government  and  to  such  other  purposes  as  the 
legislature  may  by  law  direct. 

Terms  Defined. 

S.  1087-24.  (Sec.  24,  1903,  and  Sec.  lb,  ch.  504,  1909.)  The  word  "estate" 
and  "property"  as  used  in  this  act  shall  be  taken  to  mean  the  real  and  personal 
property  or  interest  therein  of  the  testator,  intestate,  grantor,  bargainor,  vendor, 
or  donor  passing  or  transferred  to  individual  legatees,  devisees,  heirs,  next  of 
km,  grantees,  donees,  vendees,  or  successors,  and  shall  include  all  personal  prop- 
erty within  or  without  the  state.  The  word  "transfer"  as  used  in  this  act  shall 
be  taken  to  include  the  passing  of  property  or  any  interest  therein,  in  possession 
or  .enjoyment,  present  or  future,  by.  inheritance,  descent,  devise,  succession, 
bequest,  grant,  deed,  bargain  sale,  gift,  or  appointment  in  the  manner  herein 
prescribed.  The  word  "decedent"  as  used  in  this  act  shall  include  the  tes- 
tator, intestate,  grantor,  bargainor,  vendor,  or  donor.  The  words  "county 
treasurer,"  "public  administrator"  "and  district  attorney"  as  used  in  this  act 


8. 3813a.]  WISCONSIN.  1237 

shall  be  taken  to  mean  the  treasurer,  public  administrator  and  district  attorney 
of  the  county  of  the  county  court  having  jurisdiction  as  provided  in  section  . 
1087-12. 

Public  Administrators;   Appointment,  Oath,  Bond,  Etc. 

S.  3818.  (As  amended  by  Sec.  17,  ch.  504,  1909.)  The  county  court  of  each 
of  the  counties  in  this  state  .  .  .  shall  appoint  some  suitable  person  who  when 
hereafter  appointed  shall  be  an  attorney,  when  available,  to  be  known  as  the 
public  administrator,  who  shall,  before  entering  upon  the  duties  of  such  trust,  be 
sworn  to  a  faithful  discharge  thereof  and  shall  give  bond,  with  sufficient  sureties, 
to  the  judge  of  said  court  in  a  sum  not  less  than  five  thousand  dollars,  with  con- 
dition substantially  like  the  conditions  of  other  administrators'  bonds  and  that 
he  will  faithfully^  perform  his  duties  provided  by  law;  which  bond  shall  be  ap- 
proved by  the  county  court  and  with  the  oath  filed  and  recorded  therein.  Addi- 
tional bonds  may  be  required  by  the  court  in  its  discretion.  The  expense  of 
surety  upon  such  bonds  shall  be  paid  by  the  county  treasurer  out  of  any  inherit- 
ance tax  funds  in  his  hands  belonging  to  the  state,  on  the  order  of  the  county 
judge.  The  term  of  such  public  administrator  shall  continue  until  terminated 
by  the  appointment  of  his  successor  by  the  county  court  at  its  discretion. . 

Attorney  General  to  Enforce  Inheritance  Tax  Laws. 

S.  162.  (As  amended  by  ch.  500,  1907.)  The  attorney  general  may  appoint  a 
deputy  attorney  general  and  three  assistants,  to  be  designated  respectively  as 
first  assistant  attorney  general,  second  assistant  attorney  general  and  third 
assistant  attorney  general.  .  .  .  The  said  appointees  shall  perform  such  duties 
as  the  attorney  general  may  prescribe.  The  attorney  general  shall  designate 
one  of  said  appointees,  whose  special  duty  it  shall  be  to  attend  to  all  matters 
pertaining  to  the  enforcement  of  the  statute  in  respect  to  the  collection  of  the 
inheritance  tax.  .  .  . 

Special  Administrators  to  Discharge  Records  Undischarged  by  Decedents, 
Determine  Inheritance  Taxes,  etc. 

S  3813a. '  (As  amended  by  ch.  85,  1903,  and  s.  36,  ch.  660,  1907.)  Whenever 
it  shall  appear,  by  affidavit  or  verified  petition,  to  the  county  court  that  an  in- 
habitant of  such  county  has  died  leaving  no  debts  unpaid  or  that  his  estate  has  been 
fully  settled  and  the  executor  or  administrator  thereof  has  been  discharged, 
and  that  any  mortgage  or  judgment  in  favor  of  such  deceased  person  remains 
undischarged  of  record  or  any  other  act  remains  unperformed  on  the  part  of 
such  person  the  performance  of  which  affects  or  is  of  importance  to  petitioner  or 
any  other  person  the  court  may  appoint  a  special  administrator  for  the  purpose 
of  releasing  and  discharging  such  mortgage  or  judgment  of  record  or  performing 
such  other  acts  as  may  be  deemed  necessary  in  the  premises.  Upon  the  presenta- 
tion of  such  petition  or  affidavit  the  court  shall  determine  whether  notice  of  the 
hearing  thereon  shall  be  given,  and  if  such  notice  is  ordered  the  order  shall  direct 
the  manner  and  time  of  giving  the  same.  If  the  court  shall  deem  notice  of  such 
hearing  unnecessary  it  may  proceed  to  hear  the  matter  without  notice.  If  the 
court  shall  appoint  a  special  administrator  it  shall  in  all  cases,  where  money  or 
property  may  come  into  his  hands,  require  him  to  give  a  bond  to  the  judge 
of  said  court  in  such  sum,  with  such  conditions  and  with  such  surety  or  sureties 
as  said  court  shall  direct.     The  order  appointing  such  administrator  shall  require 


1238  STATUTES  ANNOTATED.  [Wis.  St. 

him  to  make  to  said  court,  without  delay,  a  full  report  of  his  acts  as  such. 
Upon  the  filing  of  such  report  such  further  proceedings  shall  be  had  and  such 
further  order  made  in  said  matter  by  said  court  as  it  shall  deem  necessary. 
Such  special  administrator  shall  exercise  no  powers  except  those  specifically 
granted  by  the  order  of  said  court.  When  he  shall  have  fully  performed  the 
act  or  acts  mentioned  in  the  order  appointing  him,  his  powers  as  such  shall  cease. 
The  court  may  at  any  time  require  the  administrator  to  make  a  report  of  his  acts 
as  such  or  revoke  and  vacate  his  appointment  whenever  it  shall  deem  best. 

Special  administration  for  inheritance  taxes:    certificate  of  descent. 

Such  special  administrator  may  be  so  appointed  and  such  special  administration 
may  be  had  and  a  prima  facie  inventory,  appraisal  and  heirship  determination 
had  thereunder,  for  the  purpose  of  having  inheritance  taxes  determined  and  paid 
and  of  having  prima  facie  certificate  of  descent  of  real  estate  issued  pursuant  to 
section  2276a  in  cases  where  it  appears  the  estate  may  come  under  the  provisions 
of  the  inheritance  tax  laws  and  where  it  does  not  otherwise  appear  necessary 
for  regular  administration  to  be  had  therein. 

Computations  of  Life  Estates,  Annuities,  etc.:    American  Table:    Rate 
5  Per  Cent. 

S.  3871a.  (Ch.  420,  1907,  and  ch.  38,  1909.)  The  present  value  of  every  estate, 
annuity  or  interest  of  beneficiaries  for  all  purposes  in  every  estate  and  in  all 
courts  .  .  .  shall  ...  be  computed  ...  in  accordance  with  the  American 
experience  table  of  mortality,  and  interest  at  the  rate  of  five  per  cent  per  annum. 
The  commissioner  of  insurance  shall  compute  the  present  value  of  the  estates 
or  interests  of  the  several  beneficiaries  when  the  necessary  statement  of  facts  is 
submitted  to  him  upon  requesf  or  order  of  any  court  or  judge  having  jurisdiction. 
The  said  statement  of  facts  shall  be  submitted  to  said  commissioner  of  insurance 
in  such  form  as  he  may  prescribe.  Provided,  however,  that  when  it  is  imprac- 
ticable to  use  the  American  experience  table  of  mortality,  the  commissioner  of 
insurance  may  use  the  Northampton  table.  ...  In  all  cases  the  sum  of  the 
present  value  of  the  several  parts,  estates,  or  interests  of  the  several  beneficiaries 
shall  equal  the  net  value  of  the  entire  estate.  .  .  . 

The  commissioner  of  insurance  shall  cause  to  be  printed  authorized  annuity 
tables  based  on  the  American  experience  table  of  mortality,  and  five  per  cent 
interest,  together  with  instructions  for  their  use  in  accordance  with  the  fore- 
going provisions  and  shall  furnish  copies  thereof  to  any  judge  making  application 
therefor. 

American  Experience  Table  and  Rule  for  Making  Simple  Computations 
Submitted  by  Commissioner  of  Insurance  pursuant  to  Sect.  3871a. 

Find  the  interest  at  five  per  cent  for  one  year  upon  the  sum,  to  the  income 
of  which  the  person  is  entitled;  then  multiply  this  interest  by  the  present  value 
of  one  dollar  per  year  for  life,  as  given  opposite  the  person's  age  in  the  table. 
The  product  is  the  present  value  of  the  interest  of  such  person  in  said  sum. 

Example.  Suppose  a  widow's  age  is  thirty-seven,  and  she  is  entitled  to  a  life 
interest  in  real,  estate  worth  $3,000.  Five  per  cent  interest  on  this  amount  is 
$150.  The  present  value  of  one  dollar  per  year  for  life  at  age  37  is  $14,191.  There- 
fore the  present  value  of  $150  per  year  would  be  150  times  $14,191  or  $2,128.65. 


s.  3871a. 


WISCONSIN. 


1239 


If  the  widow  is  entitled  to  a  dower  interest  only,  then  one-third  of  the  value  is 
taken,  and  computation  made  in  the  same  way. 

To  lind  the  present  value  of  a  remainder,  deduct  the  present  value  of  the 
annuity  as  determined  above  from  the  net  value  of  the  estate.  Thus,  if  the 
value  of  the  estate  is  $3,000  and  the  present  value  of  the  annuity  is  $2,128.65 
the  remainder  would  be  worth  $871.35. 


Present  Value  of  an  Annuity  of  One  Dollar  Per  Year,  for  Single  Life 

5  Per  Cent. 


AMERICAN  EXPERIENCE  TABLE. 


Age. 

Present  Value. 

Age. 

Present  Value. 

Age. 

Present  Value. 

10 

16.505 

40 

13.716 

70 

5.9802 

11 

16.461 

41 

13.544 

71 

5.6942 

12 

16.415 

42 

13.365 

72 

5.4129 

13 

16.366 

43 

13.179 

73 

5.1359 

14 

16.316 

44 

12.985 

74 

4.8628 

15 

16.263 

45 

12.783 

75 

4.5926 

16 

16.207 

46 

12.574 

76 

4.3248 

17 

16.149 

47 

12.357 

77 

4.0586 

18 

16.088 

48 

12.133 

78 

3.7939 

19 

16.024 

49 

11.901 

79 

3.5311 

20 

15.957 

50 

11.662 

80 

3.2702 

21 

15.886 

51 

11.416 

81 

3.0135 

22 

15.813 

52 

11.164 

82 

2.7606 

23 

15.736 

53 

10.905 

83 

2.5105 

24 

15.655 

54 

10.640 

84 

2.2607 

25 

.   15.570 

55 

10.370 

85 

2.0098 

26 

15.482 

56 

10.095 

86 

1.7606 

27 

15.389 

57 

9.8145 

87 

1.5175 

28 

15.292 

58 

9.5299 

88 

1.2861 

29 

15.191 

59 

9.2413 

89 

1.0670 

30 

15.084 

60 

8.9493 

90 

0.85453 

31 

14.973 

61 

8.6545 

91 

0.64497 

32 

14.857 

62 

8.3574 

92 

0.44851 

33 

14.735 

63 

8.0588 

93 

0.28761 

34 

14.608 

64 

7.7590 

94 

0.13605 

35 

14.475 

65 

7.4588 

36 

14.336 

66 

7.1592 

37 

14.191 

67 

6.8607 

38 

14.039 

68 

6.5642 

39 

13.881 

69 

6.2705 

Wis.  Dept.^f  Ins.  5-l-'09. 


1240 


STATUTES  ANNOTATED. 


[Wis.  St. 


In 


Form  of  Order  Determining  Tax  Prescribed  by  Attorney  General 
Pursuant  to  Subdivision  5,  Section  1087-15. 

STATE  OF   WISCONSIN     COUNTY  COURT. 

In  the  matter  of  the  estate  of deceased  — 

probate.  At  the Term  19 

The  matter  of  determining  the  cash  value  of  said  estate  and  the  amount  of 
Inheritance  Tax  to  which  the  same  is  liable,  coming  on  to  be  heard  at  this  time 
pursuant  — 

(*a)  To  an  order  herein  dated  the day  of 19 . . , 

providing  that  notice  be  given  to  all  persons  interested,  including  the  Public 
Administrator  and  Attorney  General,  by  sending  to  each  by  mail  notice  thereof 
at  least  twenty  days  before  said  term ;  and  due  proof  having  been  filed  that  due 
notice  has  been  given  as  required  by  law  and  such  order;  or 

(*b)  To  stipulation  or  due  waiver  of  notice  by  or  in  behalf  of  all  interested 
parties  herein,  including  the  Public  Administrator  and  Attorney  General:  — 

And Public    Administrator     appearing  for 

County  and  the  State  of  Wisconsin  and 


And  it  further  appearing  that  the  report  of 

the has  heretofore  been  duly  filed  herein,  and 

that  said  deceased  died  on  or  about  the day  of 19 . . ; 

And  having  taken  testimony  and  considered  the  inventory,  appraisal,  report 
and  the  whole  record  herein,  and  having  heard  all  parties  desiring  a  hearing,  and 
being  fully  advised  in  the  premises,  — 

The  Court  Finds  and  Determines,  That  all  the  property  of  said  decedent 
both  real  and  personal,  which  ts  to  be  conveyed  and  transferred  under  the  final 
judgment  herein,  and  the  cash  and  clear  market  value  of  such  property  is  as 
follows:  — 


Value  of  Real  Property  [Net]  . 
Value  of  Personal  Property  [Net] 


Total  Real  and  Personal  iNet] $ 

And  the  Court  further  finds  and  determines.  That  the  proportions  and  amounts 
of  all  such  property  of  decedent  to  be  transferred,  the  names  and  relationship 
of  the  persons  entitled  to  receive  the  same,  the  rates  and  amounts  of  Inheritance 
Tax  to  which  each  of  such  amounts  and  proportions  are  liable  upon  its  transfer, 
are  as  follows:  — 


Name 

Relationship 

Value 
Assigned 

Exemptions 

Rate 

Amount 
of  Tax 

* 















s.  3871a.]  WISCONSIN. 


1241 


Wherefore   it  is    Ordered,  That  the be,  and  he  hereby  is 

authorized  and  directed  to  forthwith  pay  and  deliver  to  the  County  Treasurer 

the   sum Dollars  as  and  for  the    Inheritance  Tax  to 

which  the  property  of  said  deceased  is  liable  in  the  proportions  and  amounts 
as  above  set  forth  upon  the  transfer  and  assignment  of  the  same  to  the  persons 
entitled  thereto  and  that  he  take  a  receipt  therefor,  and  charge  the  same  to  the 
shares  as   respectively    taxed. 

(statement  as  to  penalty  for  delay,  if  any.) 

It  is  further  Ordered,  That  upon  filing  such  receipt,  the  amount  so  paid  be 

property  credited  to  such in  his  accounts 

in  the  settlement  and  distribution  of  said  estate. 

And  it  is  further  Ordered,  That  notice  hereof  be  forthwith  given  to  all  parties 

known  to  be  interested,  including  the  County  Treasurer  and  State  Treasurer, 

by  delivering  personally  or  mailing  to  each  a  copy  of  this  order. 


Dated 190.  . .  By  the  Court, 


Judge. 


Note:  It  is  important  that  the  order  of  determination  should  be  promptly  served 
upon  both  the  county  and  state  treasurer,  and  final  judgment  should  not  be  entered 
until  proof  of  such  service  is  on  file. 


1242  STATUTES  ANNOTATED.  [Wyo.  St. 


WYOMING, 


In  General. 

Wyoming  adopted  an  inheritance  tax  in  1903,  which  was  modified 
in  1909.  Wyoming  is  not  now  collecting  a  tax  on  stock  of  a  Wyoming 
corporation  owned  by  a  non-resident  if  the  stock  certificate  is  kept 
outside  the  state,  though  it  apparently  was  doing  so  in  1908,  and 
the  statute  contains  the  usual  piovision  holding  the  corporation 
responsible  for  the  collection  of  the  tax. 

Constitutional  Limitations. 

Wyo.  Const.  1889,  a.  1,  s.  28. 

No  tax  shall  be  imposed  without  the  consent  of  the  people  or  their  authorized 
representatives.     All  taxation  shall  be  equal  and  uniform. 

Wyo.  Const.  1889,  a.  15,  s.  11. 

All  property,  except  as  in  this  constitution  otherwise  provided,  shall  be  uniformly 
assessed  for  taxation,  and  the  legislature  shall  prescribe  such  regulations  as 
shall  secure  a  just  valuation  for  taxation  of  all  property,  real  and  personal. 

Wyo.  Const.  1889,  a.  15,  s.  13. 

No  tax  shall  be  levied,  except  in  pursuance  of  law,  and  every  law  imposing  a 
tax  shall  state  distinctly  the  object  of  the  same,  to  which  only  it  shall  be  applied. 

List  of  Statutes.  ' 

1903.     Statutes  of  Wyoming,  c.  80. 

1909.  "         "  "  c.  18  (amending  ss.  17, 18,  19,  21,  of  1903,  c.  80). 

1910.  Compiled  Statutes  of  Wyoming,  c.  169,  ss.  2455-2473. 

STATUTES. 

Wyo.  St.  1903,  c.  80.     Approved  February  21,  1903. 

An  Act  to  tax  gifts,   legacies   and    inheritances  in  certain  cases, 
and  to  provide  for  the  collection  of  the  same. 

S.  1.  All  property,  real,  personal  &nd  mixed,  which  shall  pass  by  will  or  by 
the  intestate  laws  of  this  state  from  any  person  who  may  die  seized  or  possessed 
of  the  same,  while  a  resident  of  this  state,  or  if  decedent  was  not  a  resident  of 
this  state  at  the  time  of  his  death,  which  property  or  any  part  thereof  shall  be 
within  this  state  or  any  interest  therein  or  income  therefrom,  which  shall  be 


1903,  c.  80.]  WYOMING. 


1243 


transferred  by  deed,  grant,  sale  or  gift  made  in  contemplation  of  the  death  of 
the  grantor  or  bargainor  or  intended  to  take  effect,  in  possession  or  enjoyment 
after  such  death,  to  any  person  or  persons  or  to  any  body  politic  or  corporate  in 
trust  or  otherwise,  or  by  reason  whereof  any  person  or  body  politic  or  corporate 
shall  become  beneficially  entitled  in  possession  or  expectation,  to  any  property 
or  income  thereof,  shall  be  and  is  subject  to  a  tax  at  the  rate  hereinafter  speci- 
fied to  be  paid  to  the  treasurer  of  the  proper  county  for  the  use  of  the  state,  and 
all  heirs,  legatees  and  devisees,  administrators,  executors,  and  trustees  shall  be 
liable  for  any  and  all  such  taxes  until  the  same  shall  have  been  paid  as  herein- 
after directed.  When  the  beneficial  interests  to  any  property  or  income  there- 
from shall  pass  to  or  for  the  use  of  any  father,  mother,  husband,  wife,  child, 
brother,  sister,  wife  or  widow  of  the  son  or  the  husband  of  the  daughter  or  any 
child  or  children,  adopted  as  such  in  conformity  with  the  laws  of  the  state  of 
Wyoming,  or  to  any  person  to  whom  the  deceased,  for  not  less  than  ten  years 
prior  to  death,  stood  in  the  acknowledged  relation  of  a  parent,  or  to  any  lineal 
descendant  born  in  lawful  wedlock,  in  every  such  case  the  rate  of  tax  shall  be 
two  dollars  on  every  hundred  dollars  of  the  clear  market  value  of  such  property 
received  by  each  person,  and  at  and  after  the  same  rate  for  every  less  amount. 
Provided,  That  the  sum  of  ten  thousand  dollars  of  any  such  estate  shall  not  be 
subject  to  any  such  duty  or  taxes,  and  that  only  the  amount  in  excess  of  ten 
thousand  dollars  shall  be  subject  to  the  above  duty  or  tax.  In  all  other  cases 
the  rate  shall  be  as  follows:  On  each  and  every  hundred  dollars  of  the  clear 
market  value  of  all  property  five  dollars  and  at  the  same  rate  for  any  less  amount; 
Provided,  That  an  estate  in  the  above  case  which  may  be  valued  at  a  less  sum 
than  five  hundred  dollars  shall  not  be  subject  to  any  such  duty  or  tax. 

S.  2.  When  any  person  shall  bequeath  or  devise  any  property  or  interest 
therein  or  income  therefrom  to  mother,  father,  husband,  wife,  brother,  sister, 
the  widow  of  the  son,  husband  of  the  daughter  or  a  lineal  descendant  during  the 
life  or  for  a  term  of  years  and  remainder  to  the  collateral  heir  of  the  descendant, 
or  the  stranger  in  blood  or  to  the  body  politic  or  corporate  at  their  decease, 
or  on  the  expiration  of  such  term,  the  said  life  estate  or  estates  for  a  term  of 
years  shall  not  be  subject  to  any  tax  and  the  property  so  passing  shall  be  ap- 
praised immediately  after  the  death  at  what  was  the  fair  market  value  thereof 
at  the  time  of  the  death  of  the  decedent  in  the  manner  hereinafter  provided,  and 
after  deducting  therefrom  the  value  of  said  life  estate,  or  term  of  years,  the  tax 
prescribed  by  this  act  on  the  remainder  shall  be  immediately  due  and  payable 
to  the  treasurer  of  the  proper  county,  and,  together  with  the  interest  thereon 
shall  be  and  remain  a  lien  on  said  property  until  the  same  is  paid;  Provided, 
That  the  person  or  persons  or  body  politic  or  corporate  beneficially  interested 
in  the  property  chargeable  with  said  tax  elect  not  to  pay  the  same  until  they  shall 
come  into  the  actual  possession  or  enjoyment  of  such  property,  then,  in  that 
case  said  person  or  persons  or  body  politic  or  corporate  shall  give  a  bond  to  the 
people  of  the  state  of  Wyoming,  in  a  penalty  three  times  the  amount  of  the  tax 
arising  upon  such  estate  with  such  sureties  as  the  district  judge  may  approve, 
conditioned  for  the  payment  of  the  said  tax,  and  interest  thereon,  at  such  time 
or  period  as  they  or  their  representatives  may  come  into  the  actual  possession  or 
enjoyment  of  said  property,  which  bond  shall  be  filed  in  the  oflSce  of  the  county 
clerk  of  the  proper  county;  Provided,  further.  That  such  person  shall  make  a 
full,  verified  return  of  said  property  to  said  district  judge,  and  file  the  same 


1244  STATUTES  ANNOTATED.  [Wyo.  St. 

in  his  office  within  one  year  from  the  death  of  the  decedent,  and  within  that  period 
enter  into  such  securities  and  renew  the  same  each  five  years. 

Ss.  3-20  provide  for  the  collection  of  the  tax. 

S.  21.  The  provisions  of  the  chapter  shall  not  apply  to  bona  fide  residents  of 
this  state  when  they  shall  possess  the  relation  of  either  husband  or  wife  or  chil- 
dren of  the  deceased,  and  where  the  valuation  of  the  property  does  not  exceed 
the  sum  of  twenty-five  thousand  dollars  to  each  such  legatee. 

Wyo.  St.  1909,  c.  18,  amends  Wyo.  St.  1903,  c.  80,  ss.  18  and  19,  and  repeals 
ss.  17  and  21. 

THE    PRESENT  ACT. 

Compiled  Statutes  1910,  c.  169. 

S.  2455.  Property  subject  to.  All  property,  real,  personal  and  mixed, 
which  shall  pass  by  will  or  by  the  intestate  laws  of  this  state  from  any  person 
who  may  die  seized  or  possessed  of  the  same,  while  a  resident  of  this  state,  or  if 
decedent  was  not  a  resident  of  this  state  at  the  time  of  his  death,  which  property 
or  any  part  thereof  shall  be  within  this  state  or  any  interest  therein  or  income 
therefrom,  which  shall  be  transferred  by  deed,  grant,  sale  or  gift  made  in  con- 
templation of  the  death  of  the  grantor  or  bargainor  or  intended  to  take  effect, 
in  possession  or  enjoyment  after  such  death,  to  any  person  or  persons  or  to  any 
body  politic  or  corporate  in  trust  or  otherwise,  or  by  reason  whereof  any  person 
or  body  politic  or  corporate  shall  become  beneficially  entitled  in  possession  or 
expectation,  to  any  property  or  income  thereof,  shall  be  and  is  subject  to  a  tax 
at  the  rate  hereinafter  specified  to  be  paid  to  the  treasurer  of  the  proper  county 
for  the  use  of  the  state,  and  all  heirs,  legatees  and  devisees,  administrators, 
executors  and  trustees  shall  be  liable  for  any  and  all  such  taxes  until  the  same 
shall  have  been  paid  as  hereinafter  directed.  When  the  beneficial  interests  to 
any  property  or  income  therefrom  shall  pass  to  or  for  the  use  of  any  father, 
mother,  husband,  wife,  child,  brother,  sister,  wife  or  widow  of  the  son  or  the 
husband  of  the  daughter  or  any  child  or  children  adopted  as  such  in  conformity 
with  the  laws  of  the  state  of  Wyoming,  or  to  any  person  to  whom  the  deceased, 
for  not  less  than  ten  years  prior  to  death,  stood  in  the  acknowledged  relation  of 
a  parent,  or  to  any  lineal  descendant  born  in  lawful  wedlock,  in  every  such  case 
the  rate  of  tax  shall  be  two  dollars  on  every  hundred  dollars  of  the  clear  market 
value  of  such  property  received  by  each  person,  and  at  and  after  the  same  rate 
for  every  less  amount;  Provided,  That  the  sum  of  ten  thousand  dollars  of  any  such 
estate  shall  not  be  subject  to  any  such  duty  or  taxes,  and  that  only  the  amount 
in  excess  of  ten  thousand  dollars  shall  be  subject  to  the  above  duty  or  tax.  In 
all  other  cases  the  rate  shall  be  as  follows:  On  each  and  every  hundred  dollars 
of  the  clear  market  value  of  all  property  five  dollars  and  at  the  same  rate  for  any 
less  amount;  Provided,  That  an  estate  in  the  above  case  which  may  be  valued 
at  a  less  sum  than  five  hundred  dollars  shall  not  be  subject  to  any  such  duty  or 
tax.     [L.  1903,  c.  80,  s.  1.] 

S.  2456.  Life  estate.  —  Not  taxable.  When  any  person  shall  bequeath 
or  devise  any  property  or  interest  therein  or  income  therefrom  to  mother,  father, 
husband,  wife,  brother,  sister,  the  widow  of  the  son,  husband  of  the  daughter, 
or  a  lineal  descendant  during  the  life  or  for  a  term  of  years  and  remainder  to  the 
collateral  heir  of  the  descendant,  or  the  stranger  in  blood  or  to  the  body  politic 


1910,  c.  169.]  WYOMING.  1245 

or  corporate  at  their  decease,  or  on  the  expiration  of  such  term  the  said  life  estate 
or  estates  for  a  term  of  years  shall  not  be  subject  to  any  tax  and  the  property  so 
passing  shall  be  appraised  immediately  after  the  death  at  what  was  the  fair 
market  value  thereof  at  the  time  of  the  death  of  the  decedent  in  the  manner 
hereinafter  provided,  and  after  deducting  therefrom  the  value  of  said  life  estate, 
or  term  of  years,  the  ta-  prescribed  by  this  chapter  on  the  remainder  shall  be  im- 
mediately due  and  payable  to  the  treasurer  of  the  proper  county,  and,  together 
with  the  interest  thereon  shall  be  and  remain  a  lien  on  said  property  until  the 
same  is  paid:  Provided,  That  the  person  or  persons  or  body  politic  or  corporate 
beneficially  interested  in  the  property  chargeable  with  said  tax  elect  not  to  pay 
the  same  until  they  shall  come  into  the  actual  possession  or  enjoyment  of  such 
property,  then,  in  that  case  said  person  or  persons  or  body  politic  or  corporate 
shall  give  a  bond  to  the  people  of  the  state  of  Wyoming,  in  a  penalty  three  times 
the  amount  of  the  tax  arising  upon  such  estate  with  such  sureties  as  the  district 
judge  may  approve,  conditioned  for  the  payment  of  the  said  tax,  and  interest 
thereon,  at  such  time  or  period  as  they  or  their  representatives  may  come  into 
the  actual  possession  or  enjoyment  of  said  property,  which  bond  shall  be  filed  in 
the  office  of  the  county  clerk  of  the  proper  county;  Provided,  further,  That 
such  person  shall  make  a  full,  verified  return  of  said  property  to  said  district  judge, 
and  file  the  same  in  his  office  within  one  year  from  the  death  of  the  decedent, 
and  within  that  period  enter  into  such  securities  and  renew  the  same  each  five 
years.     [L.  1903,  c.  80,  s.  2.J 

S.  2457.  Tax  payable.  —  When.  All  taxes  imposed  by  this  chapter,  unless 
otherwise  herein  provided  for,  shall  be  due  and  payable  at  the  death  of  the 
decedent,  and  interest  at  the  rate  of  six  per  cent  per  annum  shall  be  charged 
and  collected  thereon  for  such  time  as  said  taxes  are  not  paid;  Provided,  That  if 
said  tax  is  paid  within  six  months  from  the  accruing  thereof,  interest  shall  not  be 
charged  or  collected  thereon,  but  a  discount  of  five  per  cent  shall  be  allowed 
and  deducted  from  said  tax,  and  in  all  cases  where  the  executors,  administrators 
or  trustees  do  not  pay  such  tax  within  one  year  from  the  death  of  the  decedent, 
they  shall  be  required  to  give  a  bond  in  the  form  and  to  the  effect  prescribed 
in  3.  2456  for  the  payment  of  said  tax,  together  with  interest.  [L.  1903,  c.  80, 
S.3.] 

S.  2458.  Duty  of  person  administering  estate.  Any  administrator, 
executor  or  trustee  having  any  charge  or  trust  in  legacies  or  property  for  dis- 
tribution subject  to  the  said  tax  shall  deduct  the  tax  therefrom,  or  if  the  legacy 
or  property  be  not  money  he  shall  collect  the  tax  thereon  upon  the  appraised  value 
thereof  from  the  legatee  or  person  entitled  to  such  property,  and  he  shall  not 
deliver  or  be  compelled  to  deliver  any  specific  legacy  or  property  subject  to  tax 
to  any  person  until  he  shall  have  collected  the  tax  thereon,  and  whenever  any 
such  legacy  shall  be  charged  upon  or  payable  out  of  real  estate,  the  executor, 
administrator  or  trustee,  before  paying  the  same  shall  deduct  said  tax  there- 
from and  pay  the  same  to  the  county  treasurer  for  the  use  of  the  state,  and  the 
same  shall  remain  a  charge  on  such  real  estate  until  paid,  and  the  payment 
thereof  shall  be  enforced  by  the  executor,  administrator  or  trustee  in  the  same 
manner  that  the  said  payment  of  said  legacies  might  be  enforced;  if,  howevCT, 
such  legacy  he  given  in  money  to  any  person  for  a  limited  period,  he  shall  retain 
the  tax  upon  the  whole  amount,  but  if  it  be  not  in  money,  he  shall  make  apoli- 
cation  to  the  court  having  jurisdiction  of  his  accounts  to  make  an  apportion- 


1246  STATUTES  ANNOTATED.  [Wyo.  St. 

ment  if  the  case  requires  it  of  the  sum  to  be  paid  into  his  hands  by  such  legatees, 
and  for  such  further  order  relative  thereto  as  the  case  may  require.  [L.  1903, 
c.  80,  s.  4.] 

S.  2459.  Sale  of  property  to  pay  tax.  All  executors,  administrators,  and 
trustees  shall  have  full  power  to  sell  so  much  of  the  property  of  the  decedent  as 
will  enable  them  to  pay  said  tax,  in  the  same  manner  as  they  may  be  enabled 
to  do  by  law,  for  the  payment  of  debts  for  their  testators  and  intestates,  and  the 
amount  of  said  tax  shall  be  paid  as  hereinafter  directed.     [L.  1903,  c.  80,  s.  5.] 

S.  2460.  Tax  payable  to  treasurer  —  Receipt  for.  Every  sum  of  money 
retained  by  any  executor,  administrator  or  trustee,  or  paid  into  his  hands  for  any 
tax  on  any  property,  shall  be  paid  by  him  within  thirty  days  thereafter  to  the 
treasurer  of  the  proper  county,  and  the  said  treasurer,  or  treasurers  shall  give, 
and  every  executor,  administrator  or  trustee  shall  take,  duplicate  receipts  from 
him  of  said  payments,  one  of  which  receipts  he  shall  immediately  send  to  the 
state  treasurer,  whose  duty  it  shall  be  to  charge  the  treasurer  so  receiving  the 
tax  with  the  amount  thereof,  and  shall  seal  said  receipt  with  the  seal  of  his  office 
and  countersign  the  same  and  return  it  to  the  executor,  administrator  or  trustee, 
whereupon  it  shall  be  a  proper  voucher  in  the  settlement  of  his  accounts,  but 
the  executor,  administrator  or  trustee  shall  not  be  entitled  to  credit  in  his  accounts 
or  be  discharged  from  liability  for  such  tax  unless  he  shall  produce  a  receipt  so 
sealed  and  countersigned  by  the  treasurer  and  a  copy  thereof  certified  by  him. 
[L.  1903,  c.  80,  s.  6.1 

[Affected  by  amendment  in  1909.     See  ss.  2471-2473.] 

S.  2461.  Duty  of  administrator  regarding  realty.  Whenever  any  of 
the  real  estate  of  which  any  decedent  may  die  seized  shall  pass  to  any  body  politic 
or  corporate,  or  to  any  persori^or  persons,  or  in  trust  for  them,  or  some  of  them, 
it  shall  be  the  duty  of  the  executor,  administrator  or  trustee  of  such  decedent 
to  give  information  thereof  in  writing  to  the  treasurer  of  the  county  where  said 
real  estate  is  situated,  within  six  months  after  they  undertake  the  execution  of 
their  duties,  or  if  the  fact  be  not  known  to  them  within  that  period,  then  within 
one  month  after  the  same  shall  have  come  to  their  knowledge.  [L.  1903,  c.  80, 
s.  7.] 

S.  2462.  Refunding  tax  in  case  of  debts.  Whenever  debts  shall  be  proved 
against  the  estate  of  the  decedent  after  distribution  of  legacies  from  which  the 
inheritance  tax  has  been  deducted  in  compliance  with  this  chapter,  and  the 
legatee  is  required  to  refund  any  portion  of  the  legacy,  a  due  proportion  of  the 
said  tax  shall  be  repaid  to  him  by  the  executor  or  administrator,  if  the  said  tax 
has  not  been  paid  into  the  state  or  county  treasury,  or  by  the  county  treasurer 
if  it  has  been  so  paid.     [L.  1903,  c.  80,  s.  8.] 

S.  2463.  Transfer  of  stocks.  Whenever  any  foreign  executor  or  adminis- 
trator shall  assign  or  transfer  any  stocks  or  loans  in  this  state  standing  in  the 
name  of  decedent,  or  in  trust  for  decedent,  which  shall  be  liable  to  the  said  tax, 
si^ch  tax  shall  be  paid  to  the  treasury  or  treasurer  of  the  proper  county  on  the 
transfer  thereof;  otherwise  the  corporation  making  such  transfer  shall  become 
liable  to  pay  such  taxes.     [L.  1903,  c.  80,  s.  9.] 

S.  2464.  Refunding  tax  erroneously  paid.  When  any  amount  of  said 
tax  shall  have  been  paid  erroneously  to  the  state  treasurer  it  shall  be  lawful 


1910,  c.  169.]  WYOMING.  1247 

for  him  on  satisfactory  proof  rendered  to  him  by  said  county  treasurer  of  said 
erroneous  payments  to  refund  and  pay  to  the  executor,  administrator  or  trustee, 
person  or  persons,  who  may  have  paid  any  such  tax  in  error,  the  amount  of  such 
tax  so  paid;  Provided,  That  all  applications  for  the  repayment  of  said  tax  shall 
be  made  within  two  years  from  the  date  of  said  payment.     [L.  1903,  c.  80,  s.  lO.J 

S.  2465.  Appraisement  of  property.  In  order  to  fix  the  value  of  property 
of  persons  whose  estate  shall  be  subject  to  the  payment  of  said  tax,  the  district 
judge,  on  the  application  of  any  persons  interested  in  the  estate,  including  the 
state,  or  upon  his  own  motion,  shall  appoint  some  competent  person  as  appraiser 
as  often  as,  or  whenever  occasion  may  require,  whose  duty  it  shall  be  forthwith 
to  give  notice  by  mail  to  all  persons  known  to  have  or  claim  an  interest  in  such 
property,  and  to  such  persons  as  the  district  judge  may  by  order  direct,  of  the 
time  and  place  at  which  he  will  appraise  such  property,  and  at  such  time  and 
place  to  appraise  the  same  at  a  fair  market  value,  and  for  that  purpose  the 
appraiser  is  authorized  by  leave  of  the  district  judge  to  use  subpoenas  for  and  to 
compel  the  attendance  of  witnesses  before  him,  and  to  take  the  evidence  of  such 
witnesses  under  oath  concerning  such  property  and  the  value  thereof,  and  he 
shall  make  a  report  thereof  and  of  such  value  in  writing  to  the  district  court  with 
the  depositions  of  the  witnesses  examined  and  such  other  facts  in  relation  thereto 
as  the  district  court  may  by  order  require  to  be  filed  in  the  office  of  the  clerk  of 
said  district  court,  and  from  this  report  the  said  district  court  shall  forthwith 
make  an  order  and  fix  the  then  cash  value  of  all  estate,  annuities  and  life  estates 
or  terms  of  years  growing  out  of  said  estate,  and  the  tax  to  which  the  same  is 
liable,  and  shall  immediately  give  notice  by  mail  to  all  parties  known  to  be 
interested  therein.  Any  person  or  persons  dissatisfied  with  the  appraisement 
or  assessment  may  appeal  therefrom  to  the  district  court  of  the  proper  county 
within  sixty  days  after  the  making  and  filing  of  such  appraisement  or  assessment, 
on  giving  good  and  sufficient  security  to  the  satisfaction  of  the  district  judge  to 
pay  all  costs  together  with  whatever  taxes  that  shall  be  fixed  by  the  district 
court.  The  said  appraiser  shall  be  paid  by  the  county  treasurer  out  of  any 
funds  he  n;ay  have  in  his  hands  on  account  of  said  tax,  on  the  certificate  of  the 
district  judge  at  the  rate  of  three  dollars  per  day  for  every  day  actually  and 
necessarily  employed  in  said  appraisement  together  with  his  actual,  and  neces 
sary  traveling  expenses,  and  the  witnesses  subpoenaed  by  said  appraiser  shall 
be  paid  such  fees  as  now  provided  by  law.     [L.  1903,  c.  80,  s.  11.] 

S.  2466.  Penalty  for  misfeasance  of  appraiser.  Any  appraiser  appointed 
by  this  chapter  who  shall  take  any  fees  or  reward  from  any  executor,  administra- 
tor, trustee,  legatee,  next  of  kin  or  heir  of  any  decedent,  or  from  any  other  person 
liable  to  pay  said  tax,  or  any  portion  thereof,  shall  be  guilty  of  a  misdemeanor, 
and  upon  conviction  in  any  court  having  jurisdiction  of  misdemeanor  he  shall 
be  fined  not  less  than  two  hundred  and  fifty  dollars,  nor  more  than  five  hundred 
dollars,  and  imprisoned  not  exceeding  ninety  days,  and  in  addition  thereto  the 
district  judge  shall  dismiss  him  from  such  service.     [L.  1903,  c.  80,  s.  12.] 

S.  2467.  Court  having  jurisdiction  of  realty.  The  district  court  in  the 
county  in  which  the  real  property  is  situated,  of  the  decedent  who  was  not  a 
resident  of  the  state,  or  in  the  county  of  which  the  deceased  was  a  resident  at 
the  time  of  his  death,  shall  have  jurisdiction  to  hear  and  determine  all  questions 
in  relation  to  the  tax  arising  under  the  provisions  of  this  chapter,  and  the  dis- 


1248  STATUTES  ANNOTATED.  [Wyo.  St. 

trict  court  first  acquiring  jurisdiction  hereunder  shall  retain  the  same  to  the 
exclusion  of  every  other.     [L.  1903,  c.  80,  s.  13.] 

S.  2468.  Duty  of  court  when  tax  is  not  paid.  If  it  shall  appear  to  the 
district  court  that  any  tax  accruing  under  this  chapter  has  not  been  paid  accord- 
ing to  law,  it  shall  issue  a  summons  summoning  the  persons  interested  in  the 
property  liable  to  the  tax  to  appear  before  the  court  on  a  day  certain  not  more 
than  three  months  after  the  date  of  such  summons,  to  show  cause  why  said  tax 
should  not  be  paid.  The  process,  practice  and  pleadings  and  the  hearing  and 
determination  thereof,  and  the  judgment  in  said  court  in  such  cases,  shall  be 
the  same  as  those  now  provided  or  which  may  hereafter  be  provided  in  probate 
cases  in  the  district  courts  in  this  state,  and  the  fees  and  costs  in  such  case 
shall  be  the  same  as  in  probate  cases  in  the  district  courts  of  this  state.  [L. 
1903,  c.  80,  s.  14.] 

S.  2469.  Duty  of  treasurer  when  tax  is  not  paid.  Whenever  the  treasurer 
of  any  county  shall  have  reason  to  believe  that  any  tax  is  due  and  unpaid  under 
this  chapter,  after  the  refusal  or  neglect  of  the  persons  interested  in  the  property 
liable  to  pay  said  tax  to  pay  the  same,  he  shall  notify  the  county  attorney  of  the 
proper  county,  in  writing,  of  such  refusal  to  pay  said  tax,  and  the  count  attorney 
so  notified,  if  he  has  proper  cause  to  believe  a  tax  is  due  and  unpaid,  shall  prose- 
cute the  proceeding  in  the  district  court  in  the  proper  county,  as  provided  in 
6.  2468  for  the  enforcement  and  collection  of  such  tax,  and  in  such  case  said  court 
shall  allow  as  costs  in  the  said  case  such  fees  to  said  attorney  as  it  may  deem 
reasonable.     [L.  1903,  c.  80,  s.  15.] 

S.  2470.  Duty  clerk  of  court.  The  clerk  of  the  district  court  of  each  county 
shall  every  three  months  make  a  statement  in  writing  to  the  county  treasurer 
of  the  county  of  the  property  irom  which,  or  the  party  from  whom  he  has  reason 
to  believe  a  tax  under  this  chapter  is  due  and  unpaid.     [L.  1903,  c.  80,  s.  16.] 

S.  2471.  Records  to  be  kept.  The  county  commissioners  of  each  county 
shall  furnish  to  each  county  clerk  a  book  in  which  he  shall  enter  the  returns 
made  by  appraisers  for  cash  value  of  annuities,  life  estates  and  terms  of  years  and 
other  property  fixed  by  the  district  court  in  his  county  and  the  tax  assessed 
thereon,  and  the  amounts  of  any  receipts  for  payment  thereof  filed  with  him, 
which  book  shall  be  kept  in  the  office  of  the  county  clerk  as  a  public  record. 
[L.  1903,  c.  80,  s.  18;  L.  1909,  c.  18,  s.  2.] 

S.  2472.  Treasurer  to  county  to  retain.  The  county  treasurer  of  each 
county  shall  keep  all  money  collected  under  the  provisions  of  this  chapter  in  a 
separate  and  special  fund  to  be  expended  under  the  direction  of  the  county 
commissioners  of  each  county,  for  the  sole  purpose  of  the  permanent  improvement 
of  the  county  road,  such  road  shall  not  be  built  within  the  corporate  limits  of 
any  city  or  village,  but  may  begin  at  the  limit  of  any  city  or  village  and  extending 
therefrom  in  the  direction  most  traveled  by  the  public;  to  be  determined  upon 
by  the  said  county  commissioners;  Provided,  That  such  improvements  may  be 
mgide  from  the  limit  of  any  city  of  the  metropolitan  or  first  class  and  through  a 
city  of  the  second  class  or  village,  where  the  road  so  determined  upon  to  be  im- 
proved is  a  main  road  between  the  county  and  such  city  of  the  metropolitan  or 
first  class.  All  contracts  for  such  permanent  improvements  shall  be  let  by  the 
said  board,  by  competitive  bids  after  the  plans  and  specifications  therefor  drawn 


1910,  c.  169.]  WYOMING.  1249 

by  the  county  surveyor  or  engineer  have  been  filed  with  the  county  clerk  of 
each  respective  county.  All  bids  for  the  construction  of  such  roads  shall  be 
deposited  with  the  county  clerk  of  the  respective  counties  and  opened  by  him 
in  the  presence  of  the  county  commissioners,  then  filed  with  the  county  clerk. 
All  such  permanent  roadbeds  shall  not  be  less  than  twelve  feet,  nor  more  than 
sixteen  feet  in  width  and  shall  be  constructed  of  the  most  durable  and  approved 
material  and  the  remaining  part  of  said  road  shall  be  constructed  at  one  side 
of  the  said  permanent  part  and  be  used  as  a  dirt  road;  Provided,  That  it  shall 
be  lawful  for  the  county  commissioners  of  any  county  having  a  population  of 
not  more  than  thirty  thousand,  to  use  said  fund  in  the  manner  herein  provided 
for  the  improvement  of  any  grade,  bridge,  cut,  fill,  or  dirt  road  leading  into  any 
city  or  village  within  said  county;  Provided,  That  all  money  hereafter  paid  by  the 
various  county  treasurers  to  the  state  treasurer,  under  the  provisions  of  this 
chapter  shall  be,  upon  proper  vouchers  signed  by  the  county  clerk  and  county 
treasurer,  paid  back  to  the  said  county  from  which  said  tax  was  received  and 
said  money  when  so  refunded  by  the  state  treasurer  shall  be  placed  in  the  special 
fund  heretofore  mentioned  in  each  county  and  shall  be  expended  in  like  manner 
and  for  like  purposes  as  herein  above  specified.  [L.  1903,  c.  80,  s.  19;  L.  1909, 
c.  18,  s.  3.] 

S.  2473.  Duplicate  receipts.  Any  person  or  body  politic  or  corporate  shall, 
upon  the  payment  of  the  sum  of  fifty  cents,  be  entitled  to  a  receipt  from  the 
county  treasurer  of  any  county  or  the  copy  of  the  receipt  at  his  option,  that  may 
have  been  given  by  said  treasurer  for  the  payment  of  any  tax  under  this  chapter, 
to  be  sealed  with  the  seal  of  his  office,  which  receipt  shall  designate  on  what 
real  property,  if  any,  of  which  any  deceased  may  have  died  seized,  said  tax  has 
been  paid  and  by  whom  paid,  and  whether  or  not  it  is  in  full  of  said  tax,  and  said 
receipt  may  be  recorded  in  the  clerk's  office  of  said  county  in  which  the  property 
may  be  situated  in  the  book  to  be  kept  by  said  clerk  for  such  purpose.  The  lien 
of  the  inheritance  tax  provided  herein  shall  continue  until  the  said  tax  is  settled 
and  satisfied;  Provided,  That  said  lien  shall  be  limited  to  the  property  chargeable 
therewith;  and  Provided  further,  That  all  inheritance  taxes  shall  be  sued  for 
within  five  years  after  they  are  due  and  legally  demandable;  otherwise  they  shall 
be  presumed  to  have  been  paid,  and  such  lien  shall  be  removed.  [L.  1903.  c.  80, 
s.  20.] 


1250  STATUTES  ANNOTATED.  [U.  S.  St. 


UNITED  STATES, 


In  General. 

The  financial  necessities  of  two  wars  caused  the  enactment  by 
our  federal  government  of  legacy  taxes  and  the  decisions  of  our 
highest  court  on  these  statutes  served  to  entrench  firmly  the 
central  government  in  this  powerful  means  of  obtaining  revenue. 
The  act  of  1898  was  attacked  on  the  fundamental  ground  that 
congress  had  no  authority  to  levy  such  a  tax  in  the  states,  but  it 
was  sustained,  and  its  progressive  features  were  also  approved. 
There  is  no  federal  inheritance  tax  at  present. 

List  of  Statutes. 

1797.  1  U.  S.  St.  527. 

1797.  1  U.  S.  St.  536. 

1802.  2  U.  S.  St.  148. 

1862.  12  U.  S.  St.  483. 

1862.  12  U.  S.  St.  485. 

1864.  13  U.  S.  St.  285. 

1864.  13  U.  S.  St.  287.   - 

1864.  13  U.  S.  St.  288. 

1864.  13  U.  S.  St.  289. 

1864.  13  U.  S.  St.  299. 

1864.  13  U.  S.  St.  300.  • 

1864.  13  U.  S.  St.  303. 

1865.  13  U.  S.  St.  481. 

1865.  13  U.  S.  St.  140. 

1866.  13  U.  S.  St.  141. 

1867.  14  U.  S.  St.  475. 
1870.  16  U.  S.  St.  261. 
1872.  17  U.  S.  St.  256. 
1872.  17  U.  S.  St.  402. 

1894.  28  U.  S.  St.  509,  c.  349. 

1898.  30  U.  S.  St.  448. 

1898.  30  U.  S.  St.  464. 

1901.  31  U.  S.  St.  946. 

1901.  31  U.  S.  St.  948. 
4902.  32  U.  S.  St.  97-. 

1902.  32  U.  S.  St.  406. 

1857-1869.  Brightly's  Digest,  a.  13,  p.  366,  s.  306. 

1873-1874.  Revised  Statutes  of  the  U.  S.,  c.  10,  p.  679,  ss.  3438-3439. 

1892-1899.  Revised  Statutes  of  the  U.  S.,  p.  679,  ss.  3438-3440. 


History.]  UNITED  STATES. 


1251 


1892-1899.     Supplement  to  Revised  Statutes  of  the  U.  S.,  v.  2,  pp.  798-799 
1901.     United  States  Compiled  Statutes,  t.  35,  c.  11a,  ss.  8,  30.  9   10   11   dd 
279-282.  ,  «.  lu,  11,  pp. 

1901.  United  States  Compiled  Statutes,  c.  10,  ss.  3438-3440  c  11a  ss 
29-31,  pp.  2307-2308. 

1905.  Supplement  to  United  States  Compiled  Statutes,  1901,  pp.  447-451. 

1906.  Commission  to  Revise  and  Codify  Laws  of  the  U.  S.,  v.  1,  s.  4601. 

1907.  Supplement  to  Revised  Statutes,  1901,  pp.  649-652.' 
1909.  1901,  pp.  876-879. 

History  of  Legislation. 

The  court  traces  the  history  of  the  European  legislation  in 
KnowUon  v.  Moore,  178  U.  S.  41,  48,  49,  20  S.  Ct.  747,  44  L.  Ed.  969. 

Congress  imposed  a  legacy  tax  in  1797,  by  the  act  of  July  6, 
1797,  c.  11,  1  Stat.  527,  which  act  was  repealed  June  30,  1802, 
2  Stat.  148,  c.  17.  In  this  statute,  as  in  the  English  legacy  duty 
statute  of  1780,  the  mode  of  collection  provided  was  by  stamp 
duties  laid  on  the  receipts  evidencing  the  payment  of  the  legacies 
or  distributive  shares  in  personal  property,  and  the  amount  was,  like 
the  English  legacy  tax,  charged  upon  the  legacies  and  not  upon  the 
residue  of  the  personal  estate. 

A  legacy  tax  was  again  enacted  by  the  statute  of  1862,  12  Stat. 
433,  485,  sections  111  and  112  of  chapter  119. 

This  statute,  like  the  act  of  1797,  was  a  tax  imposed  on  legacies 
or  distributive  shares  of  personal  property,  but  contained  a  new 
form  of  death  duty.  By  section  194  a  probate  duty,  proportioned 
to  the  amount  of  the  estate  and  to  be  paid  by  way  of  stamps,  was 
levied.  The  result  of  the  act  of  1862  was  to  cause  the  death 
duties  irnposed  by  congress  to  greatly  resemble  those  then  existing 
in  England;  that  is,  first,  a  legacy  tax,  chargeable  against  each 
legacy  or  distributive  share,  and  a  probate  duty  chargeable  against 
the  mass  of  the  estate.  Thus  it  came  to  pass  that  the  system  of 
death  duties  prevailing  in  England  and  that  adopted  by  congress 
were  substantially  identical,  and  of  a  threefold  nature,  that  is,  a 
probate  duty  charged  upon  the  whole  estate,  a  legacy  duty  charged 
upon  each  legacy  or  distributive  share  of  personalty,  and  a  succes- 
sion duty  charged  against  each  interest  in  real  property.  The  fact 
that  the  framers  had  in  mind  the  English  law  was  conclusively 
demonstrated  by  section  127,  wherein  the  succession  or  real  estate 
inheritance  tax  was  defined  in  substantially  similar  terms  to  that 
contained  in  the  English  Succession  Diity  Act.  The  parallel 
was  observed  by  this  court  in  Sholey  v.  Rew,  23  Wall.  331,  349. 
KnowUon  v.  Moore,  178  U.  S.  41,  50,  20  S.  Ct.  747,  44  L.  Ed.  969. 


1252  STATUTES  ANNOTATED.  [U.  S.  St. 

The  court  after  considering  ancient  and  modern  deatH  duties 
concludes  as  follows:  "Although  different  modes  of  assessing  such 
duties  prevail,  and  although  they  have  different  accidental  names, 
such  as  probate  duties,  stamp  duties,  taxes  on  the  transaction, 
or  the  act  of  passing  of  an  estate  or  a  succession,  legacy  taxes, 
estate  taxes  or  privilege  taxes,  nevertheless  tax  laws  of  this  nature 
in  all  countries  rest  in  their  essence  upon  the  principle  that  death 
is  the  generating  source  from  which  the  particular  taxing  power 
takes  its  being  and  that  it  is  the  power  to  transmit,  or  the  trans- 
mission from  the  dead  to  the  living,  on  which  such  taxes  are  more 
immediately  rested."  Knowlton  v.  Moore^  178  U.  S.  41,  56,  20 
S.  Gt.  747,  44  L.  Ed.  969. 

Early  Probate  Fees. 

1  U.  S.  St.  527  (July  6,  1797,  c.  11)  imposes  a  stamp  duty  on  "any  receipt 
or  other  discharge  for  or  on  account  of  any  legacy  left  by  any  will  or  other  testa- 
mentary instrument,  or  for  any  share  or  part  of  a  personal  estate  divided  by 
force  of  any  statute  of  distributions,  the  amount  whereof  shall  be  above  the 
value  of  $50,  and  shall  not  exceed  the  value  of  $100,  twenty-five  cents;  where  the 
amount  thereof  shall  exceed  the  value  of  $100  and  shall  not  exceed  $500,  fifty 
cents;  and  for  every  further  sum  of  $500,  the  additional  sum  of  one  dollar." 

The  statute  further  provided  an  exemption  on  legacies  or  distributive  shares 
to  the  wife,  children  or  grandchildren  of  the  deceased  person  and  provided  in 
section  6  that  every  receipt  for  a  legacy  or  distributive  share  should  express 
the  true  sum  received  under  penalty. 

1  U.  S.  St.  536  (Statute  of  December  15,  1797)  postpones  the  commencement 
of  the  stamp  duties  of  the  act  of  July  6,  1797,  until  after  June  30,  1798. 

2  U.  S.  St.  148  (April  6,  1802)  repeals  the  stamp  duties  of  the  act  of  1797, 
repeal  to  take  effect  July  1,  1802. 

12  U.  S.  St.  483  (Revenue  Act  July  1,  1862)  Schedule  B,  Stamp  duties)  pro- 
vides a  duty  for  probate  or  administration  where  the  estate  does  not  exceed 
$2,500,  fifty  cents;  $2,500  to  $5000,  one  dollar;  $5000  to  $20,000,  two  dollars; 
$20,000  to  $50,000,  five  dollars;  $50,000  to  $100,000,  ten  dollars;  $100,000  to 
$150,000,  twenty  dollars;  every  additional  $50,000  or  fractional  part  thereof, 
ten  dollars. 

13  U.  S.  St.  p.  300  (Statute  of  June  30,  1864),  provided  a  stamp  duty  on  pro- 
bate or  administration  where  an  estate  does  not  exceed  $2,000,  one  dollar;  on 
estates  exceeding  $2,000  for  every  additional  thousand  dollars  or  fractional  part 
thereof  in  excess  of  $2,000,  fifty  cents. 

14. U.  S.  St.  475  (Statute  of  March  2,  1867,  s.  9)  amends  statute  of  June  30, 
1864,  by  exempting  from  the  stamp  tax  any  estate  which  does  not  exceed  in 
value  one  thousand  dollars. 

17  U.  S.  St.  256  (Statute  of  June  6,  1872,  c.  315,  s.  36)  repealed  the  stamp 
duties  under  Schedule  B  of  the  statute  of  June  30,  1864,  and  acts  amendatory 
thereof,  excepting  only  the  tax  of  two  cents  on  bank  checks,  drafts  or  orders. 
This  covered  the  probate  and  administration  tax  and  went  into  effect  October 
1,  1872. 


1862.8.111.]  UNITED  STATES.  1253 

THE  ACT  OF   1862. 

12  U.  S.  St.  485,  8.  111. 

And  be  it  further  enacted,  That  any  person  or  persons  having  in  charge  or  trust, 
as  administrators,  executors,  or  trustees  of  any  legacies  or  distributive  shares 
arising  from  personal  property,  of  any  kind  whatsoever,  where  the  whole  amount 
of  such  personal  property,  as  aforesaid,  shall  exceed  the  sum  of  one  thousand 
dollars  in  actual  value,  passing  from  any  person  who  may  die  after  the  passage 
of  this  act  possessed  of  such  property,  either  by  will  or  by  the  intestate  laws  of 
any  state  or  territory,  or  any  part  of  such  property  or  interest  therein,  transferred 
by  deed,  grant,  bargain,  sale,  or  gift,  made  or  intended  to  take  effect  in  posses- 
sion or  enjoyment  after  the  death  of  the  grantor,  or  bargainor,  to  any  person  or 
persons,  or  to  any  body  or  bodies  politic  or  corporate,  in  trust  or  otherwise,  shall 
be,  and  hereby  are,  made  subject  to  a  duty  or  tax,  to  be  paid  to  the  United 
States,  as  follows,  that  is  to  say :  — 

First.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  lineal  issue  or  lineal  ancestor,  brother  or  sister,  to  the  person 
who  died  possessed  of  such  property,  as  aforesaid,  at  and  after  the  rate  of  seventy- 
five  v^ents  for  each  and  every  hundred  dollars  of  the  clear  value  of  such  interest 
in  such  property. 

Second.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in 
such  property  shall  be  a  descendant  of  a  brother  or  sister  of  the  person  who  died 
possessed,  as  aforesaid,  at  and  after  the  rate  of  one  dollar  and  fifty  cents  for 
each  and  every  hundred  dollars  of  the  clear  value  of  such  interest. 

Third.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  a  brother  or  sister  of  the  father  or  mother,  or  a  descendant 
of  a  brother  or  sister  of  the  father  or  mother  of  the  person  who  died  possessed, 
as  aforesaid,  at  and  after  the  rate  of  three  dollars  for  each  and  every  hundred 
dollars  of  the  clear  value  of  such  interest. 

Fourth.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  a  brother  or  sister  of  the  grandfather  or  grandmother,  or  a 
descendant  of  the  brother  or  sister  of  the  grandfather  or  grandmother  of  the 
person  who  died  possessed,  as  aforesaid,  at  and  after  the  rate  of  four  dollars  for 
each  and  every  hundred  dollars  of  the  clear  value  of  such  interest. 

Fifth.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  herein- 
before stated,  or  shall  be  a  stranger  in  blood  to  the  person  who  died  possessed, 
as  aforesaid,  or  shall  be  a  body  politic  or  corporate,  at  and  after  the  rate  of  five 
dollars  for  each  and  every  hundred  dollars  of  the  clear  value  of  such  interest: 
Provided,  That  all  legacies  or  property  passing  by  will,  or  by  the  laws  of  any 
state  or  territory,  to  husband  or  wife  of  the  person  who  died  possessed,  as  afore- 
said, shall  be  exempt  from  tax  or  duty. 

[See  notes  to  the  Act  of  1864,  post,  p.  1255.1 

"Arising  from  Personal  Property"  Does  not  Include  a  Legacy 
Payable  out  of  Real  Estate. 

The  testator  made  certain  pecuniary  legacies  to  be  paid  out 
of  the  proceeds  of  certain  lands  which  she  directed  her  executors 


1254  STATUTES  ANNOTATED.  [U.  S.  St. 

to  sell.  It  was  claimed  that  these  legacies  are  chargeable  with  a 
duty  under  the  United  States  statute  of  1862,  section  111  (12 
Stat.  489),  as  "arising  from  personal  property."  The  court  says 
that  the  statute  is  "too  clear  and  explicit  to  include  this  case,  Which 
is  a  legacy  arising  from  real  estate."  United  States  v.  Watts,  1 
Bond,  580,  Fed.  Cas.  16,  653^ 

Executor  Liable. 

In  a  suit  by  the  United  States  against  a  beneficiary  under  a  trust 
to  recover  the  interest  on  an  unpaid  legacy,  the  court  holds  that 
the  statute  of  1862,  sections  111  and  112,  imposed  a  tax  only  on 
an  executor  or  trustee  and  not  on  the  legatee  or  cestui  que  trust. 
The  executor  is  made  subject  to  the  tax  and  is  to  pay  the  tax 
and  not  the  legatee.  United  States  v.  Allen,  9  Ben.  154,  Fed. 
Cas.  14,  430. 

THE  ACT  OF   1864. 
13  U.  S.  St.  285,  8.  124  (Statute  of  June  30,  1864). 

S.  124.  Transfers  taxable.  —  Rates.  And  be  it  further  enacted,  That  any 
person  or  persons  having  in  charge  or  trust,  as  administrators,  executors,  or  trus- 
tees, any  legacies  or  distributive  shares  arising  from  personal  property,  where 
the  whole  amount  of  such  personal  property,  as  aforesaid,  shall  exceed  the  sum 
of  one  thousand  dollars  in  actual  value,  passing,  after  the  passage  of  this  act, 
from  any  person  possessed  of  such  property,  either  by  will  or  by  the  intestate 
laws  of  any  state  or  territory,  or  any  personal  property  or  interest  therein,  trans- 
ferred by  deed,  grant,  bargain,  sale,  or  gift,  made  or  intended  to  take  effect  in 
possession  or  enjoyment  after  the  death  of  the  grantor  or  bargainor,  to  any  per- 
son or  persons,  or  to  any  body  or  bodies  politic  or  corporate,  in  trust  or  otherwise, 
shall  be,  and  hereby  are,  made  subject  to  a  duty  or  tax,  to  be  paid  to  the  United 
States,  as  follows,  that  is  to  say:  — 

First.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  lineal  issue  or  lineal  ancestor,  brother  or  sister,  to  the 
person  who  died  possessed  of  such  property,  as  aforesaid,  at  the  rate  of  one  dollar 
for  each  and  every  hundred  dollars  of  the  clear  value  of  such  interest  in  such  prop- 
erty. 

Second.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  a  descendant  of  a  brother  or  sister  of  the  person  who  died 
possessed,  as  aforesaid,  at  the  rate  of  two  dollars  for  each  and  every  hundred 
dollars  of  the  clear  value  of  such  interest. 

Third.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  a  brother  or  sister  of  the  father  or  mother,  or  a  descendant  of  a 
brother  or  sister  of  the  father  or  mother,  of  the  person  who  died  possessed  as 
aforesaid,  at  the  rate  of  four  dollars  for  each  and  every  hundred  dollars  of  the 
clear  value  of  such  interest. 

Fourth.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  a  brother  or  sister  of  the  grandfather  or  grandmother,   or  a 


1864.]  UNITED  STATES.  1255 

descendant  of  the  brother  or  sister  of  the  grandfather  or  grandmother,  of  the 
person  who  died  possessed  as  aforesaid,  at  the  rate  of  five  dollars  for  each  and  every 
hundred  dollars  of  the  clear  value  of  such  interest. 

Fifth.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  herein- 
before stated,  or  shall  be  a  stranger  in  blood  to  the  person  who  died  possessed, 
as  aforesaid,  or  shall  be  a  body  politic  or  corporate  at  the  rate  of  six  dollars  for 
each  and  every  hundred  dollars  of  the  clear  value  of  such  interest:  Provided, 
That  all  legacies  or  property  passing  by  will,  or  by  the  laws  of  any  state  or  terri- 
tory, to  husband  or  wife  of  the  person  who  died  possessed,  as  aforesaid,  shall  be 
exempt  from  tax  or  duty. 

Constitutional. 

The  succession  tax  under  U.  S.  St.  1864,  June  30,  and  1866, 
July  13,  was  constitutional  as  an  impost  or  excise.  Scholey  v. 
Rew,  90  U.  S.  (23  Wall.)  331. 

History.  —  A  Legacy  Tax. 

This  act  was  modeled  upon  the  English  statutes  which  have 
been  held  to  be  legacy  taxes.  Knowlton  v.  Moore,  178  U.  S.  41, 
69,  20  S.  Ct.  747,  44  L.  Ed.  969. 

An  Excise  Tax. 

This  is  not  a  direct  tax,  but  instead  of  that  is  plainly  an  excise 
tax  authorized  by  the  United  States  Constitution,  section  8, 
article  1.  The  succes  sion  or  devolution  of  real  estate  is  the  subject- 
matter  of  the  tax  or  duty. 

"Successor  is  employed  in  the  act  as  the  correlative  to  prede- 
cessor, and  the  succession  or  devolution  of  the  real  estate  is  the 
subject-matter  of  the  tax  or  duty,  or,  in  other  words,  it  is  the 
right  to  become  the  successor  of  real  estate  upon  the  death  of  the 
predecessor,  whether  the  devolution  or  disposition  of  the  same 
is  effected  by  will,  deed,  or  laws  of  descent,  from  a  grantor,  testator, 
ancestor,  or  other  person  from  whom  the  interest  of  the  successor 
has  been  or  shall  be  derived;  nor  is  the  question  affected  in  the 
least  by  the  fact  that  the  tax  or  duty  is  made  a  lien  upon  the  land, 
as  the  lien  is  merely  an  appropriate  regulation  to  secure  the  collec- 
tion of  the  exaction."  Per  Clifford,  J.,  in  Scholey  v.  Rew,  90 
U.  S.  (23  Wall.)  331,  347. 

Trust  for  Grantor. 

Where- the  testator  in  1864  had  transferred  property  to  trustees 
by  deed  in  trust  to  collect  the  interest  and  pay  it  to  himself,  and  his 


1256  STATUTES  ANNOTATED.  [U.  S.  St. 

wife  until  the  death  of  the  survivor,  the  court  holds  that  the 
grantor  did  not  "die  possessed  of"  the  property  within  the  mean- 
ing of  the  statute  of  1864  when  he  died  in  1866,  and  therefore 
no  inheritance  tax  could  be  collected.  United  States  v.  Lever- 
ich,  9  Fed.  586. 

Advances. 

The  United  States  statute  of  1864  covers  an  advance  made  by 
a  father  to  his  son,  as  it  is  a  gift  made  without  valuable  or  ade- 
quate consideration.  The  fact  that  the  son  was  named  in  his 
father's  will  does  not  give  him  any  vested  or  contingent  estate,  but 
is  a  bare  possibility  not  assignable,  and  can  therefore  not  be  made 
the  basis  for  a  consideration.      United  States  v.  Banks,  17  Fed.  322. 

Not  Applicable  to  Aliens. 

This  statute  clearly  applies  only  to  the  estates  of  those  persons 
whose  domicile  at  the  time  of  their  death  is  within  the  United  States. 
Therefore,  where  the  testatrix  was  at  the  time  of  her  death  in  1869 
a  citizen  of  and  residing  in  France,  and  gave  American  securities  to 
her  son,  also  a  resident  of  France,  no  inheritance  tax  can  be  col- 
lected.     United  States  v.  Hunnewell,  13  Fed.  617. 

Where  the  testator  abandoned  his  residence  in  this  country  and 
moved  to  Europe,  where  he  died,  his  will  is  not  subject  to  the 
statute  of  1864.      United  States  v.  Morris,  27  Fed.  341. 

Consideration.  —  Assistance. 

A  deed  by  a  mother  to  her  sons  conveying  to  them  a  tract  of 
land  "in  consideration  of  love  and  affection  and  in  further  con- 
sideration of  the  assistance  they  have  rendered  me  since  the  death 
of  my  husband,"  the  court  remarks  that  the  succession  tax  cannot 
be  defeated  by  reciting  a  nominal  consideration  which  would  be 
deemed  valuable  in  the  technical  sense  of  that  term.  But  the 
court  says  that  in  the  absence  of  further  evidence  the  deed  does 
show  consideration  sufficient  to  defeat  the  operation  of  the  internal 
revenue  act  of  June  30,  1864.      United  States  v.  Hart,  4  Fed.  292. 

Devise  in  Accordance  with  Contract. 

The  husband  bought  and  paid  for  a  house  and  lot  which  he  had 
conveyed  to  his  wife  on  the  understanding  that  she  should  make 
her  will  devising  the  property  to  him  in  case  she  died  before  he 
died.     Pursuant  to  this  understanding  she  made  her  will  and  died 


1864.]  UNITED  STATES.  1257 

February  20,  1866,  and  the  court  holds  that  the  inheritance  tax 
should  be  assessed  on  her  estate.  The  legal  title  to  the  property 
and  the  ownership  were  in  her  when  she  died.  "The  fact  that  the 
will  was  made  on  account  of  an  agreement  to  that  effect  by  the  wife 
when  she  took  her  title,  rendered  it  none  the  less  an  instrument 
creating  a  beneficial  interest  in  the  husband  on  her  death,  and  that, 
under  the  statute,  is  the  succession  to  be  taxed.  Ransom  v. 
United  States,  Fed.  Cas.  11,  574. 

Charged  on  Each  Legacy. 

The  United  States  inheritance  tax  of  1864  should  be  charged  to 
a  specific  legatee  and  in  case  the  executor  finds  it  difficult  to  deduct 
the  same  out  of  such  a  legacy  the  law  would  doubtless  afford  an 
adequate  remedy. 

U.  S.  St.  1862  (12  U.  S.  St.  at  Large,  c.  119,  s.  112)  was  super- 
seded by  U.  S.  St.  June  30,  1864,  which  omitted  from  the  statute 
of  1862  the  words  "to  be  allowed  for  such  payment  by  the  person 
or  persons  entitled  to  the  beneficial  interest  in  respect  of  which  such 
tax  or  duty  was  paid."  The  statute  of  1866  provides  that  any 
tax  paid  "shall  be  deducted  from  the  particular  legacy  or  distribu- 
tive share  on  account  of  which  the  same  is  charged." 

Under  the  statute  of  1864,  notwithstanding  the  omission  of  the 
language  above  quoted,  the  duties  paid  in  respect  of  any  particular 
legacies  are  as  between  the  executors  and  the  legatees  in  the 
settlement  of  the  estate,  to  be  deducted  from  the  legacies  in  respect 
of  which  they  have  been  paid,  or  charged  to  the  legatees  respec- 
tively who  are  entitled  to  such  legacies,  and  the  amendment  of  1866 
was  simply  declaratory  to  avoid  any  doubt.  Goddard  v.  Goddard, 
9  R.  L  293,  297. 

Legatee  not  Personally  Liable. 

U.  S.  St.  1864  cancels  that  of  1862  and  created  no  personal 
liability  on  the  part  of  the  legatee.  United  States  v.  Pennsylvania 
Co.,  27  Fed.  539. 

Liability  Confined  to  One  in  Possession. 

Under  the  United  States  statute  of  1864  suit  can  only  be  brought 
against  the  individual  in  possession.  United  States  v.  Truck,  27 
Fed.  541.      United  States  v.  Kelley,  27  Fed.  542. 

Payable  from  Income  of  Life  Tenant. 

Succession  duties  under  the  United  States  inheritance  tax  of 
1864  on  life  tenants  fall  on  the  income  of  the  fund  even  where  the 


1258  STATUTES  ANNOTATED.  [U.  S.  St. 

property  is  left  by  will  in  trust  "to  receive  and  collect  the  income 
and  after  deducting  all  needful  and  proper  costs,  charges  and  ex- 
penses, to  pay  the  residue  of  said  income"  to  the  cestui  for  life. 

The  court  holds  that  the  costs,  charges  and  expenses  spoken  of 
by  the  will  which  was  drafted  before  the  passage  of  the  inheritance 
tax  are  such  as  are  incidental  to  the  management  of  the  trust  prop- 
erty, and  the  receipt,  collection  and  disbursement  of  the  income 
cannot  in  any  sense  include  the  payment  of  the  tax  by  law  imposed 
upon  the  life  tenants  and  beneficial  interests  in  the  property. 
Sohier  v.  Eldredge,  103  Mass.  345. 

Cestui  and  not  Trustee  is  Liable. 

Under  the  United  States  statute  of  1864  a  person  liable  to  pay 
a  tax  on  a  succession  for  the  "successor"  is  the  party  beneficially 
interested  in  real  estate  and  not  the  executor  or  trustee  in  whom 
the  title  may  rest.  The  tax  is  payable  by  the  successor  himself 
and  not  by  his  trustee  if  he  have  one.  United  States  v.  Tappan, 
10  Ben.  284,  Fed.  Cas.  16,  431. 

Remainders. 

Under  United  States  statute  of  1862  and  statute  of  1864  the 
executive  officers  treated  vested  interests  although  unaccompanied 
with  the  right  of  immediate  possession  or  enjoyment  as  at  once 
taxable.  This  construction  was  in  effect  repudiated  by  United 
States  statute  of  July  13,  1866,  and  was  treated  as  unsound  by  the 
reasoning  of  the  opinion  in  Clapp  v.  Mason,  94  U.  S.  589.  Vander- 
bilt  V.  Eidman,  196  U.  S.  480,  25  S.  Ct.  331,  49  L.  Ed.  563. 

Sum  Paid  in  Compromise. 

The  testa toi  died  in  1869  leaving  a  will  providing  among  other 
things  a  fund  for  a  school ,  and  the  sole  heir  attacked  this  provision 
on  the  ground  that  it  was  invalid  under  Virginia  statutes.  A  settle- 
ment of  fifty  thousand  dollars  was  made  with  him  in  consideration 
of  his  assigning  to  the  school  all  his  rights  for  the  benefit  of  the 
same  parties  and  upon  the  same  trusts  mentioned  in  the  will. 

The  court  holds  that  this  was  neither  "a  distributive  share  in 
an  intestate's  estate,"  nor  "a  legacy" ;  that  the  sum  of  fifty  thousand 
dollars  was  paid  as  a  compromise;  that  the  heir  never  claimed  a 
legacy,  but  insisted  that  the  will  was  void  and  that  he  was  entitled 
to  the  whole  as  heir  and  that  as  there  was  no  such  legacy  the  tax 
on  the  fifty  thousand  dollars  was  not  a  tax  on  a  legacy  and  was 


1864.]  UNITED  STATES.  1259 

therefore  illegally  imposed.     Page  v.   Rives,  Fed.   Cas.   10    666 
1  Hughes  297. 

Lien.  —  Collection. 

13  U.  S.  St.  285  (Statute  of  June  30, 1864),  s.  125,  covers  the  lien  of  the  tax  and 
makes  various  administrative  provisions  for  its  assessment  and  collection. 

No  Personal  Liability. 

One  who  buys  land  subject  to  the  lien  of  the  United  States 
inheritance  tax  of  1864  incurs  no  personal  liability  on  account  of 
the  tax.  The  lien  can  be  enforced  against  the  land,  but  no  personal 
judgment  cafi  be  rendered  against  him  therefor.  One  can  be  made 
personally  liable  for  the  United  States  inheritance  tax  only  to  the 
extent  of  his  interest  in  the  estate.     Wilhelmi  v.  Wade,  65  Mo.  39. 

Penalties. 

U.  S.  St.  1864,  c.  173,  s.  14,  prescribes  a  penalty  of  fifty  per  cent  for 
refusal  or  neglect  to  make  a  list  or  return;  but  this  refers  to  the 
annual  and  monthly  lists  and  returns  to  be  made  by  parties  taxable. 
But  the  penal  ty  for  failure  to  return  and  give  notice  of  a  succession 
tax  is  provided  for  in  section  148,  which  provides  a  penalty  of  ten  per 
cent.  Wright  v.  Blakeslee,  101  U.  S.  174,  178,  25  L.  Ed.  1048, 
Fed.  Cas.  18073,  13  Blat.  421. 

P        Real  Estate. 

13  U.  S.  St.  285  (Statute  of  June  30,  1864),  ss.  126-132,  carefully  define  suc- 
cessions in  real  estate  subject  to  tax. 

Effect  of  Partition. 

The  succession  tax  is  not  a  tax  upon  land.  The  fact  that  par- 
tition proceedings  were  held,  under  which  the  plaintiff's  equitable 
interest  in  certain  real  estate  was  satisfied  by  an  assignment  to 
him  of  personal  property,  does  not  relieve  him  from  the  payment 
of  a  succession  tax  on  his  share  of  the  estate  for  the  obvious  reason 
that  he  received  the  full  value  of  the  real  estate  in  other  property 
assigned  to  him  belonging  to  the  same  estate.  Scholey  v.  Rew, 
90  U.S.  (23  Wall.)  331,  349. 

Retroactive  on  Remainders. 

The  testatrix  died  in  1847,  leaving  her  property  to  her  husband 
for  life,  and  on  his  death  to  his  children.  The  husband  died 
August  10,  1866,  and  the  tax  was  assessed  upon  one  of  his   chil- 


1260  STATUTES  ANNOTATED.  [U.  S.  St. 

dren  taking  on  his  death.  This  life  interest  to  the  child  on  the 
death  of  the  father  is  subject  to  the  inheritance  tax  under  the  U. 
S.  St.  1864,  June  30,  as  it  is  a  "devolution"  under  that  statute. 
Blake  V.  McCartney,  4  Cliff  101,  Fed.  Cas.  No.  1498. 

13  U.  S.  St.  285  (Statute  of  June  30, 1864),  s.  133. 

And  be  it  further  enacted,  That  there  shall  be  levied  and  paid  to  the  United 
States  in  respect  of  every  such  succession  as  aforesaid,  according  to  the  value 
thereof,  the  following  duties,  that  is  to  say:  — 

Where  the  successor  shall  be  the  lineal  issue  or  lineal  ancestor  of  the  predecessor, 
a  duty  at  the  rate  of  one  dollar  per  centum  upon  such  value. 

Where  the  successor  shall  be  a  brother  or  sister,  or  a  descendant  of  a  brother 
or  sister  of  the  predecessor,  a  duty  at  the  rate  of  two  dollars  per  centum  upon 
such  value. 

Where  the  successor  shall  be  a  brother  or  sister  of  the  father  or  mother,  or  a 
descendant  of  a  brother  or  sister  of  the  father  or  mother  of  the  predecessor,  a 
duty  at  the  rate  of  four  dollars  per  centum  upon  such  value. 

Where  the  successor  shall  be  a  brother  or  sister  of  the  grandfather  or  grand- 
mother, or  a  descendant  of  the  brother  or  sister  of  the  grandfather  or  grand- 
mother of  the  predecessor,  a  duty  at  the  rate  of  five  dollars  per  centum  upon 
such  value. 

Where  the  successor  shall  be  in  any  other  degree  of  collateral  consanguinity 
to  the  predecessor  than  is  hereinbefore  described,  or  shall  be  a  stranger  in  blood 
to  him,  a  duty  at  the  rate  of  six  dollars  per  centum  upon  such  value. 

13  U.  S.  St.  285  (Statute  of  June  30,  1864),  ss.  134-150,  provide  for  the  assess- 
ment, payment  and  collection  (Si  the  tax. 

Repeal. 

13  U.  S.  St.,  p.  303  (Statute  of  June  30,  1864),  repealed  the  statute  of  July  1, 
1862,  as  to  probate  and  inheritance  taxes. 

Saving  Clause.  . 

Where  the  testator  died  in  1863,  the  government's  claim  accrued 
under  the  act  of  1862  at  the  death  of  the  testator,  and  was  therefore 
not  repealed  by  the  statute  of  1864,  which  expressly  saved  all  taxes 
which  had  then  accrued,  and  the  statute  of  1870,  which  again  saves 
all  taxes  which  had  accrued.  The  testator  left  property  to  his 
wife,  who  died  in  1876,  and  the  court  holds  that  the  tax  under  the 
statute  of  1862  should  be  assessed  on  this  remainder.  United 
States  V.  Townsend,  8  Fed.  306. 

WijJow  Exempted. 

13  U.  S.  St.  481  (Statute  March  3,  1865)  amended  the  statute  of  June  30, 
1864,  s.  133,  by  adding  thereto  an  exemption  of  any  succession  "vesting  before 
or  subsequent  to  the  passage  of  this  act,  where  the  successor  shall  be  the  wife 
of  the  predecessor." 


1866.J  UNITED  STATES.  1261 

THE  ACT  OF  1866. 

14  U.  S.  St.  p.  140,  141  (Statute  of  July  13,  1866)  amends  the  statute  of  June 
30,  1864,  ss.  124,  125,  137,  138,  145,  147,  148,  152,  and  repeals  s.  150. 

Where  Estate  Insolvent. 

The  plaintiff  brought  suit  to  recover  the  amount  of  the  internal 
revenue  tax  he  paid  in  1872  to  the  United  States  collector  on  the 
ground  that  he  as  lessee  of  the  real  estate  was  obliged  to  pay  the 
tax  to  avoid  eviction  and  that  the  payment  inured  to  the  benefit 
of  the  succession.  As  the  succession  was  insolvent  there  was 
no  inheritance  or  legacy  for  the  heirs,  and  it  was  not  liable  to  an 
internal  revenue  tax,  and  therefore  no  recovery  could  be  had. 
Johnson  v.  Dunbar,  28  La.  Ann.  271. 

Demand  Necessary. 

The  United  States  statute  of  1866  imposes  no  liability  until  a 
neglect  or  refusal  to  pay  "after  demand."  United  States  v.  Pennsyl- 
vania Co.,  27  Fed.  539. 

Minor  Children.  14  U.  S.  St.,  p.  140,  amends  statute  of  June  30,  1864,  by 
exempting  any  legacy  or  share  of  personal  property  to  a  minor  child  "unless  such 
legacy  or  share  shall  exceed  the  sum  of  one  thousand  dollars,  in  which  case  the 
excess  only  above  that  sum  shall  be  liable  to  such  taxation." 

When  Accrues.  14  U.  S.  St.,  p.  140  (Statute  of  July  13,  1866),  amends  the 
statute  of  June  30, 1864,  s.  125,  by  inserting  after  the  words  "that  the  tax  or  duty 
aforesaid,  "the  following:  "shall  bedueand  payable  whenever  the  party  interested 
in  such  legacy  or  distributive  share  or  property  or  interest  aforesaid  shall  become 
entitled  to  the  possession  or  enjoyment  thereof,  or  to  the  beneficial  interest  in 
the  profits  accruing  therefrom,  and  the  same."  The  administrative  provisions  of 
the  statute  are  further  strengthened. 

Remainders  Accelerated. 

One  James  Long  in  1803,  by  deed  of  settlement  conveyed  certain 
real  estate  in  Maryland  to  his  daughter  for  life,  and  after  her 
death  to  her  children  and  to  the  descendants  of  any  deceased 
child.  The  daughter  married  and  had  children  who  were  living 
at  the  time  of  the  assessment  of  the  tax,  the  parties  having  divided 
the  property  by  amicable  agreement. 

The  court  holds  that  there  can  be  no  question  that  the  deed  of 
James  Long  was  such  a  past  disposition  of  real  estate  as  conferred  a 
succession  upon  the  parties  in  remainder.  "It  was  a  past  disposition 
of  real  estate  where  persons  became  beneficially  entitled  upon  the 


1262  STATUTES  ANNOTATED.  [U.  S.  St. 

death  of  a  person  dying  after  the  passage  of  the  act.     This  consti- 
tutes a  succession." 

The  court  holds  that  this  is  one  of  those  cases  where  the  title 
to  a  succession  has  been  accelerated  by  the  extinction  of  prior 
interests  by  agreement  of  parties,  and  that  the  tax  is  payable  upon 
the  whole  value  of  the  remainder  interests.  Brune  v.  Smith, 
Fed.  Cas.  2053. 

Massachusetts  Act  for  Recording  Receipts. 

Mass.  St.  1868,  c.  132,  provided  that  registers  of  deeds  should  record  evi- 
dences of  payment  of  the  federal  inheritance  tax. 

Mass.  St.  1868,  appeared  in  Public  Statutes,  c.  24,  s.  18. 

Mass.  Public  Statutes,  c.  24,  s.  18,  provides  that  the  registers  of  deeds  shall 
record  receipts  of  United  States  collectors  of  internal  revenue  for  succession 
taxes. 

THE  REPEAL  OF   1870. 
U.  S.  St.  1870,  c.  255  (16  U.  S.  St.,  p.  261).     Approved  July  14,  1870. 

S.  17.  And  be  it  further  enacted.  That  sections  one  hundred  and  twenty,  one 
hundred  and  twenty-one,  one  hundred  and  twenty-two,  and  one  hundred  and 
twenty-three  of  the  act  of  June  thirty,  eighteen  nundred  and  sixty-four,  entitled, 
"An  act  to  provide  internal  revenue  to  support  the  government,  to  pay  interest 
on  the  public  debt,  and  for  other  purposes,"  as  amended  by  the  act  of  July 
thirteen,  eighteen  hundred  and  sixty-six,  and  the  act  of  March  two,  eighteen 
hundred  and  sixty-seven,  shall  be  construed  to  impose  the  taxes  therein  men- 
tioned to  the  first  day  of  August,  eighteen  hundred  and  seventy,  but  after  that 
date  no  further  taxes  shall  be  levied  or  assessed  under  said  sections;  and  all  acts 
and  parts  of  acts  relating  to  the  taxes  herein  repealed,  and  that  all  the  provisions 
of  said  acts,  shall  continue  in  full  force  for  levying  and  collecting  all  taxes  prop- 
erly assessed  or  liable  to  be  assessed,  or  accruing  under  the  provisions  of  former 
acts,  or  drawbacks,  the  right  to  which  has  already  accrued  or  which  may  here- 
after accrue  under  said  acts,  and  for  maintaining  and  continuing  liens,  fines, 
penalties,  and  forfeitures  incurred  under  and  by  virtue  thereof.  And  this  act 
shall  not  be  construed  to  affect  any  act  done,  right  accrued,  or  penalty  incurred 
under  former  acts,  but  every  such  right  is  hereby  saved.  And  for  carrying  out 
and  completing  all  proceedings  which  have  been  already  commenced  or  that  may 
be  commenced  to  enforce  such  fines,  penalties,  and  forfeitures,  or  criminal  pro- 
ceedings under  said  acts,  and  for  the  punishment  of  crimes  of  which  any  party 
shall  be  or  has  been  found  guilty. 

Remainder  Interests. 

Where  the  testator  dies  before  the  repeal,  leaving  a  life  tenant 
who  dies  after  the  repeal,  no  tax  can  be  assessed  on  the  remainder 
interests.  The  repealing  act  contained  a  saving  proviso  and  it 
was  insisted  that  the  tax  accrued  on  the  death  of  the  testator. 

The  court  finds  under  section  137,  that  the  right  does  not  accrue 
until  the  duty  can  be  demanded,  that  is,  when  it  is  made  payable, 


1870.]  UNITED  STATES.  1263 

in  other  words,  at  the  end  of  thirty  days,  after  becoming  entitled 
to  possession ,  and  therefore  the  saving  clause  did  not  cover  the  case, 
and  therefore  the  tax  was  not  assessable.  Clapp  v.  Mason  94 
U.  S.  589,  24  L.  Ed.  212,  affirming  Fed.  Cas.  9233. 

The  same  result  was  reached  in    the  following  cases:    United 
States  V.  Brice,  8  Fed.  381;    United  States  v.  Hazard,  8  Fed.  380; 
United  States  v.  Rankin,  3  McCrary  113,  8  Fed.  872. 

Where  Estate  not  Settled. 

The  testator  died  in  November,  1866,  and  his  estate  was  not 
settled  until  January,  1873,  and  the  court  holds  that  as  the  tax 
could  not  be  demanded  before  the  repeal  of  the  inheritance  act 
the  tax  cannot  be  collected.      United  States  v.  Kelley,  28  Fed.  845. 

Payment  on  Reaching  Certain  Age. 

Where  the  testator  died  July  17,  1870,  leaving  a  legacy  to  his 
son  payable  "within  three  months  after  he  shall  arrive  at  the  age 
of  twenty-one  years"  and  the  legatee  arrived  at  that  age  in  1872, 
no  legacy  tax  could  be  collected  on  the  authority  of  Mason  v. 
Sargent,  104  U.  S.  689.     Sturges  v.   United  States,  117  U.  S.  363. 

To  the  same  effect  see  United  States  v.  New  York  Ins.  &  Trust 
Co.  (9  Ben.  413,  Fed.  Cas.  15,873).  See,  however,  Hellman  v. 
United  States  (15  Blatch.  131),  Fed.  Cas.  6341,  affirming  Fed. 
Cas.  15,  343. 

Legacies  Payable  After  Repeal. 

The  testator  died  February  23,  1870,  before,  but  less  than  one 
year  befoie  the  repeal  of  the  federal  inheritance  tax.  The  statute 
of  July  14,  1870,  repealed  the  tax  on  and  after  the  first  day  of 
October,  saving  all  taxes  properly  assessed  or  accruing  under 
the  provisions  of  former  acts  the  right  to  which  has  already 
accrued  and  which  may  hereafter  accrue  under  said  acts. 

The  court  holds  that  legacies  under  this  act  accrued  at  the 
death  of  the  testator  and  had  therefore  accrued  within  this  sec- 
tion 17,  although  they  are  payable  at  the  earliest  in  a  year  after  the 
death  of  the  testator  undei  Massachusetts  law.  May  v.  Slack, 
Fed.  Cas.  9336. 

Alien  Estopped  to  Claim  Devise  to  him  Void. 

Where  the  devisee  of  real  estate  is  an  alien  and  has  received  the 
value  of  the  real  estate  in  partition  proceedings  he  is  estopped  to 


1264  STATUTES  ANNOTATED.  [U.  S.  St. 

deny  liability  for  the  succession  tax  on  the  ground  that  the  devise 
to  him  as  an  alien  was  void.    Scholey  v.  Rew,  90  U.  S.  (23  Wall.)  331. 

17  U.  S.  St.,  p.  402  (Statuteof  December  24,  1872, s.  2),  provided  for  the  collec- 
tion of  the  taxes  on  legacies  and  successions. 

The  Income  Tax. 

28  U.  S.  St.,  c.  53  (Statute  of  August  27,  1894,  c.  349,  s.  28),  provides  that 
in  estimating  the  gains,  profits  and  income  for  the  purpose  of  the  income  tax 
money  and  the  value  of  all  personal  property  acquired  by  gift  or  inheritance 
shall  be  included.  [This  statute  was  declared  unconstitutional  by  the  Supreme 
Court  in  Pollock  v.  Farmers'  Loan  &f  Trust  Co.,  157  U.  S.  429.  15  U.  S.  Sup. 
Ct.  73.1 

THE  ACT  OF   1898. 

30  U.  S.  St.,  p.  464.     (Statute  June  13,  1898).     Approved  and  to  take  effect 

June  13,  1898. 

S.  29.  Transfers  taxable.  —  Rates.  That  any  person  or  persons  having 
in  charge  or  trust,  as  administrators,  executors,  or  trustees,  any  legacies  or  dis- 
tributive shares  arising  from  personal  property,  where  the  whole  amount  of 
such  personal  property  as  aforesaid,  shall  exceed  the  sum  of  ten  thousand  dollars 
in  actual  value,  passing,  after  the  passage  of  this  act,  from  any  person  possessed 
of  such  property,  either  by  will  or  by  the  intestate  laws  of  any  state  or  territory, 
or  any  personal  property  or  interest  therein,  transferred  by  deed,  grant,  bargain, 
sale,  or  gift,  made  or  intended  to  take  effect  in  possession  or  enjoyment  after 
the  death  of  the  grantor  or  bargainor,  to  any  person  or  persons,  or  to  any  body 
or  bodies,  politic  or  corporate,  in  trust  or  otherwise,  shall  be,  and  hereby  are 
made  subject  to  a  duty  or  tax,  to  be  paid  to  the  United  States,  as  follows:  that  is 
to  say:  Where  the  whole  amount  of  said  personal  property  shall  exceed  in  value 
ten  thousand  and  shall  not  exceed  in  value  the  sum  of  twenty-five  thousand 
dollars  the  tax  shall  be. 

First.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  lineal  issue  or  lineal  ancestor,  brother  or  sister  to  the  per- 
son who  died  possessed  of  such  property,  as  aforesaid,  at  the  rate  of  seventy- 
five  cents  for  each  and  every  hundred  dollars  of  the  clear  value  of  such  interest 
in  such  property. 

Second.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in 
such  property  shall  be  the  descendant  of  a  brother  or  sister  of  the  person  who 
died  possessed,  as  aforesaid,  at  the  rate  of  one  dollar  and  fifty  cents  for  each 
and  every  hundred  dollars  of  the  clear  value  of  such  interest. 

Third.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  father  or  mother,  or  a  descendant 
of  a  brother  or  sister  of  the  father  or  mother,  of  the  person  who  died  possessed 
as  aforesaid,  at  the  rate  of  three  dollars  for  each,  and  every  hundred  dollars 
of  the  clear  value  of  such  interest. 

Fourth.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  grandfather  or  grandmother,  or  a 


1898.1  UNITED  STATES.  1265 

descendant  of  the  brother  or  sister  of  the  grandfather  or  grandmother,  of  the 
person  who  died  possessed  as  aforesaid,  at  the  rate  of  four  dollars  for  each  and 
every  hundred  dollars  of  the  clear  value  of  such  interest. 

Fifth.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  herein- 
before stated,  or  shall  be  a  stranger  in  blood  to  the  person  who  died  possessed,  as 
aforesaid,  or  shall  be  a  body  politic  or  corporate,  at  the  rate  of  five  dollars  for 
each  and  every  hundred  dollars  of  the  clear  value  of  such  interest:  Provided, 
That  all  legacies  or  property  passing  by  will,  or  by  the  laws  of  any  state  or  terri- 
tory, to  husband  or  wife  of  the  person  died  possessed,  as  aforesaid,  shall  be 
exempt  from  tax  or  duty. 

Where  the  amount  or  value  of  said  property  shall  exceed  the  sum  of  twenty- 
five  thousand  dojlars,  but  shall  not  exceed  the  sum  or  value  of  one  hundred  thou- 
sand dollars,  the  rates  of  duty  or  tax  above  set  forth  shall  be  multiplied  by  one 
and  one-half;  and  where  the  amount  or  value  of  said  property  shall  exceed  the 
sum  of  one  hundred  thousand  dollars,  but  shall  not  exceed  the  sum  of  five  hundred 
thousand  dollars,  such  rates  of  duty  shall  be  multiplied  by  two;  and  where 
the  amount  or  value  of  said  property  shall  exceed  the  sum  of  five  hundred  thou- 
sand dollars,  but  shall  not  exceed  the  sum  of  one  million  dollars,  such  rates  of 
duty  shall  be  multiplied  by  two  and  one-half;  and  where  the  amount  or  value 
of  said  property  shall  exceed  the  sum  of  one  million  dollars,  such  rates  of  duty 
shall  be  multiplied  by  three. 

A  Legacy  Tax.  —  History. 

The  United  States  statute  of  1898  is  upon  legacies  or  distributive 
shares  and  not  upon  the  whole  estate,  as  is  shown  further  by  the 
history  of  legislation  in  this  country.  This  statute  was  modeled 
upon  the  statute  of  1864,  which  was  modeled  upon  the  English 
statutes,  which  were  decided  to  be  legacy  taxes.  Knowlton  v. 
Moore,  17-8  U.  S.  41,  69,   20  S.  Ct.  747,  44  L.  Ed.  969. 

An  Excise  and  not  a  Direct  Tax. 

The  United  States  statute  of  1898  is  not  a  direct  tax,  and  subject 
therefore  to  apportionment.  The  tax  has  at  all  times  been  con- 
sidered as  the  antithesis  of  a  direct  tax,  and  as  a  duty  or  excise 
because  of  the  particular  occasion  which  gives  rise  to  its  levy. 
Knowlton  v.  Moore,  178  U.  S.  41,  81,  20  S.  Ct.  747,  44  L.  Ed.  969. 

Validity. 

General  Power  of  Congress. 

It  was  claimed  that  as  the  tiansmission  of  property  by  death  is 
exclusively  subject  to  the  regulating  authority  of  the  several  states, 
therefore  the  levy  by  congress  of  a  tax  on  inheritances  of  any  kmd 
is  beyond  the  power  of  congress  and  is  interference  by  the  national 


1266  STATUTES  ANNOTATED.  [U.  S.  St. 

government  with  a  matter  which  falls  alone  within  the  reach  of  state 
legislation.  The  court  states,  however,  that  transmission  of  prop- 
erty is  a  usual  subject  of  taxation,  and  that  the  taxing  power  of 
congress  extends  to  all  usual  objects  of  taxation  subject  to  the  limita- 
tions in  the  constitution. 

The  court  points  out  that  it  is  a  fallacy  to  assume  that  the  tax 
on  the  transmission  or  receipt  of  property  occasioned  by  death  is 
imposed  on  the  exclusive  power  of  the  state  to  regulate  the  devo- 
lution of  property  upon  death.  The  subject  of  taxation  is  the 
transmission  or  receipt,  not  the  right  existing  to  regulate.  Knowl- 
ton  V.  Moore,  178  U.  S.  41,  59,  20  S.  Ct.  747,  44  L.  Ed.  969. 

The  court  points  out  that  under  the  American  constitutional 
system  both  the  national  and  the  state  governments,  moving  in 
their  respective  orbits,  have  a  common  authority  to  tax  many  and 
diverse  objects,  but  this  does  not  cause  the  exercise  of  its  lawful 
attributes  by  one  to  be  a  curtailment  of  the  powers  of  government 
of  the  other.  KnowUon  v.  Moore,  178  U.  S.  41,  60,  20  S.  Ct.  747, 
44  L.  Ed.  969. 

Power  to  Tax  Municipalities. 

The  federal  congress  has  the  power  to  impose  a  succession  tax 
upon  a  bequest  to  a  municipal  corporation  of  a  state  for  a  corporate 
and  public  purpose  and  4J.  S.  St.  June  13,  1898,  30  Stat.  448,  as 
amended  March  2,  1901,  31  Stat.  946,gives  this  authority.  Snyder  y. 
Bettman,  190  U.  S.  249,  Fuller,  White  and  Peckham,  JJ.,  dissenting. 

Gifts  to  States  or  Municipalities. 

As  congress  has  the  power  to  tax  successions,  and  the  states  have 
the  power,  and  such  power  of  the  states  extends  to  bequests  to  the 
United  States,  it  follows  that  congress  has  the  same  power  to  tax 
the  transmission  of  property  by  legacy  to  states  or  their  muni- 
cipalities, and  that  the  exercise  of  that  power  in  neither  case  con- 
flicts with  the  proposition  that  neither  the  federal  nor  the  state 
government  can  tax  the  property  or  agencies  of  the  other,  since  the 
txaes  imposed  are  not  upon  the  property  but  upon  the  right  to 
succeed  to  property.    Snyder  v.  Bettman,  190  U.  S.  249. 

"The  power  to  tax  inheritances  does  not  arise  solely  from  the 
power  to  regulate  the  descent  of  property,  but  from  the  general 
authority  to  impose  taxes  upon  all  property  within  the  jurisdiction 
of  the  taxing  power.  It  has  usually  happened  that  the  power 
has  been  exercised  by  the  same  government  which  regulates  the 
succession  to  the  property  taxed ;   but  this  power  is  not  destroyed 


1898.]  UNITED  STATES.  1267 

by  the  dual  character  of  our  government,  or  by  the  fact  that  under 
our  constitution  the  devolution  of  property  is  determined  by  the 
laws  of  the  several  states."  It  was  claimed  that  the  authority  to 
lay  a  succession  tax  arose  solely  from  the  power  to  regulate  the 
descent  of  property.  But  the  court  replies  that  this  proposition 
proves  too  much,  that  a  denial  of  the  right  to  regulate  successions 
goes  to  the  whole  power  of  the  government  to  impose  a  succession 
tax.     Snyder  v.  Bettman,  190  U.  S.  249,  252. 

Progressive  Rate  Upheld. 

It  was  claimed  that  the  progressive  rate  feature  of  the  United 
States  of  1898  was  so  repugnant  to  fundamental  principles  of 
equality  and  justice  that  the  law  should  be  held  void,  even 
though  it  transgresses  no  express  limitation  in  the  constitution. 

The  court  remarks,  "The  review  which  we  have  made  exhibits 
the  fact  that  taxes  imposed  with  reference  to  the  ability  of  the 
person  upon  whom  the  burden  is  placed  to  bear  the  same  have 
been  levied  from  the  foundation  of  the  government.  So,  also, 
some  authoritative  thinkers,  and  a  number  of  economic  writers, 
contend  that  a  progressive  tax  is  more  just  and  equal  than  a  pro- 
portional one.  In  the  absence  of  constitutional  limitation,  the 
question  whether  it  is  or  is  not  is  legislative  and  not  judicial.  The 
grave  consequences  which  it  is  asserted  must  arise  in  the  future 
if  the  right  to  levy  a  progressive  tax  be  recognized  involves  in  its 
ultimate  aspect  the  mere  assertion  that  free  and  representative 
government  is  a  failure,  and  that  the  grossest  abuses  of  power  are 
foreshadowed  unless  the  courts  usurp  a  purely  legislative  function. 
If  a  case  should  ever  arise,  where  an  arbitrary  and  confiscatory 
exaction  is  imposed  bearing  the  guise  of  a  progressive  or  any  other 
form  of  tax,  it  will  be  time  enough  to  consider  whether  the  judicial 
power  can  afford  a  remedy  by  applying  inherent  and  fundamental 
principles  for  the  protection  of  the  individual,  even  though  there 
be  no  express  authority  in  the  constitution  to  do  so.  That  the 
law  which  we  have  construed  affords  no  ground  for  the  contention 
that  the  tax  imposed  is  arbitrary  and  confiscatory,  is  obvious." 
Per  White,  J.,  in  KnowUon  v.  Mocre,  178  U.  S.  41,  109,  20  S.  Ct. 
747,  44  L.  Ed.  969. 

Uniformity. 

The  United  States  constitution,  article  1,  section  8,  provides  that 
"duties,  imposts  and  excises  shall  be  uniform  throughout  the  United 
States."    The  court  finds,  considering  the  history  of  the  clause  and 


1268  STATUTES  ANNOTATED.  [U.  S.  St. 

the  antecedent  legislation,  that  "uniform"  is  confined  to  geo- 
graphical uniformity.  KnowUon  v.  Moore,  178  U.  S.  41,  108,  20  S. 
Ct.  747,  44  L.  Ed.  969. 

Transfers  Affected. 
Transactions  on  Consideration. 

The  words  in  the  United  States  statute  of  1898  ''deed,  grant,  bar- 
gain, sale  or  gift"  refer  to  transfers  without  consideration  and 
operative  by  way  of  gift  and  not  transactions  made  in  the  ordinary 
course  of  business  upon  a  valuable  consideration.  So  where  a  son 
was  in  partnership  with  his  father  under  a  contract  which  provided 
in  part  that  on  the  father's  death  his  interest  in  the  partnership 
should  belong  to  the  son,  this  is  not  a  transfer  taxable  under  the 
United  States  statute  of  1898,  as  the  son  has  vested  rights  under 
the  partnership  agreement  during  the  life  of  the  testator.  Blair  v. 
Herold,  150  Fed.  199,  affirmed  in  86  C.  C.  A.  64,  158  Fed.  804. 

Compromise. 

Where  there  is  a  contest  over  a  will  and  under  the  Massachusetts 
statute  the  contest  is  settled  by  a  compromise  agreement  for  dis- 
tribution and  the  will  is  never  probated,  the  compromise  is  for  the 
purpose  of  the  inheritance,  tax  the  will  under  which  the  property 
passed.    McCoy  v.  Gill,  156  Fed.  985,  C.  C.  A. 

Property  of  Alien. 

The  court  holds  that  United  States  statute  of  1898  does  not  apply 
to  intangible  personal  property  of  a  non-resident  alien  who  never 
had  a  domicile  in  the  United  States  and  died  abroad,  such  personal 
property  being  within  the  United  States  and  having  passed  to  his 
son,  also  an  alien  domiciled  abroad,  as  sole  legatee  and  next-of-kin 
of  the  deceased,  partly  under  a  will  executed  abroad  and  partly 
under  the  intestate  laws  of  Spain.  There  is  no  question  of  the 
power  of  the  legislature  to  tax  the  personal  property  of  non-resi- 
dents, but  the  question  is  of  its  intent  to  do  so  by  the  particular 
act  in  question.  As  the  property  in  this  case  did  not  pass  under 
any  will  executed  in  any  state  or  territory  of  the  United  States  or 
by  the  intestate  laws  of  any  such  state  or  territory,  the  case  is  not 
within  the  literal  words  of  the  act  unless  the  word  "state"  is  used 
in  a  sense  broad  enough  to  include  a  foreign  state  or  territory. 

The  court  finds  that  the  English  cases  reach  the  conclusion  that 
under  the  general  act  imposing  a  duty  upon  legacies  the  law  of 


1898.]  UNITED  STATES.  1269 

the  domicile  of  the  testator  controls.  If  he  be  domiciled  abroad, 
whether  an  alien  or  a  British  subject,  his  legacies  are  exempt 
whether  the  property  be  in  England  at  the  time  of  his  death  or  be 
subsequently  sent  there  by  his  executors  for  local  administration 
and  distribution.  Eidman  v.  Martinez,  184  U.  S.  578,  581,  22  S. 
Ct.  515,  46  L.  Ed.  697. 

The  court  holds  that  property  situated  in  this  country  belonging 
to  a  non-resident  decedent  is  not  subject  to  the  federal  inheritance 
tax  of  1898,  although  the  will  was  executed  in  New  York  in  1890, 
during  a  temporary  sojourn  there.  The  court  relies  upon  United 
States  V.  Hunnewell,  13  Fed.  Rep.  617.  Moore  v.  Ruckgaber,  184 
U.  S.  593,  22  S.  Ct.  521,  46  L.  Ed.  705,  affirming  104  Fed.  947,  31 
Civ.  Proc.  310. 

It  was  suggested  in  the  argument  of  Frederickson  v.  Louisiana 
that  the  government  of  the  United  States  is  incompetent  to  regu- 
late testamentary  dispositions  or  laws  of  inheritance  of  foreigners 
in  reference  to  property  within  the  states.  The  court  observes  that 
the  question  is  one  of  great  magnitude  and  declines  to  consider  it. 
Frederickson  v.  State,  23  How.  (U.  S.)  445. 

Limited  to  Wills  Executed  in  this  Country. 

The  words  confining  the  application  of  the  act  to  property  passing 
"either  by  will  or  by  the  intestate  laws  of  any  state  or  territory"  — 
the  words,  "passing  by  will,"  are  limited  to  wills  executed  in  "any 
state  or  territory."  Eidman  v.  Martinez,  184  U.  S.  578,  590,  22  S. 
Ct.  515,  46  L.  Ed.  697,  citing  United  States  y .  Hunnewell,  13  Fed.  617. 

The  attorney  general  had  declined  to  rule  on  this  question.  See 
23  Op.  Att.  Gen.  221  (September  7, 1900). 

District  of  Columbia. 

The  United  States  statute  of  1898  embraces  the  District  of  Co- 
lumbia. KnowUon  v.  Moore,  178  U.  S.  41,  20  S.  Ct.  747,  44  L.  Ed. 
969. 

BENEFICIARIES  AFFECTED. 
Annuity. 

The  testator  provided  that  the  trustee  under  a  trust  created  by 
him  should  pay  from  the  trust  including  accumulations  of  income 
as  well  as  the  corpus  at  the  rate  of  $14,000  per  year  to  certain  per- 
sons named ;  and  the  court  holds  that  this  is  a  bequest  of  an  annuity 
and  so  is  taxable  and  not  as  a  bequest  of  income  under  the  statute 


1270  STATUTES  ANNOTATED.  [U.  S.  St 

of  1898,  section  29.  Peck  v.  Kinney,  128  Fed.  313,  reversed  143  Fed. 
76,  74  C.  C.  A.  270. 

Where  the  testator  gave  property  in  trust  to  pay  to  the  bene- 
ficiary $15,000  a  year  for  life  out  of  the  whole  income  of  the  trust 
estate,  the  specific  payments  only  are  taxable  as  they  become  due 
under  the  United  States  statute  of  1898  as  amended  in  1902;  as 
the  statute  provides  that  legacies  are  taxable  only  as  they  come  to 
the  possession  of  the  beneficiary.  Disston  v.  McClain,  147  Fed.  114, 
77  C.  C.  A.  340,  reversing  143  Fed.  191. 

To  One  on  Reaching  a  Certain  Age. 

A  legacy  to  a  daughter  when  she  is  eighteen  years  old  is  contin- 
gent and  not  subject  to  the  United  States  tax  of  1898,  section  29. 
Heherton  v.  McClain,  135  Fed.  226. 

The  same  result  was  reached  in  Herold  v.  Shanley,  146  Fed.  20, 
76  C.  C.  A.  478,  affirming  141  Fed.  423  (N.  J.). 

Life  Tenant  a  Legatee. 

Where  a  trust  fund  is  created  to  pay  the  income  to  F.  and  upon 
his  death  the  principal  to  be  disposed  of  as  part  of  the  residue, 
two.  estates  are  created  which  pass  under  the  statute  —  the  life 
estate  and  the  remainder.  The  life  tenant  is  to  be  regarded  as  a 
legatee  for  the  purpose  of- the  payment  of  the  tax  upon  the  life 
estate  under  the  United  States  statute  of  1898.  Fitzgerald  v.  Rhode 
Island  Hospital  Trust  Co.,  24  R.  L  59,  52  Atl.  814. 

Lineal  Issue.  — Adopted  Child. 

Under  the  United  States  statute  of  1898  an  adopted  child  under 
the  law  of  her  state,  although  she  was  to  all  intents  and  purposes 
the  child  and  legal  heir  of  the  testator,  is  still  not  a  "lineal  issue." 
Kerr  v.  Goldshorough,  150  Fed.  289,  80  C.  C.  A.  177. 

Son-in-law. 

A  legacy  to  a  son-in-law  is  subject  to  the  inheritance  tax  under 
the  statute  of  1898,  section  29,  as  he  is  not  a  blood  relation.  King 
V.  Eidman,  128  Fed.  815. 

Trustee  not  a  "Person  Possessed." 

Under  the  United  States  statute  of  1898,  section  29,  a  trustee, 
who  at  the  time  of  the  passage  of  the  act  held  personal  property 
upon  a  trust  under  a  will  to  be  distributed  on  a  future  date  under 
the  will  is  not  "a  person  possessed"  of  such  property.     Personal 


1898.]  UNITED  STATES.  1271 

estate  passing  under  the  intestate  laws  passes  from  the  intestate 
himself  and  never  from  the  administrator.  McClain  v.  Pennsylva- 
nia Co,  for  Insurance  and  Annuities,  108  Fed.  618,  47  C.  C.  A.  529. 

Remainders  not  Taxable  Till  They  Fall  into  Possession. 

The  supreme  court  decides  that  future  interests,  whether  vested 
or  contingent,  were  not  taxable  until  they  fell  into  possession,  fol- 
lowing the  construction  placed  on  numerous  state  statutes  and  the 
earlier  federal  acts. 

Sections  29  and  30  of  United  States  statute  of  1898  do  not  im- 
pose any  tax  jupon  a  vested  future  interest  before  the  period  when 
possession  or  enjoyment  had  attached.  The  practice  under  the 
act  of  1898  was  to  tax  only  beneficial  interests  where  the  right  to 
possess  or  enjoy  had  accrued.  It  was  thought  that  the  amendment 
of  March  2, 1901,  31  Stat.  946,  changed  this  situation.  The  amend- 
ments which  the  tax  officials  decided  made  vested  interests  subject 
to  taxation  were  that  the  tax  or  duty  should  be  due  and  payable 
within  one  year  after  the  death  of  the  decedent ;  and  that  the  ex- 
ecutor, administrator  or  trustee  should  make  the  return  of  the  estate 
in  his  control  within  thirty  days  after  taking  charge. 

The  court  holds,  however,  that  these  amendments  did  not  jus- 
tify the  construction  congress  intended,  oecause  death  duties 
to  become  due  whithin  one  year  as  to  legacies  and  distribu- 
tive shares  were  not  capable  of  being  immediately  possessed 
or  enjoyed,  and  were  therefore  not  subject  to  taxation  under 
the  original  act. 

The  testator  died  September  12,  1899,  leaving  a  will  by  which  he 
placed  the  residue  of  his  property  in  trust  for  the  use  of  his  son  in  a 
spendthrift  trust  until  he  arrives  at  the  age  of  twenty-one  and  there- 
after to  pay  the  income  to  him  until  he  arrives  at  the  age  of  thirty, 
which  would  occur  after  1902,  when  he  shall  be  put  in  full  posses- 
sion of  one-half  the  trust  estate,  the  income  from  the  balance  to 
be  paid  to  the  son  until  he  shall  reach  the  age  of  thirty-five,  when 
the  balance  of  the  trust  estate  shall  be  placed  in  his  hands. 

There  is  no  authority  under  the  United  States  statute  of  1898  for 
taxing  the  interest  of  the  son  conditioned  on  his  attaining  the  ages 
of  thirty  and  thirty-five  years  respectively.  It  is  therefore  unnec- 
essary to  determine  whether  such  interest  was  technically  a  vested 
remainder  or  a  contingent  remainder.  Siich  an  interest  was  de- 
clared to  be  contingent  in  In  re  Tracy,  179  N.  Y.  501.  Vanderbilt 
y.Eidman,  196  U.  S.  480,  501,  25  S.  Ct.  331,  49  L.  Ed.  563. 


1272  STATUTES  ANNOTATED.  ,  [U.  S.  St. 

RATES. 

Rate  Determined  by  Size  of  Legacy. 

The  court  points  out  the  gross  inequalities  which  would  result 
from  a  construction  of  the  United  States  statute  of  1898  that  the 
rate  of  tax  is  determined  by  the  size  of  the  estate  rather  than  the 
size  of  the  legacy.  The  result  would  be  that  two  persons  receiving 
the  same  legacy  from  estates  of  different  sizes  would  pay  a  different 
tax,  and  the  court  is  bound  to  avoid  a  construction  which  would 
occasion  great  inequality  and  injustice  if  possible.  This  appears 
clear  also  from  a  comparison  with  the  statute  of  1864,  and  from  the 
text  of  the  act  itself.  This  is  also  clear  from  the  title  which  describes 
as  subject  to  taxation  "legacies  and  distributive  shares  of  personal 
property,"  and  also  appears  by  the  opening  words  of  section  29, 
describing  the  tax  as  being  upon  "any  interest  which  may  have  been 
transferred  by,"  etc.  The  provisions  for  collection  of  the  tax  con- 
tained in  section  30  of  the  act  confirm  the  construction  that  the 
passing  of  each  legacy  or  distributive  share,  and  not  the  entire  per- 
sonal estate,  forms  the  subject  of  the  tax.  KnowUon  v.  Moore, 
178  U.  S.  41,  67,  20  S.  Ct.  747,  44  L.  Ed.  969. 

Exemptions. 

Construction  of  Exemptions^ 

"It  is  an  old  and  familiar  rule  of  the  English  courts,  applicable 
to  all  forms  of  taxation,  and  particularly  special  taxes,  that  the 
sovereign  is  bound  to  express  its  intention  to  tax  in  clear  and  unam- 
biguous language,  and  that  a  liberal  construction  be  given  to  words 
of  exception  confining  the  operation  of  duty"  ...  "though 
the  rule  regarding  exemptions  from  general  laws  imposing  taxes 
may  be  different."  Per  Brown,  J.,  in  Eidman  v.  Martinez,  184  U.  S. 
578,  583,  22  S.  Ct.  515,  46  L.  Ed.  697. 

Legacies  exceeding  $10,000. 

The  tax  is  upon  such  legacies  and  distributive  shares  arising  from 
personal  property  as  exceed  ten  thousand  dollars  in  actual  value, 
and  net  upon  the  gross  amount  of  the  estate.  22  Op.  Att.  Gen.  298 
(January  5,  1899). 

Federal  Bonds. 

The  United  States  statute  of  1898  is  valid  and  the  legacy  tax 
can  be  imposed  even  although  the  legacies  are  composed  of  federal 
bonds.    The  court  holds  that  the  exempting  clauses  in  the  statutes 


1898.]  UNITED  STATES.  1273 

and  on  the  face  of  the  bonds  do  not  mean  that  "a  state  or  the  United 
States  may  not  tax  inheritances  and  legacies,  regardless  of  the 
character  of  the  property  of  which  they  are  composed.  That  some 
of  the  holders  of  United  States  bonds  may  have  paid  franchise  taxes 
to  the  states,  and  others  may  have  paid  state  or  federal  inheritance 
and  legacy  taxes,  has  nothing  to  do  with  the  contract  between  the 
United  States  and  the  bondholders.  The  United  States  will  have 
complied  with  their  contract  when  they  pay  to  the  original  holders 
of  their  bonds,  or  to  their  assigns,  the  interest  when  due,  in  full,  and 
the  principal,  when  due,  in  full."  Per  Shiras,  J.,  in  Murdoch  v. 
Ward,  178  Ur  S.  139,  148,  20  S.  Ct.  775,  44  L.  Ed.  1009. 

30  U.  S.  St.,  p.  464  (Statute  of  June  13,  1898).  Approved  and  to  take  effect 
June  13,  1898. 
S.  30.  Collection.  That  the  tax  or  duty  aforesaid  shall  be  a  lien  and  charge 
upon  the  property  of  every  person  who  may  die  as  aforesaid  for  twenty  years, 
or  until  the  same  shall,  within  that  period,  be  fully  paid  to  and  discharged  by 
the  United  States;  and  every  executor,  administrator,  or  trustee,  before  pay- 
ment and  distribution  to  the  legatees,  or  any  parties  entitled  to  beneficial  interest 
therein,  shall  pay  to  the  collector  or  deputy  collector  of  the  district  of  which 
the  deceased  person  was  a  resident  the  amount  of  the  duty  or  tax  assessed  upon 
such  legacy  or  distributive  share,  and  shall  also  make  and  render  to  the  said  col- 
lector or  deputy  collector  a  schedule,  list,  or  statement,  in  duplicate,  of  the 
amount  of  such  legacy  or  distributive  share,  together  with  the  amount  of  duty 
which  has  accrued,  or  shall  accrue,  thereon,  verified  by  his  oath  or  affirmation 
to  be  administered  and  certified  thereon  by  some  magistrate  or  officer  having 
lawful  power  to  administer  such  oaths,  in  such  form  and  manner  as  may  be 
prescribed  by  the  Commissioner  of  Internal  Revenue,  which  schedule,  list,  or  state- 
ment shall,  contain  the  names  of  each  and  every  person  entitled  to  any  beneficial 
interest  therein,  together  with  the  clear  value  of  such  interest,  the  duplicate 
of  which  schedule,  list,  or  statement  shall  be  by  him  immediately  delivered,  and 
the  tax  thereon  paid  to  such  collector;  and  upon  such  payment  and  delivery  of 
such  schedule,  list,  or  statement  said  collector  or  deputy  collector  shall  grant  to 
such  person  paying  such  duty  or  tax  a  receipt  or  receipts  for  the  same  in  duplicate 
which  shall  be  prepared  as  hereinafter  provided.  Such  receipt  or  receipts,  duly 
signed  and  delivered  by  such  collector  or  deputy  collector,  shall  be  sufficient 
evidence  to  entitle  such  executor,  administrator,  or  trustee  to  be  credited  and  al- 
lowed such  payment  by  every  tribunal  which,  by  the  laws  of  any  state  or  terri- 
tory, is,  or  may  be,  empowered  to  decide  upon  and  settle  the  accounts  of  execu- 
tors and  administrators.  And  in  case  such  executor,  administrator,  or  trustee 
shall  refuse  or  neglect  to  pay  the  aforesaid  duty  or  tax  to  the  collector  or  deputy 
collector,  as  aforesaid,  within  the  time  hereinbefore  provided,  or  shall  neglect 
or  refuse  to  deliver  to  said  collector  or  deputy  collector  the  duplicate  of  the 
schedule,  list,  or  statement  of  such  legacies,  property,  or  personal  estate,  under 
oath,  as  aforesaid,  or  shall  neglect  or  refuse  to  deliver  the  schedule,  list,  or  state- 
ment, of  such  legacies,  property,  or  personal  estate,  under  oath,  as  aforesaid, 
or  shall  deliver  to  said  collector  or  deputy  collector  a  false  schedule  or  state- 


1274  STATUTES  ANNOTATED.  [U.  S.  St. 

merit  of  such  legacies,  property,  or  personal  estate,  or  give  the  names  and  rela- 
tionship of  the  persons  entitled  to  beneficial  interests  therein  untruly,  or  shall 
not  truly  and  correctly  set  forth  and  state  therein  the  clear  value  of  such  bene- 
ficial interest,  or  where  no  administration  upon  such  property  or  personal  estate 
shall  have  been  granted  or  allowed  under  existing  laws,  the  collector  or  deputy 
collector  shall  make  out  such  lists  and  valuation  as  in  other  cases  of  neglect  or 
refusal,  and  shall  assess  the  duty  thereon;  and  the  collector  shall  commence 
appropriate  proceedings  before  any  court  of  the  United  States,  in  the  name  of 
the  United  States,  against  such  person  or  persons  as  may  have  the  actual  or 
constructive  custody  or  possession  of  such  property  or  personal  estate,  or  any 
part  thereof,  and  shall  subject  such  property  or  personal  estate,  or  any  portion 
o!f  the  same,  to  be  sold  upon  the  judgment  of  decree  of  such  court,  and  from  the 
proceeds  of  such  sale  the  amount  of  such  tax  or  duty,  together  with  all  costs 
and  expenses  of  every  description  to  be  allowed  by  such  court,  shall  be  first 
paid,  and  the  balance,  if  any,  deposited  according  to  the  order  of  such  court,  to 
be  paid  under  its  direction  to  such  person  or  persons  as  shall  establish  title  to 
the  same.  The  deed  or  deeds,  or  any  proper  conveyance  of  such  property  or  per- 
sonal estate,  or  any  portion  thereof,  so  sold  under  such  judgment  or  decree, 
executed  by  the  officer  lawfully  charged  with  carrying  the  same  into  effect, 
shall  vest  in  the  purchaser  thereof  all  the  title  of  the  delinquent  to  the  property  or 
personal  estate  sold  under  and  by  virtue  of  such  judgment  or  decree,  and  shall 
release  every  other  portion  of  such  property  or  personal  estate  from  the  lien 
or  charge  thereon  created  by  this  act.  And  every  person  or  persons  who  shall 
have  in  his  possession,  charge,  or  custody  any  record,  file,  or  paper  containing, 
or  supposed  to  contain,  any  information  concerning  such  property  or  personal 
estate,  as  aforesaid,  passing  from  any  person  who  may  die,  as  aforesaid,  shall 
exhibit  the  same  at  the  request  of  the  collector  or  deputy  collector  of  the  dis- 
trict, and  to  any  law  officer  of  the  United  States,  in  the  performance  of  his  duty 
under  this  act,  his  deputy  or  agent,  who  may  desire  to  examine  the  same.  And  if 
any  such  person,  having  in  his  possession,  charge,  or  custody  any  such  records, 
files,  or  papers,  shall  refuse  or  neglect  to  exhibit  the  same  on  request,  as  aforesaid 
he  shall  forfeit  and  pay  the  sum  of  five  hundred  dollars;  Provided,  That  in  all 
legal  controversies  where  such  deed  or  title  shall  be  the  subject  of  judicial  investi- 
gation, the  recital  in  said  deed  shall  be  prima  facie  evidence  of  its  truth,  and  that 
the  requirements  of  the  law  had  been  complied  with  by  the  officers  of  the  govern- 
ment. 

APPRAISAL. 
Appraisal  of  Life  Interest  after  Death  of  Life  Tenant. 

Where  a  life  tenant  had  died  before  the  assessment  of  the  tax  on 
his  interest  mortality  tables  should  not  be  used  in  assessing  the 
value  of  the  interest.  Kahn  v.  Herold,  147  Fed.  575,  affirmed  in 
86  C.  C.  A.  598,  159  Fed.  608,  163  Fed.  947. 

Remainder  after  Death  or  Remarriage. 

To  appraise  an  interest  after  the  death  or  remarriage  of  the 
widow  mortuary  tables  should  not  be  used.    While  the  probability 


1901.]  UNITED    STATES.  1275 

of  death  may  be  estimated  from  these  tables,  there  are  no  statistics 
available  from  which  the  probability  of  remarriage  may  even  be 
conjectured.  Herold  v.  Shanley,  146  Fed.  20,  76  C.  C.  A.  478,  affirm- 
ing 141  Fed.  423  (N.  J.). 

Purchase  money  mortgages  constitute  a  debt  of  the  estate  to 
be  deducted  from  the  residuary  legacy  in  assessing  the  inheritance 
tax.  Brown  v.  Kinney,  128  Fed.  310,  reversed  on  another  point  in 
137  Fed.  1018. 

THE    AMENDMENT  OF  1901. 

31  U.  S.  St.,  p., 946  (Statute  of  March  2,  1901,  s.  10). 

S.  10.  That  section  twenty-nine  of  said  act  is  hereby  amended  by  adding 
at  the  end  of  said  section  the  following:  "Provided,  That  nothing  in  this  section 
shall  be  construed  to  apply  to  bequests  or  legacies  for  uses  of  a  religious,  literary, 
charitable,  or  educational  character,  or  for  the  encouragement  of  art,  or  to  legacies 
or  bequests  to  societies  for  the  prevention  of  cruelty  to  children,  including  all 
bequests  or  legacies  of  such  character  on  which  the  tax  imposed  had  not  been 
paid  or  collected  on  the  first  day  of  March,  nineteen  hundred  and  one:  And  pro- 
vided further.  That  the  provisions  of  this  act  and  of  the  act  hereby  amended  shall 
not  be  held  to  apply  to  any  estate  where  the  testator  or  intestate  died  before 
June  thirteenth,  eighteen  hundred  and  ninety-eight,"  so  that  said  section  as 
amended  shall  read  as  follows:  — 

S.  11.  That  section  thirty  of  said  act  is  hereby  amended  so  as  to  read  as  fol- 
lows :  — 

"S.  30.  That  the  tax  or  duty  aforesaid  shall  be  due  and  payable  in  one  year 
after  the  death  of  the  testator  and  shall  be  a  lien  and  charge  upon  the  property 
of  every  person  who  may  die  as  aforesaid  for  twenty  years,  or  until  the  same 
shall,  within  that  period,  be  fully  paid  to  and  discharged  by  the  United  States; 
and  every  executor,  administrator,  or  trustee  having  in  charge  or  trust  any 
legacy  or  distributive  share,  as  aforesaid,  shall  give  notice  thereof,  in  writing, 
to  the  collector  or  deputy  collector  of  the  district  where  the  deceased  grantor  or 
bargainor  last  resided  within  thirty  days  after  he  shall  have  taken  charge  of 
such  trust,  and  every  executor,  administrator,  or  trustee,  before  payment  and 
distribution  to  the  legatees,  or  any  parties  entitled  to  beneficial  interest  therein, 
shall  pay  to  the  collector  or  deputy  collector  of  the  district  of  which  the  deceased 
person  was  a  resident,  or  in  which  the  property  was  located  in  case  of  non-resi- 
dents, the  amount  of  the  duty  or  tax  assessed  upon  such  legacy  or  distributive 
share,  and  shall  also  make  and  render  to  the  said  collector  or  deputy  collector  a 
schedule,  list,  or  statement,  in  duplicate,  oi  the  amount  of  such  legacy  or  distribu- 
tive share,  together  with  the  amount  of  duty  which  has  accrued,  or  shall  accrue, 
thereon,  verified  by  his  oath  or  affirmation,  to  be  administered  and  certified 
thereon  by  some  magistrate  or  officer  having  lawful  power  to  administer  such 
oaths,  in  such  form  and  manner  as  may  be  prescribed  by  the  Commissioner  of 
Internal  Revenue,  which  schedule,  list,  or  statement  shall  contain  the  names 
of  each  and-  every  person  entitled  to  any  beneficial  interest  therein,  together 
with  the  clear  value  of  such  interest,  the  duplicate  of  which  schedule,  list,  or 
statement  shall  be  by  him  immediately  delivered,  and  the  tax  thereon  paid  to 


1276  STATUTES  ANNOTATED.  [U.  S.  St. 

such  collector;  and  upon  such  payment  and  delivery  of  such  schedule,  list,  or 
statement  said  collector  or  deputy  collector  shall  grant  to  such  person  paying 
such  duty  or  tax  a  receipt  or  receipts  for  the  same  in  duplicate,  which  shall  be 
prepared  as  hereinafter  provided.      Such  receipt  or  receipts,  duly  signed  and  de- 
livered by  such  collector  or  deputy  collector,  shall  be  sufficient  evidence  to  entitle 
such  executor,  administrator,  or  trustee   to  be  credited   and  allow  such   pay- 
ment by  every  tribunal  which,  by  the  laws  of  any  state  or  territory,  is,  or  may  be, 
empowered  to  decide  upon  and  settle  the  accounts  of  executors  and  adminis- 
trators.    And  in  case  such  executor,  administrator,  or  trustee  shall  refuse  or 
neglect  to  pay  the  aforesaid  duty  or  tax  to  the  collector  or  deputy  collector,  as 
aforesaid,  within  the  time  hereinbefore  provided,  or  shall  neglect  or  refuse  to  deliver 
to  said  collector  or  deputy  collector  the  duplicate  of  the  schedule,  list,  or  state- 
ment of  such  legacies,  property,  or  personal  estate,  under  oath,  as  aforesaid,  or 
shall  neglect  or  refuse  to  deliver  the  schedule,  list,  or  statement  of  such  legacies, 
property,  or  personal  estate,  under  oath,  as  aforesaid,  or  shall  deliver  to  said 
collector  or  deputy  collector  a  false  schedule  or  statement  of  such  legacies,  prop- 
erty, or  personal  estate,  or  give  the  names  and  relationship  of  the  persons  entitled 
to  beneficial  interests  therein  untruly,  or  shall  not  truly  and  correctly  set  forth 
and  state  therein  the  clear  value  of  such  beneficial  interest  or  where  no  adminis- 
tration upon  such  property  or  personal  estate  shall  have  been  granted  or  allowed 
under  existing  laws,  the  collector  or  deputy  collector  shall  make  out  such  lists 
and  valuation  as  in  other  cases  of  neglect  or  refusal,  and  shall  assess  the  duty 
thereon;   and  the  collector  shall  commence  appropriate  proceedings  before  any 
court  of  the  United  States,  in  the  name  of  the  United  States,  against  such  person 
or  persons  as  may  have  the  actual  or  constructive  custody  or  possession  of  such 
property  or  personal  estate,  or  any  part  thereof,  and  shall  subject  such  property 
or  personal  estate,  or  any  portion  of  the  same,  to  be  sold  upon  the  judgment  or 
decree  of  such  court,  and  from  the  proceeds  of  such  sale  the  amount  of  such  tax 
or  duty,  together  with  all  costs  and  expenses  of  every  description  to  be  allowed  by 
such  court,  shall  be  first  paid,  and  the  balance,  if  any,  deposited  according  to 
the  order  of  such  court,  to  be  paid  under  its  direction  to  such  person  or  persons 
as  shall  establish  title  to  the  same.     The  deed  or  deeds,  or  any  proper  conveyance 
of  such  property  or  personal  estate,  or  any  portion  thereof,  so  sold  under  such 
judgment  or  decree,  executed  by  the  officer  lawfully  charged  with  carrying  the 
same  into  effect,  shall  vest  in  the  purchaser  thereof  all  the  title  of  the  delinquent 
to  the  property  or  personal  estate  sold  under  and  by  virtue  of  such  judgment 
or  decree,  and  shall  release  every  other  portion  of  such  property  or  personal 
estate  from  the  lien  or  charge  thereon  created  by  this  act.     And  every  person 
or  persons  who  shall  have  in  his  possession,  charge,  or  custody  any  record,  file, 
or  paper  containing,  or  supposed  to  contain,  any  information  concerning  such 
property  or  personal  estate,  as  aforesaid,  passing  from  any  person  who  may  die, 
as  aforesaid,  shall  exhibit  the  same  at  the  request  of  the  collector  or  deputy 
collector  of  the  district,  and  to  any  law  officer  of  the  United  States,  in  the  per- 
formance of  his  duty  under  this  act,  his  deputy  or  agent,  who  may  desire  to  ex- 
amine the  same.     And  if  any  such  person,  having  in  his  possession,  charge,  or  cus- 
tody, any  such  records,  files,  or  papers,  shall  refuse  or  neglect  to  exhibit  the 
same  on  request,  as  aforesaid,  he  shall  forfeit  and  pay  the  sum  of  five  hundred 
dollars:  Provided,  That  in  all  legal  controversies  where  such  deed  or  title  shall 
be  the  subject  of  judicial  investigations,  the  recital  in  said  deed  shall  be  prima 


1901.]  UNITED  STATES.  1277 

jade  evidence  of  its  truth,  and  that  the  requirements  of  the  law  had  been  com- 
plied with  by  the  officers  of  the  government.  And  provided  further,  That  in  case 
of  wilful  neglect,  refusal,  or  false  statement  by  such  executor,  administrator,  or 
trustee,  as  aforesaid,  he  shall  be  liable  to  a  penalty  of  not  exceeding  one  thousand 
dollars,  to  be  recovered  with  costs  of  suit.  Any  tax  paid  under  the  provisions 
of  sections  twenty-nine  and  thirty  shall  be  deducted  from  the  particular  legacy 
or  distributive  share  on  account  of  which  the  same  is  charged." 

REPEAL  OF   1902. 

32  U.  S.  St.  (Statute  of  April  12,  1902,  s.  7)  repeals  the  legacy  taxes. 

S.  8.  That  all  taxes  or  duties  imposed  by  section  twenty-nine  of  the  Act  of 
June  thirteenth,  eighteen  hundred  and  ninety-eight,  and  amendments  thereof, 
prior  to  the  taking  effect  of  this  act,  shall  be  subject,  as  to  lien,  charge,  collec- 
tion and  otherwise,  to  the  provisions  of  section  thirty  of  said  Act  of  June  thir- 
teenth, eighteen  hundred  and  ninety-eight,  and  amendments  thereof,  which  are 
hereby  continued  in  force,  as  follows:  — 

When  Tax  is  **Imposed." 

Where  Testator  Died  within  One  Year  before  Repeal. 

Where  the  testator  died  March  15,  1902,  leaving  a  will  which  was 
probated  May  3,  1902,  and  where  the  legacies  were  not  paid  before 
1905,  the  court  holds  that  they  are  subject  to  the  statute  of  1898; 
that  the  tax  was  imposed  on  an  immediate  right  of  possession  or 
enjoyment  during  the  operation  of  the  statute  of  1898  in  such  sense 
as  to  be  within  the  intent  of  the  saving  clause  of  the  repealing  statute. 

The  court  concludes  that  upon  the  passing  by  death  of  a  vested 
right  to  the  immediate  possession  or  enjoyment  of  a  legacy  or  dis- 
tributive share  there  was  imposed  the  tax  or  duty  exacted  upbn 
every  such  right  of  succession  which  was  saved  by  the  saving  clause 
of  the  repealing  act. 

The  fact  that  under  the  statute  of  1898  the  tax  was  not  due  and 
payable  for  a  year  after  the  death  of  the  testator  does  not  free  the 
estate  from  the  tax.    Hertz  v.  Woodman,  218  U.  S.  205,  30  S.  Ct.  621. 

This  case  would  seem  to  supersede  the  following  cases,  which 
appear  to  hold  that  no  tax  can  be  levied  where  the  testator  died 
within  one  year  before  the  repeal  of  the  inheritance  tax:  United 
States  v.  Marion  Trust  Co.,  205  U.  S.  539,  27  S.  Ct.  794,  51  L.  Ed. 
119,  affirming  142  Fed.  120,  73  C.  C.  A.  610,  135  Fed.  866,  127  Fed. 
386.  McCoach  v.  Bamberger,  161  Fed.  90,  affirming  142  Fed.  120, 
73  C.  C.  A.  610.  See  Tilghman  v.  Eidman,  131  Fed.  651.  affirmed 
in  203  U.  S.  580,  27  S.  Ct.  779. 

Where  a  testator  died  in  December,  1901,  bequeathing  certain 
property  in  trust  to  pay  the  income  to  the  son  for  life,  the  life  estate 
of  the  son  became  vested  on  the  death  of  the  testator  and  was  there- 


1278  STATUTES  ANNOTATED.  [U.  S.  St. 

fore  subject  to  the  inheritance  tax.  The  tax  was  "imposed"  by  the 
statute  itself  at  the  time  of  vesting  without  reference  to  the  time 
of  payment  or  to  its  assessment.  Westhus  v.  St.  Louis  Union  Trust 
Co.,  164  Fed.  795,  90  C.  C.  A.,  441  168  Fed.  617. 

Where  Estate  Unsettled. 

The  testator  died  in  1900,  but  owing  to  a  dispute  among  heirs  and 
to  the  pendency  of  unsettled  claims  the  estate  was  not  distributed 
until  after  the  passage  of  the  repealing  act;  and  pending  adminis- 
tration no  effort  was  made  by  the  government  to  assess  the  tax 
upon  the  estate.  Under  these  circumstances  no  tax  or  duty  had 
been  "imposed"  under  the  act  of  1898  before  the  repealing  statute, 
and  therefore  the  legacy  is  not  subject  to  tax.  United  States  v. 
Marion  Trust  Co.,  143  Fed.  301,  74  C.  C.  A.  439,  affirmed  in  205 
U.  S.  539,  27  S.  Ct.  794,  51  L.  Ed.  1191. 

Income  not  Due. 

Where  legatees  were  entitled  under  a  will  to  receive  the  income  only 
when  they  reached  certain  ages  after  July  1,  1902,  when  the  statute 
of  1898  was  repealed,  such  income  is  not  subject  to  tax.  Union 
Trust  Co.  of  San  Francisco  v.  Lynch,  148  Fed.  49,  affirmed  164  Fed. 
161. 

REFUNDING. 

32  U.  S.  St.,  p.  406  (Statute  of  June  27,  1902). 

An  Act  to  provide  for  refunding  taxes  paid  upon  legacies  and  be- 
quests for  uses  of  a  religious,  charitable,  or  educational  character,  for  the 
encouragement  of  art,  and  so  forth,  under  the  Act  of  June  thirteenth, 
eighteen  hundred  and  ninety-eight,  and  for  other  purposes. 

S.  1.  Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
States  of  America  in  Congress  assembled.  That  the  Secretary  of  the  Treasury, 
under  appropriate  rules  and  regulations  to  be  prescribed  by  him,  be,  and  he  is 
hereby,  authorized  and  directed  to  pay,  out  of  any  money  in  the  treasury  not 
otherwise  appropriated,  to  the  corporations,  associations,  societies,  or  individuals 
as  trustees  or  executors,  such  sums  of  money  as  have  been  paid  by  them  as  taxes 
upon  bequests  or  legacies  for  uses  of  a  religious,  literary,  charitable,  or  educa- 
tional character,  or  for  the  encouragement  of  art,  or  legacies  or  bequests  to 
societies  for  the  prevention  of  cruelty  to  children,  under  the  provisions  of  section 
twenty-nine  of  the  Act  entitled  "An  Act  to  provide  ways  and  means  to  meet  war 
expenditures,  and  for  other  purposes,"  approved  June  thirteenth,  eighteen  hun- 
dred and  ninety-eight. 

S.  3.  That  in  all  cases  where  an  executor,  administrator,  or  trustee  shall 
have  paid,  or  shall  hereafter  pay,  any  tax  upon  any  legacy  or  distributive  share  of 


1902.]  UNITED  STATES.  1279 

personal  property  under  the  provisions  of  the  Act  approved  June  thirteenth, 
eighteen  hundred  and  ninety-eight,  entitled  "An  Act  to  provide  ways  and  means 
to  meet  war  expenditures,  and  for  other  purposes,"  and  amendments  thereof,  the 
secretary  of  the  treasury  be,  and  he  is  hereby,  authorized  and  directed  to  refund, 
out  of  any  money  in  the  treasury  not  otherwise  appropriated,  upon  proper 
application  being  made  to  the  Commissioner  of  Internal  Revenue,  under  such 
rules  and  regulations  as  may  be  prescribed,  so  much  of  said  tax  as  may  have  been 
collected  on  contingent  beneficial  interests  which  shall  not  have  become  vested 
prior  to  July  first,  nineteen  hundred  and  two.  And  no  tax  shall  hereafter  be 
assessed  or  imposed,  under  said  act  approved  June  thirteenth,  eighteen  hundred 
and  ninety-eight,  upon  or  in  respect  of  any  contingent  beneficial  interest  which 
shall  not  become  absolutely  vested  in  possession  or  enjoyment  prior  to  said  July 
first,  nineteen  hundred  and  two. 

On  Contingent  Beneficial  Interests. 

This  statute  was  declaratory  of  the  construction  of  the  act  of  1898 
as  amended  in  1901  placed  upon  it  by  the  court  that  remainder 
interests  are  not  taxable  until  possession  is  taken.  Vanderhilt  v. 
Eidman,  196  U.  S.  480,  25  S.  Ct.  331,  49  L.  Ed.  563. 

The  testator  died  January  5,  1901,  after  making  a  will  which 
left  property  to  the  trustees  in  trust  to  pay  the  income  to  the  daugh- 
ters of  the  testator  for  life,  and  on  her  death  leaving  to  the  issue, 
and  in  default  of  issue  to  the  testator's  heirs;  the  interests  created 
are  vested  and  subject  to  tax.  Chouteau  v.  Allen,  95  C.  C.  A.  582, 
170  Fed.  412,  relying  upon  Westhus  v.  Union  Trust  Company,  164 
Fed.  795,  168  Fed.  617. 

Where  property  is  placed  in  trust  to  pay  to  the  widow  a  certain 
annual  income  and  pay  the  balance  to  the  children,  the  corpus  to 
be  divided  among  the  children,  the  children  have  a  vested  estate 
in  the  testator's  residuary  estate  but  not  in  the  portion  of  the  estate 
set  apart  for  the  benefit  of  the  widow  for  her  life.  Title  Guarantee 
&  Trust  Co.  V.  Ward,  164  Fed.  459.  See  Brown  v.  Kinney,  128  Fed. 
310,  reversed  137  Fed.  1018,  70  C.  C.  A.  679,  on  the  authority 
of  Vanderhilt  v.  Eidman,  196  U.  S.  480,  25  S.  Ct.  331,  49  L.  Ed.  563. 

Payment  in    Ignorance. 

Where  a  tax  was  paid  by  executors  in  ignorance  of  the  fact  that 
the  life  tenancy  upon  which  the  tax  they  were  paying  had  been 
assessed  had  been  terminated  by  the  death  of  the  life  tenant  before 
the  assessment  was  made  —  this  is  not  a  voluntary  payment;  as 
to  constitute  a  voluntary  payment  it  mXist  be  made  with  full 
knowledge  of  all  the  facts  and  circumstances.  Kahn  v.  Herold, 
147  Fed.  575,  affirmed  in  86  C.  C.  A.  598,  159  Fed.  608,  163  Fed.  947. 


1280  STATUTES  ANNOTATED.  [U.  S.  St. 

Limitations. 

United  States  Revised  Statutes,  section  3228,  limiting  the  time 
for  presenting  claims  for  refund  of  revenue  taxes  has  no  application 
to  a  claim  for  the  refunding  of  inheritance  taxes  illegally  collected 
under  the  statute  of  1898.     Thacher  v.   United  States,  149  Fed  902. 

Interest. 

Interest  may  be  allowed  in  a  suit  to  recover  legacy  taxes  paid, 
as  it  is  not  in  form  an  action  against  the  United  States.  Kinney  v, 
Conant,  166  Fed.  720,  92  C.  C.  A.  410. 

Practice  on  Refunding. 

The  tax  was  paid  on  demand  under  written  protest,  giving  the 
grounds  for  refusal  the  case  arising  under  the  United  StatesRevenue 
Act,  the  testator  being  domiciled  in  New  York  State.  On  denial 
of  a  petition  for  refunding,  action  was  brought  in  the  U.  S. 
Circuit  Court.  Knowlton  v.  Moore,  178  U.  S.  41,  47,  20  S.  Ct.  747, 
44  L.  Ed.  969. 

High  V.  Coyne,  178  U.  S.  Ill,  follows  Knowlton  v.  Moore,  178  U.  S. 
41,  and  holds  that  the  interpretation  of  the  statute  which  was  held 
to  be  unsound  in  Knowlton  v.  Moore  was  adopted  and  enforced  by 
the  officers  charged  with  the  administration  of  the  law.  The  ends 
of  justice,  therefore,  require  that  the  interpretation  of  the  statute 
should  not  be  foreclosed  by  the  decree  of  the  court,  although  there 
is  nothing  in  the  record  to  enable  the  court  to  say  that  the  statute 
was  by  the  collector  mistakingly  construed.  High  v.  Coyne,  178 
U.  S.  111.    Fidelity  Insurance  Co.  v.  McCl,ain,  178  U.  S.  113. 

Where  it  appears  by  the  record  that  the  tax  actually  levied  and 
paid  on  legacies  under  the  United  States  inheritance  law  were 
computed  upon  the  mistaken  assumption  that  the  amount  of  the 
estate  of  the  testatrix  was  the  measure  of  the  tax  and  not  the  amount 
of  the  respective  legacies,  the  taxpayer  is  entitled  to  be  repaid  the 
excess  this  imposed  upon  his  legacy.  Sherman  v.  United  States, 
178  U.  S.  150.  152. 


TABLES, 


States  with  an  Inheritance  Tax  Law.    States  which  Tax 

Direct  Inheritances.     States  which  Tax 

Collateral  Inheritances. 

c^„«.^              .                                        Inheritance  Direct  Collateral 

**^**®*  tax  law?  inht.  tax?  inht.  tax? 

Alabama No  No  No 

Arizona No  No  No 

Arkansas .  Yes  Yes  Yes 

California    Yes  Yes  Yes 

Colorado Yes  Yes  Yes 

Connecticut    : Yes  Yes  Yes 

Delaware Yes  No  Yes 

District  of  Columbia No  No  No 

Florida No  No  No 

Georgia No  No  No 

Hawaii Yes  Yes  Yes 

Idaho Yes  Yes  Yes 

Illinois Yes  Yes  Yes 

Indiana No  No  No 

Iowa  .  .  . Yes  No  Yes 

Kansas* Yes  Yes  Yes 

Kentucky    Yes  No  Yes 

Louisiana    Yes  Yes  Yes 

Maine Yes  Yes  Yes 

Maryland    Yes  No  Yes 

Massachusetts   Yes  Yes  Yes 

Michigan Yes  Yes  Yes 

Minnesota Yes  Yes  Yes 

Mississippi No  No  No 

Missouri    Yes  No  Yes 

Montana Yes  Yes  Yes 

Nebraska Yes  Yes  Yes 

Nevada No  No  No 

New  Hampshire  . Yes  No  Yes 

New  Jersey Yes  No  Yes 


1282  TABLES. 

Inheritance 

State.  tax  law? 

New  Mexico No 

New  York Yes 

North  Carolina    Yes 

North  Dakota    Yes 

Ohio Yes 

Oklahoma Yes 

Oregon Yes 

Pennsylvania   Yes 

Porto  Rico    Yes 

Rhode  Island No 

South  Carolina No 

South  Dakota Yes 

Tennessee Yes 

Texas Yes 

Utah Yes 

Vermont   Yes 

Virginia Yes 

Washington    Yes 

West  Virginia Yes 

Wisconsin Yes 

Wyoming    Yes 


Direct 
inht.  tax? 

Collateral 
inht.  tax? 

No 

No 

Yes 

Yes 

Yes 

Yes 

No 

Yes 

No 

Yes 

Yes 

Yes 

•  Yes 

Yes 

No 

Yes 

Yes 

Yes 

No 

No 

No 

No 

Yes 

Yes 

Yes 

Yes 

No 

Yes 

Yes 

Yes 

No 

Yes 

No 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

RATES  AND  EXEMPTIONS. 


1283 


RATES  AND  EXEMPTIONS, 


f 

Direct  Inheritances. 

Collateral  Inheritances. 

Rate 

Exemption 

Rate 

Exemption 

Alabama  1 . . 

Not  taxed 

Not  taxed 

Arizona.  .  .  . 

Not  taxed 

Not  taxed 

Arkansas* 

1% 

$5,000 

2-6% 

$1,000-2,000 

California.  . 

1-5% 

10,000-24,000 

2y2-25% 

500-2,000 

Colorado. . . 

2% 

10,000 

3-10% 

500 

Conn.*  a.  . . 

1% 

10,000 

5% 

500 

Delaware  .  . 

. . 

Not  taxed 

1-5% 

500 

Dist.ofCol. 

Not  taxed 

Not  taxed 

Florida  .... 

Not  taxed 

. . 

Not  taxed 

Georgia.  . .  . 

Not  taxed 

. . 

Not  taxed 

Hawaii  .... 

2% 

1,000 

5% 

500 

Idaho  

1-3% 

4,000-10,000 

lH-15% 

500-2,000 

Illinois  .... 

1-2% 

20,000 

2-10% 

500-2,000 

Indiana.  . .  . 

Not  taxed 

Not  taxed 

Iowa*  b  . .  . 

Not  taxed 

5% 

1,000 

Kansas  .... 

1-5% 

5,000 

3-15% 

0-1,000 

Kentucky .  . 

Not  taxed 

5% 

500 

Louisiana  c. 

^        2% 

10,000 

5% 

Nothing 

Maine    .... 

1-2% 

500-10,000 

4-7% 

500 

Maryland* 

.   . 

Not  taxed 

5% 

500 

Mass 

1-2% 

1,000-10,000 

3-5% 

1,000 

Michigan  .  . 

1% 

2,000 

5% 

100 

Minn 

i^H% 

3,000-10,000 

3-15% 

100-1,000 

Mississippi 

Not  taxed 

.  . 

Not  taxed 

Missouri 

.. 

Not  taxed 

5% 

Nothing 

Montana*  . 

1% 

7,500 

5% 

500 

Nebraska  .  . 

1% 

10,000 

2-6% 

500-2,000 

Nevada 

Not  taxed 

.   . 

Not  taxed 

New  Hamp. 

,  . 

Not  taxed 

5% 

Nothing 

New  Jersey 

.  . 

Not  taxed 

5% 

500 

New  Mex.  . 

Not  taxed 

• 

Not  taxed 

New  York  . 

1-4% 

5,000 

5-8% 

1,000 

N.  Caro.  d  . 

H7o 

2,000 

lJ^-15% 

2,000 

1284 

TABLES. 

Direct  Inheritances. 

Collateral 

Inheritances. 

N.  Dakota 

Not  taxed 

2% 

25,000 

Ohio* 

Not  taxed 

5% 

200 

Oklahoma  e 

1% 

5,000-10,000 

l>^-5% 

100-500 

Oregon  /  . . 

1% 

5,000 

2-6% 

500-2,000 

Penn 

Not  taxed 

5% 

250 

Porto  Rico 

1-3% 

200 

3-9% 

200 

R.  Island  .  . 

. , 

Not  taxed 

Not  taxed 

S.  Carolina. 

, , 

Not  taxed 

.   . 

Not  taxed 

S.  Dakota  . 

1% 

5,000-20,000 

2-10% 

100-500 

Tennessee* 

1-1M% 

5,000 

5% 

250 

Texas 

Not  taxed 

2-12% 

500-2,000 

Utah*    .... 

5% 

10,000 

5% 

10,000 

Vermont   . . 

.   . 

Not  taxed 

5% 

Nothing 

Virginia  .  .  . 

.   . 

Not  taxed 

5% 

Nothing 

Washington* 

1% 

10,000 

3-12% 

Nothing 

W.  Virginia 

1-3% 

10,000-15,000 

3-15% 

Nothing 

Wisconsin .  . 

1-3% 

2,000-10,000 

lJ^-15% 

100-500 

Wyoming* 

2% 

10,000 

5% 

500 

*  The  exemption  in  the  states  marked  with  an  asterisk  has  been  construed  to 
apply  to  the  estate  as  a  whole  rather  than  to  individual  shares. 

a.  Connecticut  —  For  non-residents,  exemption  varies  according  to  portion 
of  estate  within  the  state. 

h.  Iowa  taxes  non-resident  aliens  10-20%. 

c.  Louisiana  exempts  property  that  bore  its  just  proportion  of  taxes  during 
owner's  life. 

d.  North  Carolina  —  Exempts  husband  or  wife. 

e.  Oklahoma  —  The  tax  increases  progressively  so  that  a  litera-1  construction 
would  result  in  confiscation  of  all  in  excess  of  certain  amounts  in  large  estates. 

/.  Oregon  —  Exempts  entire  estate  if  less  than  $10,000;  direct;  $500  to  $5,000 
collateral. 


CORPORATION  TAX. 


1285 


States  which  tax  Stock  of  Domestic  Corporations  owned 
by  Non-residents.     States  which  tax  Stock  owned 
by  Non-residents  of  Foreign  Corporations 
owning  property  within  State.^ 


Alabama 

Arizona 

Arkansas   

California  t    ....... 

Coloradot**    

Connecticut  t    

Delaware 

Florida 

Georgia 

Idahot   

lUinoisJ    

Indiana 

lowaj 

Kansastf  * 

Kentuckyt    

Louisiana     

Mainet^ 

Maryland    

MassachusettsJ    .  .  . 

Michigan  t** 

Minnesotal   

Mississippi     

Missourit     

Montanal    

NebraskaJ 

Nevada 

New  Hampshire t** 

New  Jerseyt 

New  Mexico 


Are  shares 

of  non-residents 

in  local  corp. 

subject  to  tax? 

No 

No 

Yes 

Yes 

Yes 

Yes 

No 

No 

No 

No§ 

Yes 

No 

Yes 

Yes 

Yes 

Yes 

Yes 

No 

Yes 

Yes 

Yes 

No 

Yes 

Not 

No§ 

No 

Yes 

Yes 

No 


Is  tax  claimed  on 

stock  of  foreign 

Corp.  owning 

prop,  in  state? 

No 

No 

* 


No 

* 

No 
No 

Yes 
No 
Yes 
No 

Yes 


No 
No 
No 
No 
No 
Yes 

Yes 

* 

No 

Yes 

* 

No 


1286 


TABLES. 


New  York  * 

North  Carolina  t 
North  Dakota   . 

Ohio 

Oklahomat**  .  . 

Oregont 

Pennsylvania  t  . 
Rhode  Island .  .  . 
South  Carolina  . 
South  Dakota t  • 

Tennessee  { 

Texas  

Utaht    

VermontJ**   .  .  . 

Virginia 

Washington  t  .  . 
West  Virginia  t  . 

Wisconsin  t 

Wyoming  t    .  .  .  . 


Are  shares 

of  non-residents 

in  local  corp. 

subject  to  tax? 

Is  tax  claimed  on 

stock  of  foreign 

Corp.  owning 

prop,  in  state? 

No 

No 

Yes 

* 

Not 

* 

Not 

No 

Yes 

♦ 

Not 

No 

No 

No 

No 

No 

No 

No 

Not 

No 

No§ 

« 

Not 

* 

Yes 

♦ 

Yes 

Yes 

No 

.♦ 

Yes 

Yes 

Yes 

No 

Yes 

Yes 

Not 

* 

*  This  question  does  not  seem  to  have  been  raised  or  passed  upon  in  the  states 
marked  with  an  asterisk. 

t  Under  substantially  similar  laws,  other  states  are  taxing  such  stock.  In  the 
states  so  marked,  however,  no  claim  is  made  for  such  a  tax,  or  else  there  is  no 
effective  method  provided  for  collecting  it. 

§  In  the  states  so  marked  it  was  apparently  the  opinion  of  their  tax  officials 
in  1910  that  they  were. not  entitled  to  collect  such  a  tax,  and  we  do  not  know 
that  the  law  is  now  being  construed  differently.  Their  laws,  however,  are 
practically  identical  with  the  laws  of  states  which  claim  this  tax  and  moreover 
contain  a  provision  for  enforcing  its  collection. 

t  In  states  so  marked  a  corporation  transferring  stock  or  delivering  securities 
is  held  responsible  itself,  if  the  inheritance  tax  has  not  been  paid. 

**  These  states  also  tax  registered  bonds  of  local  corporations  owned  by  non- 
residents. 

^  The  New  York  courts  have  laid  down  the  rule  that  the  location  of  the  prop- 
erty of, the  corporation  cannot  be  the  basis  for  jurisdiction  to  tax  succession  in  its 
stock.  In  re  Palmer,  183  N.  Y.  238,  241,  76  N.  E.  16,  affirming  102  N.  Y.  App. 
Div.  616,  92  N.  Y.  Suppl.  1137. 

2  Maine  does  not  tax  stock  owned  by  non-residents  in  Maine  corporations 
which  have  less  than  $1,000  of  property  in  the  state  of  Maine. 

•New  York  classifies  personal  property  as  "tangible"  or  "intangible." 


LIST  OF  CORPORATIONS.  1287 


LIST  OF  CORPORATIONS. 


The  following  is  a  list  of  the  more  important  corporations 
whose  securities  are  listed  on  the  various  stock  exchanges,  showing 
the  state  or  states  in  which  they  are  incorporated.  Those  marked 
with  an  asterisk  (*)  are  not  corporations,  but  joint  stock  companies 
or  voluntary  associations. 

State  where  incorp. 
Name  of  Company.  or  organized. 

Adams  Express  Co N.  Y.  * 

Adventure  Consolidated  Copper  Co Mich. 

Algomah  Mining  Co Mich. 

Allis-Chalmers  Co.. N.  J. 

AUouez  Mining  Co Mich. 

Amalgamated  Copper  Co N.J. 

American  Agricultural  Chemical  Co.  (The)    Conn. 

American  Beet  Sugar  Co N.J. 

American  Brake  Shoe  &  Foundry  Co N.  J. 

American  Can  Co N.  J. 

American  Car  &  Foundry  Co N.  J. 

American  Cotton  Oil  Co.  (The) N.  J. 

American  Express  Co N.  Y.* 

American  Hide  &  Leather  Co N.  J. 

American  Ice  Securities  Co N.  J. 

American  Light  &  Traction  Co N.J. 

American  Linseed  Co N.  J. 

American  Locomotive  Co N.  Y. 

American  Malt  Corp N.J. 

American  Pneumatic  Service  Co Del. 

American  Radiator  Co N.J. 

American  Sewer  Pipe  Co N.J. 

American  Shipbuilding  Co N.J. 

American  Smelters  Securities  Co N.J, 

American  Smelting  &  Refining  Co N.J. 

American  Snuff  Co • N .  J  . 

American  Steel  Foundries  Co ...N.J. 

American  Sugar  Refining  Co.  (The) N.J. 


1288  TABLES. 

American  Telephone  &  Telegraph  Co N.  Y. 

American  Tobacco  Co.  (The)    N.J. 

American  Type  Founders  Co N.J. 

American  Woolen  Co N.J. 

American  Writing  Paper  Co N.J. 

American  Zinc,  Lead  &  Smelting  Co Me. 

Amoskeag  Manufacturing  Co N.  H. 

Anaconda  Copper  Mining  Co Mont. 

Ann  Arbor  Railroad  Co Mich. 

Arizona  Commercial  Copper  Co Me. 

Arnold  Mining  Co Mich. 

Associated  Merchants  Co Conn, 

Associated  Oil  Co Cal. 

Atchison,  Topeka  &  Santa  Fe  Railway  Co.  (The) Kan. 

Atlantic  Coast  Line  Railroad  Co Va. 

Atlantic,  Gulf  &  West  Indies  Steamship  Lines    Me. 

Atlantic  Mining  Co Mich. 

Baltimore  &  Ohio  Railroad  Co.  (The) Md.,  Va. 

Batopilas  Mining  Co.  (The)    N,  Y. 

Bethlehem  Steel  Corp : N.J. 

Bonanza  Development  Co Colo. 

Boston  &  Albany  Railroad  Co Mass.,  N.  Y. 

Boston  &  Corbin  Copper  &  Silver  Mining  Co Me. 

Boston  &  Lowell  Railroad  Co Mass. 

Boston  &  Maine  Railroad  Co Mass.,  N.  H.,  Me. 

Boston  &  Northern  Street  Railway  Co Mass. 

Boston  &  Providence  Railroad  Corp Mass. 

Boston  Elevated  Railway  Co Mass. 

Boston,  Revere  Beach  &  Lynn  Railroad  Co Mass. 

Brill  (J.  G.)  Co.  (The) Pa. 

Brooklyn  Rapid  Transit  Co N.  Y. 

Brooklyn  Union  Gas.  Co.  (The) N.  Y. 

Buffalo,  Rochester  &  Pittsburgh  Railway  Co N.  Y.,  Pa. 

Butte-Ballaklava  Copper  Co Ariz. 

Butte  CoaHtion  Mining  Co N.  J. 

Butterick  Co.  (The)    N.  Y. 

Calumet  &  Arizona  Mining  Co Ariz. 

Calumet  &  Hecla  Mining  Co.   .  .  .• Mich. 

Cambria  Steel  Co Pa. 

Canada  Southern  Railway  Co Dom.  of  Canada 

Canadian  Pacific  Railway  Co Dom.  of  Canada 


LIST  OF  CORPORATIONS.  1289 

Capital  Traction  Co.  (The) Dist.  of  Columbia 

Centennial  Copper  Mining  Co Mich 

Central  Coal  &  Coke  Co .Mo. 

Central  of  Georgia  Railway  Co Ga. 

Central  Leather  Co j^    j 

Central  Pacific  Railway  Co Utah 

Central  Railroad  of  New  Jersey N.  J. 

Central  &  South  American  Telegraph  Co N.  Y. 

Central  Vermont  Railway  Co Vt. 

Chesapeake  &  Ohio  Railway  Co.  (The) Va. 

Chicago  &  Alton  Railroad  Co 111. 

Chicago  &  Eastern  Illinois  Railroad  Co 111. 

Chicago  &  Northwestern  Railway  Co 111.,  Wis.,  Mich. 

Chicago,  Burlington  &  Quincy  Railroad  Co 111. 

Chicago  Great  Western  Railroad  Co 111. 

Chicago  Junction  Railways  &  Union  Stock  Yards  Co. 

(The) N.J. 

Chicago,  Milwaukee  &  St.  Paul  Railway  Co Wis. 

Chicago  Pneumatic  Tool  Co N.  J. 

Chicago  Railways  Co III. 

Chicago,  St.  Paul,  Minneapolis  &  Omaha  Railway  Co. .  Wis. 

Chicago  Subway  Co N.  J. 

Chicago  Telephone  Co 111. 

Cincinnati,  Hamilton  &  Dayton  Railway  Co.  (The)  .  .  .  Ohio 
Cleveland,  Cincinnati,  Chicago  &  St.  Louis  Railway  Co. 

Ohio  &  Ind. 

Colorado  Fuel  &  Iron  Co.  (The) Colo. 

Colorado  &  Southern  Railway  Co.  (The) Colo. 

Columbus  &  Hocking  Coal  &  Iron  Co Ohio 

Commonwealth  Edison  Co III. 

Concord  &  Montreal  Railroad  Co.  (B.  &.M.)    N.  H. 

Connecticut     &     Passumpsic     Rivers    Railroad     Co. 

(B.  &M.)   Vt. 

Connecticut  River  Railroad  Co.  (B.  &  M.)     Mass.,  N.  H. 

Consolidated  Gas  Co N.  Y. 

Consolidated  Mercur  Gold  Mines  Co N.  J. 

Consolidation  Coal  Co.  (The)  Md. 

Copper  Range  Consolidated  Co N.  J. 

Corn  Products  Refining  Co N.  J. 

Cramp  &  Sons  Ship  &  Engine  Building  Co.  (The  Wm.)  Pa. 
Crex  Carpet  Co ^^^- 


1290  TABLES. 

Crucible  Steel  Co.  of  America N.  J. 

Cuban-American  Sugar  Co.  (The) N.J. 

Cumberland  Telephone  &  Telegraph  Co Ky. 

Daly  West  Mining  Co Col. 

Delaware  &  Hudson  Co.  (The) N.  Y. 

Delaware,  Lackawanna  &  Western  Railroad  Co.  (The) .  Pa. 

Denver  &  Rio  Grande  Railroad  Co Col.&Utah 

Detroit  United  Railway  Co Mich. 

Diamond  Match  Co.  (The)    111. 

Distillers  Securities  Corp N.  J. 

Dominion  Coal  Cos.,  Ltd Nova  Scotia 

Dominion  Iron  &  Steel  Co.,  Ltd Nova  Scotia 

Draper  Co Me. 

Duluth,  South  Shore  &  Atlantic  Railway  Co Mich.,  Wis. 

Duluth-Superior  Traction  Co.  (The) Conn. 

Du  Pont  (E.  I.)  De  Nemours  Powder  Co N.  J. 

East  Boston  Co Mass. 

East  Butte  Copper  Mining  Co.  (The)   Ariz. 

Eastern  Steamship  Co Me. 

Eastman  Kodak  Co N.J. 

Exiison  Electric  Illuminating  Co.  (The) Mass. 

Electric  Storage  Battery  Co.  (The) N.J. 

Elgin  National  Watch  Co 111. 

Erie  Railroad  Co N.  Y. 

Federal  Mining  &  Smelting  Co Del. 

Fitchburg  Railroad  Co Mass.,  N.  H.,  Vt.  &  N.  Y. 

Franklin  Mining  Co Mich. 

Galveston-Houston  Electric  Co Me. 

General  Asphalt  Co.  • N.J. 

General  Chemical  Co N.  Y. 

General  Electric  Co N.  Y. 

General  Motors  Co N.J. 

Giroux  Consolidated  Mines  Co Del. 

Goldfield  Consolidated  Mines  Co.  (The) Wyo 

Granby  Consolidated  Mim'ng,  Smelting  &  Power  Co., 

Ltd.  (The)    Brit.  Col. 

Gre^t  Northern  Iron  Ore  Properties    Minn.* 

Great  Northern  Railway  Co Minn. 

Greene  Cananea  Copper  Co Minn. 

Hancock  Consolidated  Mining  Co Mich. 

Havana  Electric  Railway  Co N.  J. 


LIST  OF  CORPORATIONS.  1291 

Helvetia  Copper  Co.  (The) Ariz. 

Hocking  Valley  Railway  Co. (The) Ohio 

Illinois  Brick  Co ;  .  .  HI, 

Illinois  Central  Railroad  Co 111. 

Independent  Brewing  Co Pa. 

Indiana  Mining  Co Mich. 

IngersoU-Rand  Co N.  J. 

Inspiration  Copper  Co Me. 

Interborough-Metropolitan  Co N.  Y. 

Interborough  Rapid  Transit  Co N.  Y. 

International  &  Great  Northern  Railroad  Co Texas 

International  Buttonhole  Machine  Co. Me. 

International  Harvester  Co N.J. 

International  Mercantile  Marine  Co N.J. 

International  Nickel  Co N.J. 

International  Paper  Co N.  Y. 

International  Power  Co N.J. 

International  Smelting  &  Refining  Co N.J.  , 

International  Steam  Pump  Co N.  J. 

Iowa  Central  Railway  Co 111. 

Island  Creek  Coal  Co Me. 

Isle  Royale  Copper  Co N.J. 

Kansas  City,  Fort  Scott  &  Memphis  Railway  Co.  (The)   Kan. 

Kansas  City,  Mexico  &  Orient  Railway  Co.  (The) Kan. 

Kansas  City  Railway  &  Light  Co N.  J. 

Kansas  City  Southern  Railway  Co.  (The)    Mo. 

Kerr  Lake  Mining  Co N.  Y. 

Keweenaw  Copper  Co Mich. 

Lackawanna  Steel  Co • N.  Y. 

Laclede  Gas  Light  Co.  (The)    Mo. 

Lake  Copper  Co Mich. 

Lake  Erie  &  Western  Railroad  Co 111. 

Lake  Shore  &  Mich.  Southern  Railway  Co. 

111.,  Ohio,  Mich.,  Ind.,  Pa.,  N.  Y. 

Lake  Superior  Corp.  (The)    N .  J . 

La  Salle  Copper  Co M^^^- 

Lehigh  Coal  &  Navigation  Co.  (The)    Pa. 

Lehigh  Valley  Railroad  Co Pa. 

Long  Island  Railroad  Co.  (The) • N.  Y. 

Louisville  &  Nashville  Railroad  Co .  Ky.     ^ 

Mackay  Companies  (The) Mass. 


1292  TABLES. 

Maine  Central  Railroad  Co Me. 

Manhattan  Railway  Co N.  Y. 

Manufacturers  Light  &  Heat  Co.  (The) Pa. 

Mass.  Consolidated  Mining  Co.  (The)    Mich. 

Massachusetts  Electric  Companies Mass.* 

Massachusetts  Gas  Companies Mass.* 

Mayflower  Mining  Co Mich. 

Mergenthaler  Linotype  Co N.  Y. 

Metropolitan  West  Side  Elevated  Railway  Co.  (The) .  .111. 

Mexican  Light  &  Power  Co.,  Ltd.  (The)     Dom.  of  Canada 

Mexican  Telephone  &  Telegraph  Co Me. 

Mexico  Consolidated  Mining  &  Smelting  Co Me. 

Miami  Copper  Co Del. 

Michigan  Central  Railroad  Co Mich. 

Michigan  Copper  Mining  Co Mich. 

Michigan  State  Telephone  Co Mich. 

MinneapoHs  &  St.  Louis  Railroad  Co Minn.,  la. 

Minneapolis  General  Electric  Co.  (The)   N.  J. 

Minneapolis,  St.  Paul  &  Sault  Ste.  Marie  Railway  Co. 

Minn.,  Wis.  &  Mich. 

Missouri,  Kansas  8^  T^xas  Railway  Co Kan. 

Missouri  Pacific  Railway  Co.  (The) Mo.,  Kan.,  Neb. 

Mohawk  Mining  Co - Mich. 

Montreal  Light,  Heat  &  Power  Co.  (The)    Quebec 

Montreal  Street  Railway  Co Quebec 

Nashville,  Chattanooga  &  St.  Louis  Railway  Co Tenn. 

National  Biscuit  Co N.J. 

National  Carbon  Co N.J. 

National  EnameHng  &  Stamping  Co N.J. 

National  Fire  Proofing  Co Pa. 

National  Lead  Co N.J. 

National  Railways  of  Mexico    Mex. 

Nevada  Consolidated  Copper  Co Me. 

New  Arcadian  Copper  Co Mich. 

New  England  Cotton  Yarn  Co.  (The) Mass. 

New  England  Telephone  &  Telegraph  Co N.  Y. 

New  York  Air  Brake  Co.  (The) N.J. 

New  York  Central  &  Hudson  River  Railroad  Co N.  Y. 

New  York,  Chicago  &  St.  Louis  Railroad  Co.  (The) 

N.  Y.,  Ohio,  Ind.,  Pa. 
New  York  Dock  Co N.  Y. 


LIST  OF  CORPORATIONS.  1293 

New  York,  New  Haven  &  Hartford  Railroad  Co.  Conn.,  Mass.,  R.  I. 

New  York,  Ontario  &  Western  Railway  Co N.  Y. 

New  York,  Susquehanna  &  Western  Railroad  Co N.  J.,  Pa. 

Nipissing  Mines  Co Me. 

Norfolk  &  Western  Railway  Co Va. 

North  American  Co.  (The)    N.J. 

North  Butte  Mining  Co Minn. 

North  Lake  Mining  Co Mich. 

Northern  Central  Railway  Co.  (The)    Pa.,  Md. 

Northern  Ohio  Traction  &  Light  Co Ohio 

Northern  Pacific  Railway  Co Wis. 

Northern  Securities  Co N.J. 

Northern  Texas  Electric  Co Me. 

Ojibway  Mining  Co Mich. 

Old  Colony  Copper  Co Mich. 

Old  Colony  Railroad  Co Mass. 

Old  Dominion  Copper  Mining  &  Smelting  Co Me. 

Osceola  Consolidated  Mining  Co Mich. 

Otis  Elevator  Co N.  J. 

Pacific  Coast  Co.  (The) N.  J. 

Pacific  Mail  Steamship  Co N.  Y. 

Pacific  Telephone  &  Telegraph  Co.  (The) Cal. 

Parrot  Silver  &  Copper  Co Mont. 

Pennsylvania  Railroad  Co.  (The) Pa. 

Pennsylvania  Steel  Co N.J. 

People's  Gas  Light  &  Coke  Co 111. 

Peoria  &  Eastern  Railway  Co Ill- 

Pere  Marquette  Railroad  Co Mich.,  Ind. 

Philadelphia  Co Pa. 

Philadelphia  Electric  Co N.J. 

Philadelphia  Rapid  Transit  Co Pa. 

Pittsburgh  Brewing  Co Pa- 

Pittsburgh,  Cincinnati,  Chicago  &  St.  Louis  Railway 

Co.  (The)  Pa.,  W.  Va.,  Ohio,  Ind.,  111. 

Pittsburgh  Coal  Co N.  J. 

Pittsburgh,  Fort  Wayne  &  Chicago  Railway  Co. 

Ohio,  Ind.,  111.  &  Pa. 

Pittsburgh  Plate  Glass  Co Pa- 
Pressed  Steel  Car  Co N.  J. 

Pullman  Co.  (The)    ^'^' 

Quicksilver  Mining  Co N.  Y. 


1294  TABLES. 

Quincy  Mining  Co.  Mich. 

Railway  Steel-Spring  Co N.J. 

Ray  Consolidated  Copper  Co Me. 

Reading  Co Pa. 

Reece  Button-Hole  Machine  Co Me. 

Reece  Folding  Machine  Co. Me. 

Republic  Iron  &  Steel  Co N.J. 

Rock  Island  Co.  (The) N.  J. 

Rotary  Ring  Spinning  Co Del. 

Rutland  Railroad  Co Vt.,  N.  Y. 

St.  Joseph  &  Grand  Island  Railway  Co.  (The)    Kan.,  Neb. 

St.  Louis  &  San  Francisco  Railroad  Co Mo. 

St.  Louis  Southwestern  Railway  Co Mo. 

St.  Mary's  Mineral  Land  Co N.  J. 

San  Pedro,  Los  Angeles  &  Salt  Lake  Railroad  Co Utah 

Santa  Fe  Gold  &  Copper  Mining  Co N.J. 

Sao  Paulo  Tramway  Light  &  Power  Co.,  Ltd.  (The)  .  .Ont. 

Savannah  Electric  Co Ga. 

Sears,  Roebuck  &  Co N.  Y. 

Shannon  Copper  Co Del. 

Shattuck  Arizona  Copper  Co Minn. 

Sloss  Sheffield  Steel  &  Iron  Co N.  J. 

South  Utah  Mines  &  Smelters    Me. 

Southern  Pacific  Co Ky. 

Southern  Railway  Co Va. 

Standard  Oil  Co N.  J. 

Superior  &  Boston  Copper  Co Ariz. 

Superior  &  Pittsburgh  Copper  Co Minn. 

Superior  Copper  Co Mich. 

Swift  &  Co 111. 

Tamarack  Mining  Co Mich. 

Tennessee  Coal,  Iron  &  Railroad  Co Tenn. 

Tennessee  Copper  Co. N.  J. 

Texas  Co.  (The)    Texas 

Texas  &  Pacific  Railway  Co.  (The)  U.  S. 

Texas  Pacific  Land  Trust Texas* 

Third  Avenue  Railroad  Co.  (The) N.  Y. 

Toledo  Railways  &  Light  Co.  .  ! Ohio 

Toledo,  St.  Louis  &  Western  Railroad  Co Ind. 

Tonopah  Mining  Co.,  Nevada  (The) Del. 

Torrington  Co Me. 


LIST  OF  CORPORATIONS.  1295 

Twin  City  Rapid  Transit  Co N.J. 

Union  Bag  &  Paper  Co.  (The)    N.J. 

Union  Pacific  Railroad  Co Utah 

Union  Traction  Co.  (Phila.)    Pa. 

United  Boxboard  Co N.  J. 

United  Cigar  Manufacturers'  Co ...N.  Y. 

United  Dry  Goods  Companies    Del. 

United  Fruit  Co N.J. 

United  Gas  Improvement  Co.  (The)   Pa. 

United  Railways  Investment  Co N.J. 

United  Shoe  Machinery  Corp N.J. 

United  States  Cast  Iron  Pipe  &  Foundry  Co N.J. 

United  States  Express  Co N.  Y.* 

United  States  Realty  &  Improvement  Co N.J. 

United  States  Reduction  &  Refining  Co N.J. 

United  States  Rubber  Co N.J. 

United  States  Smelting  Refining  &  Mining  Co Me. 

United  States  Steel  Corp N.  J. 

Utah-Apex  Mining  Co Me. 

Utah  Consolidated  Mining  Co N.J. 

Utah  Copper  Co N.  J. 

Vandalia  Railroad  Co Ind.,  111. 

Victoria  Copper  Mining  Co Mich. 

Virginia-Carolina  Chemical  Co '. N.J. 

Virginia  Iron,  Coal  &  Coke  Co •  Va. 

Virginian  Railway  Co Va. 

Wabash  Pittsburgh  Terminal  Railway  Co.  (The) .  .  Pa.,  Ohio,  W.  Va. 

Wabash  Railroad  Co Ill-,  Ind.,  Mich.,  Mo.,  Ohio 

Wells  Fargo  &  Co Col. 

West  End  Street  Railway  Co Mass. 

Western  Electric  Co Ill- 
Western  Maryland  Railroad  Co Md. 

Western  New  York  &  Pennsylvania  Railway  Co Pa.,  N.  Y. 

Western  Telephone  &  Telegraph  Co N.  J. 

Western  Union  Telegraph  Co N.  Y. 

Westinghouse  Electric  &  Manufacturing  Co Pa. 

Wheeling  &  Lake  Erie  Railroad  Co Ohio 

Winona  Copper  Co ^ich. 

Wisconsin  Central  Railway  Co .• Wis. 

Wolverine  Copper  Mining  Co Mich. 

Wyandot  Copper  Co.. • Mich. 


INDEX. 


[References  are  to  pages.] 


ACCELERATION, 

effect  of,  234. 
ACCOUNTS, 

payments  of  tax  should  appear  in 
executor's',  242. 
ACCRUAL  OF  TAX, 

See  When  Tax  Accrues. 
ACTIONS, 

of    contract    against    beneficiary, 

290. 
See  further.  Practice.     . 
ACTS  OF   CONGRESS, 

See  United  States. 
ADMINISTRATOR, 

See  Executor  and  Administrator 
ADOPTION, 

liability  on,  242. 

mutually    acknowledged    relation 
of  parent,  243. 
ADVANCEMENTS, 

taxable,  113. 
AGENTS, 

situs  of"property  in  hands  of  agent, 

158. 
property  of  non-resident  in  hands 
of  agent,  155. 
ALABAMA, 

in  general,  303. 
constitution,  1901,  §  219;  303. 
statutes,  list  of,  303. 
the  early  statutes,  303. 
ALASKA, 

in  general,  305. 
ALIENS, 

discrimination    against,    49,    237, 

504. 
Federal    Act    of    1898    does    not 

apply  to,  165. 
"goods  .and  effects"  include  real 
estate  in  certain  treaty,  51. 


ALMSHOUSE, 
defined,  216. 
AMENDATORY  STATUTES, 

See  Statutes. 
AMERICAN       BAPTIST       HOME 
MISSIONARY  SOCIETY, 
exempt,  210. 
ANCILLARY  ADMINISTRATION, 

necessity  of,  284. 
ANIMALS, 

exemption  of  monument  to  horse, 
219. 
ANNUITIES, 

appraisal  of,  260. 
ceasing  on  testator's  death,  187. 
conditional  annuity,  187. 
direction  in  a  will  that  an  annuitant 
"is  to  receive  not  less  than,"  236. 
for  care,  187. 
included  in  direction  as  to  "money," 

236. 
liabilities  where  annuity  to  execu- 
tor, 238. 
liabilities  where  residue  in  trust  to 

pay  annuity,  237. 
taxation  of,  186. 
ANNUITY  TABLE, 

American  experience  tables,  1239. 
combined    experience   tables,  480, 

482. 
reference  to  mortality  tables  valid, 
43. 
ANTE-NUPTIAL  CONTRACT, 

taxation  of.  111. 
ANTIQUARIAN  SOCIETY, 

exemption  of,  220. 
APPEAL, 

extension  of  the  time  for,  286. 
from  appraisal,  264. 
from  assessment,  284. 


1298 


INDEX. 


[References 

APPEAL,— contimied. 

hearing    must    be    limited    to    the 

errors  noticed  in  appeal,  286. 
on  failure  to  appraise,  264. 
repeal  of  statute  after  appeal  taken, 

82. 
service  of  notice,  admission  of,  286. 
validity    of    allowing    appeal    to 

parties  and  not  to  state,  285. 

APPRAISAL, 
annuities,  260. 

annuity  tables,  480,  482,  1239. 
appeal,  264. 

on  failure  to  appraise,  264. 
as  of  what  date,  252. 

future  interests  are  appraised,  253. 
Boston  and  Albany  Railroad  stock, 

170. 
Boston  and  Maine  Railroad  stock, 

170. 
choses  in  action,  258. 
"clear  market  value,"  257. 
constitutionality    of    assigning    to 

probate  courts  the  duty   of  ap- 
praisal, 38. 
construction  of  will,  251. 
death  of  life  tenant  before  appraisal, 

262. 
debtor,  bequest  to,  258. 
each  interest  separately  appraised, 

252. 
general  law,  effect  of,  249. 
good  will,  259. 
inactive  securities,  259. 
jurisdiction  by  what  court,  248. 
liability,  effect  on,  264. 
life  estates,  261. 
marriage,    change    of    interest    on, 

254. 
notice,  251. 

omitted  property  brought  to  the 
^  attention  of  the  appraisers,  255.    ' 
patent  medicine  company,  259. 
power  to  order  production  of  papers, 

263. 


are  to  pages.] 

APPRAISAL,— continued. 
practice,  257. 

rule   in   the  absence   of   specific 
provision,  258. 

statute  providing  no  method  for 
ascertaining   value  of   life  es- 
tate, 262. 
reappraisal,  254. 
remainders,  262. 

after  remarriage,  263. 
residue,  252. 

sale  above  the  appraised  value,  252. 
test  of  value,  256. 
trade  secrets,  259. 
value  received  by  beneficiary,  the 

test,  258. 
"value,"    "appraised    value,"    and 

"actual  market  value,"  257. 
as    to    property   properly  included 

in,    see    Real    Estate,    Personal 

Property,  and  other  appropriate 

titles. 

APPRAISERS, 

appointment,  249. 

in  what  county,  250. 

when  appointed,  250. 
function  of  appraiser,  286. 
not  judicial  officers,  249. 
removal,  250. 
report,  252. 

report  and  security,  254. 
remitting  report  to  appraiser,  255. 
ARIZONA, 

in  general,  305. 

proposed  constitution  of  1911,  305. 

ARKANSAS, 
in  general,  306. 
appraisal,  309. 

constitution  1874,  a.  16,  §  5,  306. 
estates,  309. 
executors,  gifts  to,  309. 
interest,  309. 
inventory,  309. 

jurisdiction  of  probate  court,  310. 
liabilities,  308. 


INDEX. 


1299 


[References 

ARKANSAS— continued. 
lien,  308. 
limitations,  308. 
payment  —  deduction  of  tax,  309. 

tax  to  be  paid   before  accounts 
settled  —  vouchers,  310. 

proceedings  for  collection,  310. 
rates,  308. 
remainders,  309. 
repeal,  310 
statutes,  list  of,  306. 

St.  1901^  c.  156,  307. 

St.  1909,  c.  303,  308. 

the  present  act,  308. 
transfers  taxable,  308. 
trustees,  gifts  to,  309. 
when  tax  accrues,  309. 

ART   MUSEUM, 
exemption  of,  216. 

ASSESSMENT, 

ancillary  administration  in  case  of 

non-resident,  284. 
appeal,  284. 

effect  of  admission  of  service  of 

notice  of  appeal,  286. 
executors    cannot    appeal    from 

assessment,  285. 
extension  of  the  time  for  appeal, 

286. 
hearing  on  appeal  must  be  limited 
to  the  errors  noticed  in  appeal, 
286. 
validity  of    allowing  appeal    to 
parties  and  not  to  state,  285. 
decree  proper  where  statute  mis- 
construed by  taxing  officials,  288. 
evidence,  284. 

burden  of  proof,  284. 
executors'  appeal,  285. 
exemption,  order  of,  283. 
jurisdiction  of  probate  courts  ex- 
clusive, 280. 
a    proper   function    of    probate 

court,  279. 
of  probate   courts  over    estates 
of  non-resident  decedents,  283. 


are  to  pages.] 

ASSESSMENT,— continued. 

affected   by   right   of  action   by 

beneficiary,  280. 
in  equity  on  distribution,  280. 
in  what  proceedings  assessment  is 

proper,  282. 
power  to  fix  liabilities  and  appor- 
tion tax,  281. 
implied  power  to  hold   provision 
of  will  void,  283. 
oral  statement  by  court,  283. 
taxes  due  in  the  future,  282. 
tax    proportioned    to     mount    re- 
ceived, 61. 
vacate  assessment,  power  to,  287. 
for  newly  discovered  debt,  288. 
when  assessment  postponed,  282. 
Classification  for    assessment,    see 
Constitutionality. 
ASSIGNMENT, 

by  legatee,  183. 
ASSOCIATIONS, 

exemptions  to  unincorporated  asso- 
ciations, 221. 
joint  stock  association,  151. 
real  estate  trust  association,  182. 
ASSUMPSIT, 

See  Collection  of  Tax,  Practice. 
ASYLUM, 

for  the  blind,  216. 
See  further,  216  et  seq. 
ATTORNEY, 

attorney's  fees  in  will  contest,  271. 
AUDIT, 

expense  of,  269. 
AUSTRALIA, 
tax  in,  15. 
AUSTRIA, 

tax  in,  15. 
AVOIDING  TAX, 
advancements,  113. 
assignments  by  beneficiaries,  124. 
brokers  holding  stock  in  their  own 

name,  124. 
collusive  arrangement  illegal,  123. 
compromise  of  interests  under  will, 
125. 


1300 


INDEX. 


[References 

AVOIDING  TAX,— continued. 
consideration,  110  et  seq. 
creation  of  corporation  leaving  life 

estate  in  decedent,  125. 
disclaimer  by  beneficiary,  126,  184. 
disclaimer  by  executor,  127. 
duty  to  point  out  property  to  tax 

officials,  123. 
executor  paying  legacy  with  his  own 

money,  127. 
homestead  set  off,  98. 
insurance  or  beneficial  societies,  94. 
intent  to  evade  tax,  100. 
joint  ownership,  128. 
marshaling  local  assets  and  debts, 

161,  267. 
premature  distribution  after  taking 

assets  out  of  jurisdiction,  129. 
quick  transfer  of  stock  in  foreign 

corporation,  128. 
removal   of  property  before  taxa- 
tion, 160. 
transfers  in  contemplation  of  death, 

99. 
various  gifts  to  same  person,  128. 

BANKS, 

joint  deposits,  89. 
situs  of  deposits  in,  174. 

BAPTIST  EDUCATION  SOCIETY' 
religious,  210 

BASTARDS, 

liability,    effect    of    legitimization, 
246. 

BELGIUM, 
tax  in,  15. 

BENEFICIAL   INTERESTS, 

See  Estates. 

BENEFICIARIES, 
assignment  by,  183. 
brothers-in-law  of  wife  of  original 

owner,  197. 
classified  by  amount,  57. 
classified  by  relationship,  53. 
classified   by   residence  —  aliens  — 

effect  of  treaties,  49. 


are  to  pages.] 

BENEFICIARIES,— cow/««Med 
collaterals,  — 

descendants  of,  239. 
distinction    between    direct    de- 
scendants  and  collateral  kin- 
dred and  strangers,  valid,  54. 
son  or  daughter-in-law,  240. 
where  relative  was  both  nephew 
and  stepson,  240. 
disclaimer  by,  184. 
exemptions,  individual,  210 
heirs,  — 

defined  in  treaty,  51. 

expenses  of  heirs  contesting  will, 

271. 
liabilities  where  no  next  of  kin 
are  known,  239. 
jurisdiction  where  beneficiary  alone 

is  within  the  jurisdiction,  160. 
liability  of,  241. 

specific  legatee,  liability  of,  242. 
municipal  corporations,  211. 
rate  reckoned  by  beneficial  inter- 
ests rather  than  by  estate,  224. 
state,  211. 

stepchildren  properly  classed  with 
lineals,  55. 
liabilities,  240. 

liability   where  relative  was  both 
nephew  and  stepson,  240. 
United  States,  211. 
See  Adoption,  Aliens,  Exemptions, 
Persons  Liable. 

BENEFICIARY  SOCIETY, 

interest  in,  94. 

BENEVOLENT  CORPORATIONS, 

exemption  of,  216. 

See  Exemptions. 
BEQUEST, 

See  Beneficiary,  Will. 
BIBLE  SOCIETIES, 

exemption  of,  218. 
BISHOP, 

exemption  of,  217. 
BLACKSTONE, 

quoted,  28. 


INDEX. 


1301 


BLIND  ASYLUM, 

exempt  as  almshouse,  216. 
BONDS, 

exemption    of   government    bonds, 

212. 
exempting  clauses  in   government 

bonds,  213. 
rights  to  unsigned  bonds,  157. 
situs,  176. 

BOSTON  &  ALBANY  RAILROAD, 
in  what  states  chartered,  how  ap- 
praised, 170. 

BOSTON  &  MAINE  RAILROAD, 
in  what  staces  chartered,  how  ap- 
praised, 170. 

BROKERS, 

commissions,  272. 

holding  stock  in  their  own  name» 

124. 
stock  pledged  with  brokers,  143. 

BURDEN  OF  PROOF, 
See  Evidence. 

BURIAL   PLACES, 
See  Cemetery. 

CALIFORNIA, 
in  general,  311. 
actions  to  recover  tax,  342. 
administrators,  see  executors, 
adopted  child,  314. 
appeal  the  sole  remedy,  316. 
appraisal,  339. 

appraisers,  339,  346. 

increase    or   decrease    of   estate, 

332. 
when    value    of    inheritance    or 
bequest     is      uncertain  —  ap- 
praisement —  expense  of  same, 
327. 
assessment, — 

proceedings  for,  343. 
court  order  necessary,  332. 
attorney  for  state  comptroller,  344. 

for  county  treasurer,  344, 
classification  by  relationship,  322. 


IReferences  are  to  pages.] 

CALIFORNIA, 

collection, 


•continued. 


actions  to  recover  tax,  342. 
citation,  342. 
procedure  on,  329. 
incorrect  computations,  331. 
proceedings  for,  343. 
receipt,  form  of,  331. 
rules  of  practice  of  the  controller's 
office  under  the  act  of  1905,  331. 
community  property,  321. 
constitution,    1879,  a.  13,  §  1,  311. 
constitutiona  Hty, — 
in  general,  313. 
classification       by       relationship 

valid,  318. 
exemption  to  resident  nieces  and 

nephews,  318. 
local  law,  318. 
courts, — 
jurisdiction  of  superior  court,  328, 

311. 
moot  questions  not  decided,  316. 
definitions,  345. 
discount,  336. 

embezzlement  by  executor,  322. 
executors,  bequests  to,  336. 

duty  of  administrators  on  trans- 
fer of  stock,  338. 
where  the  executor  misappropri- 
ates, 322. 
exemptions,  — 
in  general,  335. 
computing  tax  and  exemptions, 

324,  332. 
construction,  324. 
rule  for  deduction  of  exemptions, 

324. 
to  residents,  318. 
"estates"  of  less  than  $500,  314. 
property  not  in  excess  of  $25,000 

in  value,  322. 
in  act  of  1905,  323. 
expenses,  344. 
fees,— r 

treasurer's    commissions  and  ap- 
praisers' fees,  332. 
county  treasurer,  332.  ?^4. 


1302 


INDEX. 


[References 

CALIFORNIA,— con/JWMed. 
homestead,  320. 
illegitimate  children,   statute  void 

as  to,  312. 
interest,  336,  337. 
jurisdiction  of  courts,  341. 
lien,  319,  333. 
life  estates,  336. 
lineal  descendant,  314. 
local  law,  318. 
"market  value,"  322. 
moot  questions  not  decided,  316. 
nature  of  tax,  320. 
non-residents,  where  discriminating 

against,  320. 
officers,  —  attorneys     for      county 
treasurer,  344. 
duties  of  county  treasurer,  344. 
fees  of  appraisers,  332. 
fees  of  treasurer,  332,  344. 
payment,  in  general,  337. 

administrators  to  deduct  amount 

of  tax,  326,  337. 
decree  of  distribution  ordering  a 

deduction,  326. 
on  partial  distribution,  332.  ^ 
insufficient  or  excessive  payment, 

332. 
taxes  payable  at  death,  336. 
use  of  proceeds  of  tax,  345. 
tax  to  be  paid  to  county  treasurer, 
receipt  must  be  countersigned 
by  state  controller,  326. 
penalty,  337,  345. 
power  of  sale,  337. 
property,  subject  to  tax,  333. 

"which  shall  pass  by  will  or  by 

the  intestate  laws,"  320. 
subject  to  inheritance  or  transfer 
tax,  319. 
quiet  title,  actions  to,  342. 
rates,  primary,  322,  334. 
progressive,  335. 
^condary,  323. 
refund,     method    of    recovery     of 
excess,  332. 
to  pay  debts,  338. 
remainders,  336. 


are  to  pages.] 

CALIFORNIA,— continued. 
statutes, 
list  of,  312. 

compiled  laws  of  California,  1^53, 
c.  127,  a.  5,  §§  1,  2,  3,  p.  678; 
312. 
1893,  c.  168,  312. 

title  of  act  of  1893,  312. 
1905,  c.  314,  319. 
1911,  c.  394,  346. 
1911,  c.  395,  333. 
present  act,  333. 
recent,  332. 
repeal,  346. 

effect   on   taxes    already   due, 

330. 
ol    "collateral  inheritance  tax 

law,"  330. 
retroactive,  317. 
trustees,  bequests  to,  336. 
use  of  proceeds  of  tax,  345. 
when  tax  accrues,  336. 
CAUSA  MORTIS, 

See  Gifts. 
CEMETERIES, 

care  of  cemetery  lots,  277. 
expense  of  lot,  276. 
CERTAINTY, 

necessary,  34. 
CESTUI  QUE  TRUST, 

See  Trusts. 
CHARITABLE    AND    RELIGIOUS 
CORPORATIONS   &    OTHER 
OBJECTS, 
See  Exemptions. 
CHARITY, 
exempt,  217. 

favored   in  construing  exemptions, 
197. 
CHILDREN, 

of    deceased    beneficiary,  239. 
See  Adoption. 
CHILDREN'S  AID  SOCIETY, 

exempt,  218. 
CHOSES  IN  ACTION, 
appraisal,  258. 
claim  against  estate  of  another,  136, 


INDEX. 


1303 


[References 

CHOSES   IN  ACTION— continued, 
situs, — in  general,  172. 
bank  deposits,  174. 
bonds,  176. 
claim  against  estate  of  another, 

177. 
contracts  to  sell  land,  179. 
distinction  between  tangible  and 

intangible  personalty,  177. 
insurance,  179. 
mortgages  on  real  estate,  180. 
the  Massachusetts  mortgage,  181. 
the  New  York  rule  as  to  mort- 
gages on  real  estate,  181. 
partnership  interests,  182. 
interest  in  real  estate  trust,  182. 
when    tax  accrues  on   interest   in 
estate  of  another,  234. 
CHURCHES, 

New  Hampshire   Baptist   Conven- 
tion exempt,  209. 
See  Exemptions. 
CITY, 

See  Municipal  Corporations. 
CLAIMS, 

See  Choses  in  Action. 
CLASSES  AND  CLASSIFICATION, 

See  Constitutionality. 
CLEAR  VALUE,  257. 
COLLATERAL, 

See  Pledge. 
COLLATERAL  HEIRS, 
See  Beneficiaries. 

classification    by    relationship,    see 
Constitutionality. 
COLLECTION, 

actions  of  contract  against  benefi- 
ciary, 290. 
bond  of  register,  effect  of,  291. 
fees  of  collecting  officers,  291. 
jurisdiction, — collection    a    proper 
function  of  probate  courts,  289. 
concurrent  jurisdiction  to  recover, 

290. 
validity  of  assigning  to  probate 
courts  the  duty  of  collection, 
38. 


are  to  pages.] 

COLLECTION— continued. 
limitations,  291. 

retroactive  statute  of  limitation, 

292. 
when  proceedings  premature,  291. 
officers  for  collection,  290. 
practice,  293. 

absence  of  special  machinery  for 

collection,  38,  289. 
tax  officials    joined  in  litigation 
between    other  parties,   293. 
repeal  prevents  subsequent  recovery 

of  taxes  due,  82. 
subrogation  of  corporation  paying 
taxes  on  transfer  of  its  stock, 
293. 
words    "proper    county"    refer    to 
what,  291. 
COLLEGES, 

exemption  of,  219. 
COLLUSION, 

See  Avoiding  Tax. 
COLORADO, 
in  general,  347. 
appraisers  356. 

to  receive  no  reward  from  parties 
interested,  358. 
assessment,    when    remainder    as- 
sessed, 353. 
beneficiaries,  a  tax  on,  350. 
collection,  process  for,  358. 

information  as  to  real  estate,  354. 
prosecutions,  359. 
reports,  359. 
returns,  359. 
compromise  with  "heirs,"  351. 
constitution  1876,  a.  10,  347. 
constitutionality,  uniformity,  349. 

succession  not  a  natural  right,  349. 
costs  and  expenses,  359. 
exemptions,  352. 

apply  to  the  amount  taken    by 

each  beneficiary,  350. 
an  implied  exemption  from  taxa- 
tion should  be  allowed  to  state 
institutions,  350. 
fees  of  county  treasurer,  360. 
foreign  fiduciaries,  355. 


1304 


INDEX. 


[References 

COLORADO,— contintied. 
interest,  353. 

jurisdiction  of  county  courts,  358. 
liens,  360. 
nature  of  tax,  349. 

not  a  local  or  special  law,  349. 
payment  and  receipts,  354. 

by  county  treasurer,  359. 

deduction  of  tax,  354. 
power  of  sale,  354. 
rates,  352. 
receipts,  360. 
refund,  355. 
statutes, — list  of,  347. 

present  act,  352. 

retroactive,  352. 

title,  —  one  subject,  348. 

uniformity,  349. 

1901,  c.  94,  347. 

1902,  c.  3,  351. 

1902,  c.  3  (as  amended),  352. 
1907,  c.  214,  352. 
1909,  c.  193,  352. 

when  tax  accrues,  353. 
COMITY, 

See  What  Law  Governs.     " 
COMMISSIONS, 

See  Broker,  Executors,  Trustees,  etc. 
COMMODITY, 

inheritance     taxed     as     a     "com- 
modity," 8. 
COMMUNITY  PROPERTY, 

as  affected  by  debts,  266. 

rights  in,  97. 
COMPENSATION, 

See  Consideration. 
COMPROMISE, 

of  interests  under  will,  89,  125. 
CONCEALMENT, 

See  Avoiding  Tax. 
CONFISCATION, 

See  Constitutionality. 
CONFLICT  OF  LAWS, 

See  What  Law  Governs. 
CONGRESS, 

See  United  States. 


are  to  pages.] 

CONNECTICUT, 

in  general,  361. 

administrator,  appointment   of  on 

petition  of  treasurer,  373. 
annuity,  372. 

assessment;      notice    to    treasurer 
and    others;     reassessment;     ap- 
peal, 371. 
collection,  —  possession    postponed 
till  tax  paid,  370. 
sale  of  estate  to  pay  tax,  372. 
when  treasurer  may  have  admin- 
istrator appointed,  373. 
computation  of  tax,  366. 
constitutionality     of   act    of    1897, 
363. 
constitutional   limitations,    none, 
362. 
debts  and  expenses  deducted,  365. 
executor,  — 

foreign     executors;    transfer     of 
property    notice   to    tax  com- 
missioner, penalty,  370. 
liability,  369. 

removable  when  negligent,  371. 
exemptions,  — 

brother  and  sister  exempt  under 

the  act  of  1893,  363. 
gifts  for  art  exempted  in   1901, 

367. 
ten  thousand  dollars  exempt,  364. 

validity  of,  364. 
under  present  act,  369. 
interest,  369. 

inventory  of  property  of  non-resi- 
dents, 366. 
jurisdiction,  373 
life  estate,  372. 
nature  of  tax,  364. 
non-residents ;  notice  to  state  treas- 
urer    and     to     tax     commis- 
sioner; appeal,  370. 
classes  of  property   of   non-resi- 
dents to  which  this  tax  applies, 
370. 
inventory  of  property  of,  366. 
tax  extended  to,  367. 


INDEX. 


1305 


[References 
CONNECTICVT,— continued. 

payment,  —  tax  to  be  paid  to  treas- 
urer of  state,  extension  of  time 
for,  371. 
penalty,  on  transfer  to  foreign  execu- 
tor, 370. 
possession    not   to   be  given    until 

payment  of  tax,  370. 
power  of  appointment,  374. 
probate  court,  jurisdiction,  373. 

duty  of,  371. 
property  taxable,  365. 

real    and    personal    property,  — 
property  of  non-residents,  365. 
property  within  the  jurisdiction 
of  the  state,  365. 
rate  by  classes,  369. 
tatutes,— list  of,  362. 
present  act,  368. 
repeal  of  acts  of  1889  and  1893, 

367. 
what  estates  affected  by  statutes, 

373. 
1889,  c.  180,  362. 
1897,  c.  201,  9,  901;    364. 
1899,  c.  180,  p.  106,  362. 
general     statutes     of     1902     as 

amended,  368. 
1903,  c.  63,  I  1,  367. 
1907,.c.  179,  p.  729,  367. 
1909,  c.  218,  368. 
transfers  taxable,  369. 
by  classes,  369. 
to  foreign  executor,  370. 
will  proved  without  this  state,  how 
proved  in  this  state,  368. 

CONSIDERATION, 

in  general,  110. 

advancements,  113. 

ante-nuptial  contract.  111. 

conveyance  for  consideration  where 
possession  is  postponed  till  the 
death  of  the  grantor,  106. 

deed  made  under  contract  to  sell, 
111. 

services, -113. 

support,  115. 


are  to  pages.] 

CONSIDERATION —continued. 

transfer  by  will  for  consideration, 

111. 
will  under  contract  to  leave  by  will 
112. 

CONSTITUTIONALITY, 

absence    of  special   machinery   for 

collection,  38,  289. 
aliens,  49. 
appeal  by  parties  and  not  by  state, 

285. 
appropriation  to  special  fund,  37. 
assigning   to     probate   courts   the 
duty  of  appraisal  and  collection, 
38. 
authority  to  classify  persons  and 

property,  58. 
certainty  necessary,  34. 
classification  by  amount,  see  Rates, 
classification  by  amount  of  whole 

estate,  62. 
classification  by  relationship,  — 
in  general,  53. 

distinction   between    direct    de- 
scendants and  collateral  kindred 
and  strangers  is  valid,  54. 
distinction  among  life  tenancies 
based    on    relationship    of   re- 
maindermen, 53. 
exempting  stepchildren,  55. 
if  tax  is  a  property  tax,  55. 
transfers   where  life  estate  is  re- 
served to  grantor,  55. 
classification  by  residence,  — 
corporations,  49. 

individuals,  aliens,  effect  of  trea- 
ties, 49. 
confiscatory  legislation,  36. 

inheritance  taxes  may  eat  up  an 
entire  estate  and  possibly  bank- 
rupt the  executor,  64. 
confiscatory  rates,  63. 
constitution   inapplicable  to  condi- 
tions prior  to  its  enactment,  75. 
constitutional  limitation  in  rate,  41. 
contract,  impairment  of,  40. 
"equality,"  46. 


1306 


INDEX. 


[References 

CONSTITUTIONALITY— co»/?MMe<i. 

exemptions,  193. 

based  on  estates  of   beneficiaries 

or  of  decedents,  198. 
validity  of  tax  on  whole  estate 
which  exceeds  the  exemption, 
195. 

jurisdiction  of  probate  courts  to 
appraise  and  collect,  38. 

justice  to  be  free,  41. 

local  laws,  42. 

location  of  assets  in  state  insuffi- 
cient, 75. 

municipalities,  power  of,  30. 

notice  to  collecting  officers  unneces- 
sary, 67. 

notice  to  parties  of  proceedings,  66. 

of  retrocative  legislation,  see  Stat- 
utes. 

poll  tax  prohibited,  41. 

power  derived  from  taxing  power 
or  from  power  to  regulate  descent, 
23. 

power  of  congress,  29. 

power  of  state  to  regulate  or  pro- 
hibit devolution  on  death,  24. 

proceedings  to  test  validity,  38. 

progressive  rates,  57. 

public  purpose,  36. 

reference  to  other  statutes  and  to 
mortality  tables  valid,  43. 

restrictions  of  local  or  special  laws 
applicable,  42. 

revenue  legislation  to  originate  in 
house  of  representatives,  44. 

special  laws,  42. 

state  constitutions,  40. 

state  legislatures,  power  to  impose 
tax,  22. 

statutes  upheld  and  avoided,  34. 

statutes  void  in  part  only,  35. 

tax  proportioned  to  amount  re- 
ceived, 61. 

title  to  be  expressed,  42. 

unconstitutional  statute,  effect  of 
21. 


are  to  pages.] 

CONSTITUTIONALITY,— con/mwerf- 
uniformity,  — 

authority  to  levy  inheritance  tax 
makes  uniformity  unnecessary, 
46. 
geographical  uniformity,  48. 
meaning    of    "equality"    molded 

to  new  conditions,  46. 
proportional  tax  required,  47. 
requirement    of    uniformity    not 
applicable  to  inheritancetax,45. 
uniformity        within       specified 
classes,  46. 
void  as  in  addition  to  annual  prop- 
erty tax,  42. 
where  tax  must  cover  both  realty 

and  personalty,  42. 
who  may  attack  validity,  39. 
See  Double  Taxation. 
CONSTRUCTION, 

of  exemptions,  32,  196. 
not  implied,  197. 
of  persons  exempt  under  general 

law,  203. 
effect  of  general  tax  exemption, 
202. 
of  will  in  appraisal  proceedings,  251. 
See  Statutes. 
CONTEMPLATION  OF  DEATH, 

See  Deeds. 
CONTINGENT    AND    FUTURE 
ESTATES, 
See  Remainders. 
CONTINGENT  ANNUITIES 

See  Annuities. 
CONTRACT, 

deed  made  under  contract  to  sell, 

111. 
impairment  of  contract,  40. 
situs  of  contracts  to  sell  land,  179. 
will    under   contract    to    leave    by 
will,  112. 
CONVERSION, 
in  general,  139. 

effect  of  conversion  on  lien,  140. 
Pennsylvania  rule,  140. 
what  law  governs,  18,  141. 


INDEX. 


1307 


[References 

CONVEYANCES  OR  TRANSFERS, 

See  Deeds. 
COOPER  UNION, 

a  special  exemption,  217. 
CORPORATION, 

Boston  &  Albany  railroad  company, 
170. 

Boston  &  Maine  railroad,  170. 

chartered  in  more  than  one  state, 
170. 

classified  by  state  of  incorporation, 
49. 

creation  of  corporation  leaving  life 
estate  in  decedent,  125. 

distingushed  from  joint  stock  asso- 
ciation, 151. 

domestic  stock  owned  by  non-resi- 
dent, 158., 

effect  of  use  made  of  funds  in 
determining  situs,  208. 

exemption  of  corporation  chartered 
in  more  than  one  state,  208. 
gift    to    foreign    corporation   for 
domestic  use,  208. 

foreign  corporations,  207. 
non-resident's  stock  in,  160. 
resident  owner  of  stock  in  foreign 
companies,  168. 

liabilities  wh6re  bequest  to  cor- 
poration to  be  created,  238. 

ownership  of  property  in  state  as 
basis  for  taxation,  151. 

"persons"  includes,  207. 

property  in  other  states  of  domestic 
corporation,  169. 

quick  transfer  of  stock  in  foreign 
corporation,  128. 

share  of  stock  in  a  corporation  may 
be  defined  as  a  right,  159. 

subrogation  of  corporation  paying 
taxes  on  transfer  of  its  stock,  293. 

testing  status  of  corporation,— 
when  exempt  by  general  law,  204. 

where  decedent  transfers  property 
to  corporation  and  retains  life 
interes't  in  its  stock,  106. 

See  Bonds. 


are  to  pages.] 
COURTS, 

appraisal  by  what  court,  248. 
appraisers  appointed  in  what  coun- 
ty, 250. 
collection  a  proper  function  of  pro- 
bate courts,  289. 
exemption  of  fund  in  hands  of,  215 
jurisdiction, — 
concuirent,  290. 
construction  of  will  in  appraisal 

proceedings,  251. 
for  assessment,  see  Assessment, 
implied  power  to  hold  provision 

of  will  void,  283. 
of  probate  courts  over  estates  of 

non-resident  decedents,  283. 
to  order  production   of  papers, 
263. 
order  of  probate  court  as  protec- 
tion,  237. 
effect  of  order  of  court  on  liabil- 
ities, 237. 
oral   statement    by   court    not    an 

assessment,  283. 
words    "proper    county"    refer    to 
county    first    acquiring   jurisdic- 
tion, 291. 
COUSIN, 

See  Beneficiaries. 
CREDITOR, 

bequest  to  creditor  taxed,  101. 
direction  to  fulfill  prior  obligation 
of  decedent,  101. 

CRUELTY, 

exemption  of  society  for  prevention 
of  cruelty,  219. 

CURATIVE  ACT. 

considered,  78. 

CURTESY, 

taxable,  95,  96. 

DAUGHTER-IN-LAW, 
liability,  240. 

DEATH, 

interests  under  deed  dependent  on 
death.  86. 


1308 


INDEX. 


[References 

DEATH ,— continued. 

law  at  death  of  decedent  governs 

tax,  20. 
possession  under  deed  postponed  till 

death,  106. 
tax  occurs  at  death  of  testator,  231. 
transfers  in  contemplation  of  death, 

see  Deeds. 
DEBTOR, 

appraisal  of  bequest  to,  258. 
DEBTS  AND  EXPENSES, 
action  to  construd  will,  271. 
attorney's  fees,  271. 
cemetery  lot  and  tomb,  276. 

care  of  cemetery  lots,  277. 
commissions  of  broker,  272. 

of  foreign  executor,  269. 

executor's  commissions  increased 
by  increase  in  value  of  estate, 
270. 

trustee's  commissions,  272. 

where  will  forbids  commissions  to 
executors  or  trustees,  270. 
community  property,  266. 
controversy     among     distributees, 

272. 
debts  of  decedent,  265. 
disbursements  which  it  is  admitted 

were  made  must  be  allowed,  266. 
embezzlement  by  executor,  271. 
estimate  where  the  parties  assent  to 

the  correctness  of  the,  269. 
exemptions    reckoned  without  de- 
duction for  tax  or  expenses,  201. 
expenses  of  administration,  269. 

audit,  269. 

executors  in  defending  will,  271. 

of  heirs  contesting  will,  271. 

resisting  adverse  claim,  272. 
federal  inheritance  tax,  273. 
foreign  inheritance  taxes,  274. 
funeral  expenses,  276. 
marshaling  assets  to  pay  debts,  267. 
masses,  277. 
newly  discovered  debt  as  ground 

for  modifying  assessment,  288. 
partnership  debts,  266. 


are  to  pages.] 

DEBTS  AND  EXPENSES,-cow/?«werf. 
practice  where  expenses  of  settle- 
ment unknown,  270. 
affecting  real  estate,  266. 
secured  by  real  estate,  266. 
stranger  paying  taxes  on  land,  269. 
subrogation  of  creditors,  273. 
tax  paid  improperly,  269. 
taxes  on  real  estate,  268. 
trustees,  estimated  commissions  of, 
273. 
DEDUCTION, 

See  Payment. 
DEEDS, 

deed  dependent  on  will,  88. 
delivery  of  deed,  123. 

deeds  signed  and  not  delivered, 
108,  130. 
interests  under  deed  dependent  on 

death,  86. 
power  immaterial  whether  created 

by  will  or  by  deed,  121. 
recording  lacking,  108. 
trust  deed,  88. 
what  law  governs,  86. 

deed  inter  vivos,  21. 
in  contemplation  of  death,  — 
burden    on  heirs  to  show  good 

faith,  101. 
conveyance      for      consideration 
where  possession  is  postponed 
till  the  death  of   the  grantor, 
106. 
corporation  where  decedent  trans- 
fers property  to  and  retains  life 
interest  in  its  stock,  106. 
death  impending,  102. 
delivery  lacking,  108. 
executed  before  statute  enacted, 
108. 
before    valid   statute   enacted, 
101. 
executors,  liability  of,  109. 
grantor  retaining  control,  104. 

retaining  no  control,  105. 
heirs  of  grantee  not  bound   by 

his  statements,  101. 
illness,  102 


INDEX. 


1309 


[References 
DEE  DS, — continued. 

in  contemplation  of  death  continued. 
life  estate  reserved  to  grantor,  103. 
property  burdensome  to  grantor, 

107. 
purpose  to  reduce  estate  to  affect 
widow's  election  as  to  dower, 
108. 
question  of  fact,  101. 
recording  lacking,  108. 
revocation,  power  of,  106. 
will  contemporaneous  with  deed, 
102. 
DEFEASIBLE  INTERESTS, 

taxable,  189. 
DEFINITIONS, 

actual  market  value,  257. 
almshouse,  216. 
appraised  value,  257. 
bishop,  217. 

clear  market  value,  257. 
collaterals  does  not  include  descend- 
ants of  collaterals,  239. 
contemplation  of  death,  99. 
death  duty,  1. 
'"detraction  tax,"  51. 
domicile,  etc.,  3. 
"goods   and    effects"    include   real 

estate,  51. 
"heirs"  defined  in  treaty,  51. 
"increase,"  695. 
individuals  does  not  include  trustees, 

236. 
inhabitants,  52. 
inheritance  tax,  1. 
institution,  221. 
legacy  tax,  2. 
lineal  descendants,  239. 
litigation,  230. 

money  includes  annuity,  236. 
"on  his  settlement,"  232. 
"person"  may  include  several,  183. 
"persons"     includes    corporations, 

207. 
"personal  goods,"  52. 
"proper  county,"  291. 
residence;  3. 
sale,  88. 


are  to  pages.] 

DEFINITIONS,— con/xntterf. 
share  of  stock,  159. 
strangers,  237. 
succession  tax,  2. 
unavoidable  delay,  229. 
"value,"  257. 
"widow  of  a  son,"  243. 
DELAWARE, 
in  general,  375. 
appeal,  378. 
appraisal,  378. 
collection,  — 

bond  of  executor  or  administrator 

liable,  380. 
duty  of  executor  or  administra- 
tor to  collect  tax,  379. 
duty  to  examine  records  —  pro- 
ceedings, 380. 
executor  or  administrator  to  file 
statement  within  two  months, 
380. 
constitution  1897,  a.  1,  375 

1897,  a.  8,  375. 
executor,  land  of,  380. 
exemptions,  377. 

jurisdiction  of  orphans'  court,  379. 
legacy  charged  on  land,  379. 
lien,  379. 
payment,  377. 

to  register  of  wills,  381. 
when  no  executor  or  administra- 
tor, tax  to  be  paid  to  register 
of  wills,  380. 
penalty,  377. 
rates,  377. 
receipts,  381. 
records,  380. 
register  of  wills, — duty,  commission, 

penalties,  381. 
statutes,  former,  376. 
list  of,  375. 
present  act,  377. 
1909,  c.  225;  377. 
transfers  taxable,  377. 
trust,  prpperty  held  in,  379. 
DELAY, 

unavoidable  cause  of,  229. 
See  futher,  Interest. 


1310 


INDEX. 


DENMARK, 

tax  in,  15. 
DEPOSIT  COMPANY, 

validity  of  statute  as  to  delivery 
of  box,  128. 
DEPOSITS, 

See  Banks. 
DESCENDANTS, 

See  Beneficiaries. 
DEVISE, 

See  Wills. 
DEVISEE, 

See  Beneficiaries,  Wills. 
DISCLAIMER, 

by  beneficiaries,  126,  184. 

by  executor,  127. 
DISCOUNT, 

effect  of,  227. 

exemptions  reckoned  with  discount 
for  delay  in  payment,  201. 
DISCRIMINATION, 

See  Constitutionality. 
DISTRIBUTION, 

See  When  Tax  Accrues. 
DISTRICT  OF  COLUMBIA, 

in  general,  382. 

federal  tax  applies  to,  1269. 
DOMICILE, 

defined,  3. 

disputed  domicile,  146. 

effect  of  change  of,  17. 

extraterritorial  effect  of  judgment 
as  to  domicile,  19. 

findings  as  to  domicile,  18. 

law  of  domicile  of  decedent  governs 
tax,  17. 
DOUBLE  TAXATION, 

at  domicile  of  owner  and  at  situs 
of  property,  146. 

disputed  domicile,  146. 

foreign  inheritance  tax,  274. 

lapsed  legacy,  148. 

Louisiana  rule  against  levying  tax 

^     on  property  which  had  already 

borne  its  share  of  taxation,  149. 

question   presented  is  not  one  of 

general  equities,  147. 
reciprocal  provisions,  147. 


[References  are  to  pages.] 

DOWER, 

purpose  to  reduce  estate  to  affect 
widow's  election  as  to  dower,  108. 
taxable,  95. 
when  widow's  dower  became  vested, 


where   widow  took   less  than  the 
law  allowed  her,  96. 

DRINKING  FOUNTAIN, 
exemption  of  gift  for,  219. 

DUE  PROCESS  OF  LAW, 
See  Constitutionality. 

ECCLESIASTICAL    CORPORA- 
TIONS, 
See  Exemptions. 

EDUCATIONAL  CORPORATIONS, 
See  Exemptions. 

EGYPT, 
tax  in,  14. 

ELECTION, 
See  Powers. 

EMBEZZLEMENT, 
by  executor,  184,  271. 

ENGLAND, 
tax  in,  13,  15. 

EQUALITY, 

See  Constitutionality. 

EQUITABLE  CONVERSION, 
See  Conversion. 

EQUITY, 

assessment  in  equity  on  distribu- 
tion, 280. 

ESTATE, 

all      interests      embraced      unless 

specially  exempted,  183. 
appraisal  where  change  of  interest 

on  marriage,  254. 
assignment  by  legatee,  183. 
bequest  to  creditor,  191. 
bequest  to  debtor,  191. 
contingent  remainders,  188. 
defeasiablc  or  unascertainable  inter- 
ests, 189. 


INDEX. 


1311 


[References 
ESTATE, — continued. 
disclaimer,  184. 
direction  to  fulfill  prior  obligation 

of  decedent,  191. 
embezzlement  by  executor,  184. 
exemptions  when  legacy  payable  in 

instalments,  201. 
interest  in  estate  of  another,  234. 
mere  postponement  of  payment  of 

legacies,  232. 
merger  of  remainder,  234. 
on  intestacy,  184. 
principal  or  income  of  life  estates, 

185. 
"to     any     person"     may     include 

several,  183. 
trusts,  interests  under,  190. 
See   Annuities,    Life   Estates,    Re- 
mainders,   Non-Resident    Dece- 
dents. 
ESTOPPEL, 

against  refunding,  300. 
EVASION  OF  TAX, 
See  Avoiding  Tax. 
EVIDENCE, 

appraisal,  256  et  seq. 

assessment,  284. 

burden  on  heirs  to  show  good  faith, 

101. 
heirs  of  grantee  not  bound  by  his 

statements,  101. 
that  deed  is  made  in  contemplation 
of  death,  101  et  seq. 
EXCISE  TAX, 

inheritance  tax  is,  4. 
EXECUTION  OF  WILL, 

See  Will. 
EXECUTIVE  PRACTICE, 
in  construing  statutes,  32. 
EXECUTORS, 

appeal  from  assessment,  285. 
commissions  increased  by  increase 
in  value  of  estate,  270. 
of  foreign  executor,  269. 
where   will    forbids  commissions 
to'executors,  270. 
embezzlement  by,  184,  271. 


are  to  pages.] 

EXECUTORS,— con/mttei. 
liability  of,  241. 

annuity  to  executor,  238. 

for  interest,  230. 

deed  in  contemplation  of  death, 

100. 
for  penalty,  240. 
tax  paid  improperly,  269. 
paying  legacy  with  his  own  money, 

127. 
payments  of  tax  should  appear  in 

executor's  account,  242. 
the  fact  that  the  executor  or  ad- 
ministrator is   required   by   the 
statute  to  pay  the  tax  does  not 
affect  its  nature,  199. 
EXEMPTIONS, 
almshouse,  216. 
amendment  extending  exemptions, 

79. 
American  Baptist  Home  Mission- 
ary Society,  210. 
amounts  reckoned  with  discount  for 
delay  in  payment,  201. 
without    deduction    for    tax    or 

expenses,  201. 
on  estates  of  beneficiaries  or   of 

decedents,  198. 
on  whole   estate  or  on   portion 
within  state,  199. 
animals,  monument  to,  219. 
art  museum,  216. 
Baptist  Education  Society,  210. 
bishop,  217. 
bonds,  government,  212. 

exempting  clauses  in,  213. 
charities,  197,  217. 
churches  and  dependent  societies, 

218. 
college,  219. 
constitutionality,  193. 

validity  of  tax  on  whole  estate 
which  exceeds  the  exemption, 
195. 
there  is  no  difference  in  principle 
between  an  exemption  given  to 
direct  inheritances  and  a  pro- 
gressive tax,  58. 


1312 


INDEX. 


[References 

EXEM  VriONS— continued. 
construction,  32,  196. 

old  English  rule,  196. 
corporation  chartered  in  more  than 
one  state,  208. 

testing    status  of  corporation  — 

when   exempt  by  general  law, 

204. 

county  for  charitable  purposes,  218. 

cruelty,  prevention  of,  219. 

drinking    fountain  and  monument 

to  horse,  219. 
educational,  219. 
federal  taxation  of  bequest  to  state 

or  municipality,  211. 
fixing  amount  is  a  legislative  func- 
tion, 194. 
foreign  corporations,  207. 

gift  to  foreign  corporation  for  do- 
mestic use,  208. 
general  tax  exemption,  effect  of,  202. 

persons  exempt,  under,  203. 

property  otherwise  taxed,  205. 
historical  and  antiquarian  society, 

220. 
homes,  221. 

Home  Missionary  Society,  209. 
hospitals,   221. 

implied  exemptions,  none,  197. 
instalments,   when  legacy  payable 

in,  201. 
"institution,"  221. 
library,  219,  222. 
masons,  222. 
masses,  277. 

missionary  societies,  222. 
municipal    corporations    or    public 

institutions,  214. 
nature,  exemption  is  matter  of  grace, 

196. 
New  Hampshire  Baptist  convention, 

209. 
New     York     yearly     meeting     of 

Friends,  210. 
order  of  exemption,  283. 
'persons"     includes    corporations, 

207. 
powers,  interests  under,  206. 


are  to  pages.  1 

EXEM  PTIONS,— continued. 
prevention  of  cruelty,  219. 
progressive  rates,  in  case  of,  201. 
real  as  well   as   personal  property 

considered,  200. 
religious  societies,  — 

American  Baptist  Home  Mission- 
ary Society,  210. 
Baptist  Education  Society,  210. 
churches  and  dependent  societies, 

218. 
Friends    Society    treated    as  re- 
ligious, 210. 
missionary    societies,    exemption, 

222. 
Union  for  Ministerial  Education 

exempt,  210. 
Young  Men's  Christian  Associa- 
tion not  religious,  223. 
remainder   may    be    liable    though 

prior  estate  exempt,  206. 
retroactive,  74. 
special  exem  ptions,  210,  654. 

of  Cooper  Union,  217. 
temperance  societies,  222. 
town  in  another  state,  215. 
trust  for  charity,  223. 

fund  in  hands  of  court,  215. 
university,  219. 
Union    for    Ministerial   Education, 

210. 
United  States  not  exempt  as  domes- 
tic corporation,  203. 
state  taxation  of  bequest  to,  211. 
use  made  of  funds,  eflfect  of,  208. 
Woman's  Foreign  Missionary  Soci- 
ety, 209. 
Woman's  Relief  Corps,  223. 
Young    Men's    Christian    Associa- 
tion, 223. 
not  religious,  219. 
treated  as  library,  222. 
EXPENSES, 

See  Debts  and  Expenses. 
FEDERAL  INHERITANCE  TAX, 

See  United  States. 
FEES, 

of  collecting  officers,  291. 


INDEX. 


1313 


[References 
FLORIDA, 

in  general,  382, 

constitution  1885,  a.  9,  382. 
FOREIGN    CORPORATIONS, 

See  Corporations. 
FOREIGN    EXECUTORS, 

See  Executors. 
FOREIGNERS, 

See  Non-Residents. 
FORFEITURE, 

inheritance  tax  not,  8. 
FORMS, 

See  titles  of  various  states. 
FRANCE, 

tax  in,  15. 
FRAUDULENT  CONVEYANCE, 

effect  of,  136. 
FRIENDS, 

the    New   York   yearly   meeting   of 
Friends  exempt,  210. 
FUNERAL  EXPENSES, 

See  Debts  and  Expenses. 
FUTURE  ESTATES, 

See  Remainders. 

GEORGIA, 

in  general,  382. 

constitution  1877,  a.  7,  §  2,  par.  1, 
382. 
GERMANY, 

tax  in,  15. 
GIFT, 

causa  mortis,  law  governing,  21. 

contemplation  of  death,  see  Deeds. 

on  condition  legacies  paid,  136. 

inter  vivos,  76. 

"sale"  construed  as,  88. 
GOOD  FAITH, 

See  Avoiding  Tax,  Deeds. 
GOOD  WILL, 

appraisal  of,  259. 

taxable,  136. 
GOODS  AND  EFFECTS, 

includes  real  estate  in  certain  treaty, 
51. 
GOVERNMENT   BONDS, 

See  Exemptions. 


are  to  pages.] 

GRADUATED   TAX, 
See  Rates. 

HAWAII, 

in  general,  383. 

actions,  391. 

appraisal,  386,  388. 

appraisers  to  take  no  reward  from 

parties,  389. 
collection,  — 
citation,  389. 
special  attorneys,  390. 
treasurer  to  collect  taxes,  390. 
definitions,  391. 
estates,  385. 
executors,  gift  to,  385. 
exemptions,  384,  385. 
expenses,  390. 

foreign  executor,  transfer  by,  387. 
history  of  legislation,  383. 
interest,  386. 
jurisdiction  of  court,  389. 
payments,  387. 

deduction  of  tax  from  gifts,  386. 
penalties,  386. 

on  officers,  390. 
power  of  sale,  387. 
rate,  384. 
receipts,  387,  390. 
record,  389. 

refund  to  pay  debts,  387. 
remainders,  385. 
statutes,  list  of,  383. 
the  present  act,  384. 
repeal  of  Revised  Laws,  391. 
1905,  No.  102,  as  amended,  384. 
1911,  Act  130,392. 
transfers  taxable,  384. 
treasurer,  duties  of,  38C 
trustees,  gift  to,  385. 
when  tax  accrues,  386. 
HEIRS, 

See  Beneficiaries. 
HISTORICAL  SOCIETY, 

exemption  of,  220. 
HISTORY, 

early  history,  13. 
federal  legislation,  15. 


1314 


INDEX. 


[References 

HISTORY,— continued. 

now    employed    in    nearly   all   en- 
lightened countries,  15. 

state    statutes   copied   from   other 
states,  14. 

the  present  situation,  15. 
HOLLAND, 

tax  in,  15. 
HOMES, 

exemptions  of,  221. 
HOME  MISSIONARY  SOCIETY, 

not  exempt,  209. 
HOMESTEAD, 

taxable,  98. 
HOSPITALS, 

exempt,  221. 
HUSBAND  AND  WIFE, 

ante-nuptial  contract.  111. 

statutory  rights  of  surviving  spouse, 
95. 

See  Curtesy,  Dower. 

IDAHO, 

in  general,  393. 
appraisal,  399. 

acceptance  of  bribe  by  appraiser, 
399. 
constitution   1889,  a.   7,   §  2,  a.  8, 

§  5,  393. 
collection  of  delinquent  tax,  400. 
by  administrator,  397. 
county     attorney     to     institute 

proceedings,  400. 
expenses  of  collecting  tax,  401. 
from  non-resident  administrator, 

398. 
record  of  estate,  entries,  report 

of  probate  judge,  401. 
sale  of  property  to  pay  tax,  397. 
settlements  and  reports  of  county 
treasurer,  401. 
contingent  estates,  tax  on,  396. 

suits  to  enforce  collection,  402. 
definitions,  400, 

estates,  tax  on  future  and  contin- 
gent, 396. 
executor,  tax  on  gift  to,  396. 
exemptions,  395. 


are  to  pages.] 

I DAHO, — contimied. 
interest,  397. 
officers,     failure     of,     to     perform 

duties,  402. 
payment,  time  of,  extension,  397. 

by  administrator,  398. 
power,  appointment  deemed  a  tax- 
able transfer,  394. 
probate     court,     jurisdiction     over 

estate  of  non-resident,  400. 
quiet  title,  suit  to,  402. 
rate  of  tax,  394. 

progressive,  395. 
receipts  for  taxes  paid,  401. 
refund  of  excess  tax,  398. 
revised  codes,  title  10,  c.  5,  394. 
statutes,  list  of,  393. 

present  act,  394. 
transfers  taxable,  394. 
ILLEGITIMATE  CHILDREN, 

liabilities,  246. 
ILLINOIS, 

in  general,  404. 

appeal,  any  person  may,  425 

appraisal,  422,  433. 

appeal,  425. 

fair  market  value,  422. 

life  interests,  429. 

remainders,  419. 

value  of  life  estate  deducted,  419. 
appraiser,  —  penalty   for    receiving 
reward,  434. 

report  of  appraiser,  423. 
assessment,  —  appeal,  425. 

on  petition  of  owner,  436. 
attorneys  for  collection,  433. 
"beneficial  interests,"  416. 
bond,  430. 

of  remaindermen,  429. 
charitable  bequests,  427. 
"clear  market  value,"  416. 
collection,  —  attorneys,  433. 

duty  to  give  information,  431. 

proceedings  for,  434. 

state's  attorney  to  enforce  pay- 
ment, 434. 
compromise  of  tax,  437. 


INDEX. 


1315 


[References 
ILLI  NO  I S, — continued. 

constitution  1870,  a.  9,  §1,  405. 
constitutionality, — 

exemption   to   life  tenants  with 
remainder  to  collaterals,   417, 
418. 
progressive  feature  and  classifi- 
cation by  relationship  upheld, 
409. 
contingent  interests,  436. 
conversion,  not  applicable,  411. 
copies,  certified,  438. 
deed  in  contemplation  of  death,  413. 
defeasible  interests,  436. 
definitions,  transfer,  438. 
discount,  420. 
domicile,  412. 
dower,  411. 
estates,  417- 
executor,  duties  of,  430. 

duty  to  give  information,  431. 
foreign ,  transferring  stocks,  43 1 . 
liability  of,  431. 
exemptions,  —  in  general,  417,  428. 
charitable,  426,  427. 
churches,  etc.,  437. 
confined    to    domestic    corpora- 
tions, 427. 
to   life   tenants   with   remainder 
to  collaterals  is  valid,  417,  418. 
"to  •.   .    .  wife  .    .   .during     the 
life,"  418. 
expenses,  435. 

deducted,  410. 
fees,  433,  434,  438. 

of  county  treasurer,  435. 
foreign  executors,  transfer  by,  431. 
guardians  ad  litem,  437. 
husband  and  wife,  wife  renouncing, 

418. 
interest,  420,  430. 
inventory,  424. 

jurisdiction  of  county  court,  423. 
over   property   of   non-residents^- 
434. 
lien,  429,  436. 
life  estates,  417. 
appraisal  of,  429. 


are  to  pages.] 

ILLINOIS,— continued. 
limitations,  436. 

marshaling  assets  to  pay  debts,  411. 
nature  of  inheritance  tax,  407. 
non-residents,  jurisdiction  of  county 

court  over  property  of,  434. 
payments,  431. 

deduction  of  tax  from  shares  of 
beneficiaries,  421. 
practice,    amendment   of    petition, 

423. 
property  subject  to  tax,  428. 
rates,  408,  428. 

real  estate,  foreign,  not  taxed,  411. 
land  in  another  state  not  taxed 
although  directed  to  be  sold, 
411. 
receipts,  431,  435. 
records,  435. 
refunding,  424. 

excess  of  tax  paid,  432. 
to  pay  debts,  431. 
remainders,  417. 

"at  their  decease,"  419. 

land  of,  419,  429. 

"entitled  ...  in  expectation," 

415. 
property  so  passing  shall  be  ap- 
praised  immediately  after  the 
death,  419. 
provided    that    the  .  .  .  persons 
.  .  .  interested    elect    not    to 
pay  the  same  until  they  come 
into  actual  possession,  419. 
"to  the  collateral  heir,"  418. 
value  of  life  estate  deducted  on 
appraisal,  419. 
reports,  435. 

"resident  of  this  state,"  412. 
situs    of  personal    property,    412. 
statutes,  —  construed  as  prospective 
only,  427. 
early  probate  duties,  405. 
follows  New  York  act  in  language 

and  construction,  406. 
list  of,  405. 
present  act,  428. 
repeal  of  prior  laws,  438. 


1316 


INDEX. 


[References 

ILLINOIS, — continued. 

St.  1895,  p.  301,  408. 

1901,  p.  268,  426. 

1901,  p.  269,  424. 

transfers  taxable,  408. 

^     defined,  438. 

trustee,  duty  to  give  information, 
431. 
liability  of,  431. 
when  tax  accrues,  420. 

all  taxes  shall  be  due  and  payable 
at  the  death  of  the  decedent, 
420. 
unless    otherwise    provided    for, 
420. 

IMPROVEMENTS, 

liability  of  co-tenant  for,  132. 
INCOME, 

See  Principal  and  Income. 
INCREASE, 

defined,  695. 
INDIANA, 

constitution,  1851,  a.  10,  §  1,  439. 

the  present  situation,  439. 
INDIVIDUALS, 

not  include  trustees,  236. 
INFORMATION, 

See  Collection. 
INHABITANTS, 

defined,  52. 

INHERITANCE  TAX, 

defined,  1. 
INSOLVENCY, 

of  estate,  185. 

INSTITUTION, 

defined,  221. 

exemption,  221. 
INSURANCE, 

interest    in    insurance    or    benefi- 
cial society^  94. 

situs,  179. 

INTANGIBLE  PROPERRY, 

See  Property. 

INTER  VIVOS, 
See  Deeds,  Gifts. 


are  to  pages.l 
INTEREST, 

burden  of,  showing  cause  of  delay, 
229. 

discount,  227. 

effect  of  agreement,  228. 

excuses  for  delay,  228. 

where  legatees  died  and  no  repre- 
sentative was  appointed,  230. 

from  what  date  computed,  228. 

in  absence  of  express  provision,  227. 

intent  to  evade  tax,  100. 

liabilities   of  executor  or  adminis- 
trator, 230. 

on  refunding,  299. 

pendency  of  litigation,  229. 

what  law  governs,  227. 

INTESTACY, 
interests  on,  184. 

INVENTORY, 

clause  in  repealing  act  saving  only 

estates  where  inventory  already 

filed,  83. 
necessity,  247. 
no  duty  to  point  out  property  to 

tax  officials,  123. 
of  property  outside  state,  247. 

INVESTMENT, 

taxation  of  money  for,  138. 

IOWA, 

in  general,  440. 

accounts,  probate  accounts  not  set- 
tled till  tax  paid,  465. 
actions,  465. 
adopted  child,  448. 
alien  non-residents,  457. 
annuity  tables,  479. 
appraisal,  450,  461,  462. 

annuity  tables  used,  464. 

interests    in    personal    property, 
463. 

method  of  appraisement,  notice, 
hearing  appeal,  451. 

objections  and  appeal  from,  461. 

remainders  in  real  estate,  462,  463" 

second,  450. 

"value,"  449. 


INDEX. 


1317 


[References 
low  h,— continued. 
appraisers,  460. 

commission  to,  460. 
fees,  457. 
notice  by,  460. 
art  galleries,  exempt,  457. 
avoiding  tax,  by  disclaimer,  447. 
removing    property    from    state 
without  paying  tax,  464. 
beneficiaries,  —  death     of    devisee, 
447. 
"to  any  person,"  447. 
unknown,  473. 
bonds,  form  and  amount,  464. 
cemetery  associations,  458. 
charge,    legacies    charged    on    real 

estate,  466. 
charitable  societies,  448. 
classes  exempted,  447. 
collection, —  actions,  465. 

information  to  be  furnished,  466. 
petition    by    state   treasurer  for 

administration,  459. 
tax  to  be  deducted  by  executors, 

etc.,  465, 
transfers  forbidden  till  tax  paid, 
471. 
compromise  of  tax,  454,  472. 
consideration,  446. 
constitution  1857,  a.  1,  §  6,  441. 

1857,  a.  3,  §  30,  441. 
constitutionality,  441. 
contract,  effect  of  statute  on  agree- 
ment depended  on  death,  442. 
corporations,  reports  by,  471. 
costs,  470. 

county  attorney,  fees,  469. 
debts,  459. 

deducted,  453. 
deed,  446. 

to  take  effect  after  the  death,  446. 
definitions,  — 

"actual  market  value,"  449,  451. 
appraised  value,  449,  451. 
collateral  heirs,  456,  474. 
person,  474. 
"value,"  449. 


are  to  pages.] 

IOWA, — continued. 

disclaimer,    effect    of    renunciation 

by  beneficiary,  147. 
educational  societies,  448. 
estates  in  expectancy,  473. 
executors,  bequests  to,  466. 
duty  of,  to  pay  tax,  465. 
no  non-resident  appointed,  459. 
power  of  sale,  465. 
report  by,  467. 
exemptions,  444,  459. 

above  the  sum  of  one  thousand 
dollars  after  the  payment  of 
all  debts,  449. 
art  galleries,  457. 
cemetery,  458. 
charitable,  448. 
educational,  448. 
hospitals,  457. 
public  libraries,  457. 
religious,  448,  458. 
stepchild  or  descendants,  457.     " 
explanatory    notes   and    examples, 

481. 
fees  for  collection,  469,  470. 
foreign    estate,  assessment    of   tax, 

472. 
funeral  expenses,  454. 
hospital  exempt,  457. 
intangible  property,  445. 
interest,  466. 

inventories,  extending  time  for,  468 
jurisdiction  of  district  court,  466. 
liabilities,  458. 
libraries,  457. 
lien,  450,  458. 

life  estates,  annuity  tables  used  464. 
nature  of  statute,  441. 
non-resident,  — 

foreign    estates  and    direct    and 

collateral  beneficiaries,  456. 
foreign  estates  and  deduction  of 

debts,  456. 
foreign  estate,  indebtedness,  472. 
not  appointed  executor,  etc.,  460. 
payment,  466. 

when    persons   entitled    are   un- 
known, 473. 


1318 


INDEX. 


[References 

IOWA, — continued. 
property,  — 

all  property  within  the  jurisdic- 
tion, situs  of  tangible  personal 
property,  444. 
effect   of   collateral  adjudication 

of  title,  456. 
"property  of  every  kind,"  455. 
removing    property    from    state, 

464. 
subject  to  tax,  455. 
within  the  jurisdiction,  situs  of 
intangible    personal    property, 
445. 
rate,  444,  458. 
record,  466. 

by  clerk,  468,  469. 
by  state  treasurer,  474. 
refund,  457,  473. 
religious  societies,  448. 
service  exempt,  458. 
"■    remainders,  — 

annuity    tables    used,    464. 
appraisal  of,  462,  463. 
bond,  when  tax  payable,  463. 
estates  in  expectancy,  defeasible, 
contingent,  473. 
reports  by  clerks,  469. 

by  domestic  corporations,  471. 
by  executors,  467. 
by  person  entitled,  468. 
to  court,  470. 
rules  and  regulations,  474,  475. 
appointment  of  appraisers,  477. 
books  and  blanks,  478. 
construction,  478. 
costs,  478. 

duties  of  appraisers,  477. 
duties  of  the  clerk,  476. 
duty  of  county  attorney,  477. 
duty  of  court,  478. 
lien  book,  475. 
record,  478. 

Import    by    administrators;    etc., 
476. 
statute,  — 

constructipn,  456. 

effect  of  the  act  of  1898,  452. 


are  to  pages.] 

IOWA, — continued. 

statutes, — 
list  of,  440. 
present  act,  458. 
repeal,  474. 
retroactive,  442. 
when  law  became  effective,  442. 
when  law  effective  on  agreement 

dependent  on  death,  442. 
1896,  c.  28,  §  1,  444. 
1900,  c.  51,  453. 
1906,  c.  54,  457. 
1906,  c.  55,  457. 
1909,  c.  92,  458. 
1911,  c.  68,  458. 

stepchildren,  457. 

tables  for  determining  the  valua- 
tion or  present  worth  of  life  and 
term  estates  or  annuities  and  re- 
mainders or  reversionary  inter- 
ests, 479. 

tangible  property,  444. 

transfers  taxable,  444,  458. 

trustees,  bequest  to,  466. 

no  non-resident  appointed,  459. 

when  tax  accrues,  levied  on  death, 
444. 

ITALY, 

tax  in,  15. 

JOINT  OWNERSHIP, 

property  held  jointly  as  means  of 

avoiding  tax,  128. 
share  of  co-tenant,  —  liability  for 

improvements,  132. 
taxation  of  joint  deposit,  89. 

JOINT  STOCK    ASSOCIATION, 
distinguished  from  corporation,  151. 
taxation  of  stock  in,  137. 

JUDICIAL  SALE, 

effect  of,  on  liens,  295. 

JURISDICTION, 

See  Courts. 

JUSTICE, 

to  be  free,  41. 


INDEX. 


1319 


[References 
KANSAS, 

in  general,  483. 

administration  at  instance  of  com- 
mission, 490. 
appraisal,  —  transmission,  488. 

value    of    property,   how    deter- 
mined, 489. 
assessment,  — 

amount     determined     by    com- 
mission, 489. 

how  tax  assessed,  486. 
charge,  —  legacy    charged    on   real 

estate,  487. 
collection,  proceedings  for,  490. 

report  of  county  treasurer,  491. 

sale  of  real  estate  to  pay  tax, 
488. 
commission   determine   amount   of 

tax  due,  489. 
constitution  1859,  a.  11,  §  1,  483. 
constitutional  limitations,  483. 
county  treasurer,  —  fees,  491. 

report  of,  491. 
decedent,  defined,  491. 
definitions  of  terms,  491. 

"decedent,"  491. 

"estate,"  491. 

"property,"  491. 

"transfer,"  491. 
deposit  when  bequest  or  grant  is 

contingent,  486. 
estate,  defined,  491. 
executors,  — 

account,  final,  not  allowed  unless 
tax  paid,  490. 

bequests  in  lieu  of  compensation, 
487. 

duty  of,  487. 

final  account,  490. 
fees,  per  cent  retained  by  county 

treasurer,  491. 
future  interests,  payment  on,  487. 
inventory,  failing  to  file,  488. 

record  of;  transmission,  488. 
jurisdiction  of  probate  court,  489. 
legacy  a  charge  on  real  estate,  487. 
non-resident,    assets  of    estate    of 

not  delivered  until,  488. 


are  to  pages.] 

KANSAS,  —  continued. 

payment  of  tax  on  stock  transferred 
by  foreign  executor,  etc.,  488. 

of  taxes  imposed  by  this  act,  485. 

on  future  interests,  487. 

provision  in  will  for  tax,  487. 

tax  paid  to  state  treasury,  491. 
penalty,  failing  to  file  inventor>-, 

488. 
probate  court,  jurisdiction  of,  489. 
proceedings  for  recovery  of  taxes, 

490. 
property, —  defined,  491. 

out  of  state,  or  of  non-resident 
within  state,  485. 
real  estate,  sale  of,  to  pay  tax,  488. 
repayment  of  tax,  489. 
statutes,  — 

application  of  statute,  491. 

general  statutes  of  1909,  §§  9265 
to  9291,  484. 

list  of,  483. 

1909,  c.  248,  484. 

the  present  act,  484. 
transfer,  defined,  491. 

legacies  and  successions   subject 
to  taxation,  484. 
trustees,  bequests  in  lieu  of  com- 
pensation, 487. 

final  account,  490. 
will,    provision   in,    for    payment, 

487. 
KENTUCKY, 
in  general,  492. 
appraisal,  500. 

appraiser,  misdemeanor  of,  501. 
collection,  proceedings,  503. 
constitution  1890,  492. 
constitutionality,  — 

uniform  and  equal,  494. 

source  of  power  to  tax  inherit- 
ances, 494. 
debtor,  legacy  to  debtor  of  testator. 

4ft7. 
discount,  498. 

executors,  gifts   to,  in  lieu  of  com- 
missions, 498. 


1320 


INDEX. 


IReferences 

KENTUCKY,  —  continued. 

exemptions,  497. 

devise    for    public     school     not 

exempt,  497. 
he  first  five  hundred  dollars  shall 
not  be  subject  to  such  duty  or 
tax,  496. 

history,  493. 

interest,  498. 

jurisdiction  of  county  court,  502. 

lien  on  proceeds  of  sale,  499. 

nature,  493,  494. 

particular  estates  and  remainders, 
497. 

payment  on  transfer,  500. 
receipts,  500. 
tax  to  be  deducted,  499. 

penalty,  499. 

power  of  sale,  500. 

proceedings,  503. 

property,  all  property,  496. 

rate,  495. 

refunding  to  pay  debts,  500. 

remainders,  497. 

statutes,  likeness  to  Maine  statute, 
493. 
list  of,  492. 
the  present  act,  495. 

summons,  502. 

transfers  taxable,  495. 

trustees,  gifts  to,  in   lieu   of  com- 
missions, 498. 

what  law  applies  when  remainder 
void,  493. 

when  tax  accrues,  498. 

will,  where  will  is  made  in  pursu- 
ance of  contract,  496. 

LANDLORD  AND  TENANT, 

leasehold  interests,  134. 

lessee's  interest,  137. 
LAPSE, 

double  taxation  in  case  of,  146. 
LEGACY, 

See  Will. 
LEGACY  TAX, 

defined,  2. 

legacy  and    succession    tax  distin- 
guished, 2. 


are  to  pages.] 

LEGATEES, 

See  Beneficiaries. 
LEGISLATURE, 

power  of,  22. 
LEGITIMATION, 

effect  of,  246. 

See  Adoption,  Bastards. 
LIABILITY, 

See  Persons  Liable. 
LIBRARY, 

educational,  219. 

exempt,  222. 
LIEN, 

effect  of  conversion  on,  140. 
judicial  sale,  295. 
partition,  295. 

on  whole  property  where  life  ten- 
ancy and  remainder  exists,  294. 

no  personal  liability  on  purchaser, 
296. 

priority  as  against  mortgage,  294. 

real  estate,  294. 
LIFE  ESTATES, 

appraisal,  261. 

death  of  life  tenant  before  ap- 
praisal, 262. 

decedent  reserving  life  interest  in 
stock  of  corporation,  106. 

distinction  among  life  tenancies 
based  on  relationship  of  remain- 
dermen, 53. 

liability  as  between  life  tenant  and 
remaindermen,  238. 

lien  on  whole  property  where  life 
tenancy  and  remainder  exists, 
294. 

life  estate  in  remainder,  234. 

principal  or  income  of  life  estates, 
185. 

reserved  to  decedent  in  stock,  125. 

reserved  to  grantor  by  deed,  103. 

statute  providing  no  method  for 
ascertaining  value  of  life  estate, 
262. 

transfers  where  life  estate  is  re- 
served to  grantor  may  be  classi- 
fied separately,  55. 

what  is  a  life  inteiest,  184. 


INDEX. 


1321 


[References 
LIFE  ESTATES,  —  continued. 
what  life  estates  taxable,  185. 
when  tax  accrues  on  life  estate  in 
remainder,  234. 

LIMITATIONS, 
eflfect  of,  291. 
on  refunding,  300. 
retroactive  statute  as  to  limitation, 
292. 

LINEAL  DESCENDANTS, 

defined,  239. 

property  distinguished  from  col- 
laterals, 54. 

where  relative  was  both  nephew  and 
stepson,  240. 

classification  by  relationship,  see 
Constitutionality. 

See  Beneficiaries. 

LITIGATION, 
defined,  230. 

LOCAL  LAWS, 

restrictions  against  local  laws  appli- 
cable, 42. 

LOUISIANA, 
in  general,  504. 
absentees,  527. 
adopted  children,  522. 
aliens,  discrimination  against,  504. 

alien  tax,  505. 

effect  of  federal  treaties,  509. 

federal  treaties,  512. 

history  of,  505. 

not  retroactive,  507. 

repeal  of,  511. 

the  alien  tax  statute  of  1828  and 
its  repeal  in  1830,  505. 

the  alien  tax  statute  of  1842,  506. 

the  statute  of  1850,  510. 

the  invalid  alien  statute  of  1894, 
511. 

to  whom  applicable,  508. 

validity,  507. 
annuity  tables,  use  of,  528. 
appraisal,    of    insurance    contract, 

522. 


are  to  pages.] 

LOUISIANA,  —  continued. 
assessment  of  tax,  524. 

liability  determined  by  share  of 

each  heir,  518. 
where  no  will  found,  526. 
attorneys  to  collect  tax,  528. 
beneficiaries,  duties  and  liabilities 
of,  524. 
restrictions  on,  526. 
collection,  attorneys  for,  528. 

legacy  not  to  be  delivered  till  tax 
paid,  525. 
community  property,  share  in  not 

taxable,  518. 
constitution  1845,  a.  127,  514. 
1898,  514. 

not  applicable  to  taxes  levied 
before  the  constitution  went 
into  effect,  514. 
constitutionality,  invalid  as  revenue 
legislation     introduced     in     the 
Senate,  512. 
contract  rights  uncertain,  522. 
double  taxation  prevented,  518. 
treaties,  effect  of,  509. 
costs,  528. 

creditors'  rights  preserved,  526. 
debts  deducted,  521. 

excepted,  518. 
double  taxation, —  this  tax  shall  not 
be  enforced  when  the  property 
shall  have  borne  its  just  propor- 
tion of  taxes,  518. 
executors,  duties  of,  524. 
exemptions,  523. 

burden  of  proving,  527. 
an    inheritance    to    descendants 
of  less  value  than  $10,000,  523. 
non-taxable    property    not    ex- 
empt, 515. 
of  property  already  taxed,  518. 
property    which    has    borne    its 

just  proportion  of  taxes,  523. 
sale  does  not  affect  exemption, 
523. 
fees  for  collection,  520. 
foreign  real  estate,  522. 
insurance  contract,  tax  on,  522. 


1322 


INDEX. 


[References  are  to  pages.] 
continued.  MAINE, 


527. 


each 


LOUISIANA, 

interest,  528. 
inventory,  524. 

jurisdiction  ot    district  court, 
liabilities  on  transfer,  527. 

value   based    on   share    of 
heir,  518. 
mortality  tables,  use  of,  528. 
nature  of  succession  tax,  515. 
officers,  527. 
parties,  526. 

payment  of  tax  on  special  or  par- 
ticular gifts,  525. 
power  of  sale,  524. 
property  taxable,  518. 
purpose,  516. 
rate,  521. 

restrictions  on  beneficiaries,  526. 
revenue    legislation    introduced    in 

senate,  512. 
sale,  525. 

statute,  —  application,    all    succes- 
sions not  finally  closed,  528. 

list  of,  505. 

1828,  c.  95,  505. 

1842,  c.  154,  §  4,  p.  434,  506. 

1855,  c.  315,  §  7,  p.  399, 
510. 

1904,  c.  45,  p.  102,  516. 

1906,  c.  109,  521. 

retroactive,  516. 

the  present  act,  521. 

the  present  act  a  substitute  and 
not  a  repeal  of  the  statute  of 
1904,  520. 

title  sufficient,  516. 

to  what  estates  the  act  applies, 
528. 
transfers  taxable,  521. 

liabilities  on,  527, 
treaties,  effect  of,  509. 
usufruct  not  taxable,  518. 
will,  —  assessment   where    no   will 
found,  526. 

probate  of,  525. 

search  for,  525. 


in  general,  530. 

accounts,    no    final  settlement    of, 
shall  be  allowed  until  all  taxes 
have  been  paid,  539. 
action,  of  debt  for  tax,  538. 
appeal,  540. 
appraisal,  fees  for,  540. 

how  value  of  property    shall  be 

fixed,  540. 
value  of  prior  estate,  how  deter- 
mined and  how  taxed,  537. 
assessment,  petition  for,  537. 
collection,  — 

certain  actions  in  behalf  of  the 
state  may  be  brought  in  any 
county,  541. 
debt  for  tax,  538. 
proceedings     by     the     attorney 

general,  544. 
proceedings  when  estate  liable  to 
pay    inheritance    tax    is    not 
before  probate  court  within  six 
months,  542. 
property  shall  not  be  delivered 
to  legatee  until  tax  is  paid,  538. 
registers  of  probate  shall  annu- 
ally deliver  to  attorney  general 
list  of  estates  appearing  to  be 
liable  to  collateral  inheritance 
tax  —  proceedings  thereon,  541 
reports  by  city  and  town  clerks, 

543. 
sale  of  real  estate  to  pay  tax,  539. 
whenever  any  real  estate  passes 
to  another  person  and  subject 
to  tax,  state  assessors  shall  be 
informed,  539. 
when  legacy  is  in  money  for  a 
limited   period   executor   shall 
retain   tax  on  whole  amount, 
otherwise    judge    of    probate 
shall  make  an  apportionment, 
539. 
construction,   how  words  shall  be 
construed,  541. 


INDEX. 


1323 


[References 
MAINE,  —  continued. 

constitution  1875,  a.  1,   §  1,  531. 
a.  9,  §7,531. 
a.  9,  §8,  531. 
constitutionality, — classification  by 
relationship  valid,  533. 
due  process  of  law,  532. 
uniformity,  532. 

valid  as  applied  to  non-residents, 
533. 
corporations,   incorporated   in    two 
or  more  states,  543. 
liable  for  transfer  of  their  stock, 

543. 
tax    on    stock,    etc.,    limited    to 
corporations  having  $1,000  of 
property  in  Maine,  543. 
descent,  right  of,  is  merely  statu- 
tory, 531. 
due  process  of  law,  532. 
executors,  —  excess    of   reasonable 
compensation  to  executors  for 
services   when  residuary  lega- 
tees, shall  be  taxed,  537. 
failure  to  pay  tax  renders  admin- 
istrator liable,  538. 
exemptions,  536. 

above  the  sum  of  five  hundred 
dollars,  534. 
fees  of  judges  and  registers  of  pro- 
bate, 540. 
hearing,  540. 

history  of  succession  taxes,  531. 
inventory  or  copy  thereof  of  any 
estate  subject  to  tax  shall  be 
furnished     attorney      general, 
539. 
penalty  for  neglect  or  refusal  to 
file  inventory  of  estate,  542. 
jurisdiction, —  court  of  probate  shall 
have    jurisdiction    to    determine 
all  questions  relating  to  tax,  540. 
lien,  537. 

all  taxes  payable  upon  real  estate 
shall  remain  a  charge  thereon 
until  paid,  538. 
nature,  not  a  property  tax,  532. 


are  to  pages.] 

MAINE,  —  continued. 

non-resident,  —  fiduciaries  and  cor- 
porations   liable   for    tax    on 
transfer  of  stock  of  non-resi- 
dents, 543. 
liability  of,  542. 
validity  of  statute  as  to,  533. 

notice,  540. 

payment  to  state  treasurer,  544. 

property  of  a  deceased  resident  of 
this  state  subject  to  taxation  in 
another  state  not  liable  to  taxa- 
tion in  this  state  —  property  of 
non-resident  decedent,  542. 

rates,  536. 

refund,  —  whenever  any  property 
shall  be  refunded  by  legatee  tax 
shall  be  paid  back,  539. 

statute  adoDted  from   New  York, 
532. 
list  of,  531. 

not  retroactive,  534,  544. 
1893,  c.  146,  532. 
the  amendments  of  1895,  535. 
later  amendments,  535. 
revised  statutes,  c.  8,  §  69,  535. 

c.  83,  §  15,  541. 
the  present  act,  536. 

transfers  taxable,  536. 

trustees,  bequest  to,  537. 

when  tax  payable,  537. 

MARKET    AND    FAIR    MARKET 
VALUE, 
See  Appraisal. 

MARSHALING  ASSETS, 
to  pay  debts,  267. 

marshaling    local    assets    of    non- 
resident, 161. 
masses  as  expenses,  277. 

MARYLAND, 
in  general,  545. 
action  against  legatee,  556. 
appraisers  of  real  estate,  556, 

warrant  and  oath  of,  557. 

vacancy  among,  557. 

in  different  counties,  557. 


1324 


INDEX. 


[References 

MARYLAND,  —  continued. 

appraisement   to  be   deemed   true 
value,  557. 

"clear  value,"  on  death,  555. 
assessment, —  absence  of  provisions 
for  ascertainment  of  tax  is  not 
fatal,  555. 

tax  on  appraised  value,  556. 
beneficiaries,  553. 

clerks,  accounting  and  fees  of,  560. 
collection,  — 

absence  of  provisions  for,  555. 

action  against  legatee,  556. 

information  as  to  real  estate,  560. 

proceedings  for  recovery,  561. 

revocation  of  administration  on 
failure  to  pay  tax,  559. 

where    parties    entitled    do    not 
administer,  560. 
constitution    1864,   declaration    of 

rights,  545. 
constitutionality,  549. 
debt,  situs  of,  555. 
definitions,  "being  within  this  state," 
553. 

"clear  value,"  555. 
estates,  particular,  and  remainders, 

558. 
executors  and  administrators,  — 

administrator  de  bonis,  559. 

bonds  of,  etc.,  liable  for  tax,  559. 

tax  on  commissions  of,  546. 
exemptions,  654. 
history  of  legislation,  546. 
inventory,  proceedings  on,  557. 

of  real  estate,  557. 
jurisdiction  of  court,  551. 
legislature,  power  of,  554. 
lien,  557. 
life  estates,  558. 
payment,  557. 

deduction  of  tax,  556. 

sale  of  real  estate,  557. 

when  tax  payable,  556. 
powers,  555. 

of  sale,  556. 


are  to  pages.] 

MARYLAND,  —  continued. 

property  of  non-residents,  553. 

power  of  legislature  over,  554. 

within  this  state,  553. 
rate,  554. 

receipts,  duplicate,  560. 
registers,   accounting  and  fees  of, 
560. 

compensation  of,  560. 
release,  by  statute,  552. 
remainders,  558. 

slave,  manumission  of,  taxable,  550. 
transfers  taxable,  554. 
trust,    laid     on    trustee    and     not 

cestui,  556. 
summons,  —  proceedings,     inherit- 
ance statutes,  549. 
statutes,  —  list  of,  545. 

present  act,  554. 

release    by    statute    retroactive, 
552. 
validity  of,  552. 

retroactive,  546,  547. 

St.  1844,  549. 

code  1860,  a.  81,  §  137,  551. 

code  1878,  a.  11,  §  117,  552. 

code  1888,  a.  81,  §  102,  553. 

public  general  laws  (1904),  a.  81, 
§  117,  554. 

St.  1904,  c.  222,  548. 
when  tax  accrues,  605. 

MASSACHUSETTS, 
in  general,  562. 
account,  allowance  of,  597. 

final  of  fiduciary,  601. 

must  show  payment,  582. 
actions  to  recover,  600. 
annuity  of  fluctuating  value,  567. 

tax  on,  576. 
appraisal,  579. 

appeal,  605. 

at  death  of  testator,  580. 

corporations  incorporated  in  more 
than  one  state,  590. 

equity  of  redemption,  580. 

federal  tax  deducted,  567. 

fees  of,  586. 


INDEX« 


1325 


(References 

MASSACHUSETTS.  —  continued. 
appraisal,  continued. 

income  received  after  death,  572. 

life  estate,  580. 

method  of  valuation,  592. 

rules  for  valuation,  605. 

value  of  property  liable  to  tax 

to  be  determined  by  the   tax 

commissioner,  etc.,  595. 

assessment  of  tax  on  real  estate,  601. 

beneficiaries,  property  left  intestate 

under- will,  573. 

city  or  town,  590. 
bonds,  situs  of,  569. 
choses  in  action,  situs  of,  588. 
collection,  — 

access  restricted  to  papers  filed, 
601. 

actions  for,  600. 

administrators  shall  be  liable  for 
taxes  until  paid,  574. 

by  sale  of  real  estate,  594. 

decree  of  distribution  no  de- 
fence to  action,  597. 

deposit  in  lieu  of  tax,  592. 

executor,  etc.,  holding  property 
subject  to  tax  shall  deduct  the 
tax  or  collect  it  from  the  lega- 
tee, etc.,  593. 

if  a  legacy  is  payable  out  of  real 
estate  the  devisee  shall  pay  the 
tax  to  the  executor,  etc.,  593. 

if  a  will  is  not  offered  for  probate 
within  four  months  the  pro- 
bate court  to  appoint  an  ad- 
ministrator, etc.,  597. 

if  succession  taxes  have  been  paid 
in  other  states,  605. 

information  to  tax  commissioner, 
594. 

limitations,  582. 

no  final  account  allowed  until 
taxes  paid,  597. 

proceedings  for  recovery,  597. 

state  treasurer  to  administer 
estates  in  certain  cases,  581, 

state  treasurer  to  be  notified  of 
transfer  of  real  estate,  579. 


are  to  pages.] 

MASSACHUSETTS,  —  continued. 
collection,  continued. 

suits    for    collection    of    tax,  — 

when  to  be  brought,  582. 
tax    commissioner    shall    certify 
amount    of    tax    due    to    the 
treasurer  and  receiver  general, 
etc.,  596. 
the   tax  commissioner   to   be   a 
party  to  petitions    by  foreign 
executors,  595. 
compounding  tax,  585. 
consideration,  for  full  consideration 
in  money  or  money's  worth,  589. 
constitution  1780,  pt.  2,  c.  1,   $  1, 

a.  4,  563. 
constitutionality,  — 

classification  by  relationship,  573. 
double  taxation,  571. 
of  act  of  1891,  566. 
corporations   incorporated    in    two 
states,  570,  590. 
stock   in   companies   in   two   or 

more  states,  590. 
tax  payable  on  transfer  of  stock, 
594. 
debts,  aflftdavit  of,  604. 
foreign  legacy  taxes,  605. 
instructions  as  to,  604. 
local  taxes,  604. 
mortgage  notes,  604. 
definitions,  —  "by  deed,"  572. 
by  will  or  by  the  laws  of  the 

commonwealth,  672. 
"institutions,"  57S. 
person,  582. 
property,  582. 
"tangible  property,"  571. 
descent,  right  of  succession  cannot 

be  abolished,  564. 
distribution,  effect  of,  on  liabilities, 

697. 
double  taxation,  571. 
estates,  — particular  estates  and  re- 
mainders, 575. 
tax  on  future  interests,  693. 


1326 


INDEX. 


[References 

MASSACHUSETTS,  —  continued. 
executor,  final  account,  601. 

property  bequeathed  to  an  execu- 
tor, etc.,  in  lieu  of  compensa- 
tion, 593. 
gifts  to  executors  or  trustees  in 

lieu  of  commissions,  576. 
liability  for  taxes,  574. 
exemptions,  566,  586,  587. 

confined  to  domestic  corporations, 

574. 
"institutions,"  573. 
library,  573. 
non-taxable  property  not  exempt, 

569. 
property   exempt    by    law   from 

taxation,  573. 
religious  societies,  590. 
unless  the  value  shall  exceed  the 
sum  of  ten  thousand  dollars, 
575. 
Young  Men's  Christian  Associa- 
tion, 590. 
federal  tax  deducted,  567. 
fees  of  appraisers,  586. 
foreign  taxes,  evidence  of  payment, 

605. 
forfeitures,  601. 
forms,  602. 
history,  565. 
income  received  after  the  testator's 

death,  572. 
institutions  exempt,  573. 
interest,  576,  591. 
inventory,  578,  594,  602-604. 
filed  with  state  treasurer,  579. 
register    to    furnish    inventory, 
etc.,  to  tax  commissioner,  594. 
jurisdiction,  —  decree    of  distribu- 
tion, no  defence  to  action  to 
collect,  597. 
of  probate  court,  581. 
probate  court  to  hear  and  deter- 
mine all  questions,   etc.,  596. 
library,  exemption,  573. 
lien,  576,  591. 

on  real  estate,  585. 


are  to  pages.] 

MASSACHUSETTS,  —  continued. 
life  estate,  appraisal  of,  580. 
limitations,  582. 
marshaling  assets,  567. 
mortgage,  —  appraisal  of  interests 
under,  580. 
as  debts,  604. 
situs  of,  569* 
municipal  corporations,   to  or  for 

the  use  of  a  city  or  town,  590. 
nature  of  tax,  566. 
non-resident,  license  for  transfer  of 
property  of,  595. 
statute  applicable  to,  572. 
tangible  property  of,  571. 
payment,  deducted  from  principal, 
577. 
deduction   of   tax  from   legacies 

charged  on  real  estate,  578. 
direction  in  will  to  pay  tax  from 

residue,  586. 
if     certification     for     immediate 

payment  is  desired,  605. 
in  cases  of  assignment  or  trans- 
fer of  stock  the  tax  shall  be 
paid  to  the  treasurer  and  re- 
ceiver general,  594. 
legacy  payable  out  of  real  estate, 

593. 
no  tax  chargeable  upon  money 
applied  in  payment  of  succes- 
sion tax  in  certain  cases,  593. 
tax  deducted  by  executor,  etc., 

577. 
tax  deducted  or  apportioned  in 

certain  cases,  578. 
to  whom  tax  payable,  576. 
when  payable,  591. 
penalties,  601. 
power,  583,  598. 
interest  under,  580. 
law    applicable    to    exercise    of 
power  of  appointment  by  will, 
571. 
practice,  602. 

probate  court,  jurisdiction  of,  581, 
596. 


INDEX. 


1327 


[References 
MASSACHUSETTS,  —  continued. 
property, —  situs  of  mortgage  inter- 
ests, 569. 
situs  of  stocks  and  bonds,  569. 
tangible,  571. 
trust,  interest  in,  571. 
whether    belonging    to    inhabi- 
tants   of     the    commonwealth 
or  not,  571. 
within  the  jurisdiction,  568,  588. 
rates,  566,  587. 

highest  rate  to  apply  where  in- 
formation is  not  furnished,  600. 
refund,  579,  595. 
remainder,  575,  577,  580,  593. 
tax  on,  584,  585. 
when  tax  accrues  on,  605. 
sale, — probate  court  may  authorize 
sale  of    real  estate    in  certain 
cases,  594.  , 

of  real  estate,  578. 
situs  of  mortgage  interests,  569. 

of  stocks  and  bonds,  569. 
statutes,  — 

amendments  to  the  act  of  1891, 

583. 
applicable     only     where     death 

occurs  after  passage,  571. 
early  probate  fees,  565. 
how  construed,  598. 
list  of,  564. 

not  to  apply  in  certain  cases,  598. 
present  act,  587. 
recording    receipts     for     federal 

tax,  1262. 
St.    1836-53,  supplement  to    re- 
vised statutes,  c.  355,  365. 
St.  1891,  c.  425,  566. 
St.  1902,  c.  473,  §  1,  584. 
St.  1909,  c.  490,  pt.  4,  590. 

not  affecting  other  legislation 

of  1909,  598. 
application  of,  600. 
stock,  situs  of,  569. 
"tangible  property,"  571, 
transfer,  license  for,  595, 

taxable,  566,  587. 
trust,  interest  in.  571. 


are  to  pages.] 

MASSACHUSETTS,  —  continued. 
trustee,  final  account,  601. 
gifts  to,  in  lieu  of  commissions, 

576. 
property  bequeathed  to,  in  lieu 
of  compensation,  593. 
when  payable,  591. 
when  tax  accrues,  576,  605. 

upon  future  interests,  605. 
will,  property  left  intestate  under, 
573. 
which  shall  pass  by  will  does  not 
include  agreement  of  compro- 
mise, 589. 
Young  Men's  Christian  Association, 
590. 
MASSES, 

bequest  for,  277. 
MERGER, 

of  remainder,  234. 
MICHIGAN, 
in  general,  606. 
appeal  from  appraisal,  627. 
appraisal,  626. 
appeal,  627. 
fees  of  appraisers,  626. 
instructions  for,  636. 
no  deduction  for   mortgajje  in- 
debtedness, 616. 
proceedings,  626. 
rehearing,  627. 
report,  627. 
collection,  deduction  of  tax.  619. 
instructions,  639. 
proceedings  for,  62$. 
provisions  for,  sufficient,  612. 
tax  deducted  from  legacy,  623. 
when  bond  required  in  case  of 
deferred  payments,  624. 
constitution  1850,  a.  14,  606. 
constitutionality,  application  of  pro- 
ceeds,  612. 
double  taxation  upheld,  610. 
duties  imposed  on  probate  court, 

612. 
how  to  test  the  validity  of  the 

statute,  607. 
provisions  for  collection,  612. 
of  act  of  1903.  616. 


1328 


INDEX. 


[References 

MICHIGAN,  —  continued. 

definitions,  county  treasurer,  635. 

estate,  613,  635. 

property,  613,  635. 

prosecuting  attorney,  635. 

transfer,  613,  635. 
discount,  639. 

interest,  623. 
double  taxation,  610, 
estate,  613. 
exemptions,  611,  617,  622. 

instructions  for,  636. 

valid,  612. 
executors,  —  transfers  by  foreign  ex- 
ecutors, etc.,  625. 

when  bequest  to  executors,  etc., 
subject  to  tax,  625. 
fees,  639. 

of  county  treasurer,  629. 
forms,  abstract  of  taxable  inherit- 
ances, 630. 

instructions  as  to,  639. 

instructions  as  to  use  of  blanks, 
.  638. 
interest,  623,  639. 
judge  of  probate,  635. 
jurisdiction  of  probate  court,  626» 
liabilities,  622. 
lien,  617,  622. 
limitations,  611. 
mortgage,  not  deducted,  616. 
nature,  tax  is  on  the  entire  estate 

of  decedent,  614. 
non-resident's   interests   in    Michi- 
gan land,  618. 

land  contracts  of  non-residents, 
610. 

mortgage  on  Michigan  land,  611. 

stock  actually  within  the  state, 
610. 
payment,  617,  622. 

application  of  proceeds,  635. 

application  of  proceeds  void,  612. 
pow^r  of  sale,  619,  623. 
practice,  635. 
probate  court,  duties  of,  valid,  612. 


are  to  pages.] 

MICHIGAN,  —  continued. 
"property,"  613. 

not  confined  to  property  which 
the  state  has  selected  for  taxa- 
tion, 613. 
rates,  609,  615. 
receipts,  617,  629,  639. 
records,  629. 
refund,  624,  639. 
remainders,  610. 
report,  633,  639. 

examiners,  634. 
statutes,  —  based  on  the  early  New 
York  statute  construction,  609. 
list  of,  606. 
not  retroactive,  610. 
the  present  act,  621. 
St.  1893,  c.  205,  607. 
St.  1899,  c.  188,  608,  621. 
title  of,  608. 
validity,  609. 
St.  1903,  c.  195,  615. 
St.  1909,  c.  298,  621. 
recent  amendments,  620. 
"transfers,"  613. 
transfers  taxable,  609,  615,  621. 
trustess,  bequest  to,  taxable,  625. 
when  tax  accrues,  622. 

MINNESOTA, 
in  general,  640. 
appeal,  from  assessment,  669. 
appraisal,  662. 

expenses    of   administration    de- 
ducted, 659. 

notice  of,  669. 

omission  of  means  for,  658. 

proceedings,  668. 

time  of,  656,  668. 

trustees'  fees  not  deducted,  659. 

valuation,  658. 
appraisers,  668. 

report,  669. 

fees  of,  668. 
assessment,  —  the  court  is  to  assess 
only  present  tax,  656. 

objections  to,  669. 


INDEX. 


1329 


[References 
MINNESOTA,  —  continued. 

attorney  general,  assistant,  674. 

seal  of,  674. 
avoiding  tax   by   transfer  to  cor- 
poration, 643. 
collection,  —  citation,  670. 
deduction  of  tax,  655. 

by  administrator,  664, 
proceedings  on  transfers,  665. 
proceedings   to  obtain   informa- 
tion, 672. 
tax  deducted  on  payment,  656. 
warrant  to  county  treasurers,  673. 
compromise  of  tax,  671. 
conditional,  —  when  tax  accrues  on 
conditional  gift,  657. 
conditional  interests,  658. 
constitution  1893,  first  amendment, 
645. 
a.  1,  641. 
a.  6,  641. 
constitutionality,   classification    by 
relationship  void,  648. 
distinction    between   exemptions 

to  lineals  and  collaterals,  648. 
equality,  653. 
exemptions  of  persons  exempt  by 

general  law,  647. 
exemption  of  realty  void,  647. 
exemptions  void,  649. 
how  to  test  the  validity  of  the 

statute,  642. 
omission  of  means  for  valuation 
of  life  estates  is  not  fatal,  658. 
progressive  feature  upheld,  653. 
tax  should  be  only  on  excess  above 

exemption,  647. 
unconstitutional    statute,    effect 

of,  642. 
validity  of  act  of  1905  is  settled, 

655. 
act  of  1902  void  in  its  entirety, 
650. 
corporation,  —  avoiding     tax      by 
transfer  to,  643. 
duty  of  company  holding  securi- 
ties, 667. 
transfers  of,  666. 


are  to  pages.] 

MINNESOTA,  —  continued. 
exemptions,  651,  661. 

all  gifts  to  each  individual  should 
be  consolidated  in  reckoning 
exemptions,  651. 

constitutionality  of,  649. 

construction  of,  652. 

lineals  and  collaterals  disting- 
uished, 648. 

of  persons  exempt  by  general 
law,  647. 

of  realty  void,  647. 
income,  rate  of  tax  on,  655. 

when  tax  accrues,  656. 
interest,  665. 

jurisdiction  of  probate  court,  659. 
liabilities,  664,  665. 
lien,  664. 

nature  of  tax,  642. 
non-resident,  transfers  of,  665. 

notice,  668. 
payment,  664. 
power  of  sale,  665. 

taxable,  660. 
probate    court,    jurisdiction,    etc., 

641. 
proceedings,  668. 

property,  legacy  charged  on,  665. 
rates,  650,  651,  661. 

rate  of  tax  on  income,  655. 

construction  of,  652. 

void  under  statute  of  1902,  650. 
recoids,  671. 
refund,  665. 

proceedings  for,  673. 
remainders,  when  tax  accrues  on, 

656. 
seal  of  attorney  general,  674. 
statutes,  — 

construction,  642. 

legislation  of  1911,  660. 

list  of,  640. 

not  retroactive,  651. 

present  act,  660. 

St.  1875,  c.  37,  643. 

St.  1897,  c.  293,  646. 

St.  1901,  c.  255,  648. 

St.  1902,  c.  3,  650. 


1330 


INDEX. 


[References 

MINNESOTA,  —  continued. 
St.  1905,  c.  168,  641. 
St.  1905,  c.  288,  651. 
testing  validity,  642. 
unconstitutional,  effect  of,  642. 
transfers  taxable,  650,  651,  660. 
when  tax  accrues,  655,  662. 

on  gift  conditional  on  reaching 

certain  age,  657. 
on  income,  656. 

tax    on    remainders    accrues    at 
death  of  testator,  656. 
MISSIONARY  SOCIETIES, 

Home  Missionary  Society  not  ex- 
empt, 209. 
Woman's  Foreign  Missionary  Soci- 

not  exempt,  209. 
See  Exemptions. 
MISSISSIPPI, 
in  general,  675. 
constitution  1890,  a.  4,  675. 
constitutional  limitations,  675. 
MISSOURI, 

in  general,  676. 

administrators  or  trustees  not  re- 
quired to  deliver  specific  legacy 
or   other   property    until   tax   is 
paid,  etc.,  686. 
appraisal,  report  of  appraiser  to  be 

filed  in  probate  court,  688. 
appraisers,  —  probate  court  to  ap- 
point competent  person  as  ap- 
praiser    to     fix    valuation  of 
estates  subject  to  payment  of 
tax,  688. 
appraiser  taking  any  fee  or  re- 
ward    from     executors,     etc., 
guilty  of  misdemeanor,  689. 
assessment  based  on  report,  688. 
collection,  —  duty  of  attorney  gen- 
eral, 690. 
duty  of  executor  or  trustee  to 
notify  probate  court  when  real 
»  estate  of  decedent  is  subject  to 

tax,  687. 
duty  of  executor  or  trustee  when 
legacy  or  property  subject  to 
tax      is      given     for      limited 
period,  687. 


are  to  pages.] 

MISSOURI,  —  continued. 
collection,  continued. 

duty  of  state  auditor  when  he 
believes  the  value  of  an  estate 
has  been  fraudently  or  errone- 
ously determined,  689. 

collector  entitled  to  certain  per 
centum,  in  addition  to  other 
fees,  691. 

necessary  proceedings  to  cite  per- 
sons to  appear  before  probate 
court  to  show  cause  why  tax 
should  not  be  paid,  duty  of  col- 
lector and  prosecuting  attor- 
ney, 691. 

state  auditor  to  furnish  books  and 
forms  for  reports  to  probate 
judge,  entries,  etc.,  690. 

when  and  to  whom  collector  shall 
account,  685. 
constitution  1875,  a.  10,  677. 

Missouri  revised  statutes  1899, 
vol.  1  (Missouri  constitution, 
a.  4),  676. 

constitution  1909,  a.  10,  677. 
constitutionality,  —  application     of 
proceeds  valid,  683. 

appropriations,  order  of,  676. 

classification  by  relationship  up- 
held, 678. 

constitutional  limitations,  676. 

how  to  attack  the  statute,  677. 

not  void  as  an  appropriation,  682. 

progressive  rate  condemned,  678. 

public  purpose,  680. 

scholarship  fund  not  a  public  pur- 
pose, 680. 

taxes  for  public  purposes  only 
must  be  uniform,  677. 

taxes  in  proportion  to  value,  677. 

uniform  though  confined  to  col- 
lateral inheritances,  682. 

void  as  a  property  tax,  679. 
corporation,  transfer  of  stock,  688. 
estates,  when  and  how  tax  is  paid 

on  remainders,  reversions  or  other 

estates  in  expectancy,  real  or  per- 
sonal. 686. 


INDEX. 


1331 


[References 

MISSOURI,  —  continued. 

executors,  property  bequeathed  to 
executors  or  trustees  in  lieu  of 
commissions,    excess  above    fair 
compensation  subject  to  tax,  686. 
exemptions, — property  exempt  from 
taxation,  677. 
valid,  683. 
void,  677. 
liabilities,  —  estates  subject  to  pay- 
ment  of  collateral  inheritance 
tax,  6S4. 
transfers  of  stocks  or  loans  in  this 
state   liable   to   tax   made   by 
foreign      executors,      adminis- 
trators or  trustees  —  tax  when 
and  where  paid  and  who  liable 
for  failure  to  pay,  688. 
nature,  inheritance  tax  is  a  "tax," 
677. 
not  a  property  tax,  682. 
payment,   money  to  be  deposited 
by  state  treasurer — how  used, 
685. 
tax  coming  into  hands  of  execu- 
tor,   etc.,    shall    be    paid    to 
county  collector,  687. 
when    state   treasurer   shall   de- 
posit moneys  received  to  credit 
of  "educational  fund,"  685. 
receipts,  687. 

collector  shall  issue  receipt  under 
official  seal  to  any  person  upon 
payment  of  twenty-five  cents, 
showing  real  estate  upon  which 
tax  is  paid,  etc.,  691. 
refunding,  when,  how  and  by  whom 
proportion   of   tax   is   repaid    to 
legatee,  etc.,  687. 
remainders,  tax  on,  686. 
probate  court  given  jurisdiction  to 
hear  all  questions  arising  as  to 
tax,  690. 
probate  judge  shall  make  reports  to 
county  collector  and  state  auditor, 
when,  690. 


are  to  pages.] 

MISSOURI,  —  continued. 
statutes,  — 

amendments,  683. 

how  to  attack  the  statute,  677. 

list  of,  677. 

present  act,  684. 

St.  1895,  p.  278,  678. 

St.  1895,  p.  278,  8.  1,  678. 

St.  1895,  p.  278,  680. 

act  of  1897,  681. 

St.  1899,  p.  328,  681. 

the  valid  statute  of  1899,  681. 

the   void    statutes   of   1895   and 
1897,  678. 
trustees,  bequests  to,  686. 
when  tax  accrues,   when  tax  due 

and  payable,  684. 
MISTAKE, 

refunding  of  taxes  paid  under,  298 
stranger  paying  taxes,  269. 
MONEY, 

including  annuity,  236. 
MONTANA, 
in  general,  692. 

administrators  de  bonis  non,  702. 
appraisal,  701. 

notice  of,  703. 
appraisement  of  contingent  or  de- 
terminable estates,  699. 
appraisement  of  estate,  702. 
appraiser,  misconduct  of,  703 
assessment,  how  to  attack,  696. 
collection,  —  by  suit,  704. 

citation  to  compel  payment,  704. 

costs  of,  705. 

power  of  sale  to  pay  tax,  701. 

proceedings  upon  failure  of  execu- 
tor to  pay  tax,  701. 

proceedings  upon  failure  to  ad- 
minister estates,  704. 
constitution  1899,  a.  12,  692. 

measure  by  valuation  of   prop- 
erty upheld,  695. 

retroactive,  697. 
constitutional  limitations,  692. 
contingent  estates,  699. 
county  treasurer,  705. 


1332 


INDEX. 


[References 

MONTANA,  —  continued. 
definitions,  "increase,"  695. 
estates  to  which  applicable,  706. 
executor,   devise  or  bequest  to,  in 
lieu  of  fees,  700. 
liability  of  executors'  bond,  701. 
power  of  executor  to  sell  prop- 

rety  to  pay  tax,  701. 
to  deduct  tax  from  legacy,  700. 
executors,  foreign,  702. 
exemptions,  699. 

upheld,  695. 
"increase"  defined,  695. 
interest,  700. 

jurisdiction  of  courts,  704. 
nature  of  tax,  694. 

right  to  receive  property  is  taxed, 
694. 
non-resident,  power  over  estate  of, 

698. 
payment,  —  distribution  of  tax,  706. 
duty  of  executor  to  deduct  tax 

from  legacy,  700. 
to  county  treasurer,  701. 
penalty  for  non-payment,  700. 
power  over  estate  of  non-resident, 

698. 
property,  —  inheritance  tax,  prop- 
erty subject  to,  697. 
tax  shall  be  levied  and  collected 
upon  the  increase  of  all  prop- 
erty, 695. 
rates,  699. 
real  estate,  695. 
receipts,  701. 
record  of,  705. 

record  of  clerk  of  court,  705. 
refund,  —  reduction  of  tax  upon  re- 
fund to  pay  debts,  702. 
of  erroneous  collection,  702. 
reports,  —  clerk's   quarterly    state- 
ment, 705. 
statutes,  —  inconsistent     act«s     re- 
*     pealed,  706. 
list  of,  692. 
modeled  after,  693. 
retroactive  feature  upheld,  697. 
revised  codes  of  1907,  697. 


are  to  pages.] 

MONTANA,  —  continued. 
statute  of  1897,  693. 
the  present  act,  697. 
when  tax  accrues,  estate  to  which 

applicable,  706. 
when  tax  due,  700. 
MONUMENT, 

exemption  of  gift  for  monument  to 

horse,  219. 
MORTALITY  TABLES, 

See  Annuity  Tables. 
MORTGAGE, 

priority  of  lien  for  tax  as  against 

mortgage,  294. 
real  estate  subject  to  mortgage,  132. 
situs  of  mortgages  on  real  estate, 

180. 
situs   of   the   Massachusetts   mort- 
gage, 181. 
the  New  York  rule  as  to  situs,  181. 
MORTIS  CAUSA, 

See  Gifts. 
MUNICIPAL  CORPORATIONS, 
to  county  for  charitable  purposes, 

218. 
exemption  of,  214. 
exemption  of  bequest  to  town  in 

another  state,  215. 
federal  taxation  of  bequest  to,  211. 
power  of  municipalities,  30. 

NATURE  OF  TAX, 

advantages,  10. 

economically  sound,  9. 

excise  tax,  4. 

how  often  property  becomes  sub- 
ject to  tax,  10. 

not  a  "detraction  tax,"  51. 

not  upon  the  property  itself,  160. 

not  a  penalty  or  forfeiture,  8. 

not  a  poll  tax,  4L 

not  a  property  tax,  4. 

privilege  taxed  as  a  "commodity,"  8. 

rate  determined  by  size  of  benefi- 
cial interest,  224. 

revenue  act,  4. 

right  of  inheritance  not  a  natural 
right,  11. 


INDEX. 


1333 


[References 
NATURE  OF  TAX,  —  continued. 
right  to  receive  rather  than  right 

to  transmit  is  taxed,  7. 
tax  upon  succession,  252. 
that  the  executor  or  administrator 

is  required  by  the  statute  to  pay 

the  tax  does  not  effect  its  nature, 

199. 
transfers  inter  vivos,  6. 
whether    based    on    estate    or    on 

beneficiaries,  198. 
NEBRASKA,  - 
in  general,  707. 
appraisement,  714. 
apprasier,  —  malfeasance,  715. 
collection,  —  taxes  not  paid  —  pro- 
cedure, 715,  716. 
constitution  1875,  a.  9,  707. 
constitutionality,  certainty,  710. 

limitations,  707. 

of  double  taxation,  710. 

uniformity,  710. 
double  taxation  upheld,  710. 
estates  for  life,   remainder,  712. 
executor,  foreign,  transfer  by,  714. 

payment  of  tax- voucher  on  settle- 
ment, 714. 
executors,    administrators,    duties, 
713. 

sale  pf  property,  714. 
foreign    executor,  —  transfer    of 

stocks  or  loans,  714. 
interest,  713. 

jurisdiction  over  questions,  715. 
lien,  717. 
nature,  tax  is  on  each  beneficiary, 

710. 
nature  ot  tax,  710. 
non-resident,  stock  of  non-resident 
trustee,  711. 

payment,  711. 
payment, — funds,     road  improve- 
ments, 716. 

voucher  on  settlement,  714. 
property  taxable,  712. 
purpose  of  tax,  716. 
rate,  709,  712. 
receipts,  717. 


are  to  pages.} 

NEBRASKA,  —  continued. 
records,  716. 
refund  of  tax,  711. 
refunding,  erroneous  taxes,  714. 

tax  for  debts,  714. 
remainder,  712. 
report,  716. 

St.  1901,  c.  54,  p.  414,  708. 
St.  1905,  c.  117,  s.  1,709. 
statutes, — amendment     of     1905, 
719. 
amendments  in  1907,  711. 
compiled  statutes,  1905,  712. 
list  of,  707. 
the  present  act,  712. 
transfers  taxable,  709. 
trust,  stock  of  non-resident  trus- 
tee, 711. 
trust  estates,  714. 
when  tax  accrues,  712,  713. 
NEPHEWS, 

liability   where   relative   was   both 

nephew  and  stepson,  240. 
See  Beneficiaries. 
NETHERLANDS, 

tax  in,  15. 
NEVADA, 

constitution  1864,  a.  10,  717. 
NEW  HAMPSHIRE, 
in  general,  718. 
abatement,  738. 
accounts,  not  allowed  till  tax  paid, 

740. 
annuities,  735. 
appeal,  739. 
appraisal,  731,  738. 
assessment,  appeal,  739. 
of  tax  abatement,  738. 
charitable  societies,  725. 
collection,  —  actions  to  record  tax, 
732. 
application  for  administration  by 

state  treasurer,  739. 
attorney  for  collections,  732. 
books  and  blanks  provided   by 

state  treasurer,  741. 
conditions  of  delivering  assets  to 
foreign  executor,  741. 


1334 


INDEX. 


[References  are  to  pages.] 


NEW  HAMPSHIRE,  —  continued. 
collection,  continued, 

delivery  of  securities  to  foreign 

executor,  732. 
information  as  to  real  estate,  738. 
by  administrators,  etc.,  to  b 

furnished,  737. 
by  executor,  731. 
to  state  treasurer,   737, 
notice,  741. 
parties,  notice  to,  741. 
parties    to    petition    by    foreign 

administrator,  732. 
power  of  sale,  737. 
probate  accounts  not  allowed  till 

tax  paid,  740. 
production  of  books,  papers,  etc., 

740. 
register  to  send  copies  of  will,  etc., 
to  state  treasurer,  731. 
compromise  of  tax,  733. 
constitution    1783,    bill    of    rights, 
a.  12,  718. 
1792,  pt.  2,  a.  5,  718. 
1903,  a.  6,  719. 

classification  by  relationship  up- 
held, 719. 
double  taxation  upheld,  725. 
constitutional  limitations,  718. 
object  of  statute  immaterial,  721. 
power  to  tax,  nature  right  of  sue 

cession,  721. 
progressive  tax,  719. 
tax  need  not  be  proportional,  719. 
tax  not  proportional  and  hence 

void,  721. 
validity  of  act  of  1905,  723. 
corporations    organized     in     more 

than  one  state,  723. 
double  taxation,  valid,  725. 
estates,  life  estates,  annuities,  re- 
mainder, valuation,  735. 
executor,  —  bond  by,  733.     . 

bond  by  executor  who  is  residu- 
ary legatee,  733. 
conditions  of  delivering  assets  to 
foreign,  741. 


NEW  WAMVSRIRE,  —  continued, 
executor,  continued. 
foreign,  duty  to  take  out  ancil- 
lary administration,  724. 
gifts  to    executors,  etc.,   in   lieu 
of  compensation,  735. 
exemptions,  734. 
educational,  725. 
not  retroactive,  730. 
of  charitable,  etc.,  societies,  730. 
legacy  to  church  as  trustee,  727. 
use  determines  exemption,  727. 
Young  Women's  Christian  Asso- 
ciation, 726. 
expenses,  foreign  legacy  taxes  as, 

728. 
foreign  executor,  —  delivery  of  se- 
curities to,  732. 
liabilities  on  transfer  of  stock  by, 

740. 
should  take  out  ancillary  admin- 
istration, 724. 
See  Executor, 
foreign  legacy  taxes,  728. 
history,  720. 
inventory,  738. 
liabilities  on  transfer  of  stock  by 

foreign  executor,  740, 
lien,  732. 

payment, —  deduction  of  tax  in  case 
of   particular  estates   and   re- 
mainders, 736. 
tax   on   legacy  charged   on   real 

estate  to  be  deducted,  736. 
tax  to  be  deducted,  736. 
whether  inheritance  taxes  are  a 
charge  against   the   estate   or 
against  individuals,  727. 
power  of  sale,  737. 
property,  situs  of  interest  in  savings. 

bank  deposits,  724. 
refunding,  731. 
remainders,  732,  735. 
savings  banks,  situs  of  deposit,  724. 
tatutes,  —  adopted    from    Massa- 
chusetts, 722. 
list  of,  720. 
not  retroactive,  730. 


INDEX. 


1335 


[References 
NEW  HAMPSHIRE,  —  continued. 
statutes,  continued. 
present  act,  734. 
St.  1878,  c.  74,  720. 
St.  1905,  c.  40,  722. 
St.  1911,  c.  42,  734. 
to    what    estates    act    of    1911 
applicable,  734. 
situs   of    interest   in   savings   bank 

deposits,  724. 
transfers  taxable,  734. 
trustee,  legacy  to  church  as  trustee, 

727. 
when  tax  accrues,  736. 
Young  Women's  Christian  Associa- 
tion, exemption  of,  726. 
NEW  HAMPSHIRE  BAPTIST  CON- 
VENTION, 
exempt,  209. 
NEW  JERSEY, 
in  general,  742. 
accounts,  should  show  payment  of 

tax,  750. 
annuities,  appraisal  of,  753. 
annuity  tables,  767. 
appeal,  failure  to,  753. 
record  on,  754. 
from  appraisal,  768. 
appraisal,  752. 
appeal,  768. 

failure  to  appeal  not  a  bar,  753. 
mortality  tables,  767. 
valuation  of  annuities,  753. 
valuation  on  death,  752. 
appraisers  —  misconduct  —  com- 
pensation, 769. 
collection,  —  attorney    general     to 
prosecute  unpaid  taxes,  770. 
citation,  769. 

comptroller  empowered  to  exam- 
ine papers,  records,  etc.,  768. 
comptroller   notified   by  register 

to  surrogate,  768. 
counsel  for  state  comptroller,  755. 
information  as  to  property  liable 

to  tax,  770. 
information  as  to  real  estate,  766. 
investigation  by  state  comptroller, 
767. 


are  to  pages,] 

NEW  JERSEY,  —  continued. 
compromise  of  tax,  764. 
constitution,  amendment  of,  1844 

743. 
constitutionality,  746. 

as  to  stock  of  non-resident,  756. 
double  taxation  upheld,  746. 
invalidity  of  part  not  to  affect 
other  sections,  771. 
debtor,  gift  of  bonds  to,  is  taxable, 

749. 
definitions,  —  "estate,"  770. 
"property,"  770. 
"transfer,"  770. 
discount,  765. 

domicil,  a  resident  of  the  state,  747. 
double  taxation  valid,  746. 
estates,  future  indetei  minate  inter- 
ests are  taxable,  744. 
particular  estate  and  remainder, 
763. 
executor,  —  accounts    should  show 
inheritance  tax  payments,  750. 
duties  of,  764. 
foreign  executor  or  administrator, 

751. 
gift   to,   in   lieu   of  commissions, 

765. 
liability  for  interest  and  penalty, 

750. 
transfer  by  foreign  executor,  767. 
when  executor  should  pay  tax, 
750. 
exemptions,  745,  755,  762. 

burden  on  legatee  to  prove,  759. 
college    with  a   theological    de- 
partment   is    not    a    religious 
institution,  761. 
confined  to  domestic  corporations 

759. 
education  is  charitable,  759. 
foreign  religious  corporations  not 
exempt  under  the  act  of  1906, 
762. 
New    York    yearly    meeting    of 

Friends  exempt,  762. 
public  monuments  or  memorials 

exempted,  771. 
religious  institutions,  761. 


1336 


INDEX . 


[References  are  to  pages.] 


NEW  JERSEY,  —  continued. 
exemptions,  continued. 
strictly  construed,  759. 
Vineland    historical    antiquarian 
society     is    not    charitable  — 
powers  and  not  practice  deci- 
sive of  liability,  760. 
foreign  executor,  751,  767. 
history,  745. 

interest,  liability  of  executor,  750. 
jurisdiction,  —  of  courts,  757. 
of  ordinary  court,  769. 
of  orphan's  court,  754. 
taxation  not  dependent  on  pro- 
bate in  New  Jersey,  749. 
lien,  765. 

marshaling  assets,  748. 
mortality  tables,  767. 
nature,    "inheritance,   distribution, 

bequest  and  devise,"  748. 
non-resident,  —  property    of,    758, 
767. 
New  Jersey  stocks  of  non-resi- 
dents, 756. 
tax  on,  748. 
ordinary,  jurisdiction  of,  7697 
payment,  766. 

deduction  of  tax,  765. 
disposition  of  receipts,  757. 
power  of  sale,  766. 
when  executor  should  pay,  750. 
penalty,  765. 

for  false  statements  or  reports, 

770. 
liability  of  executor,  750. 
when  not  enforced,  765. 
power  of  appointment,  749. 
property  of  non-resident,  758. 
which  shall  be  within  this  state, 
747. 
rate,  745,  762. 
receipts,  766. 
records,  766. 
\ept  by  comptroller,  770. 
on  appeal,  754. 
refund,  767. 

erroneous  payments,  768. 
to  pay  debts,  751. 


NEW  JERSEY,  —  continued. 
remainder,  755,  763. 

taxable,  744. 
statute,  —  construction,  745. 

distinguished  from  the  New  York 

act,  746. 
list  of,  743. 
present  act,  762. 
repeal,  effect  of  saving  clause  in, 

754. 
repealer,    action    heretofore    not 

impaired,  771. 
St.  1894,  c.  210,  p.  318,  745. 

title  of,  amended,  757. 
St.  1898,  c.  62,  761. 
St.  1906,  c.  228,  755. 
St.  1906,  c.  288,  757. 
St.  1909,  c.  228,  762. 
St.  1909,  c.  288,  758. 
St.  1910,  c.  28,  771. 
transfers  taxable,  745,  762. 
when  tax  accrues  in  various  cases, 

764. 
when  tax  due,  765. 
NEW   MEXICO, 

See  Tables,  1281. 
NEW  YORK, 

in  general,  772. 
f  Accrual  of  Tax. 

See  When  Tax  Accrues. 
^Adopted  Children, 

adopted  children,  779,  797,  807. 
adoption,  909. 

children  of  adopted  child,  911. 
mutually  acknowledged  relation  of 
a  parent,  797,  910. 
adults,  910. 
blood  relations,  910. 
burden  of  proof,  914. 
evidence,  913. 

formal  adoption  unnecessary,  910. 
how  designated  in  family,  912. 
illegitimates,  911. 
living  with  foster  parent,  911. 
parent  living,  910. 
See  further,  Exemptions. 
^Advancements, 

money  advanced  to  legatee,  844. 


INDEX. 


1337 


[References 

NEW  YORK,  —  continued. 
^Annuity, 

agreement  to  pay,  878. 
^Annuity  Tables, 
absence  of,  783. 
^Ante-nuptial  Contract, 

taxable,  844. 
f  Appeal, 

from  order  as  to  interest  or  penalty, 

915. 
See  Appraisal,  Assessment. 
^Appraisal, 
annuities,  939. 

legacy  subject  to,  940. 
appeal,  956,  957. 

by  city  comptroller,  959. 
effect  of  failure  to  appeal,  959. 
grounds  of  appeal  specified  are 

exclusive,  958. 
nature,  957. 
no  appeal  from  penalty  imposed, 

959. 
notice  of  814,  958. 
appraisers,    appointment    of,    812, 
819,  924. 
application  to  appoint,  925. 
appointment  compelled  by  man- 
damus, 925. 
jurisdiction    of   comptroller   and 

surrogate  to  appoint,  925. 
when  may  appoint,  813 
removal  of,  926. 
care,  legacy  for,  939. 
claims  of  estate,  931. 
against  beneficiary,  932. 
against  legatee,  932. 
against    unsettled   estate  of  an- 
other decedent,  932. 
against  worthless  legatee,  932. 
construction  of  will,  931. 
contingent     remainders,    etc.,    see 

Remainders, 
death  of  the  testator,  929. 

before  statute  enacted,  943. 
defeasible  interest,  943. 
disclaimer  by  executor,  929. 


are  to  pages.l 

^EVJ  YORK,  — continued. 
^Appraisal,  continued. 

evidence   necessary    for   rehearing, 
963. 

opinions,  935. 

securities  owned,  930. 
executor,  duty  of,  to  obtain,  928. 
expenses  of  litigation,  813. 
experts,  935. 
future,     contingent     or    defeasible 

interests,  941. 
good  will,  933. 
inactive  securities,  934. 
joint  interests,  933. 
joint  stock  association  owning  real 

estate,  935. 
life  estate,  940. 

what  is  a,  940. 

valuation  of,  where  no  rules  speci- 
fied, 783. 

not  ascertainable,  940. 
marriage,   estate  determinable  on, 

783. 
notice,  928. 

to  comptroller,  786,  928. 

to  heirs,  928. 

to  parties,  788. 

service  of,  959. 
omission  from  appraisal  on  death 

of  testator,  effect  of,  942. 
payment,  deduction  for  postponing, 

941. 
pleadings,  958. 

postponement  where  value  of  prop- 
erty unknown,  930. 

when  litigation  over  title,  930. 
practice  under   act   of    1885,  786. 

under  act  of  1887,  798. 
proceedings  by  appraiser,  926. 
property    of    taxable    beneficiaries 
only  included,  929. 

report  to  subject  after  discovered 
property,  930. 
questions  of  fact,  959. 
reappraisal,  813,  962. 

when  unwarranted,  962. 

on  motion,  963. 


1338 


INDEX. 


[References 

NEW  YORK,  —  continued. 
^Appraisal,  continued. 
remainder,  941,  942,  944, 

actual  duration  of  life  estate  as 

affecting  valuation  of,  796. 
appraisal  of  remainder  interests 
at  death  not  binding  on  state, 
820. 
contingent  interests,  788. 
contingent  remainders,  942. 

defeasible  interest,  945. 
contingency  extinguished  before 

death,  943. 
remainder  assessed  under  original 

will,  945. 
where  remaindermen  known,  942. 
retrospective  effect  of  act,  826. 
sales,  935. 

special  guardian,  813. 
surrogate,  determination  by,    814. 
test  of  value,  933. 
uncertain  interests,  812. 
yalue  at  date  of  change  of  title, 

783. 
will,  construction  of,  931. 
See  Debts  and  Expenses. 
See  Marshaling  Assets. 
^Assessment, 
appeal,  956. 
omitted  property,  790. 
vacating  assessment,  959. 

after  time  for  appeal  has  expired, 

961. 
general   authority    of   surrogate, 

959. 
not  to  correct  errors  of  law,  961. 
to  correct  clerical  errors,  960. 
where  acts  without  jurisdiction, 
960. 
^Assignment, 
by  legatee,  840. 
rate  on,  905. 
^Association, 

joint  stock,  owning  real  estate,  849. 
debt  against,  861. 
^Avoiding  Tax, 
in  general,  838. 
account  placed  in  wife's  name,  839. 


are  to  pages.] 

NEW  YORK,  —  continued. 
^Avoiding  Tax,  continued 

assignment  by  legatee,  payment  by 
executor  out  of  his  own  funds,  840. 

bequest  void,  840. 

disclaimer  by  executor,  839. 

disclaimer  by  legatee,  839. 

leaving  stock  with  broker,  838. 
^Bank  Deposit, 

See  Deposit. 
^Banks, 

liabilities  on  transfer,  922. 

See  Deposits. 
^Bishop, 

exemption  of  gift  to,  808,  898. 
^Bonds, 

exemption  of  municipal,  896. 

federal,  see  United  States. 

of  non-residents,  857. 

of  non-resident  issued  by  domestic 
corporation,  804. 
^Broker, 

commission,  951. 

deposit  by  non-resident  with,  866. 
CfBurden  of  Proof, 

on  assessment,  966. 

on  exemptions,  914. 
^Burial  Lot, 

exemption,  895,  950. 
^Causa  Mortis, 

See  Gifts. 
^Cemetery, 

exemption,  985,  950. 
^Charity, 

See  Exemptions. 
^Children, 

See  Adopted  Children. 
fChoses  in  Action, 

claim  against  estate  of  non-resident, 
845.  875. 

loans  of  non-resident,  875. 

non-resident's  claim  against  estate 
of  another,  858. 

See  Appraisal. 
^Claims. 

See  Choses  in  Action. 
^Clerks, 

appointment  of,  924. 


INDEX. 


1339 


[References 

NEW  YORK,  —  continued. 
^Collateral, 

stock  held  as,  845. 
^Collection, 

books  and  forms  to  be  furnished 
by  the  state  comptroller,  967 
collection    by    executors,    adminis- 
trators and  trustees,  916. 
fees,  798. 
proceedings  for  collection,  affidavit 
to  commence  proceedings,  814. 
burden  of  proof,  966. 
by  district  attorneys,  965. 
evidence  of  legatee,  966. 
oral  opinion,  962. 
parties  to  action  to  enforce  ante- 
nuptial contract,  966. 
reports  of  county  treasurer,  968. 
of  state  comptroller,  payment  of 

taxes,  968. 
of   surrogate   and  county   clerk, 
967. 
^Commissions, 

taxes  upon  devises  and  bequests  in 
lieu  of  commissions,  921. 
^Composition, 

of  transfer  tax  upon  certain  estates, 
963. , 
^Comptroller, 

notice  to,  786. 
^Conflict  of  Laws, 

See  What  Law  Governs. 
^Consideration, 
bequest  for,  843. 
for  transfer,  878. 
^Constitution, 

1894,  a.  3,  §  20,  775. 
act  of  1885,  776. 
act  of  1892,  805. 
act  of  1896,  817. 
act  of  1903,  827. 
present  act,  837. 
f  Constitutionality, 

classification  by  relationship,  837. 
contingent  estates  on,  823. 
contract,  impairment  of,  838. 


are  to  pages.] 

NEW  YORK,  —  continued. 
^Constitutionality,  continued. 

contract    obligation    not    impaired 

by  tax  on  power,  821. 
discrimination  among  life  estates, 
837. 
who  may  object  to  discrimina- 
tion in  rate,  837. 
double  taxation,  855,  863. 
faith   and   credit   to  judgment   of 

another  state,  855 
power  on,  884. 
retroactive,  823. 
^Contingent  Estates  or  Interests, 

See  Remainders. 
^Contract, 

ante-nuptial,  844. 
impairment  of,  838. 
to  leave  by  will,  842. 
^Conversion, 
in  general,  853. 
direction  to  pay  mortgages  out  of 

personalty,  853. 
direction  to  sell  real  estate,  853. 
interest  of  testator  in  estate,  the 
property  of  which  was  directed 
to  be  sold,  854. 
tax  on  power  of  appointment,  854. 
^Cooper  Union, 

exemption  of,  824. 
^Corporations, 

foreign  corporations,  779. 

not  exempt,  794,  799. 
liability  of  certain  corporations  to 

tax  on  transfer  of  stock,  922. 
railroad  in  several  states,  870. 
stock   given    but   not   transferred, 

846. 
stock     in     domestic     corporations 

owned  by  non-residents,  873. 
stock  in  a  foreign  corporation,  923. 
qCourt, 

order  of  distribution  no  defence  to 
executor,  917. 
^Creditor, 

bequest  to,  841. 
^Curtesy, 

in  general,  875. 


1340 


INDEX. 


[References 

NEW  YORK,  —  continued. 
^Curtesy,  continued. 

dower  and  statutory  rights  of  sur- 
viving spouse,  875. 

included  under"intestate  laws,"  969. 

statutory  exemptions,  876. 
^Debtor, 

bequest  to,  850, 
flDebts  and  Expenses, 

in  general,  947. 

apportionment  of  debts,  955. 

authority  to  consider  debts,  947 

broker's  commission,  951. 

burial  lot,  950. 

care  of  burial  lot,  950. 

commissions,  951 

commissions    of    foreign    executor, 
951. 

compromise  of  will  contest,  951. 

contested  claims  against  estate,  950. 

debts  of  a  testator,  811. 

debt    of    non-resident    secured    by 
pledge,  949. 

debts  secured  by  mortgage,  948. 

direction  to  pay  mortgages,  948. 

estimate  unpaid  debts  and  expenses 
of  administration,  947. 

executor's  commission,  951. 

expenses  of  administration  deducted, 
947. 

local    debts    set    off   against    local 
property  of  non-residents,  955. 

trustees'  commissions,  952. 
^Deeds, 

delivery,  881. 

in  contemplation  of  death,  see  Gift. 

in  trust,  881. 

recording,  881. 

what  law  governs,  835. 
^Definitions, 

"contemplation  of  death,"  877. 

county  treasurer,  969. 

district  attorney,  969. 

estate,  969. 

"husband  of  a  daughter,"  908 

intangible  property,  969. 

intestate  laws,  969. 

"lineal  descendant,"  914. 


are  to  pages.] 

NEW  YORK,  —  continued. 
^Definitions,  continued. 

property,  969. 

tangible  property,  969. 

transfer,  969. 

statutory,  815,  831,  969. 

"widow  of  a  son,"  911. 
^Deposits, 

bank  of  non-resident,  804,  861. 

broker,  with,  866. 

direction  to  invest  in  real  estate,  854 

in  savings  bank,  863. 

in  trust  company,  864. 

securities  of  non-resident,  867. 

special,  863. 
^Disclaimer, 

appraisal  where  executor  disclaims 
property,  929. 

by  executor,  839. 

by  legatee,  839. 

rate  on,  905. 
^Discount, 

discount,  819,  915. 

for  delay  in  payment,  908. 
<9fDomicile, 

adjudication  of  in  different  states, 
855. 

of  donee  of  power,  836,  888. 
^Double  Taxation, 

constitutionality,  855. 
^  Dower, 

deducted,  876. 

legacy  in  lieu  of  dower,  876. 
^Educational, 

See  Exemptions, 
f  Equitable  Interests,  846. 

particular  estates  and  remainders, 
795. 

See  Trusts. 
^Evasion  of  Tax, 

See  Avoiding  Tax. 
^Evidence, 

of  declarations  of  testator,  966. 

heirs  not  bound  by  declaration  of 
beneficiary,  880. 
^Executor, 

commission,  951. 


INDEX. 


1341 


[References 
NEW  YORK,  —  continued. 
^Executor,  continued. 

distribution   to  beneficiaries  under 

decree  of  court  is  no  defence,  917. 
duty  on  appraisal,  928. 
liability,  916. 

relying  on  void  order,  916. 
lien,  917. 
^Exemptions, 

adopted  children,  779,  909. 
considered,  775. 
when  operative,  799. 
See  Adopted  Children, 
almshouse,  —  entrance  fee,  900. 
amount  exempted, — 

"estate    less   than    five   hundred 
dollars  shall  not  be  subject  to 
tax,"  781. 
"estate  Ajvhich  may  be  valued  at 
a  less  sum  than  five  hundred 
dollars,"  795. 
five  hundred  dollars,  over,  801. 
in   excess    of   the   value   of   five 

thousand  dollars,  906. 
unless  it  is  personal  property  of 
the  value  of  ten  thousand  dol- 
lars or  more,  807. 
bishop,  808,  898. 
burden  of  proof,  914. 
cemetery  lot,  895,  950. 
charity,  901. 
construction  of  exemption  statutes, 

899. 
Cooper  Union,  824. 
corporation  to  be  created,  900. 
foreign  not  exempt,  794,  799. 
incorporation   in   several  states, 

900. 
test  of  exemption  of  corporation, 
899. 
descendants  of  brothers  and  sisters, 

779. 
educational,  825. 
failure  to  claim  exemption,  899. 
fund  in  hands  of  court,  896. 
general  exemption,  what  is,  780. 
effect  of,  969. 
general  law  not  applicable,  824. 


are  to  pages.] 

^^"^  YORK,  — continued. 

^Exemptions,  continued. 

general  exemption, — 

property    exempt   under  general 

law,  778. 
"societies,    corporations  and   in- 
stitutions   now    exempted    by 
law,"  780. 
government  bonds,  896. 
homes,  901. 
hospitals,  901. 

husband  of  a  daughter,  779,  908. 
libraries,  901. 
masses,  897. 

missionary  societies,  902. 
monument,  895. 

municipal  corporations,  795,  895. 
museums,  902. 

practice  to  settle  exemptions,  924. 
petition  for  exemption,  924. 
notice  to  comptroller,  924. 
order  of  exemption,  924. 
prevention  of  cruelty,  902. 
publication  societies,  903. 
real    estate,    legacy    to    lineals    of 
proceeds  805. 
where  only  the  real  estate  of  a 
corporation  is  exempt,  781. 
religious,  825. 

foreign  religious  corporations  not 

exempted,  808. 
religious  ceremonies,  897. 
religious  use,  898. 
to  any  religious,  educational,  char- 
itable, etc.,  corporations,  898. 
retroactive,  799,  898. 
societies  exempt,  780. 

particular,  900. 
statutory  provisions,  775,  790,  794, 
807,  818. 
under  present  act,  894. 
temperance,  903. 
test,  value  of  estate  the,  under  the 

act  of  1896,  906. 
trust  for  exempt  society,  899. 
United  States,  779,  800,  895. 
bonds,  778 


1342 


INDEX. 


[References 

NEW  YORK,  —  continued. 
^Exemptions,  continued. 

Young    Men's   Christian     Associa- 
tion, 903. 
^Expenses, 

See  Debts  and  Expenses. 
fFees, 

of  officials,  798. 
of  county  treasurer,  967. 
^Foreign  Corporations, 

See  Corporations. 
^Forms, 

copy  of,  970. 

furnished  by  state  comptroller,  967. 
^Fraudulent  Conveyance, 

tax  on  annulment  of,  849. 
^Gifts, 

before  transfer  of  stock,  846. 
causa  mortis,  794. 

take  eftect  at  death,  915. 
what  law  governs,  803. 
inter  vivos,  805. 
in  contemplation  of  death,  877. 
as  property  a  burden,  879. 
consideration  —  transfer  to  erect 
monument,  8. 
relinquish  child,  879. 
decedent  critically  ill,  878. 
deeds  not  delivered,  881. 
deeds  unrecorded  and  undelivered 

881. 
deed   signed  by  decedent  under 
contract  but  not  delivered,  881. 
definition,  877. 
deposit  in  trust,  884. 
facts,    withholding    evidence    of 

bad  faith,  880. 
for  convenience,  879. 
gifts  inter  vivos,  877. 
good  faith  the  test,  877. 
heirs  not  bound  by  statement  of 

beneficiary,  880. 
payment  of  annuity,  878. 
remainders  taking  effect  on  the 

death  of  the  donor,  883. 
support,  879. 

in  trust  until  majority,  881. 
use  reserved  to  grantor,  882. 


are  to  pages.] 

NEW  YORK,  —  continued. 
^Good  Will, 

appraisal  of,  933. 

taxable,  850. 
^Graduated  Rate, 

See  Rates. 
^History, 

of  legislation,  832. 
^Homes, 

exemption,  901. 
fHospitals, 

exemption,  901. 
^Husband  and  Wife, 

curtesy,  dower  and  statutory  rights, 
875. 
f  Husband  of  a  Daughter, 

exemption  of,  908. 
^Illegitimates, 

exemption  of,  911. 
^Income, 

payment  from,  784. 
^Insurance, 

as  property,  851. 

of  non-resident,  868. 

insurance    policies    which    testator 
had  assigned,  844. 
^Intangible  Property. 

defined,  969. 
^Interest  and  Penalties, 

appeal  from  order  as  to,  915. 

delay,  915. 

unavoidable  cause  of  delay,  785. 

ignorance    of    law    no    reason    for 
remitting  penalty,  915. 

litigation  as  ground  for  remitting 
penalty,  915. 

on  refund,  920. 

statutes  as  to,  784,  797,  819,  915. 

to  what  estates  applicable,  785. 
^Intestate  Laws, 

include  curtesy,  etc.,  875. 
f  Joint  Interests, 

appraisal  of,  933. 

joint  deposit,  846. 

joint  stock  association  owning  real 
estate,  849. 

joint    tenants,    allowance    for    im- 
provements, 848. 


INDEX. 


1343 


[References 

NEW  YORK,  —  continued. 
^Jurisdiction, 

non-resident,  over  property  of,  857. 
property  of  in  two  counties,  811. 
over  exemptions,  924. 
over    property    for    taxation,    see 

Property, 
over  which  this  state  has  any  juris- 
diction for  the  purposes  of  taxa- 
tion, 815. 
of  surrogate's  courts,  789,  923. 

exclusive,  811. 
power  to  order  refund,  812. 
to  declare  will  void,  789. 
"proper  county,"  785. 
where  no  property  in  state  when 
statute  was  passed,  802. 
^Landlord  and  Tenant, 

co-tenancy  —  allowance      for     im- 
provements, 848, 
leashold  interest  taxable,  850. 
perpetual  leases,  849. 
^Libraries, 

exemption,  901. 
fLien, 

of  tax  and  payment  thereof,  808, 

818,  824,  916. 
on  mortgaged  real  estate,  917. 
on  real  estate  to  be  sold,  917. 
on  real  estate  devised  for  life  with 
remainder  over,  918. 
^Life  Estate, 

determinable  on  marriage,  783. 
in  remainder,  810. 
valuation  of,  783. 
^Limitations, 

by  act  of  1899,  824. 
on  refunding,  921. 
under  present  act,  969. 
^Mandamus, 

to  compel  refund,  920. 
^Marriage, 

valuation  of  estate  determinable  on, 
783. 
^Marshaling  Assets,  936. 

administrator  no  right  to  elect,  937. 
executor  presumed  to  elect,  938. 


are  to  pages.] 

NEW  YORK,  —  continued. 
^Marshaling  Assets,  continued. 

right  of  executor  to  elect  to  pay 
certain  legacies  with  New  York 
assets,  936. 
the  act  of  1908,  939. 
^Masses, 

exemption  of  gift  for,  897. 
^Missionary  Societies, 

See  Exemption. 
^Mistake, 

subrogation  on  payment  under,  919. 
tax  paid  by,  955. 
^Mortgages, 

direction  to  pay  from  personalty,  853. 
mortgaged  real  estate,  847. 
of  non-residents  on  New  York  real 
estate,  870. 
^Mortis  Causa, 

See  Gifts. 
^Municipal  Corporations, 
bonds  of,  896. 
exempt,  795,  895. 
^Museums, 

See  Exemption. 
^Mutually  Acknowledged  Relation  of 
a  Parent, 
See  Adopted  Children. 
^National    Banks, 

liabilities  on  transfer,  922. 
See  Deposits. 
^Nature  of  Tax, 
nature,  792,  832. 
tax  on  successions,  775. 
on  contingent  estates,  823. 
on  power,  884. 
property  tax  on  non-residents,  792. 
QNext  of  Kin, 

rate  where  none  appear,  904. 
flNon- Residents, 
bonds,  857. 
of  non-residents  issued  by  domes- 
tic corporation,  804. 
claim  against  estate  of  another,  858. 
covers  both    testate  and  intestate 

non-residents,  793. 
debt  to  non-resident  by  association 
with  an  office  in  New  York,  861. 


1344 


INDEX. 


[References 

NEW  YORK,  —  continued. 
^Non-Residents,  continued. 

deposit  in  bank  by  non-resident, 
804,  861. 
in  savings  bank,  863. 
in  trust  company,  864. 
with  broker,  866. 
funds  for  investment,  868. 
insurance  policies,  868. 
lo^ns  from  and  to  non-resident,  875. 
mortgages    held    by    non-residents 

on  New  York  real  estate,  870. 
property  of  non-residents,  776,  792, 

857. 
property  in  two  counties,  811. 
personal   estate   in   New   York   of 

non-residents,  857. 
railroad  in  several  states,  870. 
real  estate  taxable,  793. 

New  York  real  estate  of,  857. 
securities  on  deposit,  867. 
special  deposit,  863. 
stock     in     domestic     corporations 

owned  by  non-residents,  873. 
stock  ot  non-resident,  804. 
where  only  ground  for  taxation  that 
stock  certificates  are  in  state,  868. 
^Notice, 

See  Appeal,  Appraisal,  Assessment. 
^Object  of  Tax, 

for  the  use  of  the  state,  781,  968. 
^Officers, 

See  Appraisal,  Assessment,  Collec- 
tion, etc 
^Partnership, 

partner's    claim    against    partner- 
ship, 850. 
partnership  profits,  850. 
^Payment, 

application  of  taxes,  968. 
direction  in  will,  784. 
from   principal    or   income   of    life 
estate,  784,  952. 
*  use  of  receipts,  798. 
when  tax  due,  914. 
See  When  Tax  Accrues. 
^Penalty, 
See  Interest. 


are  to  pages.l 

NEW  YORK,  —  continued. 
^Pledge, 

stock  held  as  collateral,  845. 
^Powers, 

contract  obligation  not  impaired 
by  tax,  821. 

created  by  will  before  the  existence 
of  the  inheritance  tax,  887. 

debt  against  non-resident  secured 
by,  845. 

direction  to  pay  loan,  892. 

effect  of  power  of  conversion,  854. 

election  to  take  under  original  will 
rather  than  under  appointment, 
891. 

exemption  of,  821,  908. 

exercise  of  power  created  before 
the  passage  of  the  statute,  805. 

failure  to  exercise  power,  893. 

governed  by  law  in  effect  at  the 
exercise  of  the  power,  885. 

nature  and  validity  of  tax,  821,  884. 

no  defence  that  tax  paid  under 
original  bequest  creating  power, 
894. 

property  subject  to  a  power,  891. 

relationship  to  donee  of  power,  the 
test,  886. 

retroactive,  821. 

statute  ineffective  over  interests  in 
default  of  exercise  of  power,  893. 

tax  assessed  on  present  value  of 
property  appointed,  885.. 

vested  remainders,  892. 

what  law  governs,  776. 

when  interests  depend  on  power,892. 

"whenever  any  person  shall  exer- 
cise a  power  of  appointment, ' '  884. 

where  donee  has  absolute  estate, 
892. 

where  donee  is  a  non-resident,  888. 

where  exercise  of  power  is  like  will, 
889. 

where  original  testator  is  a  non-resi- 
dent, 888. 

where  power  created  by  grant  be- 
fore the  existence  of  the  inherit- 
ance tax,  886. 


INDEX. 


1345 


[References 

NEW  YORK,  —  continued, 
^Practice, 

See  Collection. 
^Principal, 

payment  from,  784. 
tax  payable  from,  952. 
^Progressive  Rate, 

See  Rates. 
^Property. 

foreign  property  of  resident,  800. 
not  limited  to  property  subject  to 

general  taxation,  847. 
personalty  taxable,  850. 
"property  within  the  state,"  802. 
"property,"     "tangible    property," 
and    "intangible    property"    de- 
fined, 969. 
situs  of  property,  855. 

claim     against    estate    of    non- 
resident, 856. 
legal  title  in  non-resident  trustee, 

856. 
personal    property    of    resident, 
856. 
See  Real  Estate, 
^Purpose  of  Tax, 

for  state  use,  781,  968. 
^Railroads, 

See  Corporations. 
^Rates, 

in  general,  775,  790,  903. 
assignment  by  legatee,  905. 
discrimination  in,  837. 
graduated  under  act  of  1910,  830. 
how  progressive  rate  reckoned,  831. 
inequality  in  rates  on  remainders, 

944. 
renunciation  by  legatee,  905. 
where  no  next  of  kin  appear,  904. 
where  one  was  both   stepson  and 
nephew,  905. 
qReal  Estate, 
in  general,  847. 
considered,  908. 
direction   to  pay  mortgages  out  of 

personalty,  848. 
mortgages  of  non-residents  on  New 
York  real  estate,  870. 


are  to  pages.] 

NEW  YORK, -continued. 
^Real  Estate,  continued. 

mortgaged  real  estate,  847. 

of  non-residents,  793. 

on  annulment  of  fraudulent  convey- 
ance, 849. 

outside  the  state,  778,  849. 

proceeds  of,  805. 

receipts   from  county  treasurer  or 
comptroller,  966. 
^Refunding, 

appeal  not  a  prerequisite,  919. 

interest,  920. 

limitations,  921. 

mandamus,  920. 

mistake  of  law,  919. 

payment     under    unconstitutional 
statute,  920. 

power  to  order  refund,  812,  962. 

relief  denied  to  perjurer,  921. 

tax  erroneously  paid,  918. 

temporary  payment,  920. 

what  law  governs,  919. 
^Relationship, 

any  lineal  descendant,  914. 

classification  by,  see  Constitutional- 
ity. 

where  one  was  both  stepson  and 
nephew,  905. 
"husband  of  a  daughter,"  908. 
"widow  of  a  son,"  911. 

See  Adopted  Children,  Exemptions. 
^Religious, 

See  Exemptions. 
9  Remainders, 

in  general,  782,  795,  914. 

act  applying  to,  827. 

appraisal  of  at  death  not  binding 
on  state,  820. 

contingent,    in   general,    776,    782, 
819,  825,  914. 
effect  of  amendment  of  1899,  824. 
purpose  of  amendment  of  1899,822. 
retroactive  on,  776. 

interest    in     remainder    from    the 
death  of  the  life  tenant,  810. 

unascertainable    interests,    remain- 
ders not  ascertained,  796. 


1346 


INDEX. 


[References 

NEW  YORK,  —  continued, 
^Remainders,  continued. 
unanswerable  interests, 

awaiting  disposition  of  will  con- 
test, 810. 
when  tax  accrues  on,  809, 
valuation  of  remainder  based  on  ac- 
tual duration  of  the  life  estate,796. 
vested,  796. 
See  Appraisal. 
^Renunciation, 

See  Disclaimer. 
^Repeal, 

See  Statutes. 
^Reports, 

See  Collection. 
^Retroactive, 

See  Statutes. 
^Safety  Deposit  Company, 
liabilities  on  transfer,  922. 
See  Deposits. 
^Situs  of  Property, 

See  Choses  in  Action,  Property. 
^Statutes, 

construction  of,  836. 
limitations,  970. 
list  of,  773. 

present  act,  832. 
repeal,  of  act  of  1887,  798. 

leaving  law  continuous,  792,  800, 

806. 
saving  clause,  799,  816. 
retroactive,  appraisal,  826. 
as  to  assessment,  793. 
contingent  interests,  776. 
exemption,  799,  898. 
interests  under  deed,  793. 
powers,  805. 
remainders,  803. 
the  act  of  1892  is  not,  801. 
void  as,  823. 
St.  1885,  c.  483,775. 
§    1,        775. 
J    2,       781. 
§   3-  5,  784. 
§    6-10,785. 
§  11-13,  786. 
§  14-16,  789. 


are  to  pages.] 

NEW  YORK,  —  continued. 
f  Statutes,  continued. 
1885,  c.  483. 
§  17-23,  790. 
imperfections,  776. 
St.  1887,  c.  713,  790. 
§    1,        790. 
§    2,        795. 
§    3,        797. 
§    4-11,  797. 
§  12, 13,  798. 
§  14-18,  797. 
§  19,        798. 
§  20-21,  797. 
§  22,        798. 
§  23,        797. 
§  24,  25,  798. 

continuation  of  theactof  1885,792. 
imperfections  of  act  of  1887,  791. 
purpose  of  amendment  to  tax 
property  of  non-residents,  792. 
1889,  c.  307,  799. 

1889,  c.  479,  799. 

1890,  c.  553,  799. 

1891,  c.  34,  799. 

1891,  c.  215,  §§1,2,800. 

1892,  c.  167,  801. 
1892,  c.  168,  801. 
1892,  c.  169,  801. 

1892,  c.  399,  801. 
§  1,     801. 

§  2,     807. 

§  3,     808. 

§  4,     810. 

§  5-10,   811. 

§  11,     812. 

§  12-15,   814. 

§  16-22,   815. 

§  23,  24,  816. 

§  25,  817. 

construction  of,  806,  817. 

continuous  with  prior  legislation, 

806. 
not  retroactive,  806. 
purpose  of,  806 
when  took  effect,  806. 
St.  1892,  c.  443,  801. 

1893,  c.  199,  817 


INDEX. 


1347 


[References 
NEW  YORK,  —  continued. 
^Statutes,  continued. 
St.  1893,  c.  704,  817. 

1894,  c.  767,  817. 

1895,  c.  191,  817. 
1895,  c.  378,  817 
1895,  c.  515,  817. 
1895,  c.  556,  817. 

1895,  c.  861,  817. 

1896,  c.  160,  817. 
1896,  c.  952,  817. 
1896,  c.'809,  817. 
§  220,    817. 

§  221,  222,  818. 

§  223-242,  819. 

constitutional,  817. 

1896,  c.  908,  §  226  repealed,  828. 

1896,  c.  953,  821. 

1897,  c.  375,  821. 

1898,  c.  88,  822. 

1898,  c.  289,  822. 

1899,  c.  76,822. 
1897,  c.  284,  820,  821. 
1899,  c.  269,  824. 
1899,  c.  270,  824. 
1899  c.  389,  824. 
1899,  c.  406,  824. 
1899,  c.  672,  824. 

1899,  c.  737,  824. 

1900,  c.  379,  824. 
1900,  c.  382,  825. 
1900,  c.  658,  825. 

1900,  c.  723,  825. 

1901,  c.  173,  825. 
1901,  c.  288,  827. 
1901,  c.  458,  827. 
1901,  c.  493,  827. 

1901,  c.  609,  827. 

1902,  c.  101,  827. 
1902,  c.  283,  827. 

1902,  c.  496,  827. 

1903,  c.  412,  827. 

1904,  c.  758,  828. 

1905,  c.  368,  828. 

1906,  c.  Ill,  828. 

1906,  c.  567,  828. 
190e,  c.  699,  828. 

1907,  c.  204,  828. 


are  to  pages.] 

NEW  YORK,  —  continued. 
^Statutes,  continued. 
St.  1907,  c.  323,  828. 

1907,  c.  709,  828. 

1908,  c.  310,  828. 

1908,  c.  312,  828. 

1909,  c.    62,828. 
§  222,  914. 

§  223,  915. 
§  224,  916. 
§  225,  918. 
§  226,  921. 
§  227,  922. 
§  228,  923. 
§  229,  924. 
§  230,  926. 
§  231,  956. 
§  232,  956. 
§  233,  963. 
§  234,  964. 
§  235,  965. 
§  236,  966. 
§  237,  967. 
§  238,  967. 
§  239,  967. 
§  240,  968. 
§  241,  968. 
§  242,  969. 
§  243,  969. 
§  244,  969. 
§  245,  969. 

1909,  c.  596,  828. 

1910,  c.  270,  829. 
1910,  c.  600,  829. 

1910,  c.  706,  829. 
§  220,  829. 

§  221,  830. 
§  243,  831. 

1911,  c.  732,840. 
§  220,  840. 

8  221,  894. 
§  221a,  903. 
^Stenographers, 

appointment  of,  924. 
^Stockbrokers, 
See  Brokers. 
^Stock  Exchange. 

seat  in  as  property,  851. 


1348 


INDEX. 


[References 

NEW  YORK,  —  continued. 
^Surrogate, 

appraisal  by,  956. 

assistants  in  New  York,  Kings  and 
and  other  counties,  964. 

jurisdiction,  789,  811. 

to  vacate  assessment,  959. 
^Survivors, 

when  tax  accrues  on,  809. 
^Tangible  Property, 

defined,  969. 
^Taxes, 

in  general,  952. 

as  debts,  see  Debts. 

direction  for  payment  without  de- 
duction for  tax,  952. 

entire   legacy  if  any  taxable,  908. 

federal  inheritance  tax,  953. 

income,  tax  payable  from,  784. 

legacy  tax  of  another  state,  954. 

mistake,  tax  paid  by,  955. 

principal,  tax  paid  from,  784,  952. 

real  estate  taxes,  954. 
paid  by  stranger,  955 
^Transfers  Taxable, 

in  general,  775,  790,  801,  817,  829, 
840. 

contract  to  leave  by  will,  842. 

definition,  969. 

direction    to    pay    debt    or    other 
obligation,  841. 
^Treaty, 

application  of  treaty  covering  "de- 
traction tax,"  792. 
^Trust  Companies, 

liabilities  on  transfer,  922. 

See  Deposits. 
^Trusts  and  Trustees, 

commissions  of  trustee,  952. 

deposit  in,  884. 

effect  of  trusts,  945. 

equitable  interests,  846. 

legai   title    in    trustee    in    another 
state,  856. 

legatee's    interest    impressed    with 
trust,  946. 

when  trust  deed  takes  effect,  946. 


are  to  pages.] 

NEW  YORK,  —  continued. 
f  Trusts  and  Trustees,  continued. 
where  decedent  is  only  a  trustee, 
945. 
f  Unascertained  Interests, 

See  Remainders. 
^United  States, 
bequest  to,  779. 
bonds,  778,  815. 

exempt,  896. 
exemption  to,  800,  895. 
^Use  of  the  State, 
considered,  781. 
^What  Law  Governs, 
in  general,  834. 
appraisal  at  what  date,  783. 
deed,  law  at  date  of,  835. 
domicile,  836. 

adjudication  of  in  different  states, 
855. 
gifts  causa  mortis,  803. 
power,  tax  on,  885,  886. 

law    of    date    of    original    will 
governs,  776. 
time,  834. 

repeal,  see  Statutes, 
retroactive,  see  Statutes. 
^When  Tax  Accrues, 
in  general,  914. 
contingent  estates,  822. 
gifts   causa  mortis  take    effect    at 

death,  915. 
"intended  to  take  effect  at  or  after 

such  death,"  803. 
interests  unascertained,  809. 
to  survivors  on  death  of  life  tenant, 

809. 
"whether  made  before  or  after  the 
passage  of  this  act,"  803. 
^Will, 

bequest  for  consideration,  843. 
contract  to  leave  by,  842. 
■     effect  of  direction  in,  784. 

jurisdiction  to  declare  will  void,  789. 
construed  on  appraisal,  931. 
^Young  Men's  Christian  Association, 
exemption,  903. 


INDEX. 


1349 


[References 

NEXT  OF  KIN, 

liabilities  where  no  next  of  kin  are 

known,  239. 
NON-RESIDENT  DECEDENTS, 
liabilities  on  bequest  to  corporation 

to  be  created,  238. 
marshaling     local    assets    of    non- 
resident, 161. 
personalty  of  non-resident,  153. 
premature  distribution  after  taking 

assets  out  of  jurisdiction,  129. 
property  in  hands  of  agent,  155, 158. 
realty  of  non-resident,  151. 
removal  of  property  before  taxation, 

160. 
rights  to  unsigned  bonds,  157. 
stock  in  foreign  corporation,  160. 
share    of    stock    in    a    corporation 

defined,  159. 
stock  pledged  by  non-resident,  143. 
taxation  of  money  for  investment, 

138. 
the  English  rule,  154. 
the  New  Jersey  rule  as  to  domestic 

stock  of  non-resident,  159. 
three  plans  of  taxation,  154. 
where   beneficiary   alone  is  within 

the  jurisdiction,  160. 
whether  exemptions  calculated  on 

whole  estate  or  on  portion  within 

state,  199. 
NORTH  CAROLINA, 
in  general,  973. 

appraisal,    clerk    to   enter   returns 
made  by  appraisers,  etc.,  984. 

misdemeanor  for  appraiser  to 
take  fee  or  reward  from  execu- 
tor or  administrator,  983. 

where  property  depreciates,  977. 
appraiser  to  be  appointed  by  the 

clerk,  etc.,  983. 
assessment,  979. 

clerk  to  be  liable  on  his  official 
bond,  985. 

clerk  to  make  returns  and  pay- 
ments to  state  treasurer,  985. 

clerk  to  be  agent  of  the  state  for 
collection  of  said  tax,  984. 


are  to  pages.] 

NORTH  CAROLINA,  —  continued. 
assessment,  continued. 

returns     necessary    though    will 

directs  otherwise,  979. 
when  paid,  on  settlement,  977. 
constitution,  1876,  a.  5,  §  3,  974. 
constitutionality,  power  of  legisla- 
ture, 975. 
executor,  —  court  may  order  execu- 
tor, etc.,  to  file  account,  etc., 
984. 
duties  on  payment,  982. 
foreign,  to  pay  tax  on  transfer  of 
stock,  983. 
liable,  977. 
exemption,  976,  979. 
history,  974. 
interest,  981. 
legislature,  power  of,  975. 
liability,   when    all  heirs,  legatees, 

etc.,  are  discharged  from,  981. 
nature  of  tax,  974. 
non-residents,  977. 
payment,   executor,  etc.,  shall  de- 
duct tax,  982. 
executor  or  administrator  to  take 
duplicate    receipts    from    the 
clerk  of  the  court,  982. 
foreign  executor  or  administrator 
transferring  stock  shall  pay  the 
tax  on  such  transfer,  983. 
legacy  charged  upon  real  estate, 
heir  or  devisee  to  deduct  and 
pay  to  executor,  982. 
legacy  for  life,   etc.,   tax  to  be 
retained      upon      the      whole 
amount,  982. 
to  state  treasurer,  985. 
property,  of  non-residents,  977. 

out  of  the  state,  977. 
rate,  979. 

refund,    proportion    of    tax    to   be 
repaid  upon  certain  conditions, 
983. 
remainder  taxable,  976. 
statutes,  —  early  statutes,  976 
later  acts,  978. 
list  of,  973. 


1350 


INDEX. 


[References 

NORTH  CAROLINA,  —  continued. 

statutes,  continued. 
present  act,  979. 
recent  statutes,  979. 
revised  code  of  1855,  976. 

transfers  taxable,  979. 

will,  the  statute  overrides  the  testa- 
tor's direction  to  make  no  returns, 
979. 

NORTH   DAKOTA, 

in  general,  986. 

accounts,   settlements  with  execu- 
tors or  trustees,  990. 
appraisal,  988. 

copy  of,  990. 

method  of,  990. 
collections,  990. 

constitution  1889,  a.  11,  §  176,  986. 
debts  deducted,  987. 
executors,  989. 

accounts  of,  990. 
foreign    estates   and    deduction   of 

debts,  987. 
foreign  estates  and  direct  and  col- 
lateral beneficiaries,  988. 
jurisdiction  of  the  court,  991.  " 
legacies  charged  upon  land,  989. 
lien,  988. 
life  estate,  989. 

non-resident,   settlement    of  estate 
of,  987. 

tax  on  estate  of,  988. 
payment  by  executor  or  trustee,  989. 

to  state,  990. 
property  certified  to  treasurer,  990. 

subject  to  tax,  987. 
rate,  986. 

real  estate,  legacies  charged  on,  989. 
remainders,  988. 
statute, — construction,  987. 

list  of,  986. 

present  act,  986. 

revised  code  of  1905,  c.  10,  986. 
transfers  taxable,  986. 
trustees,  989. 

settlement  of  accounts  of,  990. 


are  to  pages.] 

NOTICE, 

of  appraisal,  251. 

to  collecting   officers   unnecessary, 

67. 
to  parties  of  proceedings,  66. 

NORWAY, 
tax  in,  15. 

OFFICERS, 

effect  of  the  official  bond  of  register, 

291. 
fees  of  collecting  officers,  291. 
officers  for  collection,  290. 

OHIO, 

in  general,  992. 

account,  settlement  of,  1011. 

annuity  taxed  as  received,  1008. 

appeal,  1011. 

appraisal,  1010. 

notice  on,  1004. 
assessment,  appeal,  1011. 

when  interest  is  contingent,  998. 
collection,    information  to  probate 

judge,  1010. 
constitution,  a.  2,  994. 
a.  12,  994. 
a.  12,  §  2,  995. 
bill  of  rights,  994. 
constitutionality,  act  of  1906,  vaild 
in  part,  1006. 
discriminations  among  collateral 

kindred,  1002. 
except  as  to  estates  in  which  the 
inventory    has    already    been 
filed,  1007. 
exemptions  unequal,  1000. 
power  to  tax  inheritances,  994. 
progressive  feature  void,  1000. 
provisions  for  notice  on  appraisal 

valid,  1004. 
right  to  freedom  and  protection 

of  property,  994. 
tax  no  invasion  of  right  of  sale, 

1002. 
uniformity,  1000. 
what  laws  to  have  a  uniform  oper- 
ation, 994. 


INDEX. 


1351 


[References 

OHIO,  —  continued. 

contingent  interests,  assessment  of, 

998. 
definition,  "property,"  1011. 

sales,  1002. 
discount,  1009. 
estate,  —  life  estate,  998. 

particular  estates  and  remainders, 
1008. 
executors,  gifts  to,  1009. 
exemption,  996,  1008. 

bequest  to  Smithsonian  Institute, 
exempt,  997. 

charitable  institutions,  997. 

computing,  996. 

inequality  of,  1000. 

of  domestic  corporations,  1003. 

of  foreign  charitable  corporations, 
1003. 

various  gifts  to  the  same  person, 
997. 

what  relatives  exempt,  997. 
validity  of,  1005. 
fees,  1011. 

history  of  legislation,  995. 
interest,  1009. 
inventory,  1007,  1010. 
jurisdiction  of  probate  court,  1011. 
life  estate,  998. 
masses,  bequest  for,  996. 
nature,  993,  1008. 
non-resident,  tax  on   property  of, 

996. 
payment,  1009,  1010. 

tax  to  be  deducted,  1009. 

tax    to    be    retained    or    appor- 
tioned, 1010. 
penalty,  999. 
power  of  sale,  1010. 
"property,"  1011. 

within    the   jurisdiction    of   this 
state,  996. 
rate,  1007. 
real  estate,  legacy  charged  on,  1009. 

effect  of  repeal,  1007. 
refund  to  beneficiary,  1010. 
remainders,  1008. 


are  to  pages.] 

OHIO,  —  continued. 
repeal,  effect  of,  1007. 

validity  of  repeal,  excepting  cer- 
tain estates,  1007. 
reports,  1011. 
sales,  1002. 
statutes,  — 
amendments,  1002. 
effect  of  repeal,  1007. 

validity  of  repeal  excepting  cer- 
tain estates,  1007. 
list  of,  992. 
origin,  995. 
present  act,  1007. 
retroactive,  1004. 
St.  1893,  995,  996,  998. 
St.  1894,  p.  166,  999. 
St.  1904,  9,  398,  1003. 

repeal  of  the  act  of  1904,  1006. 
St.  1906,  c.  200,  1006. 
general  code  of  1910,  1007. 
transfers  taxable,  1007. 

OKLAHOMA, 
in  general,  1012. 

appraisal,   duty  of  insurance  com- 
missioner, 1020. 

state     auditor     application     for 
rehearing,  1021. 
appraiser's  duty,  pay,  1020 

court  to  appoint  appraisers,  1018. 

their  report,  1020. 
assessment,    county    court,  district 

judge,  1021. 
collection,  auditor  to  furnish  books, 
1022. 

county  judge  to  report,  1022. 

tax  not  paid,  procedure,  1021. 
compounding    tax,    treasurer    may 

agree  on  extension,  when,  1023. 
constitution  1S07,  a.  10,  1013. 
definitions,  1024. 

estate,  1024. 

property,  1024. 

transfer,  1024. 
discount,  1016. 
estate,  defined,  1024. 


1352 


INDEX. 


iReferences 

OKLAHOMA,  —  continued. 

executor,   bequest   to   executor   in 

lieu  of  commissions,  taxed,  when, 
1017. 

foreign  administrator  or  trustee, 
duty,  1018. 
exemptions,  1015. 
foreign  executor,  1018. 
interest,  1016. 

jurisdiction  of  county  court,  1018. 
lien,  how  paid,  1015. 
payment, — deferred  payment  of  tax, 
bond  to  secure,  1017. 

money  paid  to  state,  1023. 

treasurer  to  report,  1023. 
power  of  sale,  administrator  may 

sell  property  to  pay,  1016. 
property,  defined,  1024. 
rate,  primary,  by  classes,  1014. 

primary  rate  increased,  1015. 
receipt,  1023. 
refunding,  when  debt  proved  after 

tax  paid,  1017. 
statutes,— list  of,  1013. 

present  act,  1013. 

fat.  1907-8,  c.  81,  a.  11,  1013. 

compiled  laws  of  1909,  1013. 
"transfer,"  defined,  1024. 

taxable,  1013. 

OREGON, 

in  general,  1025. 
appeals,  1037. 

appraisal,  —  county  court  to  fix  time 

and  place  of  appraisement  and 

clerk  to  give  notice  to  witnesses, 

1033. 

county    court    to    give     notice, 

when,  1034. 
extension  of  time  to  file  appraise- 
ment, 1032. 
filing,  1032. 

immediate  appraisal,  when,  1033. 
reappraisement,  when,  1034. 
report  of   appraisers  to  be  filed 
with  county  court,  1034. 
appraisers,  appointment  of,  1033. 
penalty  for  appraisers  taking  fee 
or  reward,  1039. 


are  to  pages.] 

OREGON,  —  continued. 

avoiding  tax,  penalty  for  adminis- 
tering   personal    estate    without 
proving  will,  1038. 
assessment,  court  may  act  on  first 

inventory,  1033. 

charge, — payment     of     tax     when 

legacy  charged  on  property,  1030. 

collection, — administrators,  etc.,  to 

furnish      additional       reports, 

when,    1037. 

duplicate  receipts  to  be  furnished 

by  the  state  treasurer,  1036. 
duty   of   administrators,  etc.,  to 
notify  state   treasurer  of  trust 
estate,  when,  1038. 
duty   of   administrator,    etc.,    to 
send  inventory   and  appraise- 
ment to  state  treasurer,  1032. 
duty  of  county  judge;    notice  to 

state  treasurer,  1031. 
penalty   for   secreting   or  willful 

failure  to  produce  will,  1037. 
penalty  for  suppressing  will,  1038. 
recording     receipts     by     county 

officer,  1037. 
reports    by    county    judges    and 
custodian  of  deeds  and  records, 
1036. 
secretary  of  state  to  furnish  books 
and  forms  of  reports,    entries 
by  courts,  1035. 
tax   due   and    unpaid,    duty    of 
treasurer,  1035. 
compromise  of  amount  of  tax  due, 

1037. 
constitution  1857,  a.  1,  1025. 

a.  9,  1025. 
discount,  1029. 

executors,  duty  of,  filing  inventory 
and  appraisement,  1032. 
foreign,  payment  of  tax  on  trans- 
fer, 1030. 
taxes  upon  devises  and  bequests 
in  lieu  of  commissions,  1031. 
fees,  compensation  of  officers,  1038. 
foreign  estate  where  part  of  prop- 
erty is  in  state,  1038. 


INDEX. 


1353 


[References 

OREGON,  —  continued. 
interest,  1029. 

inventory,  court  may  act  on  first, 
1033. 
filing,  1032. 
jurisdiction   of   the   county   court, 

1031. 
lien,  1029. 

depositaries  of  securities  not  to 

deliver  same  until  notice  given 

to    state    treasurer;     penalty, 

1030.  - 

non-resident,  tax  on  property    of, 

1038. 
officers,  fees  of,  1038. 
payment, — deferred  payment ;  bond, 
1031. 
depositaries  of  securities  to  hold 

same,  1030. 
duty    of    heir    or   devisee   when 
legacy  payable  out  of  property ; 
legacy  for  limited  period ;  duty 
of  administrator,  1030. 
of  disbursements  by  state  treas- 
urer, 1039. 
to    whom    paid;     duplicate    re- 
ceipts, 1029. 
when    foreign    executor    assigns 
stock,  etc.,  1030. 
when  made,  1028. 
penalty,  1029. 
power  to  sell,  1029. 
property  outside  of  the  state,  1038. 

subject  to  tax,  1026,  1027. 
rates  of  tax,  1026,  1027. 
receipts,  1029,  1036. 

recording,  1037. 
refund    of    tax    erroneously    paid, 

1030. 
repeal,  1039. 

safe   deposit  company,  not  to  de- 
liver   securities,  until   tax   paid, 
1030. 
statutes, — list  of,  1025. 
present  act,  1027. 
repeal,  1039. 
st.-1903,  p.  49,  1026. 
St.  1905,  c.  178,  p.  309,  1027. 


are  to  pages.] 

OREGON,  —  continued. 
transfers  taxable,  1026. 
trustee,  bequest  to,  1031. 
when  tax  accrues,  1028. 
will,  penalty  for  suppressing,  1038. 

PARTIES, 

in  collection  proceedings,  290. 
PARTITION   PROCEEDINGS, 
effect  of,  138. 

effect  of  partition  on  lien,  295. 
PARTNERSHIP, 

loan  to  partnership,  138. 
partnership  debts,  266. 
profits  of  partnership,  138. 
situs  partnership  interests,  182. 
PAYMENT   OF  TAX, 
form  of  receipts,  297. 
pecuniary  legacies,  297. 
subrogation  of  corporation  paying 
taxes,  293. 
PECUNIARY  LEGACY, 

payment  of,  297. 
PENALTY, 

from  what  date  computed,  228. 
liability  for,  241. 
tax  not  a  penalty  or  forfeiture,  8. 
what  law  governs,  227. 
PENNSYLVANIA, 
in  general,  1040. 
adopted  children,  1057. 

special  adoption  statutes,  1073. 
advancements  subject  to  tax,  1073. 
annuity,  how  tax  on  annuity  paid, 
1076. 
payable  out  of  future  profits  of 
land,  1077. 
appraisal, — 

appeal,  1047,  1088. 
apportionment,  expense  of  audit, 

1089. 
claims  of  mortgagors,  1088. 
deduction  of  debts,  1087. 
does     not     determine     liability, 

1047. 
final,  1050. 

name  by  executors,  1083. 


1354 


INDEX. 


PENNSYLVANIA, 

appraisal,  continued. 

income   after  death   not  consid- 
ered, 1088. 
increase  in  value  after  death  of 

testator  not  included,  1047. 
in  which  county,  1047. 
legacy  of  right  to  use,  1087. 
life  estate  and  remainder,  1089. 
notice,  1088. 
only  one,  1088. 

tax  assessed  on  the  value  of  the 
estate  at  the  time  the  right  of 
possession  accrues,  1082. 
tax  shall  not  be  payable,  increase 
in  value  of  estate  after  death 
of  decedent,  1081. 
application  of  revenues,  1046. 
appraisal,  1046,  1047,  1078. 
appeal  from,  1047,  1087. 
appraisers,  1055. 

to  take  no  fees,  1089. 
avoiding  tax,  beneficiary  societies' 

payments,  1069. 
beneficiary    society,    payment    by, 

1069. 
cemetery,  care  of  burial  lots,  1057, 

1072. 
charge,  on  real  estate,  1085. 
citation,  1045,  1090. 
commissions  for,  1090. 
duties  of  register,  1048. 
information    as    to    real    estate, 

1086. 
liability  under  land  of  register, 

1045. 
notice  as  to  real  estate,  1045. 
the  words  "proper  prothonotary's 
office,"  1048. 
collection,    administrative  features 
strengthened,  1047. 
by  county  treasurer,  1091. 
compromise,  sums  paid  in,  1071. 
condition,  gift  on,  1075. 
gift  to  widows,  1070. 
conditional    or  contingent  estates, 

1085. 
consideration,  legacy  for,  1075. 


[References  are  to  pages.] 
continued.  PENNSYLVANIA,  —  continued. 


constitution,  1873,  a.  9,  1042. 
constitutionality,    classifying   step- 
children with  lineals,  1070. 
progressive  rate,  1042. 
property  tax,  1059. 
uniformity,  1042,  1056. 
validity,  1058. 
conversion,  1060. 

land  of  a  Pennsylvania  testator, 

1060. 
lien  of  tax,  1062. 
power  to  sell  if  necessary,  1062. 
sale  at  death  of  life  tenant  and 
investment  outside  state,  1061. 
sale  postponed,  1062. 
where    a    non-resident    testator 

directed  sale,  1060. 
where    the    testator    gives    the 
executors    only    a    discretion, 
1061. 
creditor,  gift  to,  1070. 
deed,  delivery  of,  1079. 

in  contemplation  of  death,  1077. 

not  delivered,  1080. 

unrecorded,  1079. 

in  trust,  1078. 

"litigation,"  1084. 

"persons   dying  seized   thereof," 

1068. 
"situated  within  this  state,"  1065. 
disclaimer,  release  by  legatee,  1073. 
discount,  1054,  1084. 
domicile,  1069. 
double  taxation,  1070. 
dower,  1070. 

right  exercised,  1071. 
evasion,  1080. 

executors,   bequest  in  lieu  of  com- 
missions, 1081. 
no  appeal  by,  1083. 
personal  liability  of  executors  not 
barred  by  limitations,  1092. 
exemption,  adopted  children,  1057. 
children    of    former    husband   or 

wife  exempted,  1057. 
care  of  burial  lots,  1057,  1072. 


INDEX. 


1355 


[References 
PENNSYLVANIA,  —  continued. 
exemption,  continued. 

of  $250  applies  to  whole  estate, 

1080. 
refers  to  whole  estate,  1044. 
grandmother  not  exempt,  1044. 
individual,  1042. 
to  religious  society  on  condition, 

1075. 
special,  1050,  1051. 
stepchildren,  1070. 
United  States  bonds,  1062. 
widow  of  a  son,  1073. 
wife  or  widow  of  a  son  exempted. 
1047. 
fees,  commission  of  county  treasur- 
ers, 1045. 
compensation  of  registers,  1055. 
county  teasurers,  1045. 
of  registers,  1052. 
probate  fee,  1045. 
history  of  Pennsylvania  act,  1043. 
illegitimates,  1057,  1075. 
income  after  death,  1069. 
interest,  1048,  1050,  1054,  1084. 
delay,  1084. 

where  estate   involved  in  litiga- 
tion, 1048. 
lien,  1049,  1081,  1091. 

effect  of  partition  on,  1092. 
judicial  sale  on  lien,  1092. 
on  conversion,  1062. 
life  estate,  1082,  1089. 
limitations,  1049,  1091. 
limitation,  on  remainders,  1051. 
personal    liability    of    executors, 

1092. 
protection  of  bona  fide  purchasers 
after  lapse  of  time,  1092. 
nature  of  statute,  1056. 
nature  of  tax,  1059. 
non-resident,     intangible    property 
in  Pennsylvania  of  a  non-resi- 
dent, 1067. 
interest  of  non-resident  in  Penn- 
sylvania Partnership,  1065. 
Pennsylvania   personalty  of  non- 
resident, 1066. 
power  under  will  of,  1076. 


are  to  pages.] 

PENNSYLVANIA,  —  continued. 
partition,  effect  of,  on  lien,  1092. 
payment,  direction   in   will  as  to, 
1064. 
duties  of  state  treasurer,  sinking 

fund,  1052. 
executors  to  retain  tax,  1045. 
from  what  fund  payable,  1064. 
payment  from  share  not  charged 

with  tax,  1065. 
on  transfer,  1086. 
out  of  real  estate,  1085 
returns,  1052. 
tax  deducted,  1085. 
to  state  treasurer,  1045. 
where  payment  of  legacies  post- 
poned, 1084. 
penalties,  1054,  1050. 

charged  to  administrator,  1085. 
power,  donees  classified  as  relatives 
of  original  testator,  1075. 
under  will  of  non-resident,  1076. 
property,    resident's    personalty   in 
another  state  where    he    owes 
debts,  1066. 
situs  of  government  bonds,  1066. 
property  tax,  1059. 
rate  made  five  per  cent,  1046. 
progressive,  1042. 
tax  on  life  estate  and  remainder 
need   not  total  five  per  cent, 
1083. 
real  estate  outside  state,  1068. 
receipts,  1046,  1086. 
records,  1090. 
refund,  1052,  1056,  1086. 

special,  1046. 
register  of  wills,  accounts  of,  1046. 
register,  bond  of,  1091. 
fees  of,  1055. 
official  bond  of,  1045. 
returns  by,  1091. 
release,  effect  of  release  by  legatee, 

10^3. 
repeal,  1052,  1092. 
returns,  1081. 

remainder,   1044,  1048,  1054,  1089. 
assessed  as  of  time  right  of  pos- 
session accrues,  1082. 


1356 


INDEX. 


[References 

PENNSYLVANIA,  —  continued. 
remainder, — 

payment  of  tax  on,  1047. 
provided    that   the    owner   shall 
have  the  right  to  pay  the  tax, 
1082. 
tax  on  life  estate  and  remainder 
need  not  total  five  per  cent, 
1083. 
until  the  person  liable  shall  come 

into  actual  possession,  1082. 
remaindermen    liable    for    whole 
tax  when  life  tenant  is  exempt, 
1083. 
when  tax  accrues,  1049,  1081. 
situs  of  government  bonds,  1066. 
statutes, — amendments,  1055. 
early  statutes,  1043. 
list  of,  1041. 
present  act,  1058. 
repeal,  1052,  1092. 
retroactive,  1046,  1048,  1049. 
statutes  codified,  change  in  ex- 
existing  law,  1053. 
title,  1058. 
St.  1826,  c.  72,  p.  227, 1043. 
St.  1841,  c.  49,  1045. 
St.  1846,  c.  390,  1046. 
act  of  1849,  the  object  of,  1046. 
St.  1850,  c.  147,  1048. 
St.  1855,  c.  450,  1050. 
St.  1887,  c.  37  1052,  1058. 

codifies  existing  law,  1053. 
St.  1897,  c.  47,  p.  56,  1055. 
St.  1911,  c.  105,  1057. 
stepchildren,    properly    classed    as 

lineals,  1070. 
transfers,  taxable,  1058. 

in  contemplation  of  death,  1077. 
trust  deeds,  1078. 
trust,  property  invested  in  name  of 

another,  1069. 
United   States,  bonds  not  exempt, 
1062. 
federal    inheritance   tax   not   in- 
cluded   in    direction    in    will, 
1064. 
what  law  governs,  1060. 


are  to  pages.] 

PENNSYLVANIA,  —  continued. 

when  tax  accrues,  as  of  death  of 
testator,  1059. 
on  remainders,  1049,  1087. 
widow  of  the  son,  1073. 
will,  direction  in  will  as  to  payment 
of  tax,  1064. 

PERSON, 

includes  corporations,  207. 
may  include  several,  183. 

PERSONAL    PROPERTY, 
"personal  goods"  defined,  52. 
See  Property. 

PERSONS   LIABLE, 
adoption,  242. 
aliens,  237. 

annuity  to  executor,  238. 
appraisal  has  no  effect  on  liability, 

264. 
as  between  life  tenant  and  remain- 

deiman,  238. 
bastards,    effect    of    legitimization, 

246. 
charge  of  tax  subsequently  enacted, 

236. 
children    of    deceased    beneficiary, 

239. 
corporation  to  be  created,  238. 
descendants  of  collaterals,  239, 
direction     as    to    money    includes 

annuity,  236. 
direction  in  a  will  that  an  annuitant 

"is  to  receive  not  less  than  $1500 

a  year,"  236. 
executors  or  beneficiaries,  241. 
individuals     not    include    trustees, 

236. 
lineal  descendants,  239. 
loss  of  tax  paid  unnecessarily  falls 

on  residue,  246. 
mutually  acknowledged  relation  of 

parent,  243. 
■  order  of  probate  court  as  protection, 

237. 
payments  of  tax  should  appear  in 

executor's  account,  242. 
penalty,  241. 


INDEX. 


1357 


[References 

PERSONS  LIABLE,  —  continued. 

purchaser  of  land  subject  to  lien 
of  tax,  296. 

residue  in  trust  to  pay  annuity,  237. 

son  of  daughter-in-law,  240. 

specific  legatee,  242. 

stepchildren,  240. 

strangers,  237. 

tax  officials  joined  in  litigation  be- 
tween other  parties,  293. 

under  direction  of  will,  or  of  court, 
235. 

where  no  next  of  kin  are  known, 
239. 

where   relative   was   both    nephew 
and  stepson,  240. 

where  tax  paid  improperly,  269. 

"widow  of  a  son,"  243. 
PHILIPPINE   ISLANDS, 

in  general,  1093. 
PLEDGE, 

stock  pledged  by  non-resident,  143. 

stock  pledged  with  brokers,  143. 

title  when  collateral  redeemed,  143. 
POLITICAL   ECONOMY, 

ability  or  faculty  to  pay  as  test,  11. 

arguments  classified,  11. 

arguments  in  favor  of  and  against 
the  tax,  10. 

how  often  property  becomes  sub- 
ject to  tax,  10. 

progressive  rates  in,  60. 

strongest  argument  for  the  tax,  11. 

tax  sound  as  regards,  9. 
POLL   TAX, 

inheritance  tax  not  a  poll  tax,  41. 
PORTO   RICO, 

in  general,  1093. 

progressive  rate,  1042. 

the  enabling  act,  1093. 

statutes,  1093. 
POWERS, 

in  general,  116. 

exemptions     of     interests     under 
powers,  206. 

of  revocation  reserved  in  deed,  106. 

immaterial  whether  power  created 
by  will  or  by  deed,  121. 


are  to  pages.] 

POWERS,  —  continued. 

a  legislative  function  to  fix  exemp- 
tions, 194. 

what  law  governs,  19,  117. 

when  tax  on  retroactive,  70. 

when  power  is  created  before  pas- 
sage of  statute,  118. 

where  appointment  is  to  same  per- 
sons   named   in   original   instru- 
ment, 121. 
PRACTICE, 

actions  of  contract  against  benefi- 
ciary, 290. 

in  what  proceedings  assessment  is 
proper,  282. 

on  collection,  293. 

on  refunding,  298. 

proceedings  to  test  validity,  38. 

proper  decree   where  statute  mis- 
construed by  taxing  officials,  288, 

when  proceedings  premature,  291. 

where  expenses  of  settlement  un- 
known, 270. 

who  may  attack  validity,  39. 

See  Appraisal,  Assessment,  Collec- 
tion. 
PREVENTION  OF  CRUELTY. 

exemption,  219. 
PRINCIPAL  AND  INCOME, 

income  after  death,  137. 

income  due  after  repeal  of  tax,  82. 

liabilities  as  between  life  tenant  and 
remainderman,  238. 

of  life  estates,  185. 

primary    and    secondary    rate    as 
applied  to,  226. 
PROGRESSIVE  RATE, 

See  Rates. 
PROPER  COUNTY, 

defined,  291. 
PROPERTY, 

charge  on  future  rents,  136. 

claim  against  estate  of  another,  136. 

conversion  in  general,  139. 

corporations  chartered  in  more  than 
one  state,  170. 

distinction  between  tangible  and  in- 
tangible, 177. 


1358 


INDEX. 


[References 

PROPERTY,  —  continued. 

exemptions,  real  as  well  as  personal 
property  considered  in  reckoning, 
200. 

foreign  personal  estate  of  resident, 
167. 

foreign  real  estate  of  resident,  168. 

fraudulent  conveyance,  136. 

gift  on  condition  legacies  paid,  136. 

good  will,  136. 

income  after  death,  137. 

insolvent  estate,  135. 

lessee's  interest,  137. 

loan  to  partnership,  138. 

manumission  of  slave,  141. 

money  for  investment,  138. 

non-resident  trustee  holding  prop- 
erty for  resident,  169. 

property  in  other  states  of  domestic 
coroporation  considered,  169. 

personalty  of  non-resident,  153. 

profits  of  partnership,  138. 

resident  owner  of  stock  in  foreign 
companies,  168. 

seat  in  stock  exchange,  138. 

stock  in  joint  stock  association,  137. 

tangible  assets,  167. 

PROPERTY  TAX, 

inheritance  tax  is  not,  4. 

tax  on   right  to  acquire  property 

inter  vivo^  as,  6. 
void  as  in  addition  to  annual  prop- 
erty tax,  42. 
PROPORTIONAL  TAX, 
required,  47. 

PUBLIC  LIBRARIES, 

See  Exemptions. 
PUBLIC  OFFICERS, 

See  Officers. 

PUBLIC   PURPOSES, 

necessary  for  validity,  36. 
validity  of  appropriations  to  special 
fund,  37. 

QUAKERS, 

society  of  Friends  treated  as  re- 
ligious, 210. 


are  to  pages.] 

RATES, 

confiscatory,  63. 

constitutional    limitation    in,    41. 

primary  and  secondary,  as  applied 

to  income,  226. 
progressive, — 

ability  or  faculty  to  pay  as  test, 

11. 
confiscatory  rates,  63. 
computation  of  progressive  rates, 

225. 
exemptions  in  case  of  progressive 

rates,  201. 
from  the  aspect  of  political  econ 

omy,  60. 
history  and  principles,  58. 
increased  rate  applied  to  excess 

only,  60. 
inheritance  taxes  may  eat  up  an 
entire  estate  and  possibly  bank- 
rupt the  executor,  64. 
primary  and  secondary  rates  as 

applied  to  income,  226. 
the  Pennsylvania  doctrine,  62, 
there  is  no  difference  in  principle 
between  an  exemption  given  to 
direct  inheritances  and  a  pro- 
gressive tax,  58. 
validity  in  general,  57. 
validity  admitted,  62. 
reckoned     by     beneficial    interests 

rather  than  by  estate,  224. 
remainder  or  contingent  interests, 

224. 
what  law  governs,  224. 
REAL  ESTATE, 

debts  as  affecting,  266. 

debts  secured  by  real  estate,  266. 

delivery  of  deed,  133. 

effect  of  decree  as  to  title,  133. 

foreign  real  estate  of  resident,  168. 

general  taxes  on,  268. 

"goods  and  effects,"  including,  61. 

leasehold  interests,  134. 

lien  on,  294. 

of  non-residnet,  151. 

subject  to  mortgage,  132. 

partition  proceedings,  133. 


INDEX. 


1359 


[References 
REAL  ESTATE,  —  continued. 

share   of   co-tenant  —  liability   for 

improvements,  132. 
stranger  paying  taxes  on,  269. 
REAL  ESTATE  TRUST  ASSOCIA- 
TION. 
situs  of  interest  in,  182. 
RECEIPT, 

form  of,  297. 
RECIPROCAL  PROVISIONS, 

to  avoid  double  taxation,  147. 
RECORDING. 

See  Deeds. 
REFUND  OF  TAX, 
defences,  300. 
estoppel,  300. 
interest,  299. 
on  ground  of  newly  discovered  debt, 

288. 
proceedings,  298. 
what  law  governs,  298. 
when,  298. 
RELATIONSHIP, 

classification  by,  53. 
RELATIVES, 

See  Persons  Liable. 
RELIGIOUS  CORPORATIONS, 

See  Exemptions. 
REMAINDERS,    CONTINGENT  & 
FUTURE  ESTATES, 
in  general,  187,  262. 
appraisal  of  remainder  after  mar- 
riage, 263. 
as  of  what  date  future  interests 
are  appraised,  253. 
contingent  remainders,  188. 
effect    on     remainders    of    saving 

clause  in  repeal,  83. 
liability    between    life   tenant   and 

remainderman,  238. 
lien  in  case  of  remainder,  294, 
rates  on,   remainder  or  contingent 

interests,  224. 
remainders,  187. 

remainder    interests   vested   before 
passage  of  statute,  76. 


are  to  pages.] 

REMAINDERS,  ETC.,— continued. 
remainder    may    be    liable    though 

prior  estate  exempt,  206. 
report  and   security  for  contingent 

interests,  254. 
vested  remainders,  188. 
when  tax  accrues,  on  future  inter- 
ests, 232. 
if    the     remaindermen    are    not 
ascertainable,  233. 
where  the  children  of  the  testator 
took  vested  interests  subject  to 
open,  77. 
REPEAL, 

See  Statutes. 
RESIDENCE  AND  RESIDENTS, 
defined,  3. 

See  Non- Resident  Decedents. 
RESIDUARY  ESTATE, 
appraisal  of,  252. 
liabilities  where  residue  in  trust  to 

pay  annuity,  237. 
loss  of  tax  paid  unnecessarily  falls 
on  residue,  246. 
RETROACTIVE  STATUTES, 

See  Statutes. 
REVENUES, 

inheritance  tax  is  revenue  act,  4. 
revenue   legislation  to  originate  in 
house  of  representatives,  44. 
REVERSIONS  AND    EXPECTAN- 
CIES, 
See  Remainders. 
REVOCATION, 

power  of,  reserved  in  deed,  106. 
RHODE  ISLAND, 

constitution,  1842,  a.  4,  {  15,  1094. 
ROMAN  LAW, 
history,  13,  14. 

SAFE  DEPOSIT  COMPANY, 

validity  of  statute  as  to  delivery 
of  box,  128. 

SALE, 

defined,  88. 

effect  of  judicial  sale  on  lien,  295. 


1360 


INDEX. 


[References 

SALE,  —  continued. 

no  personal  liability  on  purchaser 

of  land  subject  to  lien,  296. 
sale  above  price  fixed  on  appraisal, 

255. 
above  the  appraised  value  as  evi- 
dence on  appraisal,  252. 
SAVINGS  BANK  DEPOSITS, 

See  Deposits. 
SAVING  CLAUSE  IN  REPEAL, 

See  Statutes. 
SECURITIES, 

See  Choses    in    Action,     Corpora- 
tions. 
SERVICES, 

deed  for,  113. 
SETTLEMENT, 

defined,  232. 
SHARES  OF  STOCK, 

See    Choses    in    Action,    Corpora- 
tions. 
SISTER, 

See  Beneficiaries. 
SITUS, 

double    taxation    at    domicile    of 
owner  and  at  situs  of  property, 
146. 
jurisdiction    based    solely    on    the 
situs  of  personal  property  in  the 
state,  155. 
See    Choses   in   Action,  Non-Resi- 
dent Decedents. 
SLAVE, 

manumission  of  slave,  141. 
SON-IN-LAW, 
liability,  240. 
SOUTH  CAROLINA, 
in  general,  1094. 

constitution,  1895,  a.  10,  §  1,  1094. 
SOUTH  DAKAOTA, 
in  general,  1095. 
appraisal,  1102. 

appraisers,  misconduct  of,  1102. 
collection, — citation,  1103. 
county  court  record,  1103. 
enforcing  payment,  1100. 
expenses  of  summons,  1104. 
notice  to  county  treasurer,  1101. 


are  to  pages.] 

SOUTH  DAKOTA,  —  continued. 
collection,  continued. 

notice  to  state's  attorney,  1103. 
statement    of    property    taxable, 
1103. 
constitution,  1889,  a.  11,  §  2,  1095. 
1889,  a.  11,  §  8,  1096. 
progressive  tax,  1098. 
constitutional, — 

valid    though    no    provision    for 

enforcement,  1098. 
validity  of  exemptions,  1098. 
executor,  transfer  by  foreign,  1102. 
exemptions,  validity  of,  1098. 
interest,  1100. 

jurisdiction  of  county  court,  1103. 
lien,  1104. 
life  estates,  1100. 
limitations,  1004. 
nature  of  right  of  succession,  1097. 
nature  of  tax,  1097. 
payment,  1101. 

to  state  treasurer,  1104. 
power  of  sale,  1101. 
progressive  tax  upheld,  1098. 
rates,  1096. 
receipts,  1103. 

refund  of  tax  paid  under  a  mistake, 
1102. 
on  proof  of  debts,  1101. 
remainders,  1100. 
statutes,  list  of,  1095. 

suggestions  for  new,  1104. 
1905,  c.  54,  1096. 
transfers  taxable,  1096. 
when  tax  accrues,  1100. 
SPECIAL   ACTS, 

restrictions  against  special  laws  ap- 
plicable, 42. 
SPECIAL    EXEMPTIONS, 

See  Exemptions. 
SPECIFIC  LEGATEE, 

liability  of,  242. 
STATE, 

federal  taxation  of  bequest  to,  211. 
must  be  given  same  right  of  appeal 

given  parties,  285. 
state  taxation  of  bequest  to  United 
States,  211. 


INDEX. 


1361 


STATUTE, 

amendment  does  not  affect  validity 
of  tax  already  imposed,  80. 
extending  exemptions,  79. 
effect  of,  33. 
without  repeal,  80. 
construction  of  statute  copied  from 
another  jurisdiction,  33. 
executive  practice,  32. 
prospective,  69. 

rule  of  reasonable  construction,  32. 
strict,.32. 
curative  act,  78. 
history   19. 

of  federal  legislation,  15. 
now  employed  in  nearly  all  en- 
lightened countries,  15. 
present  situation,  15. 
repeal,-^ 

amendment  without  repeal,  80. 
effect  of  repeal  after  appeal  taken, 

82. 
income  due  after  repeal,  82. 
implied  repeal  by  new  complete 

act  or  revenue  law,  81. 
repealing   act  a  continuation  of 

earlier  act,  80. 
repeal    prevents    subsequent    re- 
covery of  taxes  due,  82. 
saving  clause,  82. 
'  clause  saving  only  estates  where 
inventory  already  filed,  83. 
effect  of   saving  clause  on  re- 
mainders, 83. 
under  California  constitution  pro- 
hibiting   surrender    of    public 
rights,  81. 
retroactive,  — 

amendment  does  not  affect  valid- 
ity of  tax  already  imposed,  80. 
amendment     extending     exemp- 
tions, 79. 
construction  inapplicable  to  con- 
ditions    prior    to     its    enact- 
ment, 75. 
construed  as  prospective,  69. 
curative  act,  78. 
decisions  of  the  supreme  court,  72. 


IReferences  are  to  pages.) 

STATUTE,  —  continued. 


retroactive,  continued. 

deed  executed  before  statute  en- 
acted, 108. 
deed  made  before  valid  statute 

enacted,  101. 
effect  of  a  subsequent  treaty,  76. 
effect  of  premature  distribution, 

73. 
estate  not  finally  closed,  71. 
exemptions,  74. 

gifts  in  ter  vivos,  76. 
increase  in  value,  tax  on,  74. 
limitations,  statute  of,  292. 
location  of  assets  in  state  in- 
sufficient, 75. 
powers,  69. 
power  created   before  passage 

of  statute,  118. 
property  distributed,  73. 
remainder  interests  vested  be- 
fore passage  of  statute,  76. 
statute  applying    retroactively 
to  estates  in  the  proccbsi  of 
administration,  70. 
after  title  has  passed,  73. 
trustee's  commissions,  21. 
where  the  children  of  the  testa- 
tor took  vested  interests  sub- 
ject to  open,  77. 
what  law  governs,  79. 
state  statutes,  copied   from    other 

states,  14. 
unconstitutional  statute,  effect   of, 
21. 
validity,  see  Constitutionality. 
See  for  particular  statutes,  names 
of  states. 

STATUTE  OF  LIMITATIONS, 
See  Limitations. 

STATUTORY   EXEMPTIONS, 
See  Exemptions. 

STATUTORY  LIENS, 
See  Liens. 

STEPCHILDREN, 
See  Beneficiaries. 


1362 


INDEX. 


[References 

STOCK, 

See  Corporations. 
STOCKBROKERS, 

See  Brokers. 
STOCK   EXCHANGE, 

taxation  of  seat  in,  138. 
STRANGERS   TO  THE  BLOOD, 
classification    by    relationship,    see 

Constitutionality, 
defined,  237. 

properly  distinguished  from  lineals, 
54. 
SUBROGATION, 

corporation  paying  taxes,  2d3. 
creditors  where  tax  paid  from  prop- 
erty subject  to  debts,  273. 
where  beneficiary  advances  money 
to  pay  tax,  298. 
SUCCESSION    AND    LEGACY 
TAXES, 
succession  tax,  2. 

legacy  and  succession  tax  disting- 
uished, 2. 
SUPPORT, 

deed  for,  115. 
SURROGATE, 

See  New  York. 
SWEDEN, 

tax  in,  15. 
SWITZERLAND, 

tax  in,  15. 
TABLES, 

anmlity,  480,  482,  1239. 

reference  to,  43. 
list  of  corporations,  1287. 
rates  and  exemptions,  1283. 
states  which  tax  stock  of  domestic 
corporations   owned  by  non-resi- 
dents;    states    which   tax   stock 
owned  .  by    non-residents  of  for- 
eign corporations    owning   prop- 
erty within  state,  1285. 
states  with  an  inheritance  tax  law; 
states   which   tax  direct   inherit- 
ances; states  which  tax  collateral 
inheritances.  1281. 


are  to  pages.] 

TANGIBLE     AND     INTANGIBLE 

PROPERTY, 
See  Property. 
TAXES, 

charge    of    tax    subsequently    en- 
acted, 236. 
general  taxes  on  real  estate,  268. 
liability  where  tax  paid  improperly, 

269. 
stranger  paying  taxes  on  land,  269. 
TEMPERANCE   SOCIETIES, 

exemption,  222. 
TENANT    FOR  LIFE, 

See  Life  Estate. 
TENANT  IN  REMAINDER, 

See  Remainders. 
TENNESSEE, 
in  general,  1105. 
acceleration,  1111. 
appraisal,  — 

clear  value,  1108. 

deduction  of  debts,  1109. 
appraiser,  1114. 

duties,  1118. 

to  accept   no  fees  from  parties, 
1114. 
avoiding  tax,  by  compromise,  1108. 
bonds,  1118. 
charge,  —  legacy  charged    on    real 

estate,  1113. 
clerks  to  give  bonds,  1117. 
collection,  —  attorney     general    to 
prosecute,  1118. 

fees  for,  1116. 

information  as  to  real  estate,  1113. 

proceedings,  1116,  1123. 
compromise  of  will,  1108. 
conditional  estates,  1113. 
constitution  1870,  a.  2,  §  28,  1106. 
constitutionality,  1107. 

validity  of  classification  by  rela- 
tionship, 1119.  t 

validity  of  exemptions,  1120. 
debts,  deduction  of,  1109. 
definitions,  — 

"clear  value,"  1108. 
"inheritances,"  1123. 


INDEX. 


1363 


[References 

TENNESSEE,  —  continued. 
discount,  1112. 
election,  of  widow,  1110. 
executors,  bequest  to,  1110. 

bonds,  1118. 
exemptions,  1107. 

charities,  1122. 

practice  on,  1109. 

United  States  bonds,  1108. 

validity  of,  1120. 
heirs,  —  what  law  governs,  1109. 
history  ot  inheritances  taxes,  1105. 
inheritances  defined,  1123. 
insurance,  —  proceeds  of  a  life  in- 
surance policy  taxable,  1109. 
interest,  1111,  1112. 
lien,  1118. 

life  estate,  merger  of,  1111. 
limitations,  1118. 
marshalling  assets,  — 

effect  of  election  by  non-resident 
beneficiary,  1110. 
nature  of  right  of  succession,  1108. 

of  tax,  1107. 
partnership  debt,  1109. 
payment,  1113. 

on  transfer,  1114. 

tax  to  be  deducted,  1112. 

tax    to    be    paid    before    estate 
settled,  1118. 
property, — insurance,  1109. 
rate,  1107. 

real  estate,  legacy  charged  on,  1113. 
receipts,  1113. 
records,  1115. 
refund  to  pay  debts,  1114. 
remainders,  1120. 

when  tax  on  accrues,  1110,  1111. 
returns,  1118. 
statutes,  — 

amendments,  1122. 

effect  of  revenue  acts,  1121. 

list  of,  1106. 

present  act,  1123. 

repeal,  1119. 

effect  of  repeal  by  revenue  law, 

1121. 
not  "repealed  by  revenue  law, 
1121. 


are  to  pages.] 

TENNESSEE,  —  continued. 
statutes,  continued. 
retroactive,  1119. 
revenue  statutes,  1119. 
revenue  statute  prevails,  1120. 
St.  1891,  c.  25,  1106. 
St.  1893,  c.  89,  §  7,  1119. 
St.  1893,  c.  174,  1107. 
St.  1909,  c.  479,  1123. 
transfers  taxable,  1107. 
United  States,  — 

bonds  not  exempt,  1 108. 
what  law  governs,  — 

persons  taking  by  descent,  1109. 
when  tax  accrues,  — 

on  remainders,  1110,  1111. 
pendency   of   contest    over   will, 
1112. 
will,  compromise  of,  1108. 
TERM  OF  YEARS, 

See  Landlord  and  Tenant. 
TEXAS, 

in  general,  1124. 

account,  allowance  of,  1127. 

appraisal,  1126. 

assessment,  1126. 

charge,  —  legacy   charged    on    real 

estate,  1127. 
collection,  —  action  to  recover,  1127. 
allowance  of  final  account,  1127. 
when     administrator     dispensed 

with,  1128. 
where    application    for    probate 
not  made,  1125. 
constitution,  1876,  a.  8,  §  1,  1124. 
estates,  —  particular  estates  and  re- 
mainders, 1125. 
executor,  bequest  to,  1125. 
exemptions,  1124. 
interest,  1126. 
inventory,  1125. 
lien,  1126. 
payment,  1127. 

deduction  of  tax,  1126. 
deposit  by  state  treasurer,  1127. 
payment  to  state  treasurer,  1127. 
rate,  1124. 

real  estate,  legacy  charged  on,  1127. 
refund  to  pay  debts,  1127. 


1364 


INDEX. 


[References 
TEXAS,  —  continued. 
remainders,  1125. 
statutes,  — 

St.  1907,  c.  21,  p.  496,  1124. 
the  present  act,  1124. 
taxable  transfers,  1124. 

TITLE, 

of  decedent,  — 

before  possession  taken  of  certifi- 
cates of  stock  given,  130. 

deeds  signed  and  not  delivered, 
130. 

effect  of  decree  as  to  title,  133. 

effect  of  fraudulent  conveyance, 
136. 

property  already  bought  by  lega- 
tee, 130. 

prope*ty    standing    in    name    of 
another,  131. 

title  of  statute  to  be  expressed,  42 

See  Pledge. 

TOMB, 

expense  of,  276. 

TRADE  SECRETS, 
appraisal  of,  259. 

TRANSFERS, 
causa  mortis,  85. 

community  property,  rights  in,  97. 
compromise  of  interests  under  will, 

89. 
curtesy  or  dower,  statutory  rights 

of  surviving  spouse,  95. 
homestead,  98. 
in  contemplation  of  death,  — 

considered,  99. 

definition,  99. 

intent  to  evade  tax,  100. 
See  further.  Deeds, 
inter  vivos,  85. 

right   to  acquire  property  inter 
vivos  a  natural  right,  6. 
interest  in  insurance  or  beneficial 

society,  94. 
joint  deposit,  89. 
sale,  88. 
See  Deeds,  Wills,  etc. 


are  to  pages.] 
TREATY, 

effect  of  a  subsequent  treaty,  76. 
effect    on    discrimination     against 

aliens,  49, 
"goods   and    effects"    include    real 

estate,  51. 
heirs  defined  in,  51. 
"inhabitants,"  53. 
New  York  statute  of  1887  is  not  a 

"detraction  tax,"  51. 
"personal  goods,"  52. 

TRUST  COMPANY, 

See  Banks,  Joint  Interests,  etc. 
TRUSTS  AND  TRUSTEES, 
charity,  223. 
deed,  88. 
direction   to   individuals   does   not 

include  trustees,  236. 
extrinsic  to  will,  223. 
fund  in  hands  of  court  in  trust,  215. 
imposed  by  extrinsic  evidence,  88. 
interests  under,  taxed,  190. 
law    governing    trustee's    commis- 
sions, 21. 

property  in  hands  of  trustee,  21. 
non-resident  trustee  holding  prop- 
erty for  resident,  169. 
situs  of  interest  in  real  estate  trust 

association,  182. 
title  to  property  standing  in  name 

of  another,  131. 
trustees'  commissions,  272. 

estimated  commissions  of,  273. 

where   will   forbids   commissions 
to,  270. 

UNASCERTAINABLE  INTERESTS, 
when  taxable,  189. 
See  f  uther.  Remainders. 

UNAVOIDABLE  DELAY, 
defined,  229. 

UNIFORMITY, 

See  Constitutionality. 

UNION  FOR  MINISTERIAL  EDU- 
CATION, 
religious,  210. 


INDEX. 


1365 


[References 
UNITED  STATES, 

federal  inheritance  tax,  273. 

federal  taxation  of  bequest  to 
state  or  municipality,  211. 

history  of  federal  legislation,  14. 

not  exempt  as  domestic  corpora- 
tion, 203. 

power  of  congress  to  impose  tax,  29. 

state  taxation  of  bequest  to,  211. 

tax  need  not  include  realty  and 
personalty,  42. 

UNITED  STATES  STATUTES, 
in  general,  1250. 

acceleration  of  remainders,  1261. 
adopted  child,  1270. 
advances,  1256. 

alien  estopped  to  claim  devise  to 
him  void,  1263. 
limited  to  wills  executed  in  this 

country,  1269. 
not  applicable  to,  1256. 
property  of,  1268. 
annuity,  1269. 
appraisal,  1274. 

of  life  interest  after  death  of  life 

tenant,  1274. 
remainder  after  death  or  remar- 
riage, 1274. 
assesstnent,  where  estate  insolvent, 

1261. 
beneficiaries,  1269. 
charge,  on  each  legacy,  1257. 
collection,  1273. 

under  act  of  1864,  1259. 
sum  paid  in,  1258. 
compromise,  1268. 
consideration,  —  assistance,  1256. 
constitutionality,  1255. 

estoppel    to  claim  demise  void, 

1263. 
general  power  of  congress,  1265. 
gifts  to  states  or  municipalities, 

1266. 
power  to  tax  municiaplities,  1266. 
progressive  rate  upheld,  1267. 
uniformity,  1267. 


are  to  pages.] 

UNITED  STATES  STAT.,— cont'd. 
contingent  beneficial  interests,  1279. 

to  one  on  reaching  a  certain  age, 
1270. 
contract,  devise  in  accordance  with, 

1256. 
demand  necessary,  1261. 
District  of  Columbia,  1269. 
executor  liable,  1254. 
exemptions,  1272. 

construction  of,  1272. 

federal  bonds,  1272. 

in  act  of  1898,  1264. 

legacies  exceeding  $10,000,  1272. 

minor  children,  1261. 

widow  exempted,  1260. 
history,  1251,  1255,  1265. 
income,  — 

effect  of  repeal  on,  1278. 

payable  from  income,  1257. 

income  tax^  1264. 
interest,  1280. 
liabilities,  — 

cestui  rather  than  trustee,  1258. 

confined    to   one    in    possession, 
1257. 

legatee  not  personally  liable,  1257. 

no  personal  liability,  1259. 

payable    from     income    of    life 
tenant,  1257. 

tax  paid  for  benefit  of  another, 
1261. 
lien,  1259. 
life  tenant  a  legatee,  1270. 

payable  from  income,  1257. 
limitations,  1280. 
mortgage,  how  treated,  1275. 
municipal  corporations,  — 

gifts  to,  taxable,  1266. 

power  to  tax,  1266. 
nature,  — 

an  excise  tax,  1255. 

an  excise  and  not  a  direct  tax, 
1265. 

a  legacy  tax,  1255,  1265. 
partition,  effect  of,  1259. 
payment  in  ignorance,  1279. 
penalties,  1259. 


1366 


INDEX. 


[References 

UNITED  STATES  STAT.,—  cont'd. 
progressive  tax,  valid,  1267. 
property,  — 

"arising  from  personal  property" 
does  not  include  a  legacy  pay- 
able out  of  real  estate,  1253. 
of  lien,  1268. 
trust  for  decedent,  1255. 
purchase  money  mortgages,  1275. 
rates,  1254,  1264,  1272. 

determined    by    size    of    legacy, 

1272. 
progressive,  upheld,  1267. 
real  estate,  1259. 
refunding,  1278. 

practice  on,  1280. 
remainders,  1258. 
accelerated,  1261. 
not  taxable  till  they  fall  into  pos- 
session, 1271. 
effect  of  repeal  on,  1262. 
retroactive  on,  1259. 
repeal,  effect  of,  1262,  1277. 
son-in-law,  1270. 
states,  gifts  to,  taxable,  1266. 
statutes,  —  ^ 

early  probate  fees,  1252. 
income  tax,  1264. 
list  of,  1250. 

Massachusetts    act    for    record- 
ing receipts,  1262. 
repeal  of  act  of  1862,  1260. 
effect  of,  1262,  1277. 
saving  clause,  1260. 
retroactive  on  remainders,  1259. 

12  U.  S.  St.  485,  §  111,  1253. 

13  U.  S.  St.  285,  §  124  (Statute 
of  June  30,  1864),  1254. 

13  U.  S.  St.  285,  §  133,  1260. 

14  U.  S.  St.  140,  141  (Act  of 
1866),  1261. 

U.  S.  St.  1870,  c.  255  (repeal), 

1262. 
30  U.  S.  St.,  p.  464  (1898),, 1264. 

30  U.  S.  St.,  p.  464,  §  30,  1273. 

31  U.  S.  St.,  p.  946  (1901),  1275. 

32  U.  S.  St.  406,  §  8  (repeal  of 
1902),  1277,  1278. 


are  to  pages.] 

UNITED  STATES  STAT.,— cont'd. 
transfers  taxable,  1254,  1264. 
transactions     on     consideration, 
1268. 
trust,  — 

cestui  and  not   trustee  is  liable, 

1258. 
for  grantor,  1255. 
trustee  not  a  "person  possessed," 
1270. 
uniformity  of  act  of  1898, 1267. 
what  law  governs,  — 

legacies  payable  after  repeal,  1263. 
payment  on  reaching  certain  age 

after  repeal,  1263. 
where  estates  not  settled  before 
repeal,  1263. 
when  accrues,  1261. 
income  not  due,  1278. 
where  estate  unsettled,  1278. 
where   testator   died   within  one 
year  before  repeal,  1277. 
widow,  exempt,  1260. 
wills,  — 

limited  to  wills  executed  in  this 

country,  1269. 
under  contract  to  leave  by  will, 
1256. 

UNIVERSITY, 

exemption  of,  219. 

UTAH, 

in  general,  1129. 
account,  — 

no  settlement  allowed  until  tax 

paid,  1130. 
not  settled  till  tax  paid,  1135. 
ppraisal,  — 
action    on    cases    now    pending, 

1133. 
extension   of  time  for  appraise- 
ment, 1137. 
objections    to    appraisements, 

hearing  on,  1132. 
time  of  appraisement  and  pay- 
ment of  tax,  1133. 
appraisers,  —  commissions  to,  1132. 
duties  of,  1132. 


INDEX 


1367 


[References 

UTAH,  —  continued. 
appraisers,  continued. 

must  not  take  fee  from  heir,  etc., 

1132. 
to  be  appointed,  1131. 
assessment,  — 

in  case  of   foreign   estate,  1139. 
on  whole  estate,  1130. 
stock  of  non-resident,  1139. 
charge,  —  where  legacy  is  a  charge 

upon  real  estate,  1134. 
clerk,  dulies  of,  1137. 

duties  of  court  and  district  attor- 
ney, 1138. 
collection,  — 

clerk  to  enter  in  inheritance  tax 

and  lien  book,  1137. 
entry  of  real  estate  in  lien  book, 

1136. 
executor,  etc.,  to  collect  tax,  1134. 
to  collect  tax  in  certain  cases, 
other  cases  state  treasurer, 
1135. 
to  report  facts,  1136. 
inheritance  tax  and  lien  book  to 

be  kept  by  clerk,  1135. 
no  settlement  allowed  until  tax 

paid,  1135. 
safe  deposit  company  or  bank  to 
give  notice  before  transferring 
securities,  1139. 
state  treasurer  may  demand  in- 
formation from  executors,  etc., 
1135. 
constitution  1851,  a.  13,  §  3,  1129. 
constitutionality,  1130. 
costs,  by  whom  paid,  1138. 
"debts,"  1131. 
definitions,  — 

"debts,"  1131. 
estate,  tax  on  whole,  1130. 

estates  for  life  or  term  of  years, 
1133. 
executor,  where  bequest  is  in  lieu 

of  compensation,  1134. 
exemption,  extent  of,  1131. 
interest,  rate,  1135. 


are  to  pages.] 

UTAH ,  —  continued. 

jurisdiction,  district  court  to  have, 

1135. 
liabilities,  1130. 
lien,  1131. 

entered  and  indexed,  1137. 
life  estates,  1133. 
non-resident,  — 

assessment  of  estate  of,  1139. 

tax  on  corporate  stock,  1139. 
payment,  — 

state  treasurer  may  compromise 
certain  cases,  1140. 

taxes  payable  to  state  treasurer 
within  fifteen  months,  1134. 
record  by  clerk,  1137. 
safe  deposit  company,  to  give  notice 

before    transfer,  1139. 
statutes, — 

applies  to  pending  cases,  1140. 

construction,  1130. 

list  of,  1129. 

origin,  1130. 

present  act,  1131. 

St.  1901,  c.  62,  1129. 
transfers  taxable, — 

all  property  in  excess  of  $10,000 
subject  to  inheritance  tax;  1131. 
when  tax  accrues,  1134. 

VALUE, 

See  Appraisal. 

VENDORS  AND   PURCHASERS, 

See  Sale. 

VERMONT, 

in  general,  1141. 

account,  final  settlement  of,  of  an 

administrator,  etc.,  1149. 
appeals,  1150. 

who  may  appeal,  1150. 
appraisal,  — 

commissioner     of     state     taxes 

duties  of,  1153. 
foreign  taxes  deducted,  1148. 

oificial  receipt  required,  1148. 
life  estate,  1153. 


1368 


INDEX. 


[References 

VERMONT,  —  continued. 
appraisal,  continued. 

valuation  by  agreement,  1152. 
how  made,  1152. 
agreement    to   be   in    writing, 
when,  1152. 
to  be  filed,  where,  1152. 
may  be  set  aside,  1152. 
valuation  by  appraisers,  1151. 
appraisers,  1151. 
warrant  to  appraisers,  1152. 
oath;  notice,  1152. 
authority,  1152. 
returns;   proceedings,  1152. 
fees,  1152. 
valuation  by  probate  court,  1151. 
determination    upon    applica- 

cation;  notice,  1151. 
notice  as   to  finding    and  de- 
crees, 1151. 
how  determined,  1151. 
cemetery  lots,    exemption    of    be- 
quests to  maintain,  1148. 
charge,  —  when    legacy,    made    a 

charge  upon  property,  1149. 
chose  in  action,  situs  of,  1144.       ^ 
collection,  1149. 

bonds  and  recognizances,  1159. 
certified  copies  of  wills  and  in- 
ventories, 1156. 
to  be  furnished  commissioner  of 

state  taxes,  1156. 
failure  to  furnish;    penalty,  etc., 

1156. 
estate  of  non-resident,  1157. 
estates   not   administered    upon, 
1156. 
administrator,  how  appointed, 

1156. 
duties  of  probate  court,  1156. 
p.obate  court  proceedings,  1149, 
1159. 
issuance  of  letters  of  adminis- 

•tration,  1160. 
juridisction  and  powers,  1159. 
penalty,  1161. 

production   of   books,    records 
and  documents,  1160. 


are  to  pages. 

VERMONT,  —  continued. 
collection,  continued. 

probate  court  proceedings, — 
summons,  generally,  1161. 
summons  to  witnesses,  1160. 
witness  fees,  1161. 
proceedings   in    supreme    court, 
1150. 
probate  court  to  testify  finding 

and  decree,  1150. 
certificate;  hearing;  judgment, 
1150. 
reports  of  listers,  1161. 
reports  by  savings  bank  and  trust 
companies,  1158. 
notice  of  death  of  non-resident 

depositor,  etc.,  1158. 
payment  of  account  prohibited 
without  consent  of  commis- 
sioner of  state  taxes,  1158. 
liability,  1159. 
transfer  of  stock  before  payment 
of  tax  prohibited,  1157. 
constitutionality,  1142. 
equality  of  tax,  1143. 
exemptions,  1144. 
costs,  1150. 
definitions,  1147. 

"decree  of  a  court  in  this  state," 

1145. 
"distributive  share,"  1147. 
"legacy,"  1147. 
"legatee,"  1147. 
"share,"  1147. 
discount  on  foreign  tax,  1148. 
equity  proceedings,  1159. 

commissioner  may  institute,  1159. 
service,  how  made,  1159. 
proceedings,  1150. 
estates  in  litigation,  application  to, 

1146. 
executor,  legacy  to,  1154. 
exemptions,  1147. 

bequests  to  maintain  burial  lots 

exempt,  1148. 
onstruction,  1144. 
validity,  1144. 
false  swearing,  1161. 


INDEX. 


1369 


[References 

VERMONT,  —  continued. 
interest,  1155. 
inventories,  copies  of,  1156. 
inventory  of  property,  1155. 
duty  of  grantee  or  donee,  1155. 
penalty,  1155. 
jurisdiction  of  probate  court,  1149, 

1159. 
liability  for  tax,  1149. 
lien,  1149. 

life  estate,  appraisal,  1153. 
nature  of  tax,  1144,  1145. 
non-resident,  collection  of  tax  on, 
1157. 
deduction   of  tax  on   estate  of, 

1156. 
deduction    of   property   of   non- 
resident, 1158. 
■  failurfe  to  give  notice;    liabil- 
ity, 1158. 
deposits    not    to    be    paid    or 
transferred  before  payment 
of  tax,  1158. 
waiver  of  liability,  1158. 
payment,  1148. 

administrator,    etc.,    to    deduct, 

1148. 
deduction  of  tax  on  estate  of  non- 
resident, 1156. 
legacy    delivered    when    tax    is 

paid,  1149. 
sale  of  legacy  for  tax,  1149. 
probate  fees,  1142. 
rate,  1147. 

receipts  on  payment  of  taxes,  1154. 
refunding  taxes,  method  of,  1154. 
report,  1149. 

to  commissioner  of  state  taxes, 

1155. 
duties    of    register    of    probate, 
1155. 
savings  banks,  liabilities,  1158, 1159. 
situs  of  debts,  1144. 
state,    not  required  to  give  bond, 

1159. 
statutes,  — 

application  of  statute,  1161. 
application  to  estates  in  litigation, 
1146. 


are  to  pages.] 

VERMONT,  —  continued. 
statutes,  continued. 
effect  on  prior  law,  1146. 
list  of,  1141. 
present  act,  1147. 
St.  1896,  c.  46,  1143. 
St.  1904,  c.  30,  §  1,  1145. 
public  Statutes  of  1906,  c.  38,  as 
amended,  1146,  1147. 
transfers  taxable,  1147. 

to  take  effect  on  death,  1147. 
trust  company,  — 

liabilities,  1158,  1159. 
when  tax  accrues,  — 

time  of  payment  of  taxes,  1154. 
generally,  1154. 
on     legacies     or     distributive 

shares,  1154. 
probate    court     may    extend, 

1154. 
on  transfers,  1155. 
wills,  copies  of,  1156. 
witness  fees,  1160. 
witnesses,  summons  to,  1160. 
VESTED   ESTATES, 

See  Remainders. 
VIRGINIA, 

in  general,  1162. 
collection,  —  practice,  1175. 
constitution  1902,  a.  13,  1162. 
constitutionality,  — 

absolute    power    of    state    over 

descents,  1173. 
classification  by  relationship  valid, 

1173. 
power  in   legislature  and  not  in 

municipal  corporations,  1174. 
uniformity,  1173. 
corporations, — whether  exempt  as 

"persons,"  1175. 
exemptions,  — 

corporations  included  under  per- 
sons, 1175. 
effect  of  exemption  from  general 
taxation,  1175. 
history  of  the  Virginia  legislation, 

1164. 
municipal  corporations,  —  no  power 
to  impose  tax,  1174. 


1370 


INDEX. 


[References 

VIRGINIA,  —  continued. 
nature  of  tax,  1166. 

not  a  property  tax,  1173. 
rate, — 

effect  of  omission  to  fix  rates,  1166. 
statut  es,  — 

early  statutes,  1164. 

effect  of  omission  of  rate,  1166. 

list  of,  1163. 

present  act,  1172. 

probate  fees,  1170. 

recent  acts,  1170. 

repeal  in  1884,  1170. 

repeal  by  implication,  1166. 

uniformity,  1173. 

St.  1843-44,  c.  1,1164. 

St.  1843-44,  c.  3,  1164. 

St.  1S48-49,  c.  1,  1165. 

code  1849,  c.  35,  1165. 

code  1849,  c.  39,  1165. 

code  1849,  c.  40,  1165. 

St.  1852,  c.  17, 1166. 

St.  1853-54,  c.  2, 1166. 

St.  1853-54,  c.  2,  §  15,  1166. 

St.  1859,  c.  1, 1166. 

code  1860,  €.35,  1167. 

code  1860,  c.  39,  1167. 

St.  1861,  c.  1,  1167. 

St.  1863,  c.  1,  1167. 

St.  1863-64,  1168. 

St.  1865-66,  c.  1,  1168. 

St.  1865-66,  c.  3,  1168. 

St.  1866-67,  c.  64,  1168. 

St.  1869-70,  c.  45,  1168. 

St.  1869-70,  c.  226,  1168. 

St.  1870-71,  c.  193,  1169. 

St.  1871-72,c.  385,  1169. 

code  1873,  c.  33,  1169. 

code  1873,  c.  35,  1169. 

code  1873,  c.  36,  1169. 

St.  1874,  c.  240,  1169. 

St.  1874-75,  c.  206,  1169. 
St.  1874-75,  c.  239,  1169. 
St.  1875-76,  c.  161,  1169. 
St.  1875-76,  c.  162,  1170. 
St.  1881-82,  c.  119,  1170. 


are  to  pages.] 

WASHINGTON, 
in  general,  1176. 
aliens,  tax  on,  1182. 

validity  of  tax  on,  1180. 
appeal,  on  appraisal,  1185. 
appraisal,  — 

extension  of  time  if  estate  com- 
plicated, 1186. 
procedure  in  appraisement, —  ap- 
peal, 1185. 
collection,  —  list  of  heirs,  1186. 
State  board  of  tax  commissioners 
to  supervise  collection  of  tax; 
records,  1186. 
compounding  tax  if  value  of  estate 

doubtful,  1186. 
conflict  of  laws,  — 

decree  of  foreign  court,  1178. 
constitution  1889,  a.  7,  1176. 
constitutionality,  — 

alien   tax   invalid   as   to   certain 
treaties,  1180. 
validity  under   state  constitu- 
tion, 1181. 
of  exemptions,  1178. 
power  of  legislature,  1177. 
right  of  descent  a  creature  of  law, 
1178. 
corporation,  —  liability  on  transfer 

of  stock,  1185. 
executor,  — 

fiduciaries  shall  pay  tax,  1184. 
executor  shall  pay  if  devisee  or 
legatee,  1184. 
exemptions,  — 

certain   charitable   bequests    ex- 
empted, 1187. 
validity  of,  1178. 
interest,  when  payable,  1185. 
inventory,  time  for  filing,  1186. 
lien,  1182. 
nature  of  tax,  1178. 
non-resident,  —  effect   of  decree  of 
foreign  court,  1178. 
valuation  of  foreign  estate,  1183. 
payment,  — 

by  estates  in  remainder,  1183. 
by  estates  for  life,  1183. 


INDEX. 


1371 


[References  are  to  pages.] 


WASHINGTON,  —  continued. 
payme/it,  continued. 

sale  of  delinquent,  1183. 

tax    on    corporate     stock,    how 
paid,  1185. 

taxes  payable  to  state  treasurer, 
1185. 

when  heir  or    devisee  shall  pay 
tax  on  legacy,  1184. 
property  outside  state,  1182. 

subject  to  inheritance  tax,  1181. 
rate  of  levy^  1182. 
statutes,  — 

amendments,  1180. 

list  of,  1177. 

present  act,  1181. 
title,  1177. 

St.  1901,  c.  55,  1177. 

St.  1901,  c.  55,  as  amended,  1181. 

St.  1905,  c.  93,  1180. 

St.  1907,  c.  217,  1180. 
transfers  taxable,  1181. 
trustee,  liability  for  tax,  1184. 
WEST   VIRGINIA, 
in  general,  1188. 
accounts  of  fiduciary,  1197. 
appeal,  from  assessment,  1196. 
appraisal,  — market  value,  1191. 
assessment,  1195. 

additional  assessment,  1195. 

appeal,  1196. 
bonds,  —  liabilities    on    bonds    of 

fiduciaries,  1197. 
clerk,  —  fees  1197. 
collection,  — 

accounts  of  fiduciary,  1197. 

certificate  to  be  recorded,  1195. 

furnishing     information    to    tax 
commissioner,  1198. 

misdemeanors,  1197. 

proceedings  to  collect,  1196. 

reports,  1194. 

statement  by  executors,  1194. 
compromise,  1197. 
constitution  1872,  a.  10,  §  1,  1189. 
debtor,  bequest  in  payment  of  debt, 

1192. 


WEST  VIRGINIA,— continued. 
estates, — 

particular  estates  and  remainders, 
1192. 
executor,  — 

bequest  to,  1192. 

liability  on  bond  of,  1197. 

statement  by,  1194. 
exemptions,  1191. 
fees,  1197. 
interest,  1193. 
liabilities,  1193,  1194. 
lien,  1193. 
payment,  1196. 

on  transfer,  1194. 

suspending  payment,  1193. 

when  due,  1193. 
powerof  sale,  1193, 
property  liable,  1193. 

taxable  m  another  state,  1192. 
rates,  1191. 

progressive,  1191. 
remainder,  tax  on,  1192. 
statutes,  list  of,  1189. 

present  act,  1190. 

St.  1887,  c.  31,  1189. 
transfers  taxable,  1190. 
trustee,  liability  on  bond  of,  1197. 
WHAT  LAW  GOVERNS, 
amendment,  79. 
appraisal,  252. 

future  interests,  253. 

rule  in  the  absence  of  specific  pro- 
vision for,  258. 

where  statute  provides  no  method 
for  appraising  life  estate,  262. 
collection,  in  absence  of  special  ma- 
chinery', 289. 
conversion,  18,  141. 
deed,  36. 
deed  inter  vivos,  21. 

causa  mortis,  21. 
domicile,  disputed,  146. 

extraterritorial  effect  of  judgment 
as  to,  19. 

law  of   domicile  of  decedent, 
change  of  domicile,  17. 

findings  as  to  domicile,  18. 


1372 


INDEX. 


[References 

WHAT  LAW  GOVERNS— continued. 
foreign  inheritance  tax,  274. 
general  law  as  affecting  appraisal, 

249. 
gifts  causa  mortis,  21. 
interest  and  penalties,  227. 
place,  17. 
power  of  appointment,  19,  117. 

when    power    is   created    before 
passage  of  statute,  118. 
rates,  224. 
refunding,  298. 
repeal,  70. 
time, — 

law  at  death  of  decedent,  20. 
trustee,  property  in  hands  of,  21. 

commissions,  21. 
unconstitutional  statute,  effect  of, 

21. 
See  Statutes,  Amendment,  Repeal. 

WHEN   TAX  ACCRUES, 

at  death  of  testator,  231. 

future  interests,  232. 

increase  in  value,  74. 

interest  in  estate  of  another,  234. 

life  estate  in  remainder,  234.        ^ 

postponement  of  payment  of  lega- 
cies, 232. 

remainder,  merger  of,  234. 

remaindermen  not  ascertainable, 
233. 

statute  applying  retroactively  to 
estates  in  the  process  of  adminis- 
tration, 70. 

tax  payable  "on  his  settlement," 
232. 

WIDOW, 

"widow  of  a  son"  includes  what, 
243. 

WILL, 

charge  of  tax  subsequently  enacted, 
236. 

compromise  of  interests  under,  89, 
125. 

construction  of,  in  appraisal  pro- 
ceedings, 251. 

deed  dependent  on  will,  88. 


are  to  pages.] 

WILL,  —  continued. 

direction  as  to  legacies  to  indi- 
viduals not  include  trustee,  236. 

effect  of  direction  that  annuitant  is 
to  receive  "not  less  than,"  236. 

expenses  of  action  to  construe  will, 
271. 

expenses  of  will  contest,  271. 

immaterial  whether  power  created 
by  deed  or  will,  121. 

jurisdiction  to  hold  will  void  im- 
plied from  power  to  assess  tax, 
283. 

legacy  charged  on  future  rents,  135. 

liabilities  of,  under  direction,  235. 

place  of  execution  of,  166. 

transfer  by,  for  consideration.  111. 

various  gifts  to  same  person,  128. 

will  contemporaneous  with  deed  as 
showing  that  deed  in  contempla- 
tion of  death,  102. 

will  under  contract  to  leave  by  will, 
112. 

WISCONSIN, 

in  general,  1199. 
account, 

final  accounting  on  filing  receipt, 
1225. 
administrator,  — 

duties  of  public,  1233. 
public    administrators;    appoint- 
ment, oath,  bond,  etc.,  1237. 
annuities,  1229. 

present   value  of  an  annuity  of 
one  dollar  per  year,  for  single 
life,  5  per  cent,  1239. 
annuity  deducted,  1218. 
valuation  of,  1238. 
appraisal,  — 

additional  third  appraiser  to  rep- 
resent   county    and    state    at 
original  appraisal,  1231. 
appraisal  at  clear  market  value, 

1229. 
commissioner    of    insurance    to 
value  future  estates,  etc.,  1231. 


INDEX. 


1373 


[References 

WISCONSIN,  —  continued. 
appraisal,  continued. 

computations  of  life  estates,  an- 
nuities, etc.;  American  table; 
rate  5  per  cent,  1238. 

contingent  uncumbrances,  1229. 

contingent  or  defeasible  estates 
in  expectancy,  1230. 

contingent  trusts  taxed  primarily 
at  lowest  rate,  1229. 

hearing  by  court  without  appoint- 
ing special  appraiser,  1231. 

notice  by  and  duty  of  special  ap- 
praiser,  compensation,  1230. 

order  determining  tax;  form; 
notice,  1231. 

re-appraisement  in  circuit  court 
within  two  years,  1232. 

rehearing  within  sixty  days  upon 
record,  1232. 

report  of  appraiser;  county  court 
to  give  notice,  1218. 

report  of  special  appraiser;  notice 
for  hearing,  1230. 

special  appraiser  may  be  ap- 
pointed, 1228. 

tax  when  subject  to  charge  de- 
terminable by  death,  1229. 

valuation,  of  stock,  1219. 
assessment,  — 

form  of  order,  1240. 

guardian  ad  litem  for  infants  and 
incompetents,  1232. 

order  determining  tax,  1231. 

rehearing,  1232. 
collection,  — 

attorney  general  to  enforce  in- 
heritance tax  laws,  1238. 

county  court  may  issue  citation, 
etc.,  1233. 

duties  of  county  treasurer,  county 
judge  and  district  attorney, 
where  tax  is  unpaid,  1232. 

in  counties  of  over  200,000  public 
administrator  or  assistant  dis- 
trict attorney,  1234. 

public    administrator    may    ad- 
.      minister     estates    after    sbcty 
days,  1233. 


are  to  pages.] 

WISCONSIN,  —  continued. 
collection,  continued. 

public  administrator  to  appear 
for  county  and  state;  com- 
pensation; general  supervision 
of  attorney  general,  1233. 

special  administration  for  in- 
heritance taxes;  certificate  of 
descent,  1238. 

special  administrators  to  dis- 
charge   records    undischarged 

.  by  descendants,  determine  in- 
heritance taxes,  etc.,  1237. 

where    transfer    made    in    con- 
templation of  dpath,  1233. 
compromise  of  tax,  1288. 

composition  or  settlement  of  tax 
in  expectant  estates,  1235. 
constitution  1848,  a.  1,  §9,  1201. 

1848,  a.  8,  §  1,  1200. 

1848.  a.  8,  §  5,  1201. 

the  amendment  of  1908,  120b 
constitutionality,  — 

classification  by  relationship  up- 
held, 1211. 

classification  void,  1207. 

double  taxation  if  a  property  tax, 
1204. 

exemptions,  1211. 

not  sustained  as  tax  for  a  salary 
of  judges,  1204. 

of  provisions  leaving  assessment 
to  county  court,  1216. 

of  tax  on  contingent  estates, 
1217. 

power  of  legislature  to  abolish 
descent,  1208. 

progressive  rates,  1211. 

requirement  of  uniformity,  1208. 

right  of  descent  protected,  1221. 

sustained  under  power  of  regula- 
tion, 1210. 

uniformity,  1210. 

validity  of  exemptions,  1214. 

void  as  limited  to  certain  estates 
in  one  county,  1204. 

whether  void  as  a  probate  fee, 
1205. 


1374 


INDEX. 


[References 

WISCONSIN,  —  continued. 

contemplation    of    death    defined, 

1211. 
contingent  interests,  1218. 
tax  on,  1217. 

tax  on  contingent  estates  upheld, 
1217. 
definitions,  — 

contemplation  of  death,  1211. 
terms  defined,  1236. 
descent,  — 

power  of  legislature  over,  1208. 
right  of,  protected,  1221. 
discount,  1215. 
when,  1225. 
double  taxation,  —  considered,  1204. 
executor, —  powers  of  executors,  etc. , 
where  legacy  not  in  money,  1225. 
executors,  bequests  to,  for  services, 

1227. 
exemptions,  1220,  1224. 

applied  to  entire  property,  1207. 
valid,  1211,  1214. 
forms,  — 

form   of   order   determining   tax 
prescribed   by     attorney    gen- 
eral pursuant  to  subdivision  5, 
§  1087-15,  1240. 
history,  —  modeled  after  New  York 

act,  1206. 
income,  — 

American  experience  table  and 
rule  for  making  simple  com- 
putations submitted  by  com- 
missioner of  insurance  pursu- 
ant to  §  3871a,  1238. 
incompetents,  — 

guardian  ad  litem  for,  1232. 
infants,  — 

guardian  ad  litem  for,  1232. 
insurance,  — 

life  insurance,  1213. 
interest,   rate   of,  on  deferred  pay- 
ments,   1215. 
jurisdiction, — ancillary  letters,  1228. 
of  county  court,  petition  for  an- 
cillary letters,  1215. 


are  to  pages.] 

WISCONSIN,  —  continued. 

lien, —  tax  to  be  a  lien  on  property, 

1225. 
life  estates,  appraisal  of,  1238. 
nature,  1210. 
a  tax,  1203. 

not  a  property  tax,  1210. 
tax  on  whole  estate  and  not  on 

succession,  1204. 
the  succession  tax  is  a  tax  on  the 
privilege  of  receiving  property, 
1207. 
non-resident,  — 

transfer  by  executor  of,  1227. 
payment,  1225. 

bond  for  payment  of  legacies  not 

in  possession,  1226. 
seven  and  one-half  per  cent  to  be 

retained  by  county,  1235. 
tax,    how    applied;     deductions, 
1236. 
penalty,  1225. 

for  delay,  1215. 
power,  transfer  under,  1221. 
property,  — 

situs  of  personal  property,  1212. 
double  taxation,  1204. 
rate,  — 

contingent  trusts,  1229. 

on  annuities  and  life  estates,  1238. 

progressive,  1211. 

other  rates;    where  in  excess  of 

$25,000,  1214,  1224. 
primary  rates  where  not  in  ex- 
cess of  $25,000,  1213,  1223. 
receipts,  1225. 

transfer    receipts    may    be    re- 
corded, 1236. 
refunding,  1216. 
refund,  — 

for  subsequent  debts;  state  treas- 
urer may  refund  tax,  1226. 
how  refund  of  tax  made,  1226. 
'  remainders,  — 

bond  for  legacies  not  in  posses- 
sion, 1226. 
compromise  of  tax  on,  1235. 
tax  commission,  powers  of,  1234. 


INDEX. 


1375 


[References 

WISCONSIN,  —  continued. 

situs  of  personal  property,  1212. 
statutes,  — 

construction    modeled    on    New 
York  act,  1211. 
of    New   York   act    followed, 
1206. 
list  of,  1200. 
present  act,  1220. 
recent  amendments,  1219. 
St.  1868,  c.  121,  1201. 
St.  1889,  c.  176,  1202. 
St.  1899,  c.  355,  1205. 
the  act  of  1901,  1209. 
St.  1903,  c.  44,  1209. 
transfers  taxable,  — 
basis  of  tax,  1210. 
contingent  trusts  subject  to,  1217. 
imposed  when  beneficially  trans- 
ferred, 1220. 
in  contemplation  of  death,  1220. 
evidence,  1212. 
the  meaning  of  the  words  "in 
contemplation     of     death," 
1211. 
non-resident's    property     within 

state,  1209,  1220. 
of    stock   by    foreign    executors, 

1227. 
on  clear  market  value,  1221. 
property  within  state,  1209. 
property  of  any  kind  transferred, 

1209. 
by  a  resident  of  state,  1220. 
tax     on     transfers;      exceptions, 

1220. 
transfer  before  or  after  passage 

of  act,  1209. 
transfer  under  power  of  appoint- 
ment, 1210,  1221. 
while  a  resident  of  state,  1209. 
when  tax  accrues,  — 

tax  due  at  time  of  transfer,  1225. 


are  to  pages.] 

WOMAN'S  RELIEF  CORPS, 
exemption,  223. 

WYOMING, 

in  general,  1242. 
appraisal,  1247. 

penalty   for   misfeasance   of  ap- 
praiser, 1247. 
collection,  — 

duty  of  court  when  tax  is  not 

paid,  1248. 
duty  of  treasurer  when  tax  is  not 

paid,  1248. 
duty  of  clerk  of  court,  1248. 
records  to  be  kept,  1248. 
constitutional  limitations,  1242. 
const.  1889,  a.  1,  §  28,  1242. 
const.  1889,  a.  15,  §  11,  1242. 
const.  1889,  a.  15,  §  13,  1242. 
jurisdiction,  — 

court  having  jurisdiction  of  realty 
1247. 
life  estate,  not  taxable,  1244. 
non-resident,  — 

transfer    of     stock    by    foreign 
executor,  1246. 

'payment,  — 

tax  payable,  when,  1245. 

duty  of  person  administering  es-     • 
tate,  1245. 

sale  of  property  to  pay  tax,  1246. 

tax    payable    to    treasurer,   re- 
ceipt for,  1246. 

duty  of  administrator  regarding 
realty,  1246. 

treasurer    to    county    to    retain, 
1248. 
receipts,  1249. 

duplicate  receipts,  1249. 
refunding  tax  in  case  of  debts,  1246. 

tax  erroneously  paid,  1246. 

statutes,  — 
list  of,  1242. 
St.  1903.  c.  80.  1242. 


1376  INDEX. 

[References  are  to  pages.] 

WYOMING,  —  continued.  YOUNG   MEN'S   CHRISTIAN   AS- 

statutes,  continued.  SOCIATION, 

the  present  act,  1244.  ,        .       ,  ^,^ 

compiled  statutes   1910,  c.    169.            educational,  219. 

1244.  exemption  of,  223. 

transfer  of  stocks,  1246.  not  religious,  219. 

when  tax  accrues,  1245.  treated  as  library,  222. 


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